1
$100,000,000
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF OCTOBER 3, 1997
AND AS
AMENDED AND RESTATED
AS OF AUGUST 10, 1998
AMONG
CENTURY BUSINESS SERVICES, INC.
BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION
AS AGENT,
LETTER OF CREDIT ISSUING BANK
AND
SWING LINE BANK,
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
AND
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
AS LEAD MANAGER
2
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS 1
1.01 CERTAIN DEFINED TERMS 1
1.02 OTHER INTERPRETIVE PROVISIONS 21
1.03 ACCOUNTING PRINCIPLES 22
ARTICLE II
THE CREDITS 22
2.01 AMOUNTS AND TERMS OF COMMITMENTS 23
2.02 LOAN ACCOUNTS 23
2.03 PROCEDURE FOR BORROWING 24
2.04 CONVERSION AND CONTINUATION ELECTIONS 26
2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS 28
2.06 OPTIONAL PREPAYMENTS 28
2.07 MANDATORY PREPAYMENTS OF LOANS 28
2.08 REPAYMENT 29
2.09 INTEREST 29
2.10 FEES 30
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2.11 COMPUTATION OF FEES AND INTEREST 30
2.12 PAYMENTS BY THE COMPANY 30
2.13 PAYMENTS BY THE LENDERS TO THE AGENT 31
2.14 SHARING OF PAYMENTS, ETC. 32
ARTICLE III
THE LETTERS OF CREDIT 32
3.01 THE LETTER OF CREDIT SUBFACILITY 32
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS
OF CREDIT 33
3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS 35
3.04 REPAYMENT OF PARTICIPATIONS 36
3.05 ROLE OF THE ISSUING BANK 37
3.06 OBLIGATIONS ABSOLUTE 38
3.07 CASH COLLATERAL PLEDGE 39
3.08 LETTER OF CREDIT FEES 39
3.09 UNIFORM CUSTOMS AND PRACTICE 39
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY 40
4.01 TAXES 40
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4.02 ILLEGALITY 41
4.03 INCREASED COSTS AND REDUCTION OF RETURN 41
4.04 FUNDING LOSSES 42
4.05 INABILITY TO DETERMINE RATES 43
4.06 RESERVES ON OFFSHORE RATE LOANS 43
4.07 CERTIFICATES OF LENDERS 43
4.08 SURVIVAL 43
ARTICLE V
CONDITIONS PRECEDENT 44
5.01 CONDITIONS OF INITIAL CREDIT EXTENSIONS 44
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5.02 CONDITIONS TO ALL CREDIT EXTENSIONS 45
ARTICLE VI
REPRESENTATIONS AND WARRANTIES 46
6.01 CORPORATE EXISTENCE AND POWER 46
6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION 47
6.03 GOVERNMENTAL AUTHORIZATION 47
6.04 BINDING EFFECT 47
6.05 LITIGATION 47
6.06 NO DEFAULT 47
6.07 ERISA COMPLIANCE 48
6.08 USE OF PROCEEDS; MARGIN REGULATIONS 48
6.09 TITLE TO PROPERTIES 48
6.10 TAXES 48
6.11 FINANCIAL CONDITION 49
6.12 ENVIRONMENTAL MATTERS 49
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6.13 COLLATERAL DOCUMENTS 50
6.14 REGULATED ENTITIES 50
6.15 NO BURDENSOME RESTRICTIONS 50
6.16 SOLVENCY 50
6.17 LABOR RELATIONS 50
6.18 COPYRIGHTS, PATENTS, TRADEMARKS, ETC. 50
6.19 SUBSIDIARIES 51
6.20 BROKER'S; TRANSACTION FEES 51
6.21 INSURANCE 51
6.22 SWAP OBLIGATIONS 51
6.23 FULL DISCLOSURE 51
6.24 INSURANCE LICENSES 51
6.25 YEAR 2000 COMPLIANCE 52
ARTICLE VII
AFFIRMATIVE COVENANTS 52
7.01 FINANCIAL STATEMENTS 52
7.02 CERTIFICATES; OTHER INFORMATION 53
7.03 NOTICES 54
7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC 55
7.05 MAINTENANCE OF PROPERTY 56
7.06 INSURANCE 56
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7.07 PAYMENT OF OBLIGATIONS 56
7.08 COMPLIANCE WITH LAWS 56
7.09 COMPLIANCE WITH ERISA 57
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS 57
7.11 ENVIRONMENTAL LAWS 57
7.12 USE OF PROCEEDS 57
7.13 SOLVENCY 57
7.14 FURTHER ASSURANCES 57
ARTICLE VIII
NEGATIVE COVENANTS 58
8.01 LIMITATION ON LIENS 58
8.02 DISPOSITION OF ASSETS 60
8.03 CONSOLIDATIONS AND MERGERS 61
8.04 LOANS AND INVESTMENTS 62
8.05 LIMITATION ON INDEBTEDNESS 63
8.06 TRANSACTIONS WITH AFFILIATES 64
8.07 USE OF PROCEEDS 64
8.08 CONTINGENT OBLIGATIONS 64
8.09 JOINT VENTURES 64
8.10 LEASE OBLIGATIONS 65
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8.11 RESTRICTED PAYMENTS 65
8.12 ERISA 65
8.13 CHANGE IN BUSINESS 65
8.14 ACCOUNTING CHANGES 65
8.15 MINIMUM NET WORTH 66
8.16 LEVERAGE RATIO 66
8.17 INTEREST COVERAGE RATIO 66
ARTICLE IX
EVENTS OF DEFAULT 67
9.01 EVENT OF DEFAULT 67
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9.02 REMEDIES 70
9.03 RIGHTS NOT EXCLUSIVE 71
ARTICLE X
THE AGENT 71
10.01 APPOINTMENT AND AUTHORIZATION; "AGENT" 71
10.02 DELEGATION OF DUTIES 71
10.03 LIABILITY OF AGENT 72
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10.04 RELIANCE BY AGENT 72
10.05 NOTICE OF DEFAULT 72
10.06 CREDIT DECISION 73
10.07 INDEMNIFICATION OF AGENT 73
10.08 AGENT IN INDIVIDUAL CAPACITY 74
10.09 SUCCESSOR AGENT 74
10.10 WITHHOLDING TAX 74
ARTICLE XI
MISCELLANEOUS 76
11.01 AMENDMENTS AND WAIVERS 76
11.02 NOTICES 77
11.03 NO WAIVER; CUMULATIVE REMEDIES 77
11.04 COSTS AND EXPENSES 77
11.05 COMPANY INDEMNIFICATION 78
11.06 PAYMENTS SET ASIDE 78
11.07 SUCCESSORS AND ASSIGNS 79
11.08 ASSIGNMENTS, PARTICIPATIONS, ETC. 79
11.09 CONFIDENTIALITY 80
11.10 SET-OFF 81
11.11 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. 81
11.12 COUNTERPARTS 81
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11.13 SEVERABILITY 82
11.14 NO THIRD PARTIES BENEFITED 82
11.15 GOVERNING LAW AND JURISDICTION 82
11.16 WAIVER OF JURY TRIAL 82
11.17 ENTIRE AGREEMENT 83
11.18 AMENDMENT AND RESTATEMENT 83
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SCHEDULES
Schedule 1.01 Existing Letters of Credit
Schedule 2.01 Commitments
Schedule 6.11 Permitted Liabilities
Schedule 6.19 Subsidiaries and Minority Interests
Schedule 6.24 Licenses
Schedule 8.01 Existing Liens
Schedule 8.04 Existing Investments
Schedule 8.05 Existing Indebtedness
Schedule 8.08 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
Exhibit F-1 Form of Promissory Note - Revolving Loan
Exhibit F-2 Form of Promissory Note - Swing Line Loan
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AMENDED AND RESTATED
CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
October 3, 1997 and as amended and restated as of August 10, 1998, among Century
Business Services, Inc. (f/k/a International Alliance Services, Inc.), a
Delaware corporation (the "COMPANY"), the several financial institutions from
time to time party to this Agreement (collectively, the "LENDERS"; individually,
a "LENDER"), and Bank of America National Trust & Savings Association, as agent
for the Lenders (the "Agent").
WHEREAS, the Lenders have agreed to make available to the Company a
revolving credit facility with a letter of credit subfacility upon the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 CERTAIN DEFINED TERMS. The following terms have the following meanings:
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or indirectly,
in (a) the acquisition of all or substantially all of the assets of a
Person, or of any business or division of a Person, (b) the acquisition
of in excess of 50% of the capital stock, partnership interests,
membership interests or equity of any Person, or otherwise causing any
Person to become a Subsidiary, or (c) a merger or consolidation or any
other combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person. A Person shall be deemed to control
another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, membership interests, by contract, or
otherwise.
"AGENT" means B of A in its capacity as agent for the Lenders
hereunder, and any
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successor agent arising under SECTION 10.09.
"AGENT-RELATED PERSONS" means B of A and any successor agent
arising under SECTION 10.09 and any successor letter of credit issuing
bank hereunder, together with their respective Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set
forth on SCHEDULE 11.02 or such other address as the Agent may from
time to time specify.
"AGREEMENT" means this Credit Agreement.
"ANNUAL STATEMENT" means the annual statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation, which statement shall be in the form required by the
such Insurance Subsidiary's jurisdiction of incorporation or, if no
specific form is so required, in the form of financial statements
permitted by such insurance commissioner (or such similar authority) to
be used for filing annual statutory financial statements and shall
contain the type of information permitted by such insurance
commissioner (or such similar authority) to be disclosed therein,
together with all exhibits or schedules filed therewith.
"APPLICABLE MARGIN" shall mean on any date the applicable
percentage set forth below based upon the Level as shown in the
Compliance Certificate then most recently delivered to the Lenders:
REVOLVING LOANS LETTERS OF CREDIT
--------------- -----------------
Base Offshore Commitment
LEVEL RATE RATE NON-FINANCIAL FINANCIAL FEE
----- ---- ------- ------------- --------- -------
I .750% 1.750% .875% 1.750% .500%
II .500% 1.500% .750% 1.500% .375%
III .250% 1.250% .625% 1.250% .375%
IV .000% 1.000% .500% 1.000% .250%
; PROVIDED, HOWEVER that for the period from the date hereof until the
date that is 3 Business Days after the date the first Compliance
Certificate is delivered to the Lenders pursuant to SECTION 7.02(b),
the Applicable Margin shall be deemed to be the Level determined
pursuant to the certificate referred to in SECTION 5.01(f)(iv);
PROVIDED FURTHER that, if the Company shall have failed to deliver to
the Lenders by the date required hereunder any Compliance Certificate
pursuant to SECTION 7.02(b), then from the date such Compliance
Certificate was required to be delivered until the date of such
delivery the Applicable Margin shall be deemed to be Level I. Each
change in the Applicable
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Margin shall take effect with respect to all outstanding Loans on the
third Business Day immediately succeeding the day on which such
Compliance Certificate is received by the Agent. Notwithstanding the
foregoing, no reduction in the Applicable Margin shall be effected if a
Default or an Event of Default shall have occurred and be continuing on
the date when such change would otherwise occur, it being understood
that on the third Business Day immediately succeeding the day on which
such Default or Event of Default is either waived or cured (assuming no
other Default or Event of Default shall be then pending), the
Applicable Margin shall be reduced (on a prospective basis) in
accordance with the then most recently delivered Compliance
Certificate.
"ASSIGNEE" has the meaning specified in Section 11.08(a).
"ATTORNEY COSTS" means and includes all reasonable and
customary fees and disbursements of any law firm or other external
counsel, the allocated cost of internal legal services and all
disbursements of internal counsel related to this Agreement and the
other Loan Documents.
"B OF A" means Bank of America National Trust & Savings
Association, a national banking association.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C.ss.101, ET SEQ.).
"BASE RATE" means, for any day, the higher of (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of interest
in effect for such days as publicly announced from time to time by B of
A in San Francisco, California as its "reference rate." The "reference
rate" is a rate set by B of A based upon various factors including B of
A's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which
may be priced at, above or below such announced rate. Any change in the
reference rate announced by B of A shall take effect at the opening of
business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Revolving Loan, or an L/C Advance,
that bears interest based on the Base Rate.
"BORROWING" means a borrowing hereunder consisting of Loans of
the same Type made to the Company on the same day by the Lenders under
Article II, and, in the case of Offshore Rate Loans, having the same
Interest Period.
"BORROWING DATE" means any date on which a Borrowing occurs
under SECTION 2.03.
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"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in Chicago or San Francisco are
authorized or required by law to close and, if the applicable Business
Day relates to any Offshore Rate Loan, means such a day on which
dealings are carried on in the applicable offshore interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force of law,
in each case, regarding capital adequacy of any Lender or of any
corporation controlling a Lender.
"CAPITAL EXPENDITURES" means, for any period and with respect
to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs
and improvements during such period) which should be capitalized under
GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"CAPITAL LEASE" has the meaning specified in the definition of
"Capital Lease Obligations."
"CAPITAL LEASE OBLIGATIONS" means all monetary obligations of
the Company or any of its Subsidiaries under any leasing or similar
arrangement which, in accordance with GAAP, is classified as a capital
lease ("CAPITAL LEASE").
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, as additional collateral for the L/C Obligations, cash
or deposit account balances pursuant to documentation in form and
substance satisfactory to the Agent and the Issuing Bank (which
documents are hereby consented to by the Banks). The Company hereby
grants the Agent, for the benefit of the Agent, the Issuing Bank and
the Banks, a security interest in all such cash and deposit account
balances. Cash collateral shall be maintained in blocked deposit
accounts at B of A.
"CASH EQUIVALENTS" means:
(a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and
backed by the full faith and credit of the United States
having maturities of not more than six months from the date of
acquisition;
(b) certificates of deposit, time deposits,
Eurodollar time deposits, repurchase agreements, reverse
repurchase agreements, or bankers' acceptances, having in each
case a tenor of not more than six months, issued by any
Lender, or by any U.S. commercial bank having combined capital
and surplus of not less than $100,000,000 whose short term
securities are rated at least A-1 by Standard
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& Poor's Corporation and P-1 by ▇▇▇▇▇'▇ Investors Service,
Inc.;
(c) commercial paper of an issuer rated at least A-1
by Standard & Poor's Corporation or P-1 by ▇▇▇▇▇'▇ Investors
Service Inc. and in either case having a tenor of not more
than three months.
"CHANGE OF CONTROL" means (a) any Person or any two or more
Persons (in each case other than a Person that is a stockholder of the
Company as of the date of this Agreement) acting in concert acquiring
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Exchange Act), directly or
indirectly, of capital stock of the Company (or other securities
convertible into such capital stock) representing 25% or more of the
combined voting power of all capital stock of the Company entitled to
vote in the election of directors, other than capital stock having such
power only by reason of the happening of a contingency, or (b) during
any period of twelve consecutive calendar months, individuals who at
the beginning of such period constituted the Company's board of
directors (together with any new directors whose election by the
Company's board of directors or whose nomination for election by the
Company's stockholders was approved by a vote of at least a majority of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reasons other than death or
disability to constitute a majority of the directors then in office, or
(c) during any period of twelve consecutive calendar months (other than
pursuant to a disposition permitted pursuant to SECTION 8.02), the
ceasing of more than 25% of the individuals (i) who hold an office
possessing the title Senior Vice President or Executive Vice President
or such title that ranks senior thereto of the Company, the Company's
direct Subsidiaries and parent Insurance Subsidiaries and (ii) who are
the principal operating manager or manager, or such other title
possessing equivalent duties of Subsidiaries not described in clause
(i) (collectively, "Senior Management"), on the first day of each such
period to be part of the Senior Management of the Company and its
Subsidiaries taken as a whole.
"CLOSING DATE" means the date on which all conditions
precedent set forth in SECTION 5.01 are satisfied or waived by all
Lenders.
"CODE" means the Internal Revenue Code of 1986, as amended,
and regulations promulgated thereunder.
"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the Company or any
Guarantor in or upon which a Lien now or hereafter exists in favor of
the Lenders, or the Collateral Agent on behalf of the Lenders, whether
under this Agreement or under any other documents executed by any such
Persons and delivered to the Collateral Agent.
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"COLLATERAL AGENT" means the Agent acting in its capacity as
Collateral Agent pursuant to the Collateral Documents (other than the
Guaranty).
"COLLATERAL DOCUMENTS" means, collectively, (a) the Guaranty,
the Pledge Agreements, and other similar agreements between the Company
or its Subsidiaries and the Lenders or the Collateral Agent for the
benefit of the Lenders now or hereafter delivered to the Lenders or the
Collateral Agent pursuant to or in connection with the transactions
contemplated hereby and (b) any amendments, supplements, modifications,
renewals, replacements, consolidations, substitutions and extensions of
any of the foregoing.
"COMMITMENT" means, collectively, the Revolving Loan
Commitment and the Swing Line Loan Commitment.
"COMMITMENT FEE" has the meaning specified in Section 2.10(b).
"COMPANY" means Century Business Services, Inc. (f/k/a
International Alliance Services, Inc.)
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, gross
consolidated interest expense for the period (including all
commissions, discounts, fees and other charges in connection with
standby letters of credit and similar instruments) for the Company and
its Subsidiaries, PLUS the portion of the upfront costs and expenses
for Swap Contracts (to the extent not included in gross interest
expense) fairly allocated to such Swap Contracts as expenses for such
period, as determined in accordance with GAAP and after giving effect
to any Swap Contract then in effect.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent, with or
without recourse, (a) with respect to any Indebtedness, lease,
dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise
acquire such primary obligations or any security therefor, (ii) to
advance or provide funds for the payment or discharge of any such
primary obligation, or to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency
or any balance sheet item, level of income or financial condition of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect
thereof (each, a "GUARANTY OBLIGATION"); (b) with respect to any Surety
Instrument (other than 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
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payments; (c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the relevant
contract or other related document or obligation requires that payment
for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered, or such services
are ever performed or tendered, or (d) in respect of any Swap Contract;
PROVIDED, HOWEVER, that neither the term "CONTINGENT OBLIGATION" nor
the term "GUARANTY OBLIGATION" shall include obligations in respect of
insurance, reinsurance, surety or fidelity contracts, bonds or policies
entered into or issued in the ordinary course of business. The amount
of any Contingent Obligation shall, in the case of Guaranty
Obligations, be deemed equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty Obligation is
made or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof, and in the case of other
Contingent Obligations other than in respect of Swap Contracts, shall
be equal to the maximum reasonably anticipated liability in respect
thereof and, in the case of Contingent Obligations in respect of Swap
Contracts, shall be equal to the Swap Termination Value.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or by
which it or any of its property is bound.
"CONVERSION/CONTINUATION DATE" means any date on which, under
SECTION 2.04, the Company (a) converts Loans of one Type to another
Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"CREDIT EXTENSION" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied during such time) constitute an Event of Default.
"DISPOSITION" means (a) the sale, lease, conveyance or other
disposition of Property in excess of $100,000, other than sales or
other dispositions expressly permitted under Section 8.02, and (b) the
sale or transfer by the Company or any Subsidiary of the Company of any
equity securities issued by any Subsidiary of the Company and held by
such transferor Person.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the
United States.
"EBIT" means, for any period, for the Company and its
Subsidiaries on a consolidated
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basis, determined in accordance with GAAP, the sum of (a) Net Income
(or net loss) for such period PLUS (b) all amounts treated as expenses
for interest to the extent included in the determination of such Net
Income (or loss), PLUS (c) all accrued taxes on or measured by income
to the extent included in the determination of such Net Income (or
loss); PROVIDED, HOWEVER, that Net Income (or loss) shall be computed
for these purposes without giving effect to extraordinary losses or
extraordinary gains; and PROVIDED FURTHER, that for the purpose of
computations under SECTIONS 8.16 and 8.17 for any business acquired
during the period of determination, EBIT for such period if positive
may, at the Company's option, and, if negative, shall be determined on
a pro forma basis as if such acquisition had occurred as of the
beginning of such period notwithstanding the definition of Net Income.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance with
GAAP, the sum of (a) the Net Income (or net loss) for such period PLUS
(b) all amounts treated as expenses for depreciation and interest and
the amortization of intangibles of any kind to the extent included in
the determination of such Net Income (or loss), PLUS (c) all accrued
taxes on or measured by income to the extent included in the
determination of such net income (or loss); PROVIDED, HOWEVER, that net
income (or loss) shall be computed for these purposes without giving
effect to extraordinary losses or extraordinary gains; and PROVIDED
FURTHER, that for the purpose of computations under SECTIONS 8.16 and
8.17 for any business acquired during the period of determination,
EBITDA for such period if positive may, at the Company's option, and,
if negative, shall be determined on a pro forma basis as if such
acquisition had occurred as of the beginning of such period
notwithstanding the definition of Net Income.
"EFFECTIVE AMOUNT" means (a) with respect to any Revolving
Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any Borrowings and prepayments or repayments of
Revolving Loans occurring on such date, (b) with respect to any Swing
Line Loans on any date, the aggregate outstanding principal amount
thereof after giving effect to any Borrowings and prepayments or
repayments of Swing Line Loans occurring on such date and (c) with
respect to any outstanding L/C Obligations on any date, the amount of
such L/C Obligations on such date after giving effect to any Issuances
of Letters of Credit occurring on such date and any other changes in
the aggregate amount of the L/C Obligations as of such date, including
as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available
for drawing under Letters of Credit taking effect on such date. For
purposes of SECTION 2.07, the Effective Amount shall be determined
without giving effect to any mandatory prepayments to be made under
said Section.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least
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$100,000,000; (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$100,000,000, PROVIDED that such bank is acting through a branch or
agency located in the United States; and (c) a Person that is primarily
engaged in the business of commercial banking (other than a non-bank
affiliate of such Person) and that is (i) a Subsidiary of a Lender,
(ii) a Subsidiary of a Person of which a Lender is a Subsidiary, or
(iii) a Person of which a Lender is a Subsidiary.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential liability
or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters.
"ENVIRONMENTAL PERMITS" has the meaning specified in SECTION
6.12(B).
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning
of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
the Code for purposes of provisions relating to Section 412 of the
Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year
in which it was a substantial employer (as defined in Section
4001(a)(2) of ERISA) or a cessation of operations which is treated as
such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Company or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or
condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan or Multiemployer Plan; or
(f) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
the Company or any ERISA
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Affiliate.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events or circumstances
specified in SECTION 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"EXCLUDED SUBSIDIARY" means, at any time, any Subsidiary whose
capital stock may not be pledged under a Pledge Agreement without
violating federal, state and/or local laws or regulations applicable to
such Subsidiary, or, in the case of an Insurance Subsidiary, causing an
adverse economic effect upon such Subsidiary's capital or surplus, it
being understood that (a) all Excluded Subsidiaries existing on the
date of this Agreement are listed on Schedule 6.19, Part B and (b) an
Excluded Subsidiary may not own the capital stock of any Subsidiary
which is not an Excluded Subsidiary.
"EXISTING LETTER OF CREDIT" means each letter of credit listed
on SCHEDULE 1.01.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of New
York (including any such successor, "H.15(519)") on the preceding
Business Day opposite the caption "Federal Funds (Effective)"; or, if
for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic
mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City
time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Agent.
"FEE LETTER" has the meaning specified in Section 2.10(a).
"FINANCIAL LETTERS OF CREDIT" means any Letter of Credit which
either the Agent or the Issuing Bank determines is required under
applicable law (including regulations and guidelines established by
banking regulators) relating to reserve requirements to be classified
as a financial letter of credit.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of its
principal functions.
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"FURTHER TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees, withholdings or
similar charges (including, without limitation, net income taxes and
franchise taxes), and all liabilities with respect thereto, imposed by
any jurisdiction on account of amounts payable or paid pursuant to
Section 4.01.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting
profession), which are in effect and applicable to the circumstances as
of the date of determination; PROVIDED, HOWEVER, that for purposes of
all computations required to be made with respect to compliance by the
Company with SECTIONS 8.15, 8.16, and 8.17, such term shall mean
generally accepted accounting principles as in effect on the date of
this Agreement, applied in a manner consistent with those used in
preparing the financial statements referred to in SECTION 6.11 (X) and
(Y).
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central Lender (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government (including,
without limitation, any board of insurance, insurance department or
insurance commissioner and any taxing authority or political
subdivision), and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the
foregoing.
"GUARANTOR" means each Subsidiary of the Company that is not
an Excluded Subsidiary.
"GUARANTY" means the Amended and Restated Guaranty, dated as
of October 3, 1997 and as amended and restated as of August 10, 1998,
duly executed and delivered by each Guarantor in favor of the Agent, on
behalf of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof.
"IBOR" has the meaning specified in the definition of
"Offshore Rate".
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for
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borrowed money; (b) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (other than trade
payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations
with respect to Surety Instruments and all L/C Obligations; (d) all
obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case
with respect to property acquired by the Person (even though the rights
and remedies of the seller or bank under such agreement in the event of
default are limited to repossession or sale of such property); (f) all
obligations with respect to capital leases; (g) all indebtedness
referred to in clauses (a) through (f) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness; and (h) all Guaranty Obligations in respect of
indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) above.
"INDEMNIFIED LIABILITIES" has the meaning specified in SECTION
11.05.
"INDEMNIFIED PERSON" has the meaning specified in SECTION
11.05.
"INDEPENDENT AUDITOR" has the meaning specified in SECTION
7.01(a).
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person before any
court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"INSURANCE SUBSIDIARY" means any Subsidiary which is engaged
in the insurance business other than as a licensed agency.
"INTEREST PAYMENT DATE" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Offshore Rate
Loan and, as to any Base Rate Loan, the last Business Day of each
March, June, September and December and each date such Loan is
converted into another Type of Loan; PROVIDED, HOWEVER, that if any
Interest Period exceeds three months, the date that falls three months
after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.
"INTEREST COVERAGE RATIO" means, with respect to any period,
the ratio of EBIT for that
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period to Consolidated Interest Expense for that period.
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Company in its Notice
of Borrowing or Notice of Conversion/Continuation;
PROVIDED that:
(a) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) 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 end on the last
Business Day of the calendar month at the end of such Interest
Period; and
(c) no Interest Period for any Revolving Loan shall
extend beyond the Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"ISSUANCE DATE" has the meaning specified in SECTION 3.01(a).
"ISSUE" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount of, such
Letter of Credit; and the terms "ISSUED," "ISSUING" and "ISSUANCE" have
corresponding meanings.
"ISSUING BANK" means B of A in its capacity as issuer of one
or more Letters of Credit hereunder together with any replacement
letter of credit issuer arising under SECTION 10.01(b) or SECTION
10.09.
"JOINT VENTURE" means a single-purpose corporation,
partnership, limited liability company, joint venture or other similar
legal arrangement (whether created by contract or conducted through a
separate legal entity) now or hereafter formed by the Company or any of
its Subsidiaries with another Person in order to conduct a common
venture or enterprise with such Person.
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"LENDER" has the meaning specified in the introductory clause
hereto. References to the "Lenders" shall include BofA, including in
its capacity as Issuing Bank and Swing Loan Bank; for purposes of
clarification only, to the extent that BofA may have any rights or
obligations in addition to those of the Lenders due to its status as
Issuing Bank, its status as such will be specifically referenced.
"LENDING OFFICE" means, as to any Lender, the office or
offices of such Lender specified as its "Lending Office" or "Domestic
Lending Office" or "Offshore Lending Office", as the case may be, on
SCHEDULE 11.02, or such other office or offices as such Lender may from
time to time notify the Company and the Agent.
"L/C ADVANCE" means each Lender's participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding standby or commercial documentary letters of
credit as shall at any time be in use at the Issuing Bank, as the
Issuing Bank shall request.
"L/C APPLICATION" means an application form for issuances of
standby or commercial documentary letters of credit as shall at any
time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been reimbursed
on the date when made nor converted into a Borrowing of Revolving Loans
under SECTION 3.03(c).
"L/C COMMITMENT" means the commitment of the Issuing Bank to
Issue, and the commitment of the Lenders severally to participate in,
Letters of Credit from time to time Issued or outstanding under Article
III, in an aggregate amount not to exceed on any date the amount of
$5,000,000, as the same shall be reduced as a result of a reduction in
the L/C Commitment pursuant to SECTION 2.06; PROVIDED that the L/C
Commitment is a part of the combined Commitments, rather than a
separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then outstanding,
plus (b) the amount of all unreimbursed drawings under all Letters of
Credit, including all outstanding L/C Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"LENDING OFFICE" means, as to any Lender, the office or
offices of such Lender specified as its "Lending Office" or "Domestic
Lending Office" or "Offshore Lending Office", as
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the case may be, on SCHEDULE 11.02, or such other office or offices as
such Lender may from time to time notify the Company and the Agent.
"LETTER OF CREDIT" means any letter of credit (whether
Financial Letters of Credit or Non-Financial Letters of Credit) that is
Issued by the Issuing Bank pursuant to ARTICLE III.
"LEVEL" means, and includes, Level I, Level II, Level III,
Level IV, whichever is in effect at the relevant time.
"LEVEL I" shall exist at any time the Leverage Ratio is equal
to or greater than 2.50:1.0.
"LEVEL II" shall exist at any time the Leverage Ratio is
greater than or equal to 2.00:1.0 but less than 2.50:1.0.
"LEVEL III" shall exist at any time the Leverage Ratio is
greater than or equal to 1.50:1.0 but less than 2.00:1.0.
"LEVEL IV" shall exist at any time the Leverage Ratio is less
than 1.50:1.0.
"LEVERAGE RATIO" means, with respect to any period, the ratio
of total consolidated Indebtedness as of the end of that period to
EBITDA for that period.
"LICENSE" means any license, certificate or authority, permit
or other authorization which is required to be obtained from any
Governmental Authority in connection with the operation, ownership or
transaction of insurance business by an Insurance Subsidiary.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit arrangement,
encumbrance, lien (statutory or other) or preferential arrangement of
any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, the interest of a lessor under a
capital lease, any financing lease having substantially the same
economic effect as any of the foregoing, or the filing of any financing
statement naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable law) and
any contingent or other agreement to provide any of the foregoing, but
not including the interest of a lessor under an operating lease.
"LOAN" means an extension of credit by a Lender to the Company
under Article II or Article III in the form of a Revolving Loan, Swing
Line Loan or L/C Borrowing.
"LOAN DOCUMENTS" means this Agreement, any Notes, the Fee
Letters, the L/C Related Documents, the Collateral Documents and all
other documents delivered to the Agent or any Lender in connection
herewith.
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"MAJORITY LENDERS" means (a) at any time two Lenders are party
to this Agreement, both Lenders, and (b) at any other time, prior to
the termination of the Commitment, Lenders holding at least 66-2/3% of
the then aggregate Commitments or, if the Commitments have been
terminated, Lenders holding at least 66-2/3% of the then unpaid
principal amount of Loans and L/C Obligations.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business,
properties, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole or as to the Insurance
Subsidiaries and their Subsidiaries taken as a whole; (b) a material
impairment of the ability of the Company or any Guarantor to perform
under any Loan Document and to avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Guarantor of any Loan
Document.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company or any
ERISA Affiliate makes, is making, or is obligated to make contributions
or, during the preceding three calendar years, has made, or been
obligated to make, contributions.
"NAIC" means the National Association of Insurance
Commissioners or any successor thereto, or in lieu thereof, any other
association, agency or other organization performing advisory,
coordination or other like functions among insurance departments,
insurance commissioners and similar Governmental Authorities of the
various states of the United States toward the promotion of uniformity
in the practices of such Governmental Authorities.
"NET INCOME" shall mean for any period, the net income (or
loss) of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in
conformity with GAAP; PROVIDED, that there shall be excluded (i) the
income (or loss) of any entity accrued prior to the date it becomes a
Subsidiary (or such other date as provided in the relevant acquisition
agreement) of the Company or is merged into or consolidated with the
Company or any Subsidiary or on which its assets are acquired by the
Company or any Subsidiary of the Company, (ii) research and development
write-offs relating to an Acquisition permitted by SECTION 8.04(d) to
the extent and in the amount approved by the Agent, and (iii) the
income of any Subsidiary of the Company (including, without limitation,
any Insurance Subsidiary) 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, or without
any third-
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party consent required by, its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
"NET WORTH" means shareholders' equity as determined in
accordance with GAAP.
"NON-FINANCIAL LETTERS OF CREDIT" means Letters of Credit
which are not Financial Letters of Credit.
"NOTE" means a promissory note executed by the Company in
favor of a Lender pursuant to Section 2.02(b), in substantially the
form of EXHIBIT F-1, with respect to Revolving Loans, and EXHIBIT F-2,
with respect to the Swing Line Loan.
"NOTICE OF BORROWING" means a notice in substantially the form
of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT B.
"OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan Document owing
by the Company to any Lender, the Agent, the Collateral Agent, or any
Indemnified Person, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due,
now existing or hereafter arising.
"OFFSHORE RATE" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing, the rate
of interest per annum (rounded upward to the next 1/16th of 1%)
determined by the Agent as follows:
Offshore Rate = IBOR
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Lender) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"IBOR" means the rate of interest per annum
determined by the Agent as the rate at which dollar deposits
in the approximate amount of B of A's Offshore Rate Loan for
such Interest Period would be offered by B of A's Grand Cayman
Branch, Grand Cayman B.W.I. (or such other office as may be
designated for
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such purpose by B of A), to major banks in the offshore dollar
interbank market at their request at approximately 10:00 a.m.
(Chicago time) two Business Days prior to the commencement of
such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on
the Offshore Rate.
"ORGANIZATION DOCUMENTS" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, any shareholder rights agreement, and
all applicable resolutions of the board of directors (or any committee
thereof) of such corporation.
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery, performance, or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"PARTICIPANT" has the meaning specified in SECTION 11.08(D).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions
under ERISA.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described
in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five (5) plan years.
"PERMITTED ACQUISITION THRESHOLD" means either (a) the total
consideration to be paid by the Company or any of its Subsidiaries in
connection with an Acquisition (as determined by the Company) is equal
to or in excess of $35,000,000 or (b) the total cash consideration to
be paid by the Company or any of its Subsidiaries in connection with an
Acquisition is equal to or in excess of $20,000,000.
"PERMITTED LIENS" has the meaning specified in SECTION 8.01.
"PERMITTED SELLER DEBT" has the meaning specified in SECTION
8.05(g).
"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or arising
under Swap Contracts, provided that each of the following criteria is
satisfied: (a) such obligations are (or were) entered into by
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such Person in the ordinary course of business for the purpose of
directly mitigating risks associated with liabilities, commitments or
assets held or reasonably anticipated by such Person, or changes in the
value of securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited hereunder, and
not for purposes of speculation or taking a "market view;" (b) such
Swap Contracts do not contain (i) any provision ("walk-away" provision)
exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party, or (ii)
any provision creating or permitting the declaration of an event of
default, termination event or similar event upon the occurrence of an
Event of Default hereunder (other than an Event of Default under
Section 9.01(a)).
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture or Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company sponsors or maintains or to which the
Company makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"PLEDGE AGREEMENTS" means, collectively, those certain Amended
and Restated Pledge Agreements, each dated as of October 3, 1997 and as
amended and restated as of August 10, 1998, duly executed and delivered
by each of the Company and the Guarantors pledging the stock of its
Subsidiaries (other than Excluded Subsidiaries) to the Collateral
Agent, for the benefit of itself and the Lenders, as the same may be
amended, supplemented or otherwise modified from time to time.
"PLEDGED COLLATERAL" has the meaning specified in the relevant
Pledge Agreement.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, and whether tangible or
intangible.
"PRO RATA SHARE" means, as to any Lender at any time, the
percentage equivalent (expressed as a decimal, rounded to the ninth
decimal place) at such time of such Lender's Revolving Loan Commitment
divided by the combined Revolving Loan Commitments of all Lenders.
"QUARTERLY STATEMENT" means the quarterly statutory financial
statement of any Insurance Subsidiary required to be filed with the
insurance commissioner (or similar authority) of its jurisdiction of
incorporation or, if no specific form is so required, in the form of
financial statements permitted by such insurance commissioner (or such
similar authority) to be used for filing quarterly statutory financial
statements and shall contain the type of financial information
permitted by such insurance commissioner (or such similar authority) to
be disclosed therein, together with all exhibits or schedules filed
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therewith.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other than any
such event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the PBGC.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of
an arbitrator or of a Governmental Authority not subject to a stay
order issued by a court of competent jurisdiction, in each case
applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.
"RESPONSIBLE OFFICER" means the chief executive officer, the
president, the executive vice president or the chief financial officer
of the Company, or any other officer having substantially the same
authority and responsibility as the executive vice president and chief
financial officer; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of the Company,
or any other officer having substantially the same authority and
responsibility.
"REVOLVING LOAN" has the meaning specified in SECTION 2.01.
"REVOLVING LOAN COMMITMENT", as to each Lender, has the
meaning specified in SECTION 2.01.
"REVOLVING TERMINATION DATE" means the earlier to occur of:
(a) August 8, 2003; and
(b) the date on which the Revolving Loan
Commitments terminate in accordance with the provisions of
this Agreement.
"SAP" means, with respect to any Insurance Subsidiary, the
statutory accounting practices prescribed or permitted by the insurance
commissioner (or other similar authority) in the jurisdiction of such
Person for the preparation of annual statements and other financial
reports by insurance companies of the same type as such Person in
effect from time to time; PROVIDED, HOWEVER, that for purposes of all
computations required to be made with respect to compliance by the
Company with SECTIONS 8.18, such term shall mean statutory accounting
practices as in effect on the date of this Agreement, applied in a
manner consistent with those used in preparing the financial statements
referred to in SECTION 6.11(z).
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
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"SOLVENT" means, when used with respect to a Person, that (a)
the fair saleable value of the assets of such Person is in excess of
the total amount of the present value of its liabilities (including for
purposes of this definition all liabilities (including loss reserves as
determined by such Person), whether or not reflected on a balance sheet
prepared in accordance with GAAP and whether direct or indirect, fixed
or contingent, secured or unsecured, disputed or undisputed), (b) such
Person is able to pay its debts or obligations in the ordinary course
as they mature and (c) such Person does not have unreasonably small
capital to carry out its business as conducted and as proposed to be
conducted. "Solvency" shall have a correlative meaning.
"SUBSIDIARY" of a Person means any corporation , association,
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the voting stock, membership interests
or other equity interests (in the case of Persons other than
corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" refer to a Subsidiary of the
Company.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and documentary), banker's acceptances, bank guaranties,
shipside bonds, surety bonds and similar instruments.
"SWAP CONTRACT" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or ▇▇▇▇ option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out
and termination value(s) determined in accordance therewith, such
termination value(s), and (b) for any date prior to the date referenced
in clause (a) the amount(s) determined as the ▇▇▇▇-to-market value(s)
for such Swap Contracts, as determined by the Company based upon one or
more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include any
Lender).
"SWING LINE LOAN COMMITMENT" has the meaning specified in
SECTION 2.01.
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"SWING LINE BANK" means BofA, in its capacity as provider of
the Swing Line Loans.
"SWING LINE LOAN" has the meaning specified in SECTION 2.01.
"SWING LINE TERMINATION DATE" means the earlier to occur of:
(a) August 1, 2003; and
(b) the Revolving Termination Date.
"SWING LINE RATE" means the Base Rate.
"TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the
case of each Lender and the Agent, respectively, taxes imposed on or
measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or the Agent,
as the case may be, is organized or maintains a lending office.
"TYPE" means, with respect to any Borrowing, its nature as a
Base Rate Loan or an Offshore Rate Loan.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used for funding the Pension Plan pursuant to Section 412
of the Code for the applicable plan year.
"UNITED STATES" and "U.S." each means the United States of
America.
"WHOLLY-OWNED SUBSIDIARY" means any corporation, association,
partnership, limited liability company, joint venture or other business
entity in which (other than directors' or other qualifying shares
required by law) 100% of the equity interests of each class having
ordinary voting power, and 100% of the equity interests of every other
class, in each case, at the time as of which any determination is being
made, is owned, beneficially and of record, by the Company, or by one
or more of the other Wholly-Owned Subsidiaries, or both.
1.02. OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer to
this Agreement as a whole and not to any particular provision of this Agreement;
and Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
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(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Company and the other parties, and are the products of all parties. Accordingly,
they shall not be construed against the Lenders or the Agent merely because of
the Agent's or Lenders' involvement in their preparation.
1.03 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly requires,
all accounting terms not expressly defined herein shall be construed, and all
financial computations required under this Agreement shall be made, in
accordance with GAAP and SAP, as the case may be, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to such
fiscal periods of the Company.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS. (a) Each Lender severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan,
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"REVOLVING LOAN") from time to time on any Business Day during the period from
the Closing Date to the Revolving Termination Date, in an aggregate amount not
to exceed at any time outstanding the amount set forth on SCHEDULE 2.01 (such
amount, as the same may be reduced under Section 2.05 or as a result of one or
more assignments under Section 10.08, the Lender's "REVOLVING LOAN COMMITMENT");
PROVIDED, HOWEVER, that, after giving effect to any Borrowing of Revolving Loans
(exclusive of Revolving Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans), the Effective Amount of all outstanding Revolving Loans, Swing Line
Loans and L/C Obligations, shall not at any time exceed the combined Revolving
Loan Commitments; AND PROVIDED FURTHER, that the Effective Amount of the
Revolving Loans of any Lender plus the participation of such Lender in the
Effective Amount of all Swing Loan Loans and L/C Obligations shall not at any
time exceed such Lender's Revolving Loan Commitment. Within the limits of each
Lender's Revolving Loan Commitment, and subject to the other terms and
conditions hereof, the Company may borrow under this SECTION 2.01(a), prepay
under SECTION 2.06 and reborrow under this SECTION 2.01(a).
(b) Subject to the terms and conditions hereof, the Swing Line Bank agrees
to make loans to the Company (each such loan, a "SWING LINE LOAN") from time to
time on any Business Day during the period from the Closing Date to the Swing
Line Termination Date in an aggregate principal amount at any one time
outstanding not to exceed $5,000,000 (the "SWING LINE LOAN COMMITMENT");
PROVIDED, after giving effect to any Borrowing of Swing Line Loans, the
Effective Amount of all outstanding Swing Line Loans shall not at any time
exceed the Swing Line Loan Commitment; AND PROVIDED FURTHER, that the Effective
Amount of all outstanding Revolving Loans, Swing Line Loans and L/C Obligations
shall not at any time exceed the combined Revolving Loan Commitments. Prior to
the Swing Line Termination Date, the Company may use the Swing Line Loan
Commitment by borrowing, prepaying the Swing Line Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. All Swing
Line Loans shall bear interest at the Swing Line Rate and shall not be entitled
to be converted into Loans that bear interest at any other rate.
2.02 LOAN ACCOUNTS
(a) The Loans made by each Lender and the Letters of Credit Issued by the
Issuing Bank shall be evidenced by one or more accounts or records maintained by
such Lender or Issuing Bank, as the case may be, in the ordinary course of
business. The accounts or records maintained by the Agent, the Issuing Bank and
each Lender shall be prima facie evidence of the amount of the Loans made by the
Lenders to the Company, and the Letters of Credit issued for the account of the
Company, and the interest and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of the Company hereunder to pay any amount owing with respect to the Loans or
any Letter of Credit.
(b) Upon the request of any Lender made through the Agent, the Loans made by
such Lender may be evidenced by one or more Notes, instead of or in addition to
loan accounts. Each
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such Lender shall record on the schedules annexed to its Note(s) the date,
amount and maturity of each Loan made by it and the amount of each payment of
principal made by the Company with respect thereto. Each such Lender is
irrevocably authorized by the Company to make such recordations on its Note(s)
and each Lender's record shall be deemed prima facie correct; PROVIDED, HOWEVER,
that the failure of a Lender to make, or an error in making, a notation thereon
with respect to any Loan shall not limit or otherwise affect the obligations of
the Company hereunder or under any such Note to such Lender.
2.03 PROCEDURE FOR BORROWING
(a) REVOLVING LOANS. (i) Each Borrowing (other than a L/C Borrowing or a
Borrowing of Swing Line Loans) shall be made upon the Company's irrevocable
written notice delivered to the Agent in the form of a Notice of Borrowing
(which notice must be received by the Agent prior to 10:00 a.m. (Chicago time)
(x) two Business Days prior to the requested Borrowing Date, in the case of
Offshore Rate Loans and (y) on the date of the requested Borrowing Date, in the
case of Base Rate Loans, specifying:
(1) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $500,000, or any multiple of
$100,000 in excess thereof, in the case of Base Rate Loans,
and $1,000,000, or any multiple of $500,000 in excess thereof,
in the case of Offshore Rate Loans;
(2) the requested Borrowing Date, which shall be a
Business Day;
(3) the Type of Loans comprising the Borrowing; and
(4) the duration of the Interest Period applicable to
such Offshore Rate Loans included in such notice. If the
Notice of Borrowing fails to specify the duration of the
Interest Period for any Borrowing comprised of Offshore Rate
Loans, such Interest Period shall be one month;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:00 a.m. (Chicago time) on the Closing Date and such Borrowing will consist of
Base Rate Loans only.
(ii) The Agent will promptly notify each Lender of its receipt
of any Notice of Borrowing and of the amount of such Lender's Pro Rata Share of
that Borrowing.
(iii) Each Lender will make the amount of its Pro Rata Share
of each Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 2:00 p.m. (Chicago time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent at such office by crediting the account of the Company on the
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books of B of A with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.
(iv) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than five different Interest
Periods in effect.
(b) SWING LINE LOANS. (i) The Company may borrow under the
Swing Line Loan Commitment on any Business Day until the Swing Line Termination
Date; PROVIDED that the Company shall give the Agent irrevocable notice (which
notice must be received by the Agent prior to 12:00 noon (Chicago time)) and the
Agent shall promptly deliver to the Company and the Swing Line Bank a
confirmation of such notice specifying the amount of the requested Swing Line
Loan, which shall be in a minimum amount of $100,000 or a whole multiple of
$50,000 in excess thereof. The proceeds of the Swing Line Loan will be made
available by the Swing Line Bank to the Company in immediately available funds
at the office of the Swing Line Bank by 2:00 p.m. (Chicago time) on the date of
such notice. The Company may at any time and from time to time, prepay the Swing
Line Loans, in whole or in part, without premium or penalty, by notifying the
Agent prior to 12:00 noon (Chicago time) on any Business Day of the date and
amount of prepayment. If any such notice is given, the amount specified in such
notice shall be due and payable on the date specified therein. Partial
prepayments shall be in an aggregate principal amount of $100,000 or a whole
multiple of $50,000 in excess thereof.
(ii) The Agent, acting upon the request of the Swing Line
Bank, at any time in its sole and absolute discretion, may on behalf of the
Company (which hereby irrevocably directs the Agent to so act on its behalf)
notify each Lender (including the Swing Line Bank) to make a Revolving Loan to
the Company in a principal amount equal to such Lender's Pro Rata Share of the
amount of such Swing Line Loan, unless any Lender or Lenders shall be obligated,
pursuant to SECTION 2.01(a), to make funds available to the Agent on the date
such notice is given in an aggregate amount equal to or in excess of such Swing
Line Loan, in which case such funds shall be applied by the Agent first to repay
such Swing Line Loan and any remaining funds shall be made available to the
Borrower in accordance with SECTION 2.01(a); PROVIDED, HOWEVER, that such notice
shall be deemed to have automatically been given upon the occurrence of an Event
of Default under SECTION 9.01(f) or (g). Upon notice from the Agent, each Lender
(other than the Swing Line Bank) will immediately transfer to the Agent, for
transfer to the Swing Line Bank, in immediately available funds, an amount equal
to such Lender's Pro Rata Share of the amount of such Swing Line Loan so repaid.
Each Lender's obligation to transfer the amount of such Revolving Loan to the
Agent shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or any other Person may have
against the Swing Line Bank, (ii) the occurrence or continuance of a Default or
an Event of Default or the termination of the Revolving Loan Commitment, (iii)
any adverse change in the condition (financial or otherwise) of the Company or
any other Person, (iv) any breach of this Agreement by the Company or any other
Person or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
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(iii) Notwithstanding anything herein to the contrary, the
Swing Line Bank (i) shall not be obligated to make any Swing Line Loan if the
conditions set forth in ARTICLE V have not been satisfied and (ii) shall not
make any requested Swing Line Loan if, prior to 1:00 p.m. (Chicago time) on the
date of such requested Swing Line Loan, it has received a written notice from
the Agent or any Lender directing it not to make further Swing Line Loans
because one or more of the conditions specified in ARTICLE V are not then
satisfied.
(iv) If prior to the making of a Loan required to be made by
SECTION 2.03(b)(ii) an Event of Default described in SECTION 9.01(f) OR 9.01(g)
shall have occurred and be continuing with respect to the Company, each Lender
will, on the date such Loan was to have been made pursuant to the notice
described in SECTION 2.03(b)(ii), purchase an undivided participating interest
in the outstanding Swing Line Loans in an amount equal to its Pro Rata Share of
the aggregate principal amount of Swing Line Loans then outstanding. Each Lender
will immediately transfer to the Agent for the benefit of the Swing Line Bank,
in immediately available funds, the amount of its participation.
(v) Whenever, at any time after a Lender has purchased a
participating interest in a Swing Line Loan, the Swing Line Bank receives any
payment on account thereof, the Swing Line Bank will distribute to the Agent for
delivery to each Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
PROVIDED, HOWEVER, that in the event that such payment received by the Swing
Line Bank is required to be returned, such Lender will return to the Agent for
delivery to the Swing Line Bank any portion thereof previously distributed by
the Swing Line Bank to it.
(vi) Each Bank's obligation to make the Loans referred to in
SECTION 2.03(b)(ii) and to purchase participating interests pursuant to SECTION
2.03(b)(iv) shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or the Company may have
against the Swing Line Bank, the Company or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of
Default, (iii) any adverse change in the condition (financial or otherwise) of
the Company, (iv) any breach of this Agreement or any other Loan Document by the
Company, any Subsidiary or any other Lender, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
2.04 CONVERSION AND CONTINUATION ELECTIONS
(a) The Company may, upon irrevocable written notice to the Agent in accordance
with SECTION 2.06(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans
(other than Swing Line Loans), or as of the last day of the applicable
Interest Period, in
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the case of Offshore Rate Loans, to convert any such Loans (or any part
thereof in an aggregate minimum amount of $500,000, or any multiple of
$100,000 in excess thereof, in the case of Base Rate Loans, and
$1,000,000, or any multiple of $500,000 in excess thereof, in the case
of Offshore Rate Loans) into Loans of any other Type; or
(i) elect as of the last day of the applicable Interest Period, to continue
any Loans having Interest Periods expiring on such day (or any part
thereof in an amount not less than $1,000,000, or that is in an
integral multiple of $500,000 in excess thereof);
PROVIDED, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/Continuation to be received
by the Agent not later than 10:00 a.m. (Chicago time) at least (i) two Business
Days in advance of the Conversion/ Continuation Date, if the Loans are to be
converted into or continued as Offshore Rate Loans and (ii) on the date of the
Conversion/Continuation Date, if the Loans are to be converted into Base Rate
Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or continued;
(iii) the Type of Loans resulting from the proposed conversion or
continuation; and
(iv) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to Offshore Rate
Loans, the Company has failed to select a new Interest Period to be applicable
to such Offshore Rate Loans by the time specified in SECTION 2.04(b), or if any
Default or Event of Default then exists, the Company shall be deemed to have
elected to convert such Offshore Rate Loans into an Offshore Rate Loan with an
Interest Period of one month effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each Lender of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Company,
the Agent will promptly notify each Lender of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of
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the Loans, with respect to which the notice was given, held by each Lender.
(e) Unless the Majority Lenders otherwise consent, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan converted
into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of Offshore Rate
Loans, unless the Agent shall otherwise consent, there may not be more than five
different Interest Periods in effect.
2.05 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The Company may, upon
not less than three Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $1,000,000 or any multiple of $1,000,000 in excess thereof; UNLESS,
after giving effect thereto and to any prepayments of Revolving Loans made on
the effective date thereof, (a) the Effective Amount of all Revolving Loans,
Swing Line Loans and L/C Obligations would exceed the amount of the combined
Commitments then in effect, (b) the Effective Amount of all Swing Line Loans
then outstanding would exceed the Swing Line Loan Commitment or (c) the
Effective Amount of all L/C Obligations thus outstanding would exceed the Swing
Line Loan Commitment and the L/C Commitment. If and to the extent specified by
the Company in the notice to the Agent, some or all of the reduction in the
combined Commitments shall be applied to reduce the L/C Commitment. Once
reduced in accordance with this Section, the Commitments may not be increased.
Any reduction of the Commitments shall be applied to each Lender according to
its Pro Rata Share. All accrued commitment and letter of credit fees to, but
not including, the effective date of any reduction or termination of the
Commitments shall be paid on the effective date of such reduction or
termination.
2.06 OPTIONAL PREPAYMENT. Subject to Section 4.04, the Company may, at any time
or from time to time, upon irrevocable notice to the Agent by 10:00 a.m.
Chicago time, prepay Loans ratably among the Lenders in whole or in part, in
minimum amounts of $500,000, or any multiple of $100,000 in excess thereof, in
the case of Base Rate Loans, and $500,000, or any multiple of $500,000 in
excess thereof, in the case of Offshore Rate Loans. Such notice of prepayment
shall specify the date and amount of such prepayment and the Type(s) of Loans
to be prepaid. The Agent will promptly notify each Lender of its receipt of any
such notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to SECTION 4.04.
2.07 MANDATORY PREPAYMENTS OF LOANS.
(a) If on any date the Effective Amount of L/C Obligations exceeds the L/C
Commitment, the Company shall Cash Collateralize on such date the outstanding
Letters of
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Credit in an amount equal to the excess of the maximum amount then available to
be drawn under the Letters of Credit over the Aggregate L/C Commitment. Subject
to SECTION 4.04, if on any date after giving effect to any Cash
Collateralization made on such date pursuant to the preceding sentence, the
Effective Amount of all Revolving Loans, Swing Line Loans and L/C Obligations
exceeds the combined Revolving Loan Commitments, the Company shall immediately,
and without notice or demand, prepay the outstanding principal amount of the
Revolving Loans, Swing Line Loans and L/C Advances by an amount equal to the
applicable excess.
(b) GENERAL. Any prepayments pursuant to this SECTION 2.07 shall be applied
first to any Base Rate Loans then outstanding and then to Offshore Rate Loans
with the shortest Interest Periods remaining. The Company shall pay, together
with each prepayment under this SECTION 2.07, accrued interest on the amount
prepaid and any amounts required pursuant to SECTION 3.04.
2.08 REPAYMENT. (a) The Company shall repay to the Lenders on the Revolving
Termination Date the aggregate principal amount of Revolving Loans outstanding
on such date.
(b) Swing Line Loans. The Company shall repay to the
Swing Line Bank on the Swing Line Termination Date the aggregate principal
amount of Swing Line Loans outstanding on such date.
2.09 INTEREST.
(a) Each Loan (other than Swing Line Loans) shall bear interest on the
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to either the Offshore Rate or the Base Rate, as the case
may be, PLUS the Applicable Margin (and subject to the Company's right to
convert to other Types of Loans under SECTION 2.04). Swing Line Loans shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Swing Line Rate.
(b) Interest on each Loan shall be paid in arrears on each Interest Payment
Date. Interest shall also be paid on the date of any prepayment of Loans under
Section 2.06 or 2.07 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof and, during the existence of any Event
of Default, interest shall be paid on demand of the Agent at the request or
with the consent of the Majority Lenders.
(c) Notwithstanding SECTION 2.09(a), while any Event of Default exists or
after acceleration, the Company shall pay interest (after as well as before
entry of judgment thereon to the extent permitted by law) on the principal
amount of all outstanding Obligations, at a rate per annum which is determined
by adding 2% per annum to the Applicable Margin then in effect for such Loans;
and in the case of Obligations not subject to an Applicable Margin, at a rate
per annum equal to the Base Rate plus 2%; PROVIDED, HOWEVER, that, on and after
the
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expiration of any Interest Period applicable to any Offshore Rate Loan
outstanding on the date of occurrence of such Event of Default or acceleration,
the principal amount of such Loan shall, during the continuation of such Event
of Default or after acceleration, bear interest at a rate per annum equal to the
Base Rate plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations of the
Company to any Lender hereunder shall be subject to the limitation that payments
of interest shall not be required for any period for which interest is computed
hereunder, to the extent (but only to the extent) that contracting for or
receiving such payment by such Lender would be contrary to the provisions of any
law applicable to such Lender limiting the highest rate of interest that may be
lawfully contracted for, charged or received by such Lender, and in such event
the Company shall pay such Lender interest at the highest rate permitted by
applicable law.
2.10 FEES
(a) AGENCY FEES. The Company shall pay the fees to the Agent for the Agent's
own account, as required by the letter agreement ("FEE LETTER") between the
Company and the Agent, dated August 10, 1998.
(b) COMMITMENT FEES. The Company shall pay to the Agent for the account of each
Lender a commitment fee ("Commitment Fee") on the average daily unused portion
of such Lender's Revolving Loan Commitment, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon the daily
utilization for that quarter as calculated by the Agent, at the Applicable
Margin per annum. For purposes of calculating utilization under this Section,
the Revolving Loan Commitment shall be deemed used to the extent of the
Effective Amount of Revolving Loans then outstanding, plus the Effective Amount
of L/C Obligations then outstanding. Such commitment fee shall accrue from the
Closing Date to the Revolving Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September
and December through the Revolving Termination Date, with the final payment
to be made on the Revolving Termination Date; PROVIDED that, in connection with
any reduction or termination of Revolving Loan Commitment under SECTION 2.05,
the accrued commitment fee calculated for the period ending on such date shall
also be paid on the date of such reduction or termination, with the following
quarterly payment being calculated on the basis of the period from such
reduction or termination date to such quarterly payment date. The commitment
fees provided in this Section shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article V are not met.
2.11 COMPUTATION OF FEES AND INTEREST.
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(a) All computations of interest for Base Rate Loans when the Base Rate is
determined by B of A's "reference rate" shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more interest being paid than if
computed on the basis of a 365-day year). Interest and fees shall accrue during
each period during which interest or such fees are computed from the first day
thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall be conclusive and
binding on the Company and the Lenders and shall be prima facie evidence of such
interest rate. The Agent will, at the request of the Company or any Lender,
deliver to the Company or the Lender, as the case may be, a statement showing
the quotations used by the Agent in determining any interest rate and the
resulting interest rate.
2.12 PAYMENTS BY THE COMPANY.
(a) All payments to be made by the Company shall be made without set-off,
recoupment or counterclaim. Except as otherwise expressly provided herein, all
payments by the Company shall be made to the Agent for the account of the
Lenders at the Agent's Payment Office, and shall be made in dollars and in
immediately available funds, no later than 12:00 Noon (Chicago time) on the date
specified herein. The Agent will promptly distribute to each Lender its Pro Rata
Share (or other applicable share as expressly provided herein) of such payment
in like funds as received. Any payment received by the Agent later than 12:00
Noon (Chicago time) shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue for the
day actually received.
(b) Subject to the provisions set forth in the definition of "Interest Period"
herein, whenever any payment is due on a day other than a Business Day, such
payment shall be made on the following Business Day, and such extension of time
shall in such case be included in the computation of interest or fees, as the
case may be.
(c) Unless the Agent receives notice from the Company prior to the date on which
any payment is due to the Lenders that the Company will not make such payment in
full as and when required, the Agent may assume that the Company has made such
payment in full to the Agent on such date in immediately available funds and the
Agent may (but shall not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Company has not made such payment in
full to the Agent, each Lender shall repay to the Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
2.13 PAYMENTS BY THE LENDERS TO THE AGENT.
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(a) Unless the Agent receives notice from a Lender on or prior to the Closing
Date or, with respect to any Borrowing after the Closing Date, at least one
Business Day prior to the date of such Borrowing, that such Lender will not make
available as and when required hereunder to the Agent for the account of the
Company the amount of that Lender's Pro Rata Share of the Borrowing, the Agent
may assume that each Lender has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall
not be so required), in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent any Lender
shall not have made its full amount available to the Agent in immediately
available funds and the Agent in such circumstances has made available to the
Company such amount, that Lender shall on the Business Day following such
Borrowing Date make such amount available to the Agent, together with interest
at the Federal Funds Rate for each day during such period. A notice of the Agent
submitted to any Lender with respect to amounts owing under this clause (a)
shall be conclusive, absent manifest error. If such amount is so made available,
such payment to the Agent shall constitute such Lender's Loan on the date of
Borrowing for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Borrowing Date, the
Agent will notify the Company of such failure to fund and, upon demand by the
Agent, the Company shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to the Loans comprising such Borrowing.
(b) The failure of any Lender to make any Loan on any Borrowing Date shall not
relieve any other Lender of any obligation hereunder to make a Loan on such
Borrowing Date, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on any Borrowing Date.
2.14 SHARING OF PAYMENTS, ETC. If, other than as expressly provided elsewhere
herein, any Lender shall obtain on account of the Loans made by it any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in excess of its ratable share (or other share contemplated
hereunder), such Lender shall immediately (a) notify the Agent of such fact, and
(b) purchase from the other Lenders such participations in the Loans made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment pro rata with each of them; PROVIDED, HOWEVER, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying Lender's required repayment to (ii)
the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Company agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to SECTION 11.10) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation. The
Agent will keep records (which shall be
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conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments.
ARTICLE III
THE LETTERS OF CREDIT
3.01 THE LETTER OF CREDIT SUBFACILITY.
(a) On the terms and conditions set forth herein (i) the Issuing Bank agrees,
(A) from time to time on any Business Day during the period from the Closing
Date to the Revolving Termination Date to issue Letters of Credit for the
account of the Company, and to amend or renew Letters of Credit previously
issued by it, in accordance with SECTIONS 3.02(c) and (d), and (B) to honor
drafts under the Letters of Credit; and (ii) the Lenders severally agree to
participate in Letters of Credit Issued for the account of the Company;
PROVIDED, that the Issuing Bank shall not be obligated to Issue, and no Lender
shall be obligated to participate in, any Letter of Credit if as of the date of
Issuance of such Letter of Credit (the "ISSUANCE DATE") (1) the Effective Amount
of all L/C Obligations plus the Effective Amount of all Revolving Loans exceeds
the combined Commitments, (2) the participation of any Lender in the Effective
Amount of all L/C Obligations and Swing Line Loans plus the Effective Amount of
the Revolving Loans of such Lender exceeds such Lender's Revolving Loan
Commitment or (3) the Effective Amount of L/C Obligations exceeds the L/C
Commitment. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Company's ability to obtain Letters of Credit shall be
fully revolving, and, accordingly, the Company may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit which have expired or
which have been drawn upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from Issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or
not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the
Issuing Bank refrain from, the Issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing
Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank
in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) the Issuing Bank has received written notice from any Lender, the
Agent or the Company, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more
of the applicable conditions contained in ARTICLE V is not then
satisfied;
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(iii) the expiry date of any requested Letter of Credit is after the
Revolving Termination Date, unless the Company has Cash Collateralized,
in form and substance satisfactory to the Issuing Bank, its L/C
Obligations under such Letter of Credit on or prior to the date of the
Issuance of such Letter of Credit;
(iv) any requested Letter of Credit does not provide for drafts, or is
not otherwise in form and substance reasonably acceptable to the
Issuing Bank, or the Issuance of a Letter of Credit shall violate any
applicable policies of the Issuing Bank; or
(v) such Letter of Credit is in a face amount less than $25,000, unless
such lesser amount is approved by the Agent and the Issuing Bank, or is
to be denominated in a currency other than Dollars.
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.
(a) Each Letter of Credit shall be issued upon the irrevocable written request
of the Company received by the Issuing Bank (with a copy sent by the Company to
the Agent) at least three days (or such shorter time as the Issuing Bank may
agree in a particular instance in its sole discretion) prior to the proposed
date of issuance. Each such request for issuance of a Letter of Credit shall be
by facsimile, confirmed immediately in an original writing, in the form of an
L/C Application, and shall specify in form and detail satisfactory to the
Issuing Bank: (i) the proposed date of issuance of the Letter of Credit (which
shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii)
the expiry date of the Letter of Credit; (iv) the name and address of the
beneficiary thereof; (v) the documents to be presented by the beneficiary of the
Letter of Credit in case of any drawing thereunder; (vi) the full text of any
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuing Bank may require.
(b) Prior to the Issuance of any Letter of Credit, the Issuing Bank will confirm
with the Agent (by telephone or in writing) that the Agent has received a copy
of the L/C Application or L/C Amendment Application from the Company and, if
not, the Issuing Bank will provide the Agent with a copy thereof. Unless the
Issuing Bank has received notice on or before the Business Day the Issuing Bank
is to issue a requested Letter of Credit from the Agent (A) directing the
Issuing Bank not to issue such Letter of Credit because such issuance is not
then permitted under SECTION 3.01(a) as a result of the limitations set forth in
clauses (1) through (3) thereof or SECTION 3.01(b)(ii); or (B) that one or more
conditions specified in Article V are not then satisfied; then, subject to the
terms and conditions hereof, the Issuing Bank shall, with the written approval
of the Agent, on the requested date, issue a Letter of Credit for the account of
the Company in accordance with the Issuing Bank's usual and customary business
practices.
(c) From time to time while a Letter of Credit is outstanding and prior to the
Revolving Termination Date, the Issuing Bank will, upon the written request
of the Company
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received by the Issuing Bank (with a copy sent by the Company to the Agent) at
least three days (or such shorter time as the Issuing Bank may agree in a
particular instance in its sole discretion) prior to the proposed date of
amendment, amend any Letter of Credit issued by it. Each such request for
amendment of a Letter of Credit shall be made by facsimile, confirmed
immediately in an original writing, made in the form of an L/C Amendment
Application and shall specify in form and detail satisfactory to the Issuing
Bank: (i) the Letter of Credit to be amended; (ii) the proposed date of
amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such letter of Credit does not accept
the proposed amendment to the Letter of Credit. The Agent will promptly notify
the Lenders of the receipt by it of any L/C Application or L/C Amendment
Application.
(d) The Issuing Bank and the Lenders agree that, while a Letter of Credit is
outstanding and prior to the Revolving Termination Date, at the option of the
Company and upon the written request of the Company received by the Issuing Bank
(with a copy sent by the Company to the Agent) at least five days (or such
shorter time as the Issuing Bank may agree in a particular instance in its sole
discretion) prior to the proposed date of notification of renewal, the Issuing
Bank shall be entitled to authorize the automatic renewal of any Letter of
Credit issued by it. Each such request for renewal of a Letter of Credit shall
be made by facsimile, confirmed immediately in an original writing, in the form
of an L/C Amendment Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the Letter of Credit to be renewed; (ii)
the proposed date of notification of renewal of the Letter of Credit (which
shall be a Business Day); (iii) the revised expiry date of the Letter of Credit;
and (iv) such other matters as the Issuing Bank may require. The Issuing Bank
shall be under no obligation so to renew any Letter of Credit if: (A) the
Issuing Bank would have no obligation at such time to issue or amend such Letter
of Credit in its renewed form under the terms of this Agreement; or (B) the
beneficiary of any such Letter of Credit does not accept the proposed renewal of
the Letter of Credit. If any outstanding Letter of Credit shall provide that it
shall be automatically renewed unless the beneficiary thereof receives notice
from the Issuing Bank that such Letter of Credit shall not be renewed, and if at
the time of renewal the Issuing Bank would be entitled to authorize the
automatic renewal of such Letter of Credit in accordance with this clause (d)
upon the request of the Company but the Issuing Bank shall not have received any
L/C Amendment Application from the Company with respect to such renewal or other
written direction by the Company with respect thereto, the Issuing Bank shall
nonetheless be permitted to allow such Letter of Credit to renew, and the
Company and the Lenders hereby authorize such renewal, and, accordingly, the
Issuing Bank shall be deemed to have received an L/C Amendment Application from
the Company requesting such renewal.
(e) The Issuing Bank may, at its election (or as required by the Agent at the
direction of the Majority Lenders), deliver any notices of termination or other
communications to any Letter of Credit beneficiary or transferee, and take any
other action as necessary or
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appropriate, at any time and from time to time, in order to cause the expiry
date of such Letter of Credit to be a date not later than the Revolving
Termination Date.
(f) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent, concurrently or promptly
following its delivery of a Letter of Credit, or amendment to or renewal of a
Letter of Credit, to an advising lender or a beneficiary, a true and complete
copy of each such Letter of Credit or amendment to or renewal of a Letter of
Credit.
3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.
(a) Immediately upon the Issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuing Bank a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) the Pro Rata Share of such
Lender, times (ii) the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively. For purposes of SECTION
2.01(b), each Issuance of a Letter of Credit shall be deemed to utilize the
Commitment of each Lender by an amount equal to the amount of such
participation.
(b) In the event of any request for a drawing under a Letter of Credit by the
beneficiary or transferee thereof, the Issuing Bank will promptly notify the
Company. The Company shall reimburse the Issuing Bank (by an L/C Borrowing or
otherwise) prior to 12:00 Noon (Chicago time), on each date that any amount is
paid by the Issuing Bank under any Letter of Credit (each such date, an "HONOR
DATE"), in an amount equal to the amount so paid by the Issuing Bank. In the
event the Company fails to reimburse the Issuing Bank for the full amount of any
drawing under any Letter of Credit by 12:00 Noon (Chicago time) on the Honor
Date, the Issuing Bank will promptly notify the Agent and the Agent will
promptly notify each Lender thereof, and the Company shall be deemed to have
requested that Base Rate Loans in an aggregate amount equal to the unreimbursed
drawing be made by the Lenders to be disbursed on the Honor Date under such
Letter of Credit, subject to the amount of the unutilized portion of the
Revolving Commitment and subject to the conditions set forth in SECTION 5.02.
Any notice given by the Issuing Bank or the Agent pursuant to this clause (b)
may be oral if immediately confirmed in writing (including by facsimile);
PROVIDED that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(c) Each Lender shall upon any notice pursuant to Section 3.03(b) make available
to the Agent for the account of the relevant Issuing Bank an amount in Dollars
and in immediately available funds equal to its Pro Rata Share of the amount of
the drawing, whereupon the participating Lenders shall (subject to SECTION
3.03(d)) each be deemed to have made a Revolving Loan consisting of a Base Rate
Loan to the Company in that amount. If any Lender so notified fails to make
available to the Agent for the account of the Issuing Bank the
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amount of such Lender's Pro Rata Share of the amount of the drawing by no later
than 2:00 p.m. (Chicago time) on the Honor Date, then interest shall accrue on
such Lender's obligation to make such payment, from the Honor Date to the date
such Lender makes such payment, at a rate per annum equal to the Federal Funds
Rate in effect from time to time during such period. The Agent will promptly
give notice of the occurrence of the Honor Date, but failure of the Agent to
give any such notice on the Honor Date or in sufficient time to enable any
Lender to effect such payment on such date shall not relieve such Lender from
its obligations under this SECTION 3.03.
(d) Each Lender's obligation in accordance with this Agreement to make the
Revolving Loans or L/C Advances, as contemplated by this SECTION 3.03, as a
result of a drawing under a Letter of Credit, shall be absolute and
unconditional and without recourse to the Issuing Bank and shall not be affected
by any circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the Issuing Bank, the
Company or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED, however, that each Lender's
obligation to make Revolving Loans under this SECTION 3.03 is subject to the
conditions set forth in SECTION 5.02.
3.04 REPAYMENT OF PARTICIPATIONS.
(a) Upon (and only upon) receipt by the Agent for the account of the Issuing
Bank of immediately available funds from the Company (i) in reimbursement of any
payment made by the Issuing Bank under the Letter of Credit with respect to
which any Lender has paid the Agent for the account of the Issuing Bank for such
Lender's participation in the Letter of Credit pursuant to SECTION 3.03 or (ii)
in payment of interest thereon, the Agent will pay to each Lender, in the same
funds as those received by the Agent for the account of the Issuing Bank, the
amount of such Lender's Pro Rata Share of such funds, and the Issuing Bank shall
receive the amount of the Pro Rata Share of such funds of any Lender that did
not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to return to the
Company, or to a trustee, receiver, liquidator, custodian, or any official in
any Insolvency Proceeding, any portion of the payments made by the Company to
the Agent for the account of the Issuing Bank pursuant to SECTION 3.04(a) in
reimbursement of a payment made under the Letter of Credit or interest or fee
thereon, each Lender shall, on demand of the Agent, forthwith return to the
Agent or the Issuing Bank the amount of its Pro Rata Share of any amounts so
returned by the Agent or the Issuing Bank plus interest thereon from the date
such demand is made to the date such amounts are returned by such Lender to the
Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds Rate
in effect from time to time.
3.05 ROLE OF THE ISSUING BANK.
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(a) Each Lender and the Company agree that, in
paying any drawing under a Letter of Credit, the Issuing Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document which on its face
appears valid or the authority of the Person executing or delivering any such
document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Lender for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Majority Lenders (or all of the Lenders, as applicable under
SECTION 11.01); (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
PROVIDED, however, that this assumption is not intended to, and shall not,
preclude the Company's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.06; PROVIDED,
however, anything in such clauses to the contrary notwithstanding, that the
Company may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to the Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company which the
Company proves were caused by the Issuing Bank's willful misconduct or gross
negligence or the Issuing Bank's willful failure to pay under any Letter of
Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, unless it received a notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which appear to be in order
when presented.
3.06 OBLIGATIONS ABSOLUTE. The obligations of the Company under this Agreement
and any L/C-Related Document to reimburse the Issuing Bank for a drawing under a
Letter of Credit, and to repay any L/C Borrowing and any drawing under a Letter
of Credit converted into Revolving Loans, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this Agreement or any
L/C-Related Document;
(ii) any permitted change in the time, manner or place of payment of,
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or in any other term of, all or any of the obligations of the Company
in respect of any Letter of Credit or any other amendment or waiver of
or any consent to departure from all or any of the L/C-Related
Documents;
(iii) the existence of any claim, set-off, defense or other right that
the Company may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or
any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C-Related Documents or any
unrelated transaction;
(iv) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate that does not strictly comply
with the terms of any Letter of Credit; or any permitted payment made
by the Issuing Bank under any Letter of Credit to any Person purporting
to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of any Letter of
Credit, including any arising in connection with any Insolvency
Proceeding;
(vi) any exchange, release or non-perfection of any collateral, or any
release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the obligations of the Company in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of,
the Company or a guarantor.
3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent or the Majority
Lenders, (A) if the Issuing Bank has honored any full or partial drawing request
on any Letter of Credit and such drawing has resulted in an L/C Borrowing
hereunder, or (B) if, as of the Revolving Termination Date, any Letters of
Credit may for any reason remain outstanding and partially or wholly undrawn, or
(ii) the occurrence of the circumstances described in SECTION 2.07(a) requiring
the Company to Cash Collateralize Letters of Credit, then, the Company shall
immediately Cash Collateralize the L/C Obligations in an amount equal to such
L/C Obligations.
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3.08 LETTER OF CREDIT FEES.
(a) The Company shall pay to the Agent for the account of each of the Lenders a
letter of credit fee with respect to the Letters of Credit equal to the
Applicable Margin per annum of the average daily maximum amount available to be
drawn of the outstanding Letters of Credit, computed on a quarterly basis in
arrears on the last Business Day of each March, June, September and December
based upon Letters of Credit outstanding for that quarter as calculated by the
Agent. Such letter of credit fees shall be due and payable quarterly in arrears
on the last Business Day of each calendar quarter during which Letters of Credit
are outstanding, commencing on the first such quarterly date to occur after the
Closing Date, through the Revolving Termination Date (or such later date upon
which the outstanding Letters of Credit shall expire), with the final payment to
be made on the Revolving Termination Date (or such later expiration date).
(b) The Company shall pay to the Issuing Bank a letter of credit fronting fee
for each Letter of Credit Issued by the Issuing Bank equal to .250% per annum of
the face amount (or increased face amount, as the case may be) of such Letter of
Credit. Such Letter of Credit fronting fee shall be due and payable quarterly in
arrears on the last Business Day of each calendar quarter during which such
Letter of Credit is outstanding, commencing on the first such quarterly date to
occur after such Letter of Credit is issued, through the Revolving Termination
Date (or such later date upon which such Letter of Credit shall expire), with
the final payment to be made on the Revolving Termination Date (or such later
expiration date).
(b) The Company shall pay to the Issuing Bank from time to time on demand the
normal issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of the Issuing Bank relating to letters of credit as
from time to time in effect.
3.09 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.01 TAXES.
(a) Any and all payments by the Company to each Lender or the Agent under this
Agreement and any other Loan Document shall be made free and clear of, and
without deduction or withholding for, any Taxes. In addition, the Company shall
pay all Other Taxes.
(b) If the Company shall be required by law to deduct or withhold any Taxes,
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Other Taxes or Further Taxes from or in respect of any sum payable hereunder to
any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this
Section), such Lender or the Agent, as the case may be, receives and
retains an amount equal to the sum it would have received and retained
had no such deductions or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to each Lender or the Agent for the
account of such Lender, at the time interest is paid, Further Taxes in
the amount that the respective Lender specifies as necessary to
preserve the after-tax yield the Lender would have received if such
Taxes, Other Taxes or Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each Lender and the Agent
for the full amount of i) Taxes, ii) Other Taxes, and iii) Further Taxes in the
amount that the respective Lender specifies as necessary to preserve the
after-tax yield the Lender would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were correctly
or legally asserted. Payment under this indemnification shall be made within 30
days after the date the Lender or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment pursuant to this Section by the
Company of Taxes, Other Taxes or Further Taxes, the Company shall furnish to
each Lender or the Agent the original or a certified copy of a receipt
evidencing payment thereof, or other evidence of payment satisfactory to such
Lender or the Agent.
(e) If the Company is required to pay any amount to any Lender or the Agent
pursuant to clauses (b) or (c) of this Section, then such Lender shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Company which may thereafter accrue, if such change in the sole
judgment of such Lender is not otherwise disadvantageous to such Lender.
4.02 ILLEGALITY.
(a) If any Lender determines that the introduction of any Requirement of Law,
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or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make Offshore Rate Loans,
then, on notice thereof by the Lender to the Company through the Agent, any
obligation of that Lender to make Offshore Rate Loans shall be suspended until
the Lender notifies the Agent and the Company that the circumstances giving rise
to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any Offshore Rate
Loan, the Company shall, upon its receipt of notice of such fact and demand from
such Lender (with a copy to the Agent), prepay in full such Offshore Rate Loans
of that Lender then outstanding, together with interest accrued thereon and
amounts required under Section 4.04, either on the last day of the Interest
Period thereof, if the Lender may lawfully continue to maintain such Offshore
Rate Loans to such day, or immediately, if the Lender may not lawfully continue
to maintain such Offshore Rate Loan. If the Company is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, the Company may
borrow from the affected Lender, in the amount of such repayment, a Base Rate
Loan.
(c) If the obligation of any Lender to make or maintain Offshore Rate Loans has
been so terminated or suspended, the Company may elect, by giving notice to the
Lender through the Agent that all Loans which would otherwise be made by the
Lender as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the affected
Lender shall designate a different Lending Office with respect to its Offshore
Rate Loans if such designation will avoid the need for giving such notice or
making such demand and will not, in the judgment of the Lender, be illegal or
otherwise disadvantageous to the Lender.
4.03 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender determines that, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance by that Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law), there
shall be any increase in the cost to such Lender of agreeing to make or making,
funding or maintaining any Offshore Rate Loans, or participating in Letters of
Credit, or, in the case of the Issuing Bank, any increase in the cost to the
Issuing Bank of agreeing to issue, issuing or maintaining any Letter of Credit
or of agreeing to make or making, funding or maintaining any unpaid drawing
under any Letter of Credit, then the Company shall be liable for, and shall from
time to time, upon demand (with a copy of such demand to be sent to the Agent),
pay to the Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of any ▇▇▇▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, (▇▇) any change in any Capital Adequacy Regulation, (iii)
any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Lender (or
its Lending Office) or any corporation controlling the Lender with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Lender or any corporation controlling the
Lender and (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy and such Lender's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Lender to the Company through the Agent,
the Company shall pay to the Lender, from time to time as specified by the
Lender, additional amounts sufficient to compensate the Lender for such
increase.
4.04 FUNDING LOSSES. The Company shall reimburse each Lender and hold each
Lender harmless from any loss or expense which the Lender may sustain or incur
as a consequence of:
(i) the failure of the Company to make on a timely basis any payment of
principal of any Offshore Rate Loan;
(ii) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/ Continuation;
(iii) the failure of the Company to make any prepayment in accordance
with any notice delivered under SECTION 2.06;
(iv) the prepayment (including pursuant to SECTION 2.07) or other
payment (including after acceleration thereof) of an Offshore Rate Loan
on a day that is not the last day of the relevant Interest Period; or
(v) the automatic conversion under SECTION 2.04 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained. For purposes of
calculating amounts payable by the Company to the Lenders under this Section and
under Section 4.03(a), each Offshore Rate Loan made by a Lender (and each
related reserve, special deposit or similar requirement) shall be conclusively
deemed to have been funded at the IBOR used in determining the Offshore Rate for
such Offshore Rate Loan by a matching deposit or other borrowing in the
interbank eurodollar market for a comparable amount and for a comparable period,
whether or not such Offshore Rate Loan is in fact so funded.
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4.05 INABILITY TO DETERMINE RATES. If the Agent determines that for any reason
adequate and reasonable means do not exist for determining the Offshore Rate for
any requested Interest Period with respect to a proposed Offshore Rate Loan, or
that the Offshore Rate applicable pursuant to Section 2.09(a) for any requested
Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Lenders of funding such Loan, the
Agent will promptly so notify the Company and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Offshore Rate Loans hereunder
shall be suspended until the Agent revokes such notice in writing. Upon receipt
of such notice, the Company may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Company does not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed
by the Company, in the amount specified in the applicable notice submitted by
the Company, but such Loans shall be made, converted or continued as Base Rate
Loans instead of Offshore Rate Loans.
4.06 RESERVES ON OFFSHORE RATE LOANS. The Company shall pay to each Lender, as
long as such Lender shall be required under regulations of the FRB to maintain
reserves with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities"),
additional costs on the unpaid principal amount of each Offshore Rate Loan equal
to the actual costs of such reserves allocated to such Loan by the Lender (as
determined by the Lender in good faith, which determination shall be
conclusive), payable on each date on which interest is payable on such Loan,
provided the Company shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Lender. If a
Lender fails to give notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be payable 15 days from receipt of such notice.
4.07 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or compensation
under this Article IV shall deliver to the Company (with a copy to the Agent) a
certificate setting forth in reasonable detail the amount payable to the Lender
hereunder and such certificate shall be conclusive and binding on the Company in
the absence of manifest error. Notwithstanding anything to the contrary
contained in this Agreement, no amounts shall be payable by the Company pursuant
to SECTIONS 4.03, 4.04 or 4.06 with respect to any period commencing more than
180 days before the delivery of the certificate contemplated by this SECTION
4.07 unless such amounts are claimed as a result of the retroactive effect of
any newly enacted or adopted law, rule or regulation and such certificate is
delivered within 180 days after such enactment or adoption.
4.08 SURVIVAL. The agreements and obligations of the Company in this Article IV
shall survive the payment of all other Obligations.
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ARTICLE V
CONDITIONS PRECEDENT
5.01 CONDITIONS OF INITIAL CREDIT EXTENSIONS. The obligation of each Lender to
make its initial Credit Extension hereunder is subject to the condition that the
Agent shall have received on or before the Closing Date all of the following, in
form and substance satisfactory to the Agent and each Lender, and in sufficient
copies for each Lender:
(a) CREDIT AGREEMENT AND NOTES. This Agreement and the Notes executed by each
party thereto;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of directors of the Company
and each Subsidiary that may become party to a Loan Document
authorizing the transactions contemplated hereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of such Person;
and
(ii) A certificate of the Secretary or Assistant Secretary of the
Company, and each Subsidiary that may become party to a Loan Document
certifying the names and true signatures of the officers of the Company
or such Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be
delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the following documents:
(i) the articles or certificate of incorporation, the bylaws and board
of directors resolutions of the Company and each Guarantor as in effect
on the Closing Date, certified by the Secretary or Assistant Secretary
of such Person as of the Closing Date; and
(ii) a good standing certificate for the Company and each Guarantor
from the Secretary of State (or similar, applicable Governmental
Authority) of its state of incorporation and each state where such
Person is qualified to do business as a foreign corporation as of a
recent date, together with a bring-down certificate by facsimile,
dated the Closing Date;
(d) LEGAL OPINIONS. An opinion addressed to the Agent, the Collateral Agent and
the Lenders (i) of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, General Counsel to the Company,
substantially in the form of EXHIBIT D and (ii) from local counsel in such
jurisdictions as the Agent may request, such opinion to be in form and substance
acceptable to the Agent.
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(e) PAYMENT OF FEES. Evidence of payment by the Company of all accrued and
unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of B of A to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of Attorney Costs
as shall constitute B of A's reasonable estimate of Attorney Costs incurred or
to be incurred by it through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between the
Company and B of A); including any such costs, fees and expenses arising under
or referenced in SECTIONS 2.10 and 10.04;
(f) CERTIFICATE. A certificate signed by a Responsible Officer of the Borrower,
dated as of the Closing Date:
(i) stating that the representations and warranties contained in
Article VI are true and correct on and as of such date, as though made
on and as of such date;
(ii) stating that no Default or Event of Default exists or would result
from the Credit Extension;
(iii) stating that there has occurred since December 31, 1997, no event
or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect; and
(iv) delineating the Applicable Margin after giving pro forma effect
to the Loans to be incurred on the Closing Date.
(g) COLLATERAL DOCUMENTS. The Collateral Documents, executed by the Company and
each Subsidiary party to such Collateral Document, in appropriate form for
recording, where necessary, together with:
(i) all certificates and instruments representing the Pledged
Collateral, stock transfer powers executed in blank as the Collateral
Agent or the Lenders may specify; and
(ii) evidence that all other actions necessary or, in the opinion of
the Collateral Agent or the Lenders, desirable to perfect and protect
the first priority security interest created by the Collateral
Documents have been taken.
(h) SOLVENCY CERTIFICATE. A written solvency certificate from the chief
financial officer of the Company in form and content satisfactory to the
Lenders, dated the initial Borrowing Date, with respect to the value, Solvency
and other factual information of, or relating to, as the case may be, Company,
after giving effect to the initial Borrowing.
(i) OTHER DOCUMENTS. Such other approvals, opinions, documents or materials
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as the Agent or any Lender may reasonably request.
5.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender to make
any Loan to be made by it (including its initial Loan) or to continue or convert
any Loan under SECTION 2.04 and the obligation of the Issuing Bank to Issue any
Letter of Credit (including the initial Letter of Credit) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or Issuance Date:
(a) NOTICE, APPLICATION. The Agent shall have received (with a copy for each
Lender) a Notice of Borrowing (or equivalent notice pursuant to SECTION 2.03(B)
with respect to Swing Line Loans) or, in the case of any Issuance of any Letter
of Credit, the Issuing Bank and the Agent shall have received an L/C Application
or L/C Amendment Application, as required under SECTION 3.02;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties in Article VI shall be true and correct on and as of such Borrowing
Date or Issuance Date with the same effect as if made on and as of such
Borrowing Date or Issuance Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be true
and correct as of such earlier date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default shall exist or shall
result from such Borrowing or continuation or conversion or Issuance.
Each Notice of Borrowing, L/C Application or L/C Amendment Application
submitted by the Company hereunder shall constitute a representation and
warranty by the Company hereunder, as of the date of each such notice and as of
each Borrowing Date or Issuance Date, as applicable, that the conditions in this
SECTION 5.02 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender that:
6.01 CORPORATE EXISTENCE AND POWER. The Company and each of its Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all material governmental licenses,
authorizations, consents and material approvals to own its assets,
carry on its business and to execute, deliver, and perform its
obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
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good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification or license, except in each case to the extent that
the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(d) is in compliance with all Requirements of Law, except to the extent
that the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by the Company and its Subsidiaries of this Agreement and each other
Loan Document to which such Person is party, have been duly authorized by all
necessary corporate action, and do not and will not:
(a) contravene the terms of any of such Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any material
Contractual Obligation to which such Person is a party or any order,
injunction, writ or decree of any Governmental Authority to which such
Person or its property is subject; or
(c) violate any material Requirement of Law.
6.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption, authorization,
or other action by, or notice to, or filing with, any Governmental Authority is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company or any of its Subsidiaries of the
Agreement or any other Loan Document.
6.04 BINDING EFFECT. This Agreement and each other Loan Document to which the
Company or any of its Subsidiaries is a party constitute the legal, valid and
binding obligations of the Company and any of its Subsidiaries to the extent it
is a party thereto, enforceable against such Person in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
6.05 LITIGATION. There are no actions, suits, proceedings, claims or disputes
pending, or to the best knowledge of the Company, threatened or contemplated,
at law, in equity, in arbitration or before any Governmental Authority, against
the Company, or its Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan Document,
or any of the transactions contemplated hereby or thereby; or (b) if determined
adversely to the Company or its Subsidiaries, would reasonably be expected to
have a Material Adverse Effect. No injunction, writ, temporary restraining
order or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the execution, delivery
or performance of this Agreement or any other Loan Document, or directing that
the transactions provided for herein or therein not be consummated as herein or
therein provided.
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6.06 NO DEFAULT. No Default or Event of Default exists or would result from the
incurring of any Obligations by the Company. As of the Closing Date, neither the
Company nor any Subsidiary is in default under or with respect to any
Contractual Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create an
Event of Default under Section 9.01(e).
6.07 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the applicable
provisions of ERISA, the Code and other federal or state law. Each Plan which is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Company,
nothing has occurred which would cause the loss of such qualification. The
Company and each ERISA Affiliate has made all required contributions to any Plan
subject to Section 412 of the Code, and no application for a funding waiver or
an extension of any amortization period pursuant to Section 412 of the Code has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company, threatened
claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
6.08 USE OF PROCEEDS: MARGIN REGULATIONS. The proceeds of the Loans are to be
used solely for the purposes set forth in and permitted by SECTION 7.12 and
SECTION 8.07. Neither the Company nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock.
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6.09 TITLE TO PROPERTIES. The Company and each Subsidiary have good record and
marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. The property of the Company and
its Subsidiaries is subject to no Liens other than Permitted Liens.
6.10 TAXES. The Company and its Subsidiaries have filed all Federal and other
material tax returns and reports required to be filed, and have paid all Federal
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. There is no proposed tax assessment against the Company or any
Subsidiary.
6.11 FINANCIAL CONDITION. (a) The (x) audited consolidated financial
statements of the Company and its Subsidiaries dated December 31, 1997, (y) the
unaudited consolidated financial statements of the Company and its Subsidiaries
dated June 30, 1998, and (z) the Annual Statement of each Insurance Subsidiary
dated December 31, 1997, in each case including the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
period ended on that date:
(i) were prepared in accordance with GAAP or SAP, as applicable,
consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein (subject to ordinary, good faith year
end audit adjustments);
(ii) fairly present the financial condition of the Company and its
Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in SCHEDULE 6.11, show all
material indebtedness and other liabilities, direct or contingent, of
the Company and its consolidated Subsidiaries as of the date thereof,
including liabilities for taxes, material commitments and Contingent
Obligations.
(b) Since December 31, 1997, there has been no Material Adverse Effect.
6.12 ENVIRONMENTAL MATTERS.
(a) The on-going operations of the Company and each of its Subsidiaries comply
in all material respects with all Environmental Laws, except such non-compliance
which would not (if enforced in accordance with applicable law) result in
liability in excess of $250,000 in the aggregate.
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(b) The Company and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any Environmental Law
("Environmental Permits") and necessary for their respective ordinary course
operations, all such Environmental Permits are in good standing, and the Company
and each of its Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits.
(c) None of the Company, any of its Subsidiaries or any of their respective
present Property or operations, is subject to any outstanding written order from
or agreement with any Governmental Authority, nor subject to any judicial or
docketed administrative proceeding, respecting any Environmental Law,
Environmental Claim or Hazardous Material.
(d) There are no Hazardous Materials or other conditions or circumstances
existing with respect to any Property, or arising from operations prior to the
Closing Date, of the Company or any of its Subsidiaries that would reasonably
be expected to give rise to Environmental Claims with a potential liability of
the Company and its Subsidiaries in excess of $250,000 in the aggregate for any
such condition, circumstance or Property. In addition, (i) neither the Company
nor any of its Subsidiaries has any underground storage tanks (x) that are not
properly registered or permitted under applicable Environmental Laws, or (y)
that are leaking or disposing of Hazardous Materials off-site, and (ii) the
Company and its Subsidiaries have met all notification requirements under Title
III of CERCLA and all other Environmental Laws.
6.13 COLLATERAL DOCUMENTS.
(a) The provisions of each Pledge Agreement are effective to create, in favor of
the Collateral Agent for the benefit of the Lenders, a legal, valid and
enforceable first priority security interest in all of the collateral described
therein; and the Pledged Collateral was delivered to the Collateral Agent or its
nominee in accordance with the terms thereof. The Lien of each Pledge Agreement
constitutes a perfected, first priority security interest in all right, title
and interest of the Company or such Subsidiary, as the case may be, in the
Collateral described therein, prior and superior to all other Liens and
interests.
(b) All representations and warranties of the Company and any of its
Subsidiaries party thereto contained in the Collateral Documents are true and
correct.
6.14 REFULATED ENTITIES. None of the Company nor any Subsidiary that is not an
Excluded Subsidiary, is an "Investment Company" within the meaning of the
Investment Company Act of 1940. None of the Company nor any Subsidiary is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public utilities code,
or any other Federal or state statute or regulation limiting its ability to
incur Indebtedness.
6.15 NO BURDENSOME RESTICTIONS. Neither the Company nor any Subsidiary is a
party
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to or bound by any Contractual Obligation, or subject to any restriction in any
Organization Document, or any Requirement of Law, which could reasonably be
expected to have a Material Adverse Effect.
6.16 SOLVENCY. The Company is Solvent.
6.17 LABOR RELATIONS. There are no strikes, lockouts or other labor disputes
against the Company or any of its Subsidiaries, or, to the best of the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries, and no significant unfair labor practice complaint is pending
against the Company or any of its Subsidiaries or, to the best knowledge of the
Company, threatened against any of them before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect.
6.18 COPYRIGHTS, PATENTS, TRADEMARKS, ETC. The Company or its Subsidiaries own
or are licensed or otherwise have the right to use all of the material patents,
trademarks, service marks, trade names, copyrights, contractual franchises,
authorizations and other material rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened, and no
material patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the knowledge of the
Company, proposed, which, in any case, could reasonably be expected to have a
Material Adverse Effect.
6.19 SUBSIDIARIES. As of the Closing Date, the Company has no Subsidiaries other
than those specifically disclosed in part (a) of SCHEDULE 6.19 hereto and has no
equity investments in any other corporation or entity other than those
specifically disclosed in part (b) of SCHEDULE 6.19 and as otherwise permitted
pursuant to SECTION 8.04(f).
6.20 BROKER'S; TRANSACTIONS FEES. Neither the Company nor any of its
Subsidiaries has any obligation to any Person in respect of any finder's,
broker's or investment banker's fee in connection with this Agreement or any
other Loan Document.
6.21 INSURANCE. The properties of the Company and its Subsidiaries are insured
with financially sound and reputable insurance companies not Affiliates of the
Company, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Company or such Subsidiary operates.
6.22 SWAP OBLIGATIONS. Neither the Company nor any of its Subsidiaries has
incurred any outstanding obligations under any Swap Contracts, other than
Permitted Swap Obligations. The Company has undertaken its own independent
assessment of its consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks associated with
such matters and has not relied on any swap counterparty or any Affiliate of
any swap counterparty in determining whether to enter into any Swap Contract.
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6.23 FULL DISCLOSURE. None of the representations or warranties made by the
Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Company or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Company to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
6.24 INSURANCE LICENSES. SCHEDULE 6.24 hereto lists all of the jurisdictions in
which, as of the date of this Agreement, the Company and each Insurance
Subsidiary holds a License and is authorized to transact insurance business. No
License of the Company or any Insurance Subsidiary, the loss of which could
reasonably be expected to have a Material Adverse Effect, is the subject of a
proceeding for suspension or revocation. To the Company's knowledge, there is no
sustainable basis for such suspension or revocation, and no such suspension or
revocation has been threatened by any Governmental Authority. SCHEDULE 6.24 also
indicates the line or lines of insurance in which, as of the date of this
Agreement, the Company and each Insurance Subsidiary is engaged in the states in
which such Person is licensed to engage in any type of insurance.
6.25 YEAR 2000 COMPLIANCE. The Company acknowledges that it has received a
copy of the brochure prepared by the Agent entitled "On Turning 00" and that it
has reviewed this material and is aware of the possible impact of the year 2000
problem (that is, the risk that computer applications may not be able to
properly perform date sensitive functions after December 31, 1999) upon its
computer applications and ongoing business. The Company represents that any
corrective action necessary will be taken and that the Company believes the year
2000 problem will not result in a Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:
7.01 FINANCILAL STATEMENTS. The Company shall deliver to the Agent, in form and
detail satisfactory to the Agent and the Majority Lenders, with sufficient
copies for the Agent and each Lender:
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(a) as soon as available, but not later than 90 days after the end of
each fiscal year (commencing with the fiscal year ended December 31,
1998), to the extent prepared to comply with SEC requirements, a copy
of SEC Form 10-K's filed by the Company with the SEC for such fiscal
year, or if no such Form 10-K was filed by the Company for such fiscal
year, a copy of the audited consolidated balance sheet of the Company
and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations and shareholders'
equity and cash flows for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, and
accompanied by the opinion of KPMG Peat Marwick or another
nationally-recognized independent public accounting firm ("INDEPENDENT
AUDITOR") which report shall state that such consolidated financial
statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with
prior years. Such opinion shall not be qualified or limited because of
a restricted or limited examination by the Independent Auditor of any
material portion of the Company's or any Subsidiary's records;
(b) as soon as available, but not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year (commencing
with the fiscal quarter ended September 30, 1998), to the extent
prepared to comply with SEC requirements, a copy of the SEC Form 10-Qs
filed by the Company with the SEC for such fiscal quarter, or if no
such Form 10-Q was filed by the Company for such fiscal quarter, a copy
of the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such quarter and the related consolidated
statements of income and shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of such
quarter, and certified by a Responsible Officer as fairly presenting,
in accordance with GAAP (subject to ordinary, good faith year-end audit
adjustments), the financial position and the results of operations of
the Company and the Subsidiaries;
(c) (i) as soon as available, if required, but not later than 90 days
after the end of each fiscal year of each Insurance Subsidiary, a copy
of the Annual Statement of such Insurance Subsidiary, setting forth in
each case in comparative form the figures for the previous fiscal year,
and (ii) as soon as available, but not later than 180 days after the
end of each fiscal year of each Insurance Subsidiary, a copy of the
audited financial statements of such Insurance Subsidiary, setting
forth in each case in comparative form the figures of the previous
fiscal year, accompanied by the opinion of an Independent Auditor,
which report shall state that such financial statements present fairly
the financial position for the periods indicated in conformity with SAP
applied on a basis consistent with prior years. Such opinion shall not
be qualified or limited because of a restricted or limited examination
by the Independent Auditor of any material portion of any Subsidiary's
records; and
(d) as soon as available, if required, but not later than the earlier
of (i) ten days after the regulatory filing date or (ii) 50 days after
the end of each of the first three fiscal quarters of each fiscal year
of each Insurance Subsidiary, a copy of the Quarterly Statement of
such Insurance Subsidiary certified by a Responsible Officer of such
Insurance Subsidiary as fairly presenting, in accordance with SAP
(subject to ordinary, good faith year-end audit adjustments), the
financial position and the results of operations of such Insurance
Subsidiary.
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7.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish to the Agent,
with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements referred
to in SECTION 7.01(a), a certificate of the Independent Auditor stating
that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements referred
to in SECTIONS 7.01(a) and (b), a Compliance Certificate executed by a
Responsible Officer;
(c) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms
10K, 10Q and 8K) that the Company or any Subsidiary may make to, or
file with, the SEC and copies of all registration statements and
annual, quarterly, monthly or other regular reports which the Company
or any of its Subsidiaries files with the NAIC or any insurance
commission or department or analogous Governmental Authority (including
without limitation, any filing made by the Company or any Subsidiary
pursuant to any insurance holding company act or related rules or
regulations), but excluding routine or non-material filings with the
NAIC, any insurance commissioner or department or analogous
Governmental Authority;
(d) as soon as available, but in any event not later than the 30th day
prior to the end of each fiscal year, a copy of the plan and forecast
(including a projected consolidated balance sheet, income statement and
cash flow statement by business services and insurance segments) of the
Company and its Subsidiaries for the next fiscal year;
(e) Promptly and in any event within ten days after (i) learning
thereof, notification of any changes after the date hereof in the
rating given by A.M. Best & Co. in respect of any Insurance Subsidiary
and (ii) receipt thereof, copies of any ratings analysis by A.M. Best &
Co. relating to any Insurance Subsidiary; and
(f) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the
Agent, at the request of any Lender, may from time to time request.
7.03 NOTICES. The Company shall promptly notify the Agent and each Lender:
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(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or may reasonably be expected to
result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of
the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any
Subsidiary and any Governmental Authority; or (iii) the commencement
of, or any material development in, any litigation or proceeding
affecting the Company or any Subsidiary; including pursuant to any
applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after
such event), and deliver to the Agent and each Lender a copy of any
notice with respect to such event that is filed with a Governmental
Authority and any notice delivered by a Governmental Authority to the
Company or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Section 412 of
the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated
Subsidiaries;
(e) upon the request from time to time of the Agent, the Swap
Termination Values, together with a description of the method by which
such values were determined, relating to any then-outstanding Swap
Contracts to which the Company or any of its Subsidiaries is party;
(f) of the receipt of any notice from any Governmental Authority of the
expiration without renewal, revocation or suspension of, or the
institution of any proceedings to revoke or suspend, any License now or
hereafter held by any Insurance Subsidiary which is required to conduct
insurance business in compliance with all applicable laws and
regulations;
(g) of the receipt of any notice from any Governmental Authority of the
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institution of any disciplinary proceedings against or in respect of
any Insurance Subsidiary, or the issuance of any order, the taking of
any action or any request for an extraordinary audit for cause by any
Governmental Authority; and
(h) of any judicial or administrative order limiting or controlling the
insurance business of any Insurance Subsidiary (and not the insurance
business generally) which has been issued or adopted.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under SECTION 7.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company shall, and shall
cause each Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction
of incorporation;
(b) preserve and maintain in full force and effect all material
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its
business, except in connection with transactions permitted by Section
8.03 and sales of assets permitted by Section 8.02;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill;
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably
be expected to have a Material Adverse Effect; and
(e) with respect to each Insurance Subsidiary, maintain its domicile in
the state it is domiciled on the Closing Date; PROVIDED, HOWEVER that
so long as (x) no Default or Event of Default shall have occurred and
be continuing both before and after giving effect to such transaction
and (y) such transaction will not result in a Material Adverse Effect,
an Insurance Subsidiary may change its state of domicile to a state
having investment, dividend, regulatory and statutory provisions
applicable to insurance companies domiciled therein substantially
similar to those of the State of Illinois and upon 30 days prior
written notice to the Agent and the Lenders.
7.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall cause each
Subsidiary to maintain, and preserve all its property which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and make all necessary repairs thereto and renewals and replacements
thereof.
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7.06 INSURANCE. The Company shall maintain, and shall cause each Subsidiary to
maintain, with financially sound and reputable independent insurers, insurance
with respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons.
7.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each Subsidiary
to, pay and discharge as the same shall become due and payable, all their
respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Company or
such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
(other than a Permitted Lien) upon its property; and
(c) all indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement
evidencing such Indebtedness, unless the payment of such indebtedness
is being contested in good faith by appropriate proceedings and
adequate reserves in accordance with GAAP are being maintained by the
Company or such Subsidiary.
7.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause each
Subsidiary to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
7.09 COMPLIANCE WITH ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification unless such Plan is terminated; and (c) make
all required contributions to any Plan subject to Section 412 of the Code.
7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall maintain
and shall cause each Subsidiary to maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP or SAP, as
applicable, consistently applied shall be
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made of all financial transactions and matters involving the assets and business
of the Company and such Subsidiary. The Company shall permit, and shall cause
each Subsidiary to permit, representatives and independent contractors of the
Agent or any Lender to visit and inspect any of their respective properties, to
examine their respective corporate, financial and operating records, and make
copies thereof or abstracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective directors, officers, and independent
public accountants, all at the expense of the Company and at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; PROVIDED, HOWEVER, when an Event
of Default exists the Agent or any Lender may do any of the foregoing at the
expense of the Company at any time without advance notice.
7.11 ENVIRONMENTAL LAWS. The Company shall, and shall cause each Subsidiary to,
conduct its operations and keep and maintain its property in compliance with all
Environmental Laws.
7.12 USE OF PROCEEDS. The Company shall use the proceeds of the Loans for
working capital and other general corporate purposes, including Acquisitions
other than for the purpose of financing a hostile Acquisition, and the payment
of fees and expenses relating thereto, in each case not in contravention of any
Requirement of Law or of any Loan Document.
7.13 SOLVENCY. The Company shall at all times be Solvent.
7.14 FURTHER ASSURANCES.
(a) The Company shall ensure that all written information, exhibits and reports
furnished to the Agent or the Lenders pursuant to the Loan Documents do not and
will not contain any untrue statement of a material fact and do not and will
not omit to state any material fact or any fact necessary to make the
statements contained therein not materially misleading in light of the
circumstances in which made, and will promptly disclose to the Agent and the
Lenders and correct any defect or error that may be discovered therein or in
any Loan Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request the Agent or the Majority Lenders, the Company shall
(and shall cause any of its Subsidiaries to) do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register, any and all such
further acts, deeds, conveyances, security agreements, mortgages, assignments,
estoppel certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments the Agent or such Lenders, as the case may be,
may reasonably require from time to time in order (i) to carry out more
effectively the purposes of this Agreement or any other Loan Document, (ii) to
subject any of the properties, rights or interests covered by any of the
Collateral Documents to the Liens created by any of the Collateral Documents,
(iii) to perfect and maintain the validity, effectiveness and priority of any
of the Collateral Documents and the Liens intended to be created thereby, and
(iv) to better assure, convey, grant, assign, transfer, preserve, protect and
confirm to the Collateral Agent and Lenders the rights granted or now or
hereafter intended to be granted to the Collateral Agent and the Lenders under
any Loan Document or under any other document executed in connection therewith.
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ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:
8.01 LIMITATION ON LIENS. The Company shall not, and shall not suffer or permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any part of its property, whether now
owned or hereafter acquired, other than the following ("PERMITTED LIENS"):
(a) any Lien (other than as described in SECTION 8.01(m)) existing on
property of the Company or any Subsidiary on the Closing Date and set
forth in SCHEDULE 8.01 securing Indebtedness outstanding on such date
and described therein (other than Indebtedness in a principal amount
not exceeding individually $50,000 or in the aggregate $500,000, it
being understood and agreed that any such Lien shall be permitted to
exist pursuant to this clause (a) notwithstanding the absence thereof
on SCHEDULE 8.01);
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the
extent that non-payment thereof is permitted by Section 7.07, provided
that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of
business which are not delinquent or remain payable without penalty or
which are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or sale
of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social
security legislation;
(f) Liens on the property of the Company or its Subsidiaries securing
(i) the non-delinquent performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, (ii)
contingent obligations on surety and appeal bonds, and (iii) other
non-delinquent obligations of a like nature; in each case, incurred in
the ordinary course of business, provided all such Liens in the
aggregate would not (even if enforced) cause a Material Adverse
Effect;
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(g) Liens consisting of judgment or judicial attachment liens, provided
that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $250,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not interfere
with the ordinary conduct of the businesses of the Company and its
Subsidiaries;
(i) Liens on assets of corporations which become Subsidiaries after the
date of this Agreement, PROVIDED, HOWEVER, that such Liens existed at
the time the respective corporations became Subsidiaries and were not
created in anticipation thereof and do not in the aggregate at any time
outstanding exceed $10,000,000;
(j) purchase money security interests on any property acquired or held
by the Company or its Subsidiaries in the ordinary course of business,
securing Indebtedness incurred or assumed for the purpose of financing
all or any part of the cost of acquiring such property; PROVIDED THAT
(i) any such Lien attaches to such property concurrently with or within
20 days after the acquisition thereof, (ii) such Lien attaches solely
to the property so acquired in such transaction and (iii) the principal
amount of the Indebtedness secured by any and all such purchase money
security interests shall not at any time exceed, together with
Indebtedness permitted under Section 8.05(d), $10,000,000;
(k) Liens securing Capital Lease Obligations on assets subject to such
Capital Leases, provided that such Capital Leases are otherwise
permitted under Section 8.10(c);
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; PROVIDED THAT (i) such deposit
account is not a dedicated cash collateral account and is not subject
to restrictions against access by the Company in excess of those set
forth by regulations promulgated by the FRB, and (ii) such deposit
account is not intended by the Company or any Subsidiary to provide
collateral to the depository institution;
(m) Liens consisting of pledges of cash collateral or government
securities to secure on a ▇▇▇▇-to-market basis Permitted Swap
Obligations only, provided that (i) the counterparty to any Swap
Contract relating to such Permitted Swap Obligations is under a
similar requirement to deliver similar collateral from time to time to
the Company or the Subsidiary party thereto on a ▇▇▇▇-to-market
basis, and (ii) the aggregate value of such collateral so pledged by
the Company and the Subsidiaries together in favor of any counterparty
does not at any time exceed $1,000,000;
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(n) Liens consisting of deposits made by any Insurance Subsidiary with
the insurance regulatory authority in its jurisdiction of formation or
as otherwise required by a Governmental Authority pursuant to
applicable insurance laws, or other statutory Liens or Liens or claims
imposed or required by applicable insurance law or regulation against
the assets of such Insurance Subsidiary, in each case in favor of all
policyholders of such Insurance Subsidiary and in the ordinary course
of such Insurance Subsidiary's business;
(o) Liens incurred in the ordinary course of business of an Insurance
Subsidiary with respect to reinsurance transactions or any premium
trust account or similar account; and
(p) Liens comprised of cash or Cash Equivalents with respect to the
Company's reimbursement obligations under Existing Letters of Credit.
8.02 DISPOSITION OF ASSETS. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without
recourse) or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment
(including, without limitation, demonstration or pilot plants), all in
the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied
to the purchase price of such replacement equipment; and
(c) dispositions of Investments and insurance contracts by any
Insurance Subsidiary in the ordinary course of business; and
(d) dispositions not otherwise permitted hereunder which are made for
fair market value; PROVIDED that (i) at the time of any disposition, no
Event of Default shall exist or shall result from such disposition,
(ii) not less than 80% of the aggregate sales price from such
disposition shall be paid in cash, and (iii) the aggregate value of all
assets so sold by the Company and its Subsidiaries, together, shall not
exceed (x) 5% of the net tangible assets of the Company and its
Subsidiaries on a consolidated basis during any twelve month period
with net tangible assets to be measured as of the beginning of such
period, and (y) 15% of the net tangible assets of the Company and its
Subsidiaries on a consolidated basis during the term of this Agreement,
with net tangible assets to be measured as of the Closing Date.
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8.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not suffer or
permit any Subsidiary to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions all or substantially all of its assets whether now owned or
hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary (other than an Excluded Subsidiary) may merge with
the Company (provided that the Company shall be the continuing or
surviving corporation), or with any one or more Subsidiaries (other
than an Excluded Subsidiary), PROVIDED that if any transaction shall be
between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation it being
understood and agreed that, notwithstanding the prohibition contained
in this clause, an Excluded Subsidiary shall be permitted to constitute
part of a transaction permitted by this clause in the event that such
transaction would remove or eliminate the condition that caused such
Excluded Subsidiary to be an Excluded Subsidiary;
(b) any Subsidiary (other than an Excluded Subsidiary) may sell all or
substantially all of its assets (upon voluntary liquidation or
otherwise), to the Company or another Wholly-Owned Subsidiary (other
than an Excluded Subsidiary) it being understood and agreed that,
notwithstanding the prohibition contained in this clause, an Excluded
Subsidiary shall be permitted to constitute part of a transaction
permitted by this clause in the event that such transaction would
remove or eliminate the condition that caused such Excluded Subsidiary
to be an Excluded Subsidiary;
(c) any Subsidiary may merge with or consolidate into any Person (other
than an Excluded Subsidiary), PROVIDED that (i) at the time of such
merger or consolidation, no Default or Event of Default shall exist or
result after giving effect to the consummation of such merger or
consolidation and (ii) either (x) such Subsidiary shall be the
continuing or surviving corporation as a Wholly-Owned Subsidiary of the
Company or (y) such Person shall become a Subsidiary of the Company as
a result thereto; it being understood and agreed that, notwithstanding
the prohibition contained in this clause, an Excluded Subsidiary shall
be permitted to constitute part of a transaction permitted by this
clause in the event that such transaction would remove or eliminate the
condition that caused such Excluded Subsidiary to be an Excluded
Subsidiary; and
(d) any Excluded Subsidiary may merge with or consolidate into any one
or more Excluded Subsidiaries.
8.04 LOANS AND INVESTMENTS. The Company shall not purchase or acquire, or suffer
or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
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Affiliate of the Company (together, "INVESTMENTS"), except for:
(a) Investments held by the Company or Subsidiary in the form of cash
and/or Cash Equivalents;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the
ordinary course of business;
(c) extensions of credit by the Company to any Guarantor or by any
Guarantor to another Guarantor or the Company, PROVIDED, that any
extension of credit pursuant to this clause (c) shall be evidenced by a
promissory note, in form and substance acceptable to the Agent, and
such promissory note shall be delivered to the Collateral Agent
pursuant to the relevant Pledge Agreement;
(d) Investments, subject to Section 8.09, incurred in order to
consummate Acquisitions otherwise permitted herein, PROVIDED that (i)
any such Acquisition the aggregate consideration of which exceeds the
relevant Permitted Acquisition Threshold shall not be permitted without
the prior written approval of the Majority Lenders, (ii) no Default or
Event of Default is in existence both before and after giving effect to
such Acquisition, (iii) such Acquisition is undertaken in accordance
with all applicable Requirements of Law, (iv) the prior, effective
written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the acquiree is obtained, (v)
in the case of the Acquisition of the capital stock of any Person, such
Acquisition shall be for 100% of the capital stock of such Person, and
(vi) the Company shall deliver to the Agent a true and correct copy of
each document entered into in connection with such Acquisition.;
(e) Investments constituting Permitted Swap Obligations or payments or
advances under Swap Contracts relating to Permitted Swap Obligations;
(f) Investments (other than pursuant to Section 8.04(c)) made by the
Company or any Guarantor after the date of this Agreement in any
Guarantor;
(g) Investments by an Insurance Subsidiary to the extent permitted by
applicable insurance laws, rules and regulations governing such
Insurance Subsidiary;
(h) other Investments existing as of the Closing Date and listed on
SCHEDULE 8.04;
(i) Investments of a Person that becomes a Subsidiary after the date of
this Agreement as a result of an Acquisition so long as (x) such
Investment existed at the time such Person became a Subsidiary and was
not created in anticipation thereof and (y) such Investment would
otherwise be permitted pursuant to this SECTION 8.04;
(j) Investments in Joint Ventures to the extent permitted by SECTION
8.09; and
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(k) Investments made by the Company or any of its Insurance
Subsidiaries in any Insurance Subsidiary; PROVIDED, that the aggregate
amount of all such Investments made after the date of this Agreement
shall not exceed an amount equal to 10% of the aggregate capital and
surplus for all Insurance Subsidiaries as determined by reference to
the most recent Annual Statement delivered pursuant to SECTION 7.01(c).
8.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.08;
(c) Indebtedness existing on the Closing Date and set forth in SCHEDULE
8.05;
(d) other Indebtedness in an aggregate amount outstanding not to exceed
$11,000,000 (including Indebtedness secured by Liens permitted by
SECTION 8.01(i) and (j));
(e) Indebtedness incurred in connection with leases permitted pursuant
to SECTION 8.10;
(f) Indebtedness permitted to be incurred pursuant to SECTION 8.04(c);
(g) unsecured Indebtedness under notes to sellers containing terms
satisfactory to the Agent and fully subordinated to the Loans and the
other Obligations on term satisfactory to the Agent (any such
Indebtedness, "PERMITTED SELLER DEBT");
(h) Indebtedness (other than for borrowed money) of a Person that
becomes a Subsidiary after the date of this Agreement as the result of
an Acquisition if the Company would be in compliance on a PRO FORMA
basis with SECTIONS 8.16 and 8.17, assuming that such Acquisition and
the Indebtedness incurred in connection therewith had occurred and been
incurred, respectively, on the day which is twelve months prior to the
consummation of such Acquisition, PROVIDED that (x) such Indebtedness
existed at the time such Person became a Subsidiary and was not created
in anticipation thereof and (y) such Indebtedness is not guaranteed in
any respect by the Company or any other Subsidiary; and
(i) Existing Letters of Credit, excluding any replacements, renewals or
extensions thereof.
8.06 TRANSACTIONS WITH AFFILIATES The Company shall not, and shall not suffer
or permit any Subsidiary to, enter into any transaction with any Affiliate of
the Company (other than a Wholly-Owned Subsidiary), except upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than would
obtain in a comparable arm's-length transaction with a Person not an Affiliate
of the Company or such Subsidiary.
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8.07 USE OF PROCEEDS. The Company shall not, and shall not suffer or permit any
Subsidiary to, use any portion of the Loan proceeds or any Letter of Credit,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.
8.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations (x) of the Company and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 8.08 and (y) of
the Company with respect to payments to be made by a Subsidiary of the
Company pursuant to operating leases entered into by such Subsidiary in
the ordinary course of business;
(d) Contingent Obligations with respect to Surety Instruments incurred
in the ordinary course of business;
(e) Contingent Obligations of a Person that becomes a Subsidiary after
the date of this Agreement as a result of an Acquisition so long as
such Contingent Obligation existed at the time such Person became a
Subsidiary and was not created in anticipation thereof.
8.09 JOINT VENTURES. The Company shall not, and shall not suffer or permit any
Subsidiary to enter into any Joint Venture; PROVIDED, HOWEVER that the Company
and its Wholly-Owned Subsidiaries (other than Excluded Subsidiaries) shall be
permitted to make Investments in Joint Ventures so long as (x) no Default or
Event of Default has occurred and is continuing or would result therefrom, (y)
after giving effect to any such Investment, the Company and/or a Wholly-Owned
Subsidiary of the Company shall control 51% or more of the interests in such
Joint Venture and (z) after giving effect to any such Investment, the aggregate
net amount expended by the Company and/or any Wholly-Owned Subsidiary of the
Company in connection with all such Investments made after the date of the
Agreement shall not at any time exceed $10,000,000.
8.10 LEASE OBLIGATIONS. The Company shall not, and shall not suffer or permit
any Subsidiary to, create or suffer to exist any obligations for the payment of
rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;
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(a) operating leases entered into by the Company or any Subsidiary
after the Closing Date in the ordinary course of business; and
(b) Capital Leases other than those permitted under clause (a) of this
Section, entered into by the Company or any Subsidiary after the
Closing Date to finance the acquisition of equipment; PROVIDED that the
aggregate Capital Lease Obligations for all such Capital Leases shall
not at any time exceed $10,000,000.
8.11 RESTICTED PAYMENTS. The Company shall not, and shall not suffer or permit
any Subsidiary to, declare or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding, except that any
Subsidiary may declare and make dividend payments or other distributions to the
Company or a Wholly-Owned Subsidiary of the Company.
8.12 ERISA. The Company shall not, and shall not suffer or permit any of its
Subsidiaries to, (i) terminate any Plan subject to Title IV of ERISA so as to
result in any material (in the opinion of the Majority Lenders) liability to the
Company or any ERISA Affiliate, (ii) permit to exist any ERISA Event or any
other event or condition, which presents the risk of a material (in the opinion
of the Majority Lenders) liability to any member of the Controlled Group, (iii)
make a complete or partial withdrawal (within the meaning of ERISA Section 4201)
from any Multiemployer Plan so as to result in any material (in the opinion of
the Majority Lenders) liability to the Company or any ERISA Affiliate, (iv)
enter into any new Plan or modify any existing Plan so as to increase its
obligations thereunder which could result in any material (in the opinion of the
Majority Lenders) liability to any member of the Controlled Group, or (v) permit
the present value of all nonforfeitable accrued benefits under any Plan (using
the actuarial assumptions utilized by the PBGC upon termination of a Plan)
materially (in the opinion of the Majority Lenders) to exceed the fair market
value of Plan assets allocable to such benefits, all determined as of the most
recent valuation date for each such Plan.
8.13 CHARGE IN BUSINESS. The Company shall not, and shall not suffer or permit
any Subsidiary to, engage in any material line of business substantially
different from those lines of business, and reasonable extensions thereof,
carried on by the Company and its Subsidiaries taken as a whole on the
Closing Date.
8.14 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or permit
any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP or SAP, as the case may be, or
change the fiscal year of the Company or of any Subsidiary.
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8.15 MINIMUM NET WORTH. The Company shall not permit its
consolidated Net Worth at any time to be less than an amount equal to the sum of
(a) $221,000,000 PLUS (b) 70% of the Company's positive Net Income, if any, for
each fiscal quarter ending after the date hereof and prior to the date of
determination PLUS (c) an amount equal to 100% of the cash and non-cash proceeds
of any equity securities issued by the Company after the date of this Agreement.
8.16 LEVERAGE RATIO. The Company shall not permit, at any time during a
period listed below, its Leverage Ratio at such time for the twelve month period
(taken as one accounting period) last ended prior to the date of determination,
to be greater than the ratio set forth below opposite the respective period in
which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 2.75:1.00
to but excluding the last day of the
fiscal quarter ended on December 31, 1998
Thereafter, from and including the last day 2.50:1.00
of the fiscal quarter ended on December 31, 1998
to but excluding the last day of the fiscal quarter
ended on December 31, 1999
Thereafter 2.25:1.0
8.17 INTREST COVERAGE RATIO. The Company shall not permit, at any time during a
period listed below, its Interest Coverage Ratio at such time for the twelve
month period (taken as one accounting period) last ended prior to the date of
determination, to be less than the ratio set forth below opposite the respective
period in which the determination is being made:
PERIOD RATIO
------ -----
From and including the Closing Date 4.50:1.00
to but excluding the last day of the fiscal
quarter ended on December 31, 1998
Fromand including the last day 4.75:1.00
of the fiscal quarter ended on December 31, 1998
to but excluding the last day of the fiscal quarter
ended on December 31, 1999
Thereafter 5.00:1.00
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8.18 RISK-BASED CAPITAL. The Company shall cause Century Surety Company, as of
the end of each fiscal year, to maintain a ratio of (a) Total Adjusted Capital
(as defined in the Risk-Based Capital Act or in the rules and procedures
prescribed from time to time by the NAIC with respect thereto) to (b) the
Company Action Level RBC (as defined in the Risk-Based Capital Act or in the
rules and procedures prescribed from time to time by the NAIC with respect
thereto) of at least one hundred fifty percent (150%).
ARTICLE IX
EVENTS OF DEFAULT
9.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT OF
DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) when and as required to be paid
herein, any amount of principal of any Loan or of any L/C Obligation, or (ii)
within five days after the same becomes due, any interest, fee or any other
amount payable hereunder or under any other Loan Document; or
(b) REPRESENTATIONS OR WARRANTY. Any representation or
warranty by the Company or any Subsidiary made or deemed made herein, in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement by the Company, any Subsidiary, or any Responsible
Officer, furnished at any time under this Agreement, or in or under any other
Loan Document, is incorrect in any material respect on or as of the date made or
deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or observe any term,
covenant or agreement contained in any of Section 7.01, 7.02, 7.03 (a), (b), (c)
or (f) or 7.08 or in Article VIII; or
(d) OTHER DEFAULTS. The Company or any Subsidiary party thereto
fails to perform or observe any other term or covenant contained in this
Agreement or any other Loan Document, and such default shall continue unremedied
for a period of 30 days after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure or (ii)
the date upon which written notice thereof is given to the Company by the Agent
or any Lender; or
(e) CROSS-DEFAULT. (i) The Company or any Subsidiary (A) fails to make any
payment in respect of any Indebtedness or Contingent Obligation (other than in
respect of Swap Contracts), having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$3,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other condition
or covenant, or any other event shall occur or
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condition exist with respect to the obligations of the Company or such
Subsidiary, under any agreement or instrument relating to any Indebtedness or
Contingent Obligation of more than $3,000,000, and such failure continues after
the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable prior to its stated maturity,
or such Contingent Obligation to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (1) any event
of default under such Swap Contract as to which the Company or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or (2) any Termination
Event (as so defined) as to which the Company or any Subsidiary is an Affected
Party (as so defined), and, in either event, the Swap Termination Value owed by
the Company or such Subsidiary as a result thereof is greater than $3,000,000;
or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any Subsidiary (i) ceases
or fails to be solvent, or generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) voluntarily
ceases to conduct its business in the ordinary course; (iii) commences any
Insolvency Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or (u)
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency Proceeding is
commenced or filed against the Company or any Subsidiary, or any writ, judgment,
warrant of attachment, execution or similar process, is issued or levied against
a substantial part of the Company's or any Subsidiary's properties, and any such
proceeding or petition shall not be dismissed, or such writ, judgment, warrant
of attachment, execution or similar process shall not be released, vacated or
fully bonded within 60 days after commencement, filing or levy; (ii) the Company
or any Subsidiary admits the material allegations of a petition against it in
any Insolvency Proceeding, or an order for relief (or similar order under
non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the Company or
any Subsidiary acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its property or business;
or
(h) ESISA. (i) An ERISA Event shall occur with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $250,000 the
aggregate amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $250,000; or (iii) the Company or any ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$250,000; or
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(i) MONETARY JUDGMENTS. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance or reinsurance as to which the
insurer does not dispute coverage) as to any single or related series of
transactions, incidents or conditions, of $500,000 or more, and the same shall
remain unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order or decree is
entered against the Company or any Subsidiary which does or would reasonably be
expected to have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(k) COLLATERAL. Any provision of any Collateral Document shall for any reason
cease to be valid and binding on or enforceable against the Company or any
Subsidiary of the Company party thereto or the Company or any Subsidiary of the
Company shall so state in writing or bring an action to limit its obligations or
liabilities thereunder; or any Collateral Document shall for any reason (other
than pursuant to the terms thereof or as a result of the failure of the
Collateral Agent to file appropriate continuation statements or to take other
required actions) cease to create a valid security interest in the Collateral
purported to be covered thereby or such security interest shall for any reason
cease to be a perfected and first priority security interest subject only to
Permitted Liens; or
(l) CHANGE OF CONTROL. There occurs any Change of Control; or
(m) GUARANTOR DEFAULTS. Any Guarantor fails in any material respect to perform
or observe any term, covenant or agreement in the Guaranty or the Guaranty is
for any reason partially (including with respect to future advances) or wholly
revoked or invalidated, or otherwise ceases to be in full force and effect, or
any Guarantor or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or obligation
thereunder; or any event described at clauses (f) or (g) of this Section occurs
with respect to such Guarantor; or
(n) LICENSES. Any License of any Insurance Subsidiary (a) shall be revoked
by the Governmental Authority which issued such License, or any action
(administrative or judicial) to revoke such License shall have been commenced
against such Insurance Subsidiary and shall not have been dismissed within
thirty (30) days after the commencement thereof, (b) shall be suspended by such
Governmental Authority for a period in excess of thirty (30) days or (c) shall
not be reissued or renewed by such Governmental Authority upon the expiration
thereof following application for such reissuance or renewal of such Insurance
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Subsidiary, which loss of License, in any case, could reasonably be expected to
have a Material Adverse Effect; or
(o) INSURANCE SUBSIDIARY FINES. Any Insurance Subsidiary shall be the
subject of a final non-appealable order imposing a fine by or at the request of
any state insurance regulatory agency as a result of the violation by such
Insurance Subsidiary of such state's applicable insurance laws or the
regulations promulgated in connection therewith which could reasonably be
expected to have a Material Adverse Effect; or
(p) INSURANCE COMPANY ORDERS . Any Insurance Subsidiary shall become subject
to any conservation, rehabilitation or liquidation order, directive or mandate
issued by any Governmental Authority or any Insurance Subsidiary shall become
subject to any other directive or mandate issued by any Governmental Authority
in either case which could reasonably be expected to have a Material Adverse
Effect and which is not stayed within thirty (30) days.
9.02 REMEDIES. If any Event of Default occurs, the Agent shall, at the request
of, or may, with the consent of, the Majority Lenders:
(a) declare the commitment of each Lender to make Loans and any
obligation of the Issuing Bank to Issue Letters of Credit to be
terminated, whereupon such commitments and obligation shall be
terminated;
(b) declare an amount equal to the maximum aggregate amount that is or
at any time thereafter may become available for drawing under any
outstanding Letters of Credit (whether or not any beneficiary shall
have presented, or shall be entitled at such time to present, the
drafts or other documents required to draw under such Letters of
Credit) to be immediately due and payable, and declare the unpaid
principal amount of all outstanding Loans, all interest accrued and
unpaid thereon, and all other amounts owing or payable hereunder or
under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Company; and
(c) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or
applicable law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in Sections
9.01(f) or (g) (in the case of clause (i) of Section 9.01 (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and any obligation of the Issuing Bank to Issue Letters of
Credit shall automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid shall
automatically become due and payable without further act of the Agent, the
Issuing Bank or any Lender.
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9.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and the
other Loan Documents are cumulative and are not exclusive of any other rights,
powers, privileges or remedies provided by law or in equity, or under any other
instrument, document or agreement now existing or hereafter arising.
ARTICLE X
THE AGENT
10.01 APPOINTMENT AND AUTHORIZATION; "AGENT".
(a) Each Lender hereby irrevocably (subject to SECTION 10.09) appoints,
designates and authorizes the Agent (including, without limitation, in its
capacity as Collateral Agent) to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents associated
therewith until such time and except for so long as the Agent may agree at the
request of the Majority Lenders to act for such Issuing Bank with respect
thereto; provided, however, that the Issuing Bank shall have all of the benefits
and immunities (i) provided to the Agent in this ARTICLE X with respect to any
acts taken or omissions suffered by the Issuing Bank in connection with Letters
of Credit issued by it or proposed to be issued by it and the application and
agreements for letters of credit pertaining to the Letters of Credit as fully as
if the term "Agent", as used in this ARTICLE X, included the Issuing Bank with
respect to such acts or omissions, and (ii) as additionally provided in this
Agreement with respect to the Issuing Bank.
10.02 DELEGATION OF DUTIES. The Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
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10.03 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be liable
to the Lenders for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct), or (ii) be responsible in any manner to any of the Lenders
for any recital, statement, representation or warranty made by the Company or
any Subsidiary or Affiliate of the Company, or any officer thereof, contained
in this Agreement or in any other Loan Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or any other Loan
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
the Company or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of the
Company or any of the Company's Subsidiaries or Affiliates.
10.04 RELIANCE BY AGENT.
(a) The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Company), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Majority Lenders as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Majority
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions specified in
SECTION 5.01, each Lender that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Agent to such Lender for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Lender.
10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
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Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with ARTICLE IX; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.
10.06 CREDIT DECISION. Each Lender acknowledges that none of the Agent-Related
Persons has made any representation or warranty to it, and that no act by the
Agent hereinafter taken, including any review of the affairs of the Company and
its Subsidiaries, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender. Each Lender represents to the Agent
that it has, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Company and
its Subsidiaries, and all applicable lender regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Company and its Subsidiaries hereunder.
Each Lender also represents that it will, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Agent, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of any of the
Agent-Related Persons.
10.07 INDEMNIFICATION OF AGENT. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so), pro rata,
from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that no
Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Company.
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The undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
10.08 AGENT IN INDIVIDULA CAPACITY. B of A and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though B of A were not the Agent or the Issuing
Lender hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, B of A or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, B of
A shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent.
10.09 SUCCESSOR AGENT. The Agent may, and at the request of the Majority Lenders
shall, resign as Agent upon 30 days' notice to the Lenders. If the Agent resigns
under this Agreement, the Majority Lenders shall appoint from among the Lenders
a successor agent for the Lenders which successor agent shall be approved by the
Company. If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Company, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article X and
Sections 11.04 and 11.05 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Lenders appoint a successor agent as provided for above.
Notwithstanding the foregoing, however, B of A may not be removed as the Agent
at the request of the Majority Lenders unless B of A shall also simultaneously
be replaced as "Issuing Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to B of A.
10.10 WITHHOLDING TAX.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, two properly
completed and executed copies of IRS Form 1001 before the payment of
any interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
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(ii) if such Lender claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such Lender
and in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding tax under
a United States tax treaty by providing IRS Form 1001 and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Lender, such Lender agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Lender. To the extent of such percentage
amount, the Agent will treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Company to such
Lender, such Lender agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable withholding tax,
the Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable withholding tax after taking into account such
reduction. However, if the forms or other documentation required by clause (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered or was not properly executed, or because such Lender
failed to notify the Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any
other reason) such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Lenders under this
Section shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
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ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS AND WAIVERS No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Majority Lenders
(or by the Agent at the written request of the Majority Lenders) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent shall,
unless in writing and signed by all the Lenders and the Company and acknowledged
by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to SECTION 8.02);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document ;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (iii) below) any fees or other
amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans which is required for the Lenders or any
of them to take any action hereunder; or
(e) amend this Section, or SECTION 2.14, or any provision herein
providing for consent or other action by all Lenders;
(f) discharge any Guarantor (other than pursuant to the Collateral
Documents), or release all or substantially all of the Collateral
except as otherwise may be provided in the Collateral Documents or
except where the consent of the Required Lenders only is provided for;
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and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Lenders or
all the Lenders, as the case may be, affect the rights or duties of the Issuing
Bank under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Lenders or
all the Lenders, as the case may be, affect the rights or duties of the Agent,
the Issuing Bank or the Swing Line Bank under this Agreement or any other Loan
Document, and (iii) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto.
11.02 NOTICES.
(a) All notices, requests, consents, approvals, waivers and other communications
shall be in writing (including, unless the context expressly otherwise provides,
by facsimile transmission, provided that any matter transmitted by facsimile (i)
shall be immediately confirmed by a telephone call to the recipient at the
number specified on SCHEDULE 11.02, and (ii) shall be followed promptly by
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on SCHEDULE 11.02; or, as
directed to the Company or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when transmitted by
overnight delivery, or faxed, be effective when delivered for overnight
(next-day) delivery, or transmitted in legible form by facsimile machine,
respectively, or if mailed, upon the third Business Day after the date deposited
into the U.S. mail, or if delivered, upon delivery; except that notices pursuant
to ARTICLE II, III or X to the Agent shall not be effective until actually
received by the Agent, and notices pursuant to ARTICLE III to the Issuing Bank
shall not be effective until actually received by the Issuing Bank at the
address specified for the "Issuing Bank" on the applicable signature page
hereof.
(c) Any agreement of the Agent and the Lenders herein to receive certain notices
by telephone or facsimile is solely for the convenience and at the request of
the Company. The Agent and the Lenders shall be entitled to rely on the
authority of any Person purporting to be a Person authorized by the Company to
give such notice and the Agent and the Lenders shall not have any liability to
the Company or other Person on account of any action taken or not taken by the
Agent or the Lenders in reliance upon such telephonic or facsimile notice. The
obligation of the Company to repay the Loans and L/C Obligations shall not be
affected in any way or to any extent by any failure by the Agent and the Lenders
to receive written confirmation of any telephonic or facsimile notice or the
receipt by the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in the
telephonic or facsimile notice.
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11.03 NO WAIVER; CUMMULATIVE REMEDIES. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
11.04 COST AND EXPENSES. The Company shall:
(a) whether or not the transactions contemplated hereby are consummated, pay or
reimburse B of A (including in its capacity as Agent and Issuing Bank) within
five Business Days after demand (subject to SECTION 5.01(e)) for all costs and
expenses incurred by B of A (including in its capacity as Agent and Issuing
Bank) in connection with the development, preparation, delivery, administration
and execution of, and any amendment, supplement, waiver or modification to (in
each case, whether or not consummated), this Agreement, any Loan Document and
any other documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby, including
reasonable Attorney Costs incurred by B of A (including in its capacity as Agent
and Issuing Bank) with respect thereto; and
(b) pay or reimburse the Agent and each Lender within five Business Days after
demand (subject to SECTION 5.01(e)) for all costs and expenses (including
Attorney Costs) incurred by them in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
any other Loan Document during the existence of an Event of Default or after
acceleration of the Loans (including in connection with any "workout" or
restructuring regarding the Loans, and including in any Insolvency Proceeding or
appellate proceeding).
11.05 COMPANY INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify, defend and hold the
Agent-Related Persons, and each Lender and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any
Lender) be imposed on, incurred by or asserted against any such Person in any
way relating to or arising out of the Company entering into this Agreement or
any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of any act or failure to act of
the Company or any of its Subsidiaries in connection with this Agreement or the
Loans or Letters of Credit the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
Obligations.
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11.06 PAYMENTS SET ASIDE. To the extent that the Company makes a payment to the
Agent or the Lenders, or the Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Agent upon demand its pro rata share
of any amount so recovered from or repaid by the Agent.
11.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Lender.
11.08 ASSIGNMENTS, PARTICIPATIONS, ETC.
(a) Any Lender may, with the written consent of the Agent and the Issuing Bank,
which consents shall not be unreasonably withheld, at any time assign and
delegate to one or more Eligible Assignees (provided that no written consent of
the Agent or the Issuing Bank shall be required in connection with any
assignment and delegation by a Lender to an Eligible Assignee that is an
Affiliate of such Lender) (each an "ASSIGNEE") all, or any ratable part of all,
of the Loans, the Commitments and L/C Obligations, and the other rights and
obligations of such Lender hereunder, in a minimum amount of $5,000,000 (or, if
less, the entire amount of such Lender's Loans, Commitment and L/C Obligations);
PROVIDED, HOWEVER, that the Company and the Agent may continue to deal solely
and directly with such Lender in connection with the interest so assigned to an
Assignee until (i) written notice of such assignment, together with payment
instructions, addresses and related information with respect to the Assignee,
shall have been given to the Company and the Agent by such Lender and the
Assignee; (ii) such Lender and its Assignee shall have delivered to the Company
and the Agent an Assignment and Acceptance in the form of EXHIBIT E ("ASSIGNMENT
AND ACCEPTANCE") together with any Note or Notes subject to such assignment and
(iii) the assignor Lender or Assignee has paid to the Agent a processing fee in
the amount of $3,000.
(b) From and after the date that the Agent notifies the assignor Lender that it
has received (and provided its consent with respect to) an executed Assignment
and Acceptance and payment of the above-referenced processing fee, (i) 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 and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assignor Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents.
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(c) Within five Business Days after its receipt of notice by the Agent that it
has received an executed Assignment and Acceptance and payment of the processing
fee, (and provided that it consents to such assignment in accordance with
Section 11.08(a)), the Company shall execute and deliver to the Agent, new Notes
evidencing such Assignee's assigned Loans and Commitment and, if the assignor
Lender has retained a portion of its Loans and its Commitment, replacement Notes
in the principal amount of the Loans retained by the assignor Lender (such Notes
to be in exchange for, but not in payment of, the Notes held by such Lender).
Immediately upon each Assignee's making its processing fee payment under the
Assignment and Acceptance, this Agreement shall be deemed to be amended to the
extent, but only to the extent, necessary to reflect the addition of the
Assignee and the resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of the
assigning Lender PRO TANTO.
(d) Any Lender may at any time sell to one or more commercial lenders or other
Persons not Affiliates of the Company (a "PARTICIPANT") participating interests
in any Loans, the Commitment of that Lender and the other interests of that
Lender (the "originating Lender") hereunder and under the other Loan Documents;
PROVIDED, HOWEVER, that (i) the originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the originating Lender shall remain
solely responsible for the performance of such obligations, (iii) the Company,
the Issuing Bank and the Agent shall continue to deal solely and directly with
the originating Lender in connection with the originating Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no
Lender shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Lenders
as described in the FIRST PROVISO to SECTION 11.01. In the case of any such
participation, the Participant shall not have any rights under this Agreement,
or any of the other Loan Documents, and all amounts payable by the Company
hereunder shall be determined as if such Lender had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Lender may at
any time create a security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement and the Note held by it in favor of
any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
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(f) No assignee, participant or other transferee of any Lender's rights shall be
entitled to receive any greater payment under Article IV than such Lender would
have been entitled to receive with respect to the rights transferred or by
reason of the provisions of Article IV requiring such Lender to designate a
different Applicable Lending Office under certain circumstances or at a time
when the circumstances giving rise to such greater payment did not exist.
11.09 CONFIDENTIALITY. Each Lender agrees to take and to cause its Affiliates to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it or to which it otherwise is granted access by the
Company or any Subsidiary, or by the Agent on the Company's or such Subsidiary's
behalf, under this Agreement or any other Loan Document, and neither it nor any
of its Affiliates shall use any such information other than in connection with
or in enforcement of this Agreement and the other Loan Documents or in
connection with other business now or hereafter existing or contemplated with
the Company or any Subsidiary or to disclose it to any third person; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Lender, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Lender; PROVIDED, HOWEVER, that any Lender may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Lender is subject or in connection with an
examination of such Lender by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Lender or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Lender's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder; (H) as to any
Lender or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Lender or such Affiliate; and
(I) to its Affiliates; PROVIDED that such Lender shall provide notice to the
Company of any requirement to disclose to a person who does not have an
obligation to such Lender (or pursuant to applicable law or applicable court
order) to keep such information confidential (it being understood and agreed
that the failure to provide such notice shall not constitute a violation by such
Lender of this SECTION 11.09).
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11.10 SET-OFF. In addition to any rights and remedies of the Lenders provided by
law, if an Event of Default exists or the Loans have been accelerated, each
Lender is authorized at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the Company against any and all Obligations owing to such Lender, now
or hereafter existing, irrespective of whether or not the Agent or such Lender
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Company and the Agent after any such set-off and application made by
such Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not
affect the validity of such set-off and application.
11.11 NOTIFICATION OF ADDRESS, LENDING OFFICES, ETC. Each Lender shall notify
the Agent in writing of any changes in the address to which notices to the
Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.12 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.13 SEVERABILITY. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in any
way affect or impair the legality or enforceability of the remaining provisions
of this Agreement or any instrument or agreement required hereunder.
11.14 NO THIRD PARTIES BENEFITED. This Agreement is made and entered into for
the sole protection and legal benefit of the Company, the Lenders, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.
11.15 GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED THAT
THE PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR OF THE
UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND THE LENDERS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE COMPANY, THE
AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS LAW.
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11.16 WAIVER OF JURY TRIAL. THE COMPANY, THE LENDERS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE LENDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
11.17 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Lenders and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
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11.18 AMENDMENT AND RESTATEMENT
(a) On and after the Closing Date, this Agreement will automatically and without
further action of any kind amend and restate in its entirety the Credit
Agreement, dated as of October 3, 1997, among the Company, the financial
institutions party thereto as lenders and BofA, as agent (as amended through the
date of this Agreement, the "Prior Loan Document"), and, upon Closing Date the
terms and provisions of the Prior Loan Document shall, subject to this SECTION
11.18, be superseded hereby and thereby; PROVIDED, HOWEVER, that notwithstanding
the amendment and restatement of the Prior Loan Document by this Agreement, the
Company shall continue to be liable to any Bank (as such term is defined in the
Prior Loan Document), BofA (individually and as agent) or the Agent-Related
Persons (as defined in the Prior Loan Document) with respect to agreements on
the part of the Company under the Prior Loan Document to indemnify and hold any
Bank, BofA (individually and as agent) or the Agent-Related Persons harmless
from and against all claims, demands, liabilities, damages, losses, costs,
charges and expenses to which any Bank, BofA (individually and as agent) or the
Agent-Related Persons may be subject arising in connection with any action
taken, failure to take action or transaction contemplated in or under the Prior
Loan Document during the period that such agreement was in effect. Without
limiting the generality of the foregoing, SECTIONS 11.05 and 4.01, 4.03 and,
4.04 of the Prior Loan Document shall not be superseded, modified or otherwise
affected by this Agreement.
(b) Notwithstanding the amendment and restatement of the Prior Loan Document by
this Agreement, the Loans under, and as defined in, the Prior Loan Document
("Continuing Loans") owing to the Lenders by the Company closing remain
outstanding as of the date hereof, and will remain outstanding as of the Closing
Date, and will constitute continuing Obligations hereunder and shall continue to
be secured by the Collateral.
(c) The Continuing Loans and the Liens securing payment thereof shall in all
respects be continuing, and this Agreement shall not be deemed to evidence or
result in a novation or repayment and re-borrowing of the Continuing Loans. In
furtherance of and without limiting the foregoing (i) all amounts owing with
respect to the Continuing Loans, other than the principal amount thereof, but
including, accrued interest, fees and expenses with respect to the Continuing
Loans shall have been paid currently on and as of the Closing Date and (ii) from
and after the Closing Date, the terms, conditions, and covenants governing the
Continuing Loans shall be solely as set forth in this Agreement, which shall
supersede the Prior Loan Document in its entirety.
[Signature Pages Follow]
-100-
100
S-1
[TO AMENDED AND RESTATED CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their proper and duly
authorized officers as of the day and year first above written.
CENTURY BUSINESS SERVICES,
INC. (F/K/A INTERNATIONAL ALLIANCE
SERVICES, INC.)
By
Name:
Title:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION, as Agent
By
Name:
Title:
BANK OF AMERICA NATIONAL
TRUST & SAVINGS ASSOCIATION, Individually
as a Lender and as the Issuing Bank
By
Name:
Title:
STAR BANK, N.A.
By
Name:
Title:
101
PNC BANK, NATIONAL ASSOCIATION
By
Name:
Title:
LASALLE NATIONAL BANK
By
Name:
Title:
FIRST UNION NATIONAL BANK
By
Name:
Title:
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[TO AMENDED AND RESTATED CREDIT AGREEMENT]