EXHIBIT 10.4
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CREDIT AGREEMENT
DATED AS OF JULY 22, 1998
AMONG
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.,
AS COMPANY,
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
DLJ CAPITAL FUNDING, INC.,
AS DOCUMENTATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT
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▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS.............................. 2
1.1 Certain Defined Terms................................................ 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement...................................................... 42
1.3 Other Definitional Provisions and Rules of Construction.............. 43
1.4 Changes in GAAP...................................................... 43
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........... 44
2.1 Commitments; Making of Loans; the Register; Notes.................... 44
2.2 Interest on the Loans................................................ 50
2.3 Fees................................................................. 54
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments; Application of
Proceeds of Collateral and Payments Under Guaranties................. 54
2.5 Use of Proceeds...................................................... 61
2.6 Special Provisions Governing Eurodollar Rate Loans................... 61
2.7 Increased Costs; Taxes; Capital Adequacy............................. 63
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................ 67
2.9 Defaulting Lenders................................................... 68
2.10 Removal or Replacement of a Lender................................... 69
SECTION 3.
LETTERS OF CREDIT........................... 71
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.............................................................. 71
3.2 Letter of Credit Fees................................................ 75
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
.................................................................... 76
3.4 Obligations Absolute................................................. 79
3.5 Indemnification; Nature of Issuing Lenders' Duties................... 79
3.6 Increased Costs and Taxes Relating to Letters of Credit.............. 81
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Page
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT............................ 82
4.1 Conditions to Initial Loans.......................................... 82
4.2 Conditions to All Loans.............................................. 91
4.3 Conditions to Letters of Credit...................................... 92
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES..... 92
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries......................................................... 93
5.2 Authorization of Borrowing, etc...................................... 94
5.3 Financial Condition.................................................. 95
5.4 No Material Adverse Change........................................... 96
5.5 Title to Properties; Liens; Real Property............................ 96
5.6 Litigation; Adverse Facts............................................ 97
5.7 Payment of Taxes..................................................... 97
5.8 Performance of Agreements; Materially Adverse Agreements............. 98
5.9 Governmental Regulation.............................................. 98
5.10 Securities Activities................................................ 98
5.11 Employee Benefit Plans............................................... 98
5.12 Certain Fees......................................................... 99
5.13 Environmental Protection............................................. 99
5.14 Employee Matters..................................................... 100
5.15 Solvency............................................................. 100
5.16 Matters Relating to Collateral....................................... 100
5.17 Related Agreements................................................... 101
5.18 Disclosure........................................................... 102
5.19 Subordination of Permitted Seller Notes and Shareholder Subordinated
Notes................................................................ 102
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS..... 103
6.1 Financial Statements and Other Reports............................... 103
6.2 Corporate/Partnership Existence, etc................................. 108
6.3 Payment of Taxes and Claims; Tax Consolidation....................... 108
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds...................................... 109
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
Meeting.............................................................. 111
6.6 Compliance with Laws, etc............................................ 112
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental Claims
and Violations of Environmental Laws................................. 112
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Page
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Subsidiaries and Future Subsidiaries.................... 115
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.................................................. 116
6.10 Interest Rate Protection............................................. 118
6.11 Post-Closing Deliveries.............................................. 119
6.12 Deposit Accounts and Cash Management Systems......................... 119
6.13 Year 2000............................................................ 119
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS...................... 119
7.1 Indebtedness......................................................... 120
7.2 Liens and Related Matters............................................ 122
7.3 Investments; Joint Ventures.......................................... 125
7.4 Contingent Obligations............................................... 127
7.5 Restricted Junior Payments........................................... 128
7.6 Financial Covenants.................................................. 129
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions..... 130
7.8 Fiscal Year.......................................................... 134
7.9 Sales and Lease-Backs................................................ 134
7.10 Sale or Discount of Receivables...................................... 134
7.11 Transactions with Shareholders and Affiliates........................ 134
7.12 Disposal of Subsidiary Interests..................................... 135
7.13 Conduct of Business.................................................. 135
7.14 Amendments or Waivers of Certain Agreements; Amendments of
Documents Relating to Subordinated Indebtedness and Senior Notes;
Designation of "Designated Senior Debt".............................. 136
SECTION 8.
EVENTS OF DEFAULT................................... 137
8.1 Failure to Make Payments When Due.................................... 137
8.2 Default in Other Agreements.......................................... 137
8.3 Breach of Certain Covenants.......................................... 138
8.4 Breach of Warranty................................................... 138
8.5 Other Defaults Under Loan Documents.................................. 138
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................. 138
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc................... 139
8.8 Judgments and Attachments............................................ 139
8.9 Dissolution.......................................................... 139
8.10 Employee Benefit Plans............................................... 139
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Page
8.11 Change in Control................................................... 139
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations .................................................... 140
8.13 Failure to Consummate Recapitalization.............................. 140
SECTION 9.
AGENTS................................. 141
9.1 Appointment......................................................... 141
9.2 Powers and Duties; General Immunity................................. 143
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.................................................... 145
9.4 Right to Indemnity.................................................. 145
9.5 Successor Administrative Agent and Swing Line Lender................ 145
9.6 Collateral Documents and Guaranty................................... 146
SECTION 10.
MISCELLANEOUS........................ 147
10.1 Assignments and Participations in Loans and Letters of Credit....... 147
10.2 Expenses............................................................ 151
10.3 Indemnity........................................................... 152
10.4 Set-Off; Security Interest in Deposit Accounts...................... 153
10.5 Ratable Sharing..................................................... 153
10.6 Amendments and Waivers.............................................. 154
10.7 Independence of Covenants........................................... 155
10.8 Notices............................................................. 155
10.9 Survival of Representations, Warranties and Agreements.............. 156
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............... 156
10.11 Marshalling; Payments Set Aside..................................... 156
10.12 Severability........................................................ 157
10.13 Obligations Several; Independent Nature of Lenders' Rights.......... 157
10.14 Headings............................................................ 157
10.15 Applicable Law...................................................... 157
10.16 Successors and Assigns.............................................. 157
10.17 Consent to Jurisdiction and Service of Process...................... 158
10.18 Waiver of Jury Trial................................................ 158
10.19 Confidentiality..................................................... 159
10.20 Counterparts; Effectiveness......................................... 159
Signature pages S-1
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EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF REVOLVING NOTE
V FORM OF SWING LINE NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
VIII FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI FORM OF FINANCIAL CONDITION CERTIFICATE
XII FORM OF INTERCREDITOR AGREEMENT
XIII FORM OF PLEDGE AND SECURITY AGREEMENT
XIV FORM OF SUBSIDIARY GUARANTY
XV FORM OF HOLDINGS GUARANTY
XVI FORM OF MORTGAGE
XVII FORM OF COLLATERAL ACCESS AGREEMENT
XVIII FORM OF SUBORDINATION PROVISIONS
XIX FORM OF BORROWING BASE CERTIFICATE
XX FORM OF DEPOSIT ACCOUNT AGREEMENT
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SCHEDULES
1.1(i) ADJUSTMENTS TO BORROWING BASE
1.1(ii) ADDBACKS TO EBITDA
1.1(iii) EXISTING INVESTORS
1.1(iv) RECAPITALIZATION TRANSACTIONS
1.1(v) ORDERLY LIQUIDATION VALUE
1.1(vi) CERTAIN SUBSIDIARIES
1.1(vii) VALUATION PERCENTAGE/VALUATION METHODOLOGY
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.1I CLOSING DATE MORTGAGED PROPERTIES
4.1K CLOSING DATE ENVIRONMENTAL REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.13 ENVIRONMENTAL MATTERS
6.11 POST-CLOSING DELIVERIES
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
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▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of July 22, 1998 and entered into by and
among ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P., a Pennsylvania limited partnership
("COMPANY"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P., a Pennsylvania limited
partnership ("HOLDINGS"), ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P. ("GSCP"), as
arranger and syndication agent (in such capacity, "SYNDICATION AGENT"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), DLJ CAPITAL
FUNDING, INC. ("DLJ"), as documentation agent (in such capacity, "DOCUMENTATION
AGENT") and FLEET NATIONAL BANK ("FLEET"), as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT") and Fleet as Collateral Agent for
Lenders (in such capacity, "COLLATERAL AGENT").
R E C I T A L S
- - - - - - - -
WHEREAS, Bain and the other Investors propose to engage in a series of
Recapitalization Transactions, (capitalized terms used herein having the
meanings assigned to those terms in subsection 1.1), whereby the Bain Investors
will acquire on the Closing Date not less than 72% of all of the partnership
interests of Holdings;
WHEREAS, Company, which pursuant to the Recapitalization Transactions will
become a Subsidiary of Holdings, has requested Lenders to extend, and Lenders
have agreed to extend, certain credit facilities in an aggregate principal
amount of $275,000,000 to Company, the proceeds of which will be used (i)
together with (a) the proceeds of $50,000,000 in aggregate principal amount of
borrowings under the Term Loan Credit Agreement, (b) approximately $41,000,000
from the Equity Contribution, (c) not less than $155,000,000 in gross cash
proceeds from the issuance and sale of the Senior Notes, (d) not less than
$25,000,000 in gross cash proceeds from the issuance and sale of the Senior
Discount Debentures and (e) the issuance of Preferred Units with a liquidation
value of approximately $22,500,000 to permit consummation of the
Recapitalization Transactions, to refinance certain existing Indebtedness of
Company and to pay related fees and expenses, and (ii) to provide financing for
working capital and other general corporate purposes of Company and its
Subsidiaries;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the equity interests of each of its
Subsidiaries.
WHEREAS, Holdings, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Rental Corporation and all Subsidiaries of
Holdings and Company (other than Excluded Subsidiaries) and the General Partner
desire to guarantee the Obligations hereunder and under the other Loan Documents
and to secure their guaranties by
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granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
substantially all of their respective real, personal and mixed property,
including, without limitation, (i) a pledge of all of their partnership
interests of Company and (ii) a pledge of all of the equity interests of each of
their Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
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The following terms used in this Agreement shall have the following
meanings:
"ACCOUNTS" shall mean all of Company's Permitted Subsidiaries'
accounts receivable, whether now or hereafter existing, arising in the
ordinary course of business from Company's sales or leases of goods or
rendition of services made by Company's Permitted Subsidiaries, or through
any of Company's or Permitted Subsidiaries' divisions.
"ACQUISITION CONSIDERATION" means with respect to any Permitted
Acquisition the sum, without duplication, of any of the following
consideration paid or debt assumed in connection with such Permitted
Acquisition:
(i) Cash;
(ii) Securities (including, without limitation, Permitted
Seller Notes);
(iii) any other property;
(iv) principal amount of any Indebtedness assumed in connection
with the applicable Permitted Acquisition;
(v) maximum pretax payments anticipated to be made under
Permitted Earn-Out Agreements and other contractual
arrangements entered into pursuant to a Permitted
Acquisition (as such maximum amount is determined by
Company and discounted at a discount rate equal to the
interest rate applicable to Loans outstanding under the
Revolving Facility on the date of the consummation of such
Permitted Acquisition; and
(vi) the amount of any reserves established with respect to the
contingent liabilities assumed in connection with such
Permitted Acquisition (net of escrowed portion of the
purchase price amounts and indemnification arrangements
designed to apply to such liabilities).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.9.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in subsection 6.9.
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"ADDITIONAL SECURED INDEBTEDNESS" has the meaning assigned to that
term in subsection 7.1(xv).
"ADJUSTED BORROWING BASE AMOUNT" means as of any date of determination
the Borrowing Base Amount reflected on the most recently delivered
Borrowing Base Certificate, as such amount may be adjusted in accordance
with Schedule 1.1(i) annexed hereto.
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"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the
rate per annum obtained by dividing (i) the arithmetic average (rounded
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upward to the nearest 1/16 of one percent) of the offered quotations, if
any, to first class banks in the interbank Eurodollar market by Reference
Lenders for U.S. dollar deposits of amounts in same day funds comparable to
the respective principal amounts of the Eurodollar Rate Loans of Reference
Lenders for which the Adjusted Eurodollar Rate is then being determined
(which principal amount shall be deemed to be $1,000,000 in the case of any
Reference Lender not making, converting to or continuing such a Eurodollar
Rate Loan) with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
-- -----
maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the Federal Reserve
System in respect of "Eurocurrency liabilities" as defined in Regulation D
(or any successor category of liabilities under Regulation D); provided
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that if any Reference Lender fails to provide Administrative Agent with its
aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by
the other Reference Lender(s).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.
"AGENT" means, individually, each of Syndication Agent, Administrative
Agent and Documentation Agent, and "AGENTS" means Syndication Agent,
Administrative Agent and Documentation Agent, collectively.
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"AGREEMENT" means this Credit Agreement dated as of July 22, 1998, as
it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 1.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Base Rate Margin to be effective on the date of any
corresponding change in the Applicable Total Leverage Ratio.
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APPLICABLE APPLICABLE
TOTAL LEVERAGE BASE RATE MARGIN
RATIO
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greater than or equal to 1.25%
5.5:1.00
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less than 5.5:1.00 but 1.00 %
greater than or equal to
5.0:1.00
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less than 5.0:1.00 but 0.75 %
greater than or equal to
4.5:1.00
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less than 4.5:1.00 but 0.50 %
greater than or equal to
4.0:1.00
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less than 4.0:1.00 but 0.25 %
greater than or equal to
3.5:1.00
--------------------------------------------------------------
less than 3.5:1.00 0.00%
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"APPLICABLE COMMITMENT FEE PERCENTAGE" means (a) for the period from
the Closing Date up to (but excluding) the date of commencement of the
first Pricing Period, 1/2 of 1% per annum and (b) at any date of
determination thereafter, a rate per annum equal to the percentage set
forth below opposite the Applicable Total Leverage Ratio in effect as of
such date of determination, any change in the Applicable Commitment Fee
Percentage to be effective on the date of any corresponding change in the
Applicable Total Leverage Ratio.
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APPLICABLE APPLICABLE
TOTAL LEVERAGE COMMITMENT
RATIO FEE PERCENTAGE
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greater than or equal to 5.0:1.00 0.500%
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less than 5.0:1.00 but greater 0.375%
than or equal to 4.0:1.00
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less than 4.0:1.00 0.250%
=============================================================
"APPLICABLE EURODOLLAR RATE MARGIN" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 2.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Total Leverage Ratio in effect as of such date of determination, any change
in any such Applicable Eurodollar Rate Margin to be effective on the date
of any corresponding change in the Applicable Total Leverage Ratio.
=============================================================
APPLICABLE APPLICABLE
TOTAL LEVERAGE EURODOLLAR RATE
RATIO MARGIN
=============================================================
greater than or equal to 2.25%
5.5:1.00
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less than 5.5:1.00 but 2.00%
greater than or equal to
5.0:1.00
-------------------------------------------------------------
less than 5.0:1.00 but 1.75%
greater than or equal to
4.5:1.00
-------------------------------------------------------------
less than 4.5:1.00 but 1.50%
greater than or equal to
4.0:1.00
-------------------------------------------------------------
less than 3.5:1.00 but 1.25%
greater than or equal to
3.5:1.00
-------------------------------------------------------------
less than 3.5:1.00 1.00%
==============================================================
"APPLICABLE TOTAL LEVERAGE RATIO" means, with respect to any date of
determination, the Total Leverage Ratio set forth in the Pricing
Certificate (as defined below) in effect for the Pricing Period (as defined
below) in which such date of determination occurs. For purposes of this
definition, (i) "PRICING CERTIFICATE" means an Officer's Certificate of
5
Company certifying as to the Total Leverage Ratio as of the last day of any
Fiscal Quarter and setting forth the calculation of such Total Leverage
Ratio in reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by
Company of the Compliance Certificate (the "RELATED COMPLIANCE
CERTIFICATE") with respect to the period ending on the last day of such
Fiscal Quarter pursuant to subsection 6.1(iv), and (ii) "PRICING PERIOD"
means each period commencing on the first Business Day after the delivery
to Administrative Agent of a Pricing Certificate and ending on the first
Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition
--------
to the contrary notwithstanding, (a) the first Pricing Period for purposes
of calculating the Applicable Total Leverage Ratio shall commence no
earlier than March 31, 1999, and the Pricing Certificate in respect of such
first Pricing Period may be delivered at any time on or after such date and
shall relate to the most recent financial statements delivered by Company
to Administrative Agent prior to such date pursuant to subsection 6.1(ii)
or 6.1(iii), (b) the Applicable Total Leverage Ratio for the period from
the Closing Date to but excluding the date of commencement of such first
Pricing Period shall be deemed to be 5.50:1.00 for purposes of making the
relevant calculation referred to above and (c) in the event that, after the
commencement of such first Pricing Period, (X) Company fails to deliver a
Pricing Certificate to Administrative Agent setting forth the Total
Leverage Ratio as of the last day of any Fiscal Quarter on or before the
last day on which Company is required to deliver the Related Compliance
Certificate (such last day being the "CUTOFF DATE") and (Y) Administrative
Agent determines (each such determination being an "AGENT DETERMINATION")
on or after the Cutoff Date (on the basis of the Related Compliance
Certificate or a Pricing Certificate delivered after the Cutoff Date) that
the Applicable Total Leverage Ratio that would have been in effect if
Company had delivered a Pricing Certificate on the Cutoff Date is greater
than the Total Leverage Ratio set forth in the most recent Pricing
Certificate actually delivered by Company, then (1) the Applicable Total
Leverage Ratio in effect for purposes of making the relevant calculation
referred to above for the period from the Cutoff Date to the date of
delivery by Company of the next Pricing Certificate (or, if earlier, the
next date on which an Agent Determination is made) shall be the Total
Leverage Ratio determined pursuant to the Agent Determination and (2) on
the first Business Day after Administrative Agent delivers written notice
to Company of any Agent Determination, Company shall pay to Administrative
Agent, for distribution (as appropriate) to Lenders, an aggregate amount
equal to the additional interest, letter of credit fees and commitment fees
Company would have been required to pay in respect of all applicable Loans,
Letters of Credit or Commitments in respect of which any interest or fees
have been paid by Company during the period from the Cutoff Date to the
date such notice is given by Administrative Agent to Company if the amount
of such interest and fees had been calculated using the Applicable Total
Leverage Ratio based on such Agent Determination.
"ASSET SALE" means the sale by Holdings or any of its Subsidiaries to
any Person other than Holdings or any of its wholly-owned Subsidiaries of
(i) any of the stock of any of Holdings' Subsidiaries, (ii) substantially
all of the assets of any division or line of business of Holdings or any of
its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of Holdings or any of its Subsidiaries; provided, however, that
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Asset Sales shall not include (1) equipment sold in the ordinary course of
business, (2) any such other assets
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to the extent that the aggregate fair market value of an asset (at the time
of sale thereof) sold in any single transaction or related series of
transactions is equal to $1,000,000 or less, (3) any sale or discount, in
each case without recourse, of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or
collection thereof, (4) any sale or exchange of specific items of
equipment, so long as the purpose of each such sale or exchange is to
acquire (and results within 365 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged, (5) the leasing
(pursuant to operating leases in the ordinary course of business) or
licensing of real or personal property, including intellectual property,
(6) the sale for cash in the ordinary course of business of Cash
Equivalents, and (7) disposals or replacements of obsolete, uneconomical,
negligible, worn out or surplus assets or property in the ordinary course
of business; provided however that for purposes of determining Asset Sales
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under subsection 2.4A(iii)(a), none of the above exclusions (excluding
clause (5)) to Asset Sales shall apply in the event that the amount of
proceeds of transactions relating to such exclusions in any Fiscal Year
shall exceed $10,000,000 in the aggregate.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit IX annexed hereto.
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"BAIN" means ▇▇▇▇ Capital, Inc. and/or one or more of its Affiliates.
"BAIN ADVISORY SERVICES AGREEMENT" means that certain Advisory
Services Agreement by and among Company, Holdings and Bain, in the form
delivered to Agents prior to the Closing Date and as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.14A.
"BAIN INVESTORS" means collectively, Bain/ACR, L.L.C., BCIP Associates
II, BCIP Associates II-B, ▇▇▇▇ Capital Fund VI, L.P., ▇▇▇▇ Capital Fund VI-
B, L.P., BCIP Trust Associates II, BCIP Trust Associates II-B, and BCIP
Associates II-C.
"BAIN MANAGEMENT FEES" means the fees (including one-time fees payable
in connection with acquisitions, divestitures and financings) and expenses
payable by Holdings or the Company to Bain pursuant to the Bain Advisory
Services Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(i) the rate of interest announced publicly by Fleet in Boston,
Massachusetts, from time to time, as Fleet's base rate; and
(ii) 1/2 of 1% per annum above the Federal Funds Effective Rate.
7
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BORROWING BASE AMOUNT" means, at any date of determination, the sum
of:
(i) 100% of the Orderly Liquidation Value of Eligible Cranes and
Lifting Equipment; plus
----
(ii) 75% of the Orderly Liquidation Value of Eligible Trucks and
Trailers; plus
----
(iii) 85% of the aggregate value of Eligible Account Receivables;
plus
----
(iv) 75% of the aggregate value of Eligible Parts and Supplies
Inventory.
"BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of Exhibit XIX annexed hereto delivered to Administrative Agent by
-----------
Company pursuant to subsections 4.1U and 6.1(xvii) or as otherwise provided
under Schedule 1.1(i).
---------------
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York and
Pennsylvania or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to
close, and (ii) with respect to all notices, determinations, fundings and
payments in connection with the Adjusted Eurodollar Rate or any Eurodollar
Rate Loans, any day that is a Business Day described in clause (i) above
and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, would be required to be accounted for as a capital
lease on the balance sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means: (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard & Poor's Ratings
Group ("S&P") or ▇▇▇▇▇'▇ Investors Service, Inc. ("MOODY'S"); (iii)
commercial paper maturity no more than one year from the date of creation
thereof and at the time of acquisition, having a rating of at least A-l
from S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar
instruments) maturing within one year from the date of acquisition thereof
issued by any bank organized under the laws of the United States of America
or any state or territory thereof or the District of Columbia, Japan or any
member
8
of the European Economic Community or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of
not less than $200,000,000; (v) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds
which invest substantially all of their assets in securities of the types
described in clauses (i) through (v) above.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit X annexed hereto delivered by a Lender to
---------
Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before July 31, 1998, on which the
initial Loans are made.
"CLOSING DATE MORTGAGE" has the meaning assigned to that term in
subsection 4.1I.
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 4.1I.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor (excluding lessees
of property or equipment in the ordinary course of business) in possession
of any Collateral, substantially in the form of Exhibit XVII annexed hereto
------------
with such changes thereto as may be agreed to by Administrative Agent in
the reasonable exercise of its discretion.
"COLLATERAL AGENT" means Fleet in its capacity as Collateral Agent
under the Collateral Documents and the InterCreditor Agreement.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the
Intercreditor Agreement, the Mortgages and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement or any of
the other Loan Documents in order to grant to Collateral Agent, on behalf
of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
"COLLATERAL WARRANTIES" shall mean the representations and warranties
made pursuant to Sections 5.5A and 5.16A and Section 5 of the Pledge and
Security Agreement.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the
9
purchase of any materials, goods or services by Company or any of its
Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMMON UNITS" means common partnership interests of Holdings
(including Class A and Class L units).
"COMPANY" has the meaning assigned to such term in the introduction to
this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VI annexed hereto delivered to Administrative Agent by Company
----------
pursuant to subsection 6.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain Confidential
Information Memorandum prepared by GSCP, DLJ and Fleet relating to the Term
Loans and Revolving Loans dated June 1998.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has substantially agreed in writing for the benefit
of Administrative Agent (which writing has been delivered to Administrative
Agent), whether under the terms of the applicable lease, under the terms of
a Landlord Consent and Estoppel, or otherwise, to the matters described in
the definition of "Landlord Consent and Estoppel," which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any contrary
restrictions contained in a superior lease or sublease.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income (including,
without duplication, foreign withholding taxes and any payment of Permitted
Tax Distributions), (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items reducing Consolidated Net Income, and
(vii) to the extent deducted in determining Consolidated Net Income, those
items described on Schedule 1.1(ii) annexed hereto, less (a) other non-cash
---------------- ----
items increasing Consolidated Net Income, (b) to the extent included in
Consolidated Net Income, net gains on sales of used equipment, all of the
foregoing as determined on a consolidated basis for Company and its
Subsidiaries in conformity with GAAP, and (c) to the extent not otherwise
deducted in Consolidated Adjusted EBITDA, any payments made under Permitted
Earn-Out Agreements or other contractual payment related to a Permitted
Acquisition made after the date of consummation of such Permitted
Acquisition.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration
or accrued as a liability and including that portion of Capital Leases
which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period
10
that, in conformity with GAAP, are included in "purchases of property,
plant or equipment" or comparable items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including interest expense paid in
kind and amortization of discount, of deferred financing fees, of premiums
paid on Hedge Agreements and of debt issuance costs).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total cash and
non-cash interest expense (including that portion attributable to Capital
Leases in accordance with GAAP, interest expense paid in kind and
amortization or write-off of discount, of deferred financing fees, of
premiums paid on Hedge Agreements and of debt issuance costs, and accretion
of any debt discount and capitalized interest) of Company and its
Subsidiaries on a consolidated basis in accordance with GAAP with respect
to all outstanding Indebtedness of Company and its Subsidiaries, including
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing, net costs under
Interest Rate Agreements, commitment fees accrued under subsection 2.3A and
any administrative agent's fees payable to Administrative Agent, but
excluding, however, any amounts referred to in subsection 2.3 payable to
--------- -------
Agents and Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
GAAP; provided that there shall be excluded (i) the income (or loss) of any
--------
Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to Company or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Company or is merged into or consolidated
with Company or any of its Subsidiaries or that Person's assets are
acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not
at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any gains or
losses attributable to Asset Sales, other than of new or used Rental
Equipment (without regard to the $1,000,000 limitation set forth in the
definition thereof or reserves relating thereto and the related tax
effects) or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and
its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
11
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another
if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of
credit issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (iii) under Hedge
Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to (a) the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited, or (B) if neither amount in
clause (a) is stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform)
as determined by such Person in good faith. Contingent Obligations shall
not include standard contractual indemnities entered into in the ordinary
course of business.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other material instrument to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties is
subject.
"CORPORATE LOAN PARTY" means any Loan Party which is a corporation.
"CRANES AND LIFTING EQUIPMENT" shall mean each item of equipment
identified on Schedule 1.1(d)(A) to the Pledge and Security Agreement or on
any supplement thereto.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its
Subsidiaries is a party which is entered into for the purpose of hedging
against fluctuations in currency values; provided however that such
----------------
agreements (i) relate only to the purchase or sale of equipment used in the
business of the Company and (ii) are not entered into for speculative
purposes.
12
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate
of deposit.
"DEPOSIT ACCOUNT AGREEMENT" means the Deposit Account Agreement
substantially in the form of Exhibit XX annexed hereto, as such Deposit
----------
Account Agreement may be amended, supplemented or otherwise modified from
time to time as permitted thereunder and hereunder.
"DLJ." has the meaning assigned to that term in the introduction to
this Agreement.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" shall mean the aggregate face amount of
Company's and Permitted Subsidiaries' Accounts as reflected in their books
and records in accordance with GAAP, payable in Dollars, that conform to
the warranties contained in this definition and to the Collateral
Warranties. Unless otherwise approved in writing by Administrative Agent,
no Account shall be deemed to be an Eligible Account Receivable if:
(i) the Account is unpaid 90 days or more from the original
invoice date; or
(ii) such Account if from the same account debtor (or any
affiliate thereof) and fifty percent (50%) or more, in face amount, of
other Accounts from such account debtor (or any affiliate thereof) are
unpaid 90 days or more after the original invoice date; or
(iii) the Account, when aggregated with all other Accounts of
such account debtor, exceeds fifteen percent (15%) in face value of
all consolidated Accounts of Company and Permitted Subsidiaries in the
aggregate then outstanding, to the extent of such excess; or
(iv) (A) the account debtor is also a creditor of Company or
Permitted Subsidiaries, to the extent of the amount owed by Company or
Permitted Subsidiaries to the account debtor, (B) the account debtor
has disputed its liability on, or the account debtor has made any
claim with respect to, such Account or any other Account due from such
account debtor to Company or Permitted Subsidiaries, which has not
been resolved to the extent of such dispute or (C) the Account
otherwise is or may become subject to any right of setoff by the
account debtor, to the extent of the amount of such setoff; or
(v) to the knowledge of the Company, the account debtor has
commenced a voluntary case under the federal bankruptcy laws, as now
constituted or hereafter
13
amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having
jurisdiction in the premises in respect to the account debtor in an
involuntary case under the federal bankruptcy laws, as now constituted
or hereafter amended, or if any other petition or other application
for relief under the federal bankruptcy laws has been filed by or
against the account debtor, or if the account debtor has failed,
suspended business, ceased to be solvent, or consented to or suffered
a receiver, trustee, liquidator or custodian to be appointed for it or
for all or a significant portion of its assets or affairs; or
(vi) the sale is to an account debtor outside the continental
United States, the United States Virgin Islands, or Canada, unless the
sale is (a) on letter of credit, guaranty or acceptance terms, in each
case acceptable to Administrative Agent in its sole discretion, or (b)
otherwise approved by and acceptable to Administrative Agent in its
reasonable discretion; or
(vii) the sale to the account debtor is on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return except in accordance with ordinary course of
business dealings or customary practice; or
(viii) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless Company or a
Permitted Subsidiary duly and effectively assigns its rights to
payment of such Account to Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 3727
et seq.); or
-- ----
(ix) the goods giving rise to such Account have not been
shipped and delivered to and accepted by the account debtor or the
services giving rise to such Account have not been performed by
Company or a Permitted Subsidiary and accepted by the account debtor
or the Account otherwise does not represent a final sale; or
(x) the Account is not subject to a valid, enforceable and
First Priority perfected Lien in favor of Administrative Agent; or
(xi) Administrative Agent, in the exercise of its reasonable
discretion, determines it to be ineligible.
"ELIGIBLE ASSIGNEE" means (a) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided that (x)
--------
such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the
14
Securities Act) which extends credit or buys loans as one of its businesses
including insurance companies, funds, investment companies and lease
financing companies; and (b) any Lender, any Affiliate of any Lender and,
with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial
loans and that is managed or advised by the same investment advisor as such
Lender or by an Affiliate of such investment advisor; provided that no
--------
Affiliate of Holdings shall be an Eligible Assignee.
"ELIGIBLE CRANES AND LIFTING EQUIPMENT" shall mean each of the Cranes
and Lifting Equipment that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title, (ii) unless in transit, is located on
property of a customer of Company or a Permitted Subsidiary, or is stored
on property that is either owned or leased by Company or a Permitted
Subsidiary (provided, that, with respect to Cranes and Lifting Equipment
stored on property leased by Company or a Permitted Subsidiary, Company or
a Permitted Subsidiary shall have delivered in favor of Administrative
Agent a Collateral Access Agreement from the landlord of such leased
property); (iii) is subject to a valid, enforceable and perfected First
Priority Lien in favor of Collateral Agent; (iv) is located in the United
States, unless otherwise undergoing ordinary maintenance, the United States
Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not obsolete;
(vi) unless otherwise undergoing ordinary maintenance, is available for
such use, rent or lease in the business of Company and its Permitted
Subsidiaries, is in a condition suitable for such use, rent or lease and is
routinely so used, rented or leased; (vii) conforms to the warranties
contained in this definition and to the Collateral Warranties; and (viii)
Administrative Agent has not determined in its reasonable judgment to be
ineligible.
"ELIGIBLE PARTS AND SUPPLIES INVENTORY" shall mean each of the Parts
and Supplies Inventory that (i) is owned solely by Company or a Permitted
Subsidiary and with respect to which Company or a Permitted Subsidiary has
good, valid and marketable title; (ii) is stored on property that is either
owned or leased by Company or a Permitted Subsidiary (provided, that, with
respect to Parts and Supplies Inventory stored on property leased by
Company or a Permitted Subsidiary, Company or Permitted Subsidiary shall
have delivered in favor of the Agent a Collateral Access Agreement from the
landlord of such leased property); (iii) is subject to a valid, enforceable
and perfected First Priority Lien in favor of Collateral Agent; (iv) is
located in the United States, the United States Virgin Islands, Canada or a
Caribbean jurisdiction; (v) is not obsolete; (vi) otherwise conforms to the
warranties contained in this definition and to the Collateral Warranties;
(vii) is subject to record keeping, valuation methodologies, and process
and reporting controls reasonably acceptable to Administrative Agent; and
(viii) Administrative Agent has not determined in its reasonable judgment
to be ineligible.
"ELIGIBLE TRUCKS AND TRAILERS" shall mean each of the Trucks and
Trailers that (i) is owned solely by Company or a Permitted Subsidiary and
with respect to which Company or a Permitted Subsidiary has good, valid and
marketable title; (ii) unless in transit, is stored on property that is
either owned or leased by Company or a Permitted Subsidiary when not rented
to an account debtor pursuant to an equipment lease (provided,
15
that, with respect to Trucks and Trailers stored on property leased by such
Company, such Company shall have delivered in favor of Administrative Agent
a Collateral Access Agreement from the landlord of such leased property);
(iii) is subject to a valid, enforceable and perfected First Priority Lien
(and no other Liens other than Permitted Encumbrances) in favor of
Administrative Agent; (iv) is located in the United States, the United
States Virgin Islands, Canada or a Caribbean jurisdiction; (v) is not
obsolete; (vi) unless otherwise undergoing ordinary maintenance is used or
available for use and in a condition available for use in the ordinary
course of business in connection with Company's and its Permitted
Subsidiary's equipment rental and sales activities; (vii) otherwise
conforms to the warranties contained in this definition and to the
Collateral Warranties; and (viii) Administrative Agent has not determined
in its reasonable judgment to be ineligible.
"EMPLOYMENT AGREEMENT" means the Employment Agreements between Company
and each of ▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇▇ in the form provided to Agents
pursuant to subsection 4.1C on or prior to the Closing Date.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare from environmental hazards (including
Hazardous Materials), in any manner applicable to Holdings or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. (S) 9601 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et seq.), the
-- ---
Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et seq.), the
-- ---
Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et seq.), the Clean
-- ---
Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances Control Act (15
-- ---
U.S.C. (S) 2601 et seq.), the Federal Insecticide, Fungicide and
-- ---
Rodenticide Act (7 U.S.C. (S)136 et seq.), the Occupational Safety and
-- ---
Health Act (29 U.S.C. (S) 651 et seq.), the Oil Pollution Act (33 U.S.C.
-- ---
(S) 2701 et seq.) and the Emergency Planning and Community Right-to-Know
-- ---
Act (42 U.S.C. (S) 11001 et seq.), each as amended or supplemented, any
-- ---
analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
16
"EQUITY CONTRIBUTION" means, collectively, (i) the contribution by
▇▇▇▇ and Other Investors to Holdings of cash in exchange for Common Units
of Holdings and (ii) the rollover equity contribution by the Existing
Investors for Common Units, as contemplated by the Recapitalization
Transactions in the aggregate amount valued at not less than $41,000,000.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto, and the regulations
promulgated and rulings issued thereunder.
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person
is a member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or
business described in clause (ii) above is a member. Any former ERISA
Affiliate of Holdings or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of Holdings or such Subsidiary within the
meaning of this definition with respect to the period such entity was an
ERISA Affiliate of Holdings or such Subsidiary and with respect to
liabilities arising after such period for which Holdings or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make by its
due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any
required contribution to a Multiemployer Plan; (iii) the provision by the
administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA
of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Holdings, any
of its Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Section 4063 or
4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate
any Pension Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is
any potential liability therefor, or the receipt by Holdings, any of its
Subsidiaries or
17
any of their respective ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission
which could give rise to the imposition on Holdings or any of its
Subsidiaries of fines, penalties, taxes or related charges under Chapter 43
of the Internal Revenue Code or under Section 409, Section 502(c), (i) or
(l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix)
the assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Holdings or any of its Subsidiaries in
connection with any Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan
to qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of the applicable Issuing Lender in
the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in exchange for Dollars at
12:00 noon (New York time) one Business Day prior to such date, expressed
as a number of units of such currency per one Dollar.
"EXCLUDED SUBSIDIARIES" means, collectively, all Subsidiaries in which
the fair market value (as reasonably determined and certified by senior
management of the Company) of that Subsidiary's assets does not exceed
$1,000,000; provided, however, that no Subsidiary shall be an Excluded
-------- -------
Subsidiary if it acquires assets with a fair market value in excess of
$1,000,000 in the aggregate or incurs Indebtedness or Contingent
Obligations in excess of $1,000,000 in the aggregate.
----------
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated
as of September 28, 1994, by and among Company as borrower, certain
financial institutions and Corestates Bank, N.A. as agent, as amended prior
to the Closing Date.
"EXISTING INVESTORS" means certain existing shareholders, management
officers and employees of Company and other investors identified in
Schedule 1.1(iii) annexed hereto as Existing Investors.
-----------------
18
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Holdings or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by Administrative
Agent from three Federal funds brokers of recognized standing selected by
Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Permitted Encumbrances) and (ii) such Lien is the only Lien (other than
Permitted Encumbrances and Liens permitted pursuant to subsection 7.2) to
which such Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Holdings and its Subsidiaries
ending on the December 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to
the calendar year in which such Fiscal Year ends.
"FLEET" has the meaning assigned to that term in the introduction to
this Agreement.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FOREIGN CASH EQUIVALENTS" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada, or a Caribbean
jurisdiction or any country that is a member of the European Economic
Community whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof, in each case with maturities of not more than one year from the
date of acquisition.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ or (ii) such other office of Administrative Agent and Swing
Line Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender to
Company and each Lender.
19
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsections 1.2 and 1.4, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
"GENERAL PARTNER" means ACR Management LLC, a Pennsylvania limited
liability company, the sole general partner of Company.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal,
state or local governmental authority, agency or court.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
"GUARANTIES" means the Holdings Guaranty and the Subsidiary Guaranty.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined in any statute or regulation as or included in the
definition in any statute or regulation of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous
waste", "infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by reason of
properties harmful to health, safety or the indoor or outdoor environment
(including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar meaning and regulatory
effect under any applicable Environmental Laws); (ii) any oil, petroleum,
petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal
resources; (iv) any flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde
foam insulation; (viii) polychlorinated biphenyls, including any oil or
dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance which could pose a hazard to
the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, present or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, migration, Release,
threatened Release, discharge, placement, generation, transportation,
processing, treatment, abatement, removal, remediation, disposal,
20
disposition or handling of any Hazardous Materials and any corrective
action or response action with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or
currency values.
"HOLDINGS" has the meaning assigned to that term in the introduction
to this Agreement.
"HOLDINGS GUARANTY" means the Holdings Guaranty executed and delivered
by Holdings and the General Partner on the Closing Date, substantially in
the form of Exhibit XV annexed hereto, as such Holdings Guaranty may
----------
thereafter be amended, supplemented or otherwise modified from time to time
as permitted thereunder and hereunder.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations
for borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA and any accrued expenses or trade
payables), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price
is evidenced by a note or similar written instrument, and (v) all
indebtedness secured by any Lien on any property or asset owned or held by
that Person regardless of whether the indebtedness secured thereby shall
have been assumed by that Person or is nonrecourse to the credit of that
Person. The amount of any Indebtedness which is non-recourse to the
obligor thereunder or to any other obligor and for which recourse is
limited to an identified asset or assets shall be equal to the lesser of
(1) the stated amount of such obligation and (2) the fair market value of
such asset or assets. Obligations under Interest Rate Agreements and
Currency Agreements constitute (X) in the case of Hedge Agreements,
Contingent Obligations, and (Y) in all other cases, Investments, and in
neither case constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INDEPENDENT PUBLIC ACCOUNTANT" means any of the five largest public
accounting firms in the United States selected by Holdings.
"INITIAL PERIOD" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments and (ii) the date which is 30 days
after the Closing Date.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the
conduct of the business of Holdings and its Subsidiaries as currently
conducted that are material to the condition
21
(financial or otherwise), business or operations of Holdings and its
Subsidiaries, taken as a whole.
"INTERCREDITOR AGREEMENT" means that certain Intercreditor Agreement
executed and delivered by Administrative Agent, Fleet, as administrative
agent for lenders under the Term Loan Credit Agreement, and Administrative
Agent on the Closing Date, substantially in the form of Exhibit XII annexed
-----------
hereto, as such Intercreditor Agreement may thereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months, "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement to which Holdings or any of its
Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any
successor statute, and the regulations promulgated by the Internal Revenue
Service thereunder.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and
work in process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Holdings), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Holdings from any
Person other than Holdings or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course
of business) or capital contribution by Holdings or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordi nary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not
22
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Invest ment.
"IP COLLATERAL" means, collectively, the "Intellectual Property" as
defined in the Pledge and Security Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any Subsidiary of any Person be considered
--------
to be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor
substantially agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to
the purchaser at a foreclosure sale or in a transfer in lieu of such a sale
(and to a subsequent third party assignee if Administrative Agent, any
Lender, or an Affiliate of either so acquires such Leasehold Property),
(ii) that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving Administrative
Agent notice of such default and at least 60 days (or, if such default
cannot reasonably be cured by Administrative Agent within such period, such
longer period as may reasonably be required) to cure such default, (iii) to
the matters contained in a Collateral Access Agreement, and (iv) to such
other matters relating to such Leasehold Property as Administrative Agent
may reasonably request; provided, however, that Administrative Agent may
-------- -------
determine in its reasonable discretion that any one or more of the
agreements set forth in clauses (i) through (iv) are not required to be
included in a Landlord Consent and Estoppel with respect to a particular
Leasehold Property.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its
reasonable discretion as not being required to be included in the
Collateral.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
--------
particular Commitment, shall mean Lenders having that Commitment.
23
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is
denominated in a currency other than Dollars shall be valued based on the
applicable Exchange Rate for such currency as of the applicable date of
determination.
"LEVERAGE RATIO" means the ratio of (i) the average outstanding
principal amount of the Loans and the Term Loans, less cash on hand, for
----
the quarterly period ending on the last day of any Fiscal Quarter to (ii)
Consolidated Adjusted EBITDA for the four-Fiscal Quarter period then ended,
in each case as set forth in the most recent Compliance Certificate
delivered by Company to Administrative Agent pursuant to clause (iv) of
subsection 6.1; provided, however, that with respect to any period during
-------- -------
which a Permitted Acquisition occurs, for purposes of calculating the Total
Leverage Ratio under subsections 2.4A(iii)(d), Consolidated Adjusted EBITDA
shall be determined in accordance with the provisions of subsection 7.6D,
except that any cost savings that would otherwise be given effect in
calculating Consolidated Adjusted EBITDA as a result of such provisions
shall not be given effect until such cost savings are actually realized.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement, any lease in the nature thereof, and
any agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"LOAN" or "LOANS" means one or more of the Revolving Loans or Swing
Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties, the Deposit Account
Agreement and the Collateral Documents.
"LOAN PARTY" means each of Holdings, General Partner, Company and any
of Company's Subsidiaries from time to time executing a Loan Document, and
"LOAN PARTIES" means all such Persons, collectively.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
24
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets or condition (financial or
otherwise) of Holdings and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of any Loan Party to perform, or of
Administrative Agent, Collateral Agent or Lenders to enforce, the
Obligations; provided that consummation of the Recapitalization
--------
Transactions in accordance with the terms of the Recapitalization Agreement
shall not be deemed to have a Material Adverse Effect for purposes of
subsection 5.4.
"MATERIAL CONTRACT" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that no Leasehold Property with respect to
--------
which the aggregate amount of all rents payable during any one Fiscal Year
never exceeds $1,000,000 shall be a "Material Leasehold Property".
"MATERIAL REAL PROPERTY ASSET" means a Real Property Asset reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, "Material Real Property Assets" shall not include
--------
any individual Real Property Asset that does not exceed $500,000 in fair
market value and, provided, further, that Real Property Assets that do not
--------
constitute Material Real Property Assets shall not exceed $3,000,000 in
aggregate fair market value.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XVI annexed hereto
-----------
or in such other form as may be approved by Administrative Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at
Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form reasonably
satisfactory to Administrative Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage,
in either case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time. "MORTGAGES" means
all such instruments, including the Closing Date Mortgages and any
Additional Mortgages, collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
25
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) received from such Asset Sale, net of any bona fide costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of
such Asset Sale as a result of any gain recognized in connection with such
Asset Sale and (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on any Indebtedness (other than the Loans)
that is secured by a Lien on the stock or assets in question and that is
repaid as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any
casualty insurance policy in respect of a covered loss thereunder or (ii)
as a result of the taking of any assets of Holdings or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net
of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims
of Holdings or such Subsidiary in respect thereof.
"NEW BUSINESS" means any assets or business acquired by Company or any
of its Subsidiaries in a Permitted Acquisition.
"NOTES" means one or more of the Revolving Notes or Swing Line Note or
any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent
---------
pursuant to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of Exhibit II annexed hereto delivered by Company to
----------
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to
-----------
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Lenders or their respective Affiliates or
any of them under the Loan
26
Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership, by the chairman of the board (if an officer) or chief
executive officer, chief operating officer, president or vice president or
by the chief financial officer of one of its partners and (y) if such
Person is a corporation, on behalf of such corporation by its chairman of
the board (if an officer), chief executive officer, chief operating officer
or its president or one of its vice presidents and, with respect to
financial matters only, by its principal financial officer or principal
accounting officer or its treasurer; provided that every Officers'
--------
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion
as to whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such condition has
been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"ORDERLY LIQUIDATION VALUE" shall mean with respect to each item of
Rental Equipment, an amount equal to (a) (y) with respect to each item of
Rental Equipment in existence as of the Closing Date, the appraised orderly
liquidation value (assuming liquidation within an 180-day period) of each
item of Rental Equipment as of the Closing Date specified on Schedule
--------
1.1(v) annexed hereto, and (z) with respect to each item of Rental
------
Equipment acquired subsequent to the Closing Date, the orderly liquidation
value (assuming liquidation within an 180-day period) of such Rental
Equipment (which shall not, in any event, exceed the purchase price
thereof, net of shipping costs and taxes, as determined [specify
methodology] pursuant to Schedule 1.1(vii) in form and substance reasonably
-----------------
satisfactory to Administrative Agent times (B) the Valuation Percentage.
-----
"OTHER INVESTORS" means [OPEN]
"PARTNERSHIP AGREEMENTS" means limited partnership agreements of
Holdings and Company.
"PARTNERSHIP LOAN PARTY" means any Loan Party which is a general or
limited partnership.
"PARTS AND SUPPLIES INVENTORY" shall mean as of any date of
determination Company's or a Permitted Subsidiary's inventory (valued at
the lower of book value and market value) consisting of parts and supplies
(excluding fluids and de minimus amounts of
27
other parts and supplies) being used or reasonably expected to be used in
the immediately succeeding twelve months in connection with the Rental
Equipment.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" means the acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(xvii).
"PERMITTED DOMESTIC SUBSIDIARY" means (y) the Subsidiaries set forth
at Schedule 1.1(vi) and (z) any wholly-owned Subsidiary of Company which is
----------------
organized under the laws of the United States or any state thereof;
provided however that all such Subsidiaries have not been capitalized in
-------- -------
Cash or other property, including equipment, of Company or another
Subsidiary of Company that exceed, in the aggregate, more than 3% of the
total assets of Company; provided however that all the assets thereof shall
-------- -------
be subject to a first priority perfected Lien in favor of the Collateral
Agent, and the Administrative Agent shall be reasonably satisfied that such
Liens are substantially similar in respect of priority, enforceability and
realization to those granted to Collateral Agent by the Company.
"PERMITTED EARN-OUT AGREEMENTS" means any other agreement by Company
to pay the seller or sellers of any Person or assets acquired in accordance
with the provisions of subsection 7.7(xiii) at any time following the
consummation of such acquisition by reference to the financial performance
of the person or assets acquired; provided that the aggregate amount of all
payments required to be made under Permitted Earn-Out Agreements shall not
exceed [15]% of the total consideration under any Permitted Acquisition.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly
prohibited by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess
of 5 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts, and (2) in the case of a Lien
28
with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of
the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Holdings or any of its Subsidi aries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other defects or irregularities in title, in each case which do
not and will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of
the interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause (b), so
long as the holder of such restriction or encumbrance agrees to
recognize the rights of such lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to operating leases or Capital Leases permitted by
this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar
29
agreements entered into in the ordinary course of business of Company
and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Holdings or such
Subsidiary; and
(xiii) Liens existing on the Closing Date and described in the
Closing Date Mortgage Policies.
"PERMITTED FOREIGN SUBSIDIARY" means any wholly-owned Subsidiary of
Company which is organized under the laws of Canada or a Caribbean
jurisdiction; provided however that all such Subsidiaries have not been
-------- -------
capitalized in Cash or other property, including equipment, by Company or
another Subsidiary of Holdings that exceeds, in the aggregate, more than 3%
of the total assets of Company; provided however that all the assets
-------- -------
thereof shall be subject to a perfected First Priority Lien in favor of the
Collateral Agent, and Administrative Agent shall be reasonably satisfied
that such Liens are substantially similar in respect of priority,
enforceability and realization to those granted to Collateral Agent by the
Company.
"PERMITTED SELLER NOTE" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable
to Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit XVIII annexed hereto,
-------------
representing any Indebtedness of Holdings or Company incurred in connection
with any Permitted Acquisition payable to the seller in connection
therewith, as such note may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.14B; provided
--------
that no Permitted Seller Note shall (i) be guarantied by any Subsidiary of
Company or secured by any property of Holdings, Company or any of its
Subsidiaries or (ii) bear cash interest at a rate greater than 15% per
annum; and provided further, that no Permitted Seller Note shall provide
-------- -------
for any prepayment or repayment of all or any portion of the principal
thereof prior to the date of the final scheduled installment of principal
of any of the Loans.
"PERMITTED SUBSIDIARIES" means, collectively, Permitted Domestic
Subsidiaries, Permitted Foreign Subsidiaries and Excluded Subsidiaries.
"PERMITTED TAX DISTRIBUTION" means, for so long as Holdings or Company
is treated as a partnership or disregarded as an entity separate from its
owners for federal income tax purposes, distributions to the partners of
Holdings or Company in an amount with respect to any period after June 30,
1998, not to exceed the amount of distributions, whether paid or accrued,
necessary to permit Holdings' and Company's partners to pay federal and
state income tax liabilities arising from income of Holdings or Company and
their respective Subsidiaries and taxable to such partners, including the
tax distributions contemplated by Holdings' and Company's respective
partnership agreements attributable to such partners solely as a result of
Holdings or Company (and any intermediate entity
30
through which any such partner owns its interest in Holdings or Company)
being a partnership or similar pass-through entity for federal income tax
purposes.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and
including political subdivisions thereof) and agencies or other
administrative or regulatory bodies thereof.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security
Agreement substantially in the form of Exhibit XIII annexed hereto, as such
------------
Pledge and Security Agreement may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Pledge and Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PREFERRED UNITS" means preferred interests of Holdings with an
initial liquidation value of $22,500,000, which were initially issued to
▇▇▇▇▇▇▇ Iron and Metal Company pursuant to the Recapitalization
Transactions.
"PRINCIPALS" means any Bain Investor, any Other Investor, their
respective Related Parties, and any Affiliate of any such Person.
"PROPOSED INSURANCE REINVESTMENT PROCEEDS" has the meaning assigned to
that term in subsection 6.4C.
"PRO RATA SHARE" means (i) with respect to all payments, computations
and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or
participations therein purchased by any Lender or any participations in any
Swing Line Loans purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the
-------- --
aggregate Revolving Loan Exposure of all Lenders, and (ii) for all other
purposes with respect to each Lender, the percentage obtained by dividing
--------
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection
10.1. The initial Pro Rata Share of each Lender for purposes of each of
clauses (i) and (ii) of the preceding sentence is set forth opposite the
name of that Lender in Schedule 2.1 annexed hereto.
------------
31
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to
create or perfect Liens on any IP Collateral.
"QUALIFIED PREFERRED UNITS" means payment-in-kind preferred units of
Holdings that have no cash-call or cash payment provision exercisable
during the term of the Loans or the Term Loan.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECAPITALIZATION AGREEMENT" means that certain Amended and Restated
Recapitalization Agreement dated as of July __, 1998, by and among Company,
Bain/ACR L.L.C. and ACR Management L.L.C., in the form delivered to Agents
and Lenders prior to their execution of this Agreement and as such
agreement may be amended from time to time thereafter to the extent
permitted under subsection 7.14A.
"RECAPITALIZATION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary to finance the Recapitalization Transactions.
"RECAPITALIZATION REVOLVING LOANS" has the meaning assigned to that
term in subsection 2.5A.
"RECAPITALIZATION TRANSACTIONS" means the series of transactions
described in Schedule 1.1(iv) annexed hereto.
----------------
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-
party purchasers and encumbrancers of the affected real property. For
purposes of this definition, the term "RECORD DOCUMENT" means, with respect
to any Leasehold Property, (a) the lease evidencing such Leasehold Property
or a memorandum thereof, executed and acknowledged by the owner of the
affected real property, as lessor, or (b) if such Leasehold Property was
acquired or subleased from the holder of a Recorded Leasehold Interest, the
applicable assignment or sublease document, executed and acknowledged by
such holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory to
Administrative Agent.
"REFERENCE LENDERS" means Fleet and [OTHER SYNDICATE MEMBER BANKS].
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
32
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Recapitalization
Agreement, the Securityholders Agreement, the Bain Advisory Services
Agreement, the Partnership Agreements, the Senior Notes, the Senior Note
Indenture, the Senior Discount Debentures and the Senior Discount
Indenture.
"RELATED PARTY" means (i) with respect to any Person, any stockholder,
officer, employee or partner of such Person and (a) trusts for the benefit
of such Person or the spouses, issue, parents or other relatives of such
Person, (b) entities controlling or controlled by such Person and (c) in
the event of death of any such individual Person, heirs or testamentary
legatees of such Person and, in addition, with respect to Bain, shall
include the Bain Investors.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the migration of any Hazardous Materials through the air, soil,
surface water or groundwater.
"RENTAL EQUIPMENT" shall mean (i) all of the Cranes and Lifting
Equipment, and (ii) all of the Trucks and Trailers, that in each case is
held for resale or held for lease by Company.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the aggregate Revolving Loan Exposure of all Lenders.
"RESPONSIBLE OFFICER" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the
general counsel, its principal financial officer or principal accounting
officer, the secretary or the treasurer of Holdings or, as applicable, any
Subsidiary of Holdings.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock, partnership interest or equivalent equity interests of Holdings or
Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock, partnership interest or equivalent equity
interests to the holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Holdings or
Company now or hereafter outstanding, (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of Holdings or Company now
or hereafter outstanding, and (iv) any cash payment or prepayment of
principal of, premium, if any, or interest on, or
33
redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness or the Senior Notes.
"REVOLVER LEVERAGE RATIO" means the ratio of (i) average principal
amount of Revolving Loans outstanding, less cash on hand, for the quarterly
period ending on the last day of any Fiscal Quarter to (ii) Consolidated
Adjusted EBITDA for the four-Fiscal Quarter period then ended, in each case
as set forth in the most recent Compliance Certificate delivered by Company
to Administrative Agent pursuant to clause (iv) of subsection 6.1.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(i), and "REVOLVING
LOAN COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earlier of (i)
July 22, 2004 or (ii) the date of termination in whole of the Revolving
Loan Commitments pursuant to subsection 2.4A or Section 8.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b)
----
in the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that Lender (in
each case net of any participations purchased by other Lenders in such
Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
----
aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any
Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
----
outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"REVOLVING NOTES" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the form of Exhibit IV annexed hereto, as they may be
----------
amended, supplemented or otherwise modified from time to time.
"SECURED PARTIES" has the meaning assigned to that term in the
Intercreditor Agreement.
"SECURITIES" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest
or participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences
34
of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or
any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITYHOLDERS AGREEMENT" means that certain securityholders
agreement among the General Partner, Holdings and various equityholders of
such entities as amended, modified and supplemented from time to time to
the extent permitted under sub section 7.14B.
"SENIOR DISCOUNT DEBENTURES" means $25,000,000 in initial aggregate
principal amount of Senior Discount Debentures of Holdings and ▇▇▇▇▇▇▇
▇▇▇▇▇ Holdings Capital Corporation issued pursuant to the Senior Discount
Indenture, as amended from time to time as permitted pursuant to subsection
7.14.
"SENIOR DISCOUNT INDENTURE" means the indenture pursuant to which the
Senior Discount Debentures are issued, as such indenture may be amended
from time to time to the extent permitted under subsection 7.14B.
"SENIOR NOTE INDENTURE" means the indenture pursuant to which the
Senior Notes are issued, as such indenture may be amended from time to time
to the extent permitted under subsection 7.14B.
"SENIOR NOTES" means the $155,000,000 in aggregate principal amount of
Senior Notes due July, 2008 of Company and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
Corporation issued pursuant to the Senior Note Indenture, including any
notes issued in exchange for such notes as contemplated under the Senior
Note Indenture, as amended from time to time as permitted pursuant to
subsection 7.14B.
"SHAREHOLDER SUBORDINATED NOTE" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by Company or any of its Subsidiaries) containing subordination
provisions substantially in the form of, or no less favorable to Lenders
(in the reasonable judgment of Administrative Agent) than the subordination
provisions contained in Exhibit XVIII annexed hereto, as such note may be
-------------
amended, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.14B.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property
(sold as a going concern) of such Person is (y) greater than the total
amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such
35
Person; (ii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iii) such
Person does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as
they become due; and (B) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to fraudulent
transfers and conveyances. For purposes of this definition, the amount of
any contingent liability at any time shall be computed as the amount that,
in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Holdings or any of
its Subsidiaries, (v) performance, payment, deposit or surety obligations
of Holdings or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (vi) such other obligations of Company and its
Subsidiaries as are reasonably acceptable to Administrative Agent and the
Issuing Lender and otherwise permitted to exist pursuant to the terms of
this Agreement; provided that Standby Letters of Credit may not be issued
--------
for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means (i) any Permitted Seller Notes, (ii)
any Shareholder Subordinated Notes, and (iii) any other Indebtedness of
Holdings, or any of its Subsidiaries subordinated in right of payment to
the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" with respect to any Person means any corporation,
partnership or limited liability company organized under the laws of the
United States of America or a jurisdiction thereof, the financial
statements of which are consolidated with the financial statements of such
Person for GAAP financial reporting purposes. The term "Subsidiary", when
used herein without reference to any particular Person, shall mean a
Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Holdings, other than
Company, that executes and delivers a counterpart of the Subsidiary
Guaranty on the Closing Date or from time to time thereafter pursuant to
subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by all Subsidiaries of Holdings (other than Company and the
Excluded Subsidiaries) on the Closing Date and to be executed and delivered
by additional Subsidiaries of Holdings from
36
time to time thereafter in accordance with subsection 6.8, substantially in
the form of Exhibit XIV
-----------
annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"SWING LINE LENDER" means Fleet, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender
hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(ii).
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(ii).
"SWING LINE NOTE" means any promissory note of Company issued pursuant
to subsection 2.1E to evidence the Swing Line Loans of Swing Line Lender,
substantially in the form of Exhibit V annexed hereto, as it may be
---------
amended, supplemented or otherwise modified from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
--------
shall be construed as a reference to a tax imposed by the jurisdiction in
which that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TERM LOAN CREDIT AGREEMENT" means that certain Term Loan Credit
Agreement of even date herewith, by and among Company, Holdings, GSCP, as
Arranger and Syndication Agent, Fleet, as Collateral Agent and
Administrative Agent, and DLJ, as Documentation Agent, as such Term Loan
Credit Agreement may be amended, supplemented, refinanced, renewed,
extended or otherwise modified from time to time to the extent permitted
under subsection 7.14C.
"TERM LOAN CREDIT DOCUMENTS" means the Term Loan Credit Agreement, the
promissory notes issued thereunder and each other document executed in
connection with the Term Loan Credit Agreement.
37
"TERM LOANS" means the second priority secured term loans of Company
outstanding pursuant to the Term Loan Credit Agreement in the original
principal amount of $50,000,000.
"TITLE COMPANY" means, collectively, First American Title Insurance
Company and/or one or more other title insurance companies reasonably
satisfactory to Syndication Agent and Administrative Agent.
"TOTAL LEVERAGE RATIO" means the ratio of (i) average Consolidated
Total Debt, less cash on hand, for the quarterly period ending on the last
----
day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period then ended, in each case as set forth in the
most recent Compliance Certificate delivered by Company to Administrative
Agent pursuant to clause (iv) of subsection 6.1; provided, however, that
-------- -------
with respect to any period during which a Permitted Acquisition occurs, for
purposes of calculating the Total Leverage Ratio in the definition of
Applicable Total Leverage Ratio, Consolidated Adjusted EBITDA shall be
determined in accordance with the provisions of subsection 7.6D, except
that any cost savings that would otherwise be given effect in calculating
Consolidated Adjusted EBITDA as a result of such provisions shall not be
given effect until such cost savings are actually realized.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"TRANSACTION COSTS" means the fees, costs, premiums, penalties and
expenses payable by Holdings and Company in connection with the
transactions contemplated by the Loan Documents, the Term Loan Credit
Documents and the Related Agreements.
"TRUCKS AND TRAILERS" means each item of equipment identified on
Schedule 1.1(d)B to the Pledge and Security Agreement, as it may be
supplemented from time to time.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"VALUATION PERCENTAGE" means, at any date of determination, the
percentage (which shall not be greater than 1.0) set forth on Schedule
--------
1.1(v) hereto applicable as of such date of determination with respect to
------
the item of Rental Equipment the Orderly Liquidation Value of which is then
being determined.
"WHOLLY-OWNED" means, with respect to any Subsidiary, that all of the
equity Securities of such Subsidiary are owned by one other Person;
provided, any Subsidiary that
---------
38
is a limited partnership shall be deemed to be wholly-owned by another
Person so long as such other Person owns all of the limited partnership
interests of such Subsidiary.
"YEAR 2000 COMPLIANT" means with regard to any Person that by December
31, 1998 all computer applications that are material to Holdings and its
Subsidiaries' business and operations will, prior to _______________, be
able to perform properly date-sensitive functions for all dates before and
after January 1, 2000, except to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
------------------------------------------------------------------------
AGREEMENT.
---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial state ments and other information required to
be delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and
(xiii) of subsection 6.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
December 31, 1997 financial statements referred to in subsection 5.3.
Notwithstanding the foregoing, except as otherwise specifically provided herein,
all computations determining compliance with subsection 2.4 and Section 7, and
the calculation of the Total Leverage Ratio, the Leverage Ratio and Revolving
Total Leverage Ratio for all purposes set forth herein, in each case, including
the definitions used therein, shall utilize accounting principles and policies
in effect at the time of the preparation of, and in conformity with those used
to prepare, the December 31,1997 financial statements of Holdings and its
Subsidiaries delivered to the Lenders, but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development, in each case arising in
connection with any Permitted Acquisitions) and APB 17 and its interpretations
(including non-cash charges relating to intangibles and goodwill arising in
connection with any Permitted Acquisitions).
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
-------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
39
D. Each reference to a "Fiscal Quarter period" of a specified number of
Fiscal Quarters shall be a reference to a period of consecutive Fiscal Quarters
of such number.
1.4 CHANGES IN GAAP.
---------------
In the event that a change in GAAP or other accounting principles and
policies after the date hereof affects in any material respect the calculations
of the compliance by Holdings and its Subsidiaries with the covenants contained
herein, Lenders, Company and Holdings agree to negotiate in good faith to amend
the affected covenants (and related definitions) to compensate for the effect of
such changes so that the restrictions, limitations and performance standards
effectively imposed by such covenants, as so amended, are substantially
identical to the restrictions, limitations and performance standards imposed by
such covenants as in effect on the date hereof; provided that if Requisite
--------
Lenders, Company and Holdings fail to reach agreement with respect to such
amendment within a reasonable period of time following the date of effectiveness
of any such change, calculation of compliance by Holdings and its Subsidiaries
with the covenants contained herein shall be determined in accordance with GAAP
as in effect immediately prior to such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
-------------------------------------------------
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Holdings and Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i) and Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(ii).
(i) Revolving Loans. Each Lender severally agrees, subject to the
---------------
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to lend to Company
from time to time during the period from the Closing Date to but excluding
the Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5. The
original amount of each Lender's Revolving Loan Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate original
------------
amount of the Revolving Loan Commitments is $275,000,000; provided that the
--------
Revolving Loan Commitments of Lenders shall be adjusted to give effect to
any assignments of the Revolving Loan Commitments pursuant to subsection
10.1B; and provided, further that the amount of the Revolving Loan
-------- -------
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4A(ii). Each Lender's
Revolving Loan Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date. Amounts
borrowed under
40
this subsection 2.1A(i) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding
in no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the lesser of (y), the Revolving Loan Commitments then in
effect and (z) the Adjusted Borrowing Base Amount then in effect.
(ii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $15,000,000; provided that any reduction of the
--------
Revolving Loan Commitments made pursuant to subsection 2.4A(ii) which
reduces the aggregate Revolving Loan Commitments to an amount less than the
then current amount of the Swing Line Loan Commitment shall result in an
automatic corresponding reduction of the Swing Line Loan Commitment to the
amount of the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Administrative Agent or Swing Line
Lender. The Swing Line Loan Commitment shall expire on the Revolving Loan
Commitment Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be paid in full
no later than that date. Amounts borrowed under this subsection 2.1A(ii)
may be repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4A(ii), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 11:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans (the
"REFUNDED SWING LINE LOANS") outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall
no longer be outstanding as Swing Line Loans and
41
shall no longer be due under the Swing Line Note, if any, of Swing Line
Lender but shall instead constitute part of Swing Line Lender's outstanding
Revolving Loans and shall be due under the Revolving Note, if any, of Swing
Line Lender. Company hereby authorizes Administrative Agent and Swing Line
Lender to charge Company's accounts with Administrative Agent and Swing
Line Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent the proceeds of such Revolving Loans made by Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender, are
not sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line Lender
should be recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the
loss of the amount so recovered shall be ratably shared among all Lenders
in the manner contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause (b),
immediately prior to such termination of the Revolving Loan Commitments) of
the unpaid amount of such Swing Line Loans together with accrued interest
thereon. Upon one Business Day's notice from Swing Line Lender, each
Lender shall deliver to Swing Line Lender an amount equal to its respective
participation in same day funds at the Funding and Payment Office. In
order to further evidence such participation (and without prejudice to the
effectiveness of the participation provisions set forth above), each Lender
agrees to enter into a separate participation agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing
Line Lender. In the event any Lender fails to make available to Swing Line
Lender the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the rate
customarily used by Swing Line Lender for the correction of errors among
banks for three Business Days and thereafter at the Base Rate. In the event
Swing Line Lender receives a payment of any amount in which other Lenders
have purchased participations as provided in this paragraph, Swing Line
Lender shall promptly distribute to each such other Lender its Pro Rata
Share of such payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition
42
(financial or otherwise) or prospects of Holdings or any of its
Subsidiaries; (d) any breach of this Agreement or any other Loan Document
by any party thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided that
--------
such obligations of each Lender are subject to the condition that (X) Swing
Line Lender believed in good faith that all conditions under Section 4 to
the making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (Y) the
satisfaction of any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made.
B. BORROWING MECHANICS. Revolving Loans made on any Funding Date (other
than Revolving Loans made pursuant to a request by Swing Line Lender pursuant to
subsection 2.1A(ii) for the purpose of repaying any Refunded Swing Line Loans or
Revolving Loans made pursuant to subsection 3.3B for the purpose of reimbursing
any Issuing Lender for the amount of a drawing under a Letter of Credit issued
by it) shall be in an aggregate minimum amount of $500,000 and integral
multiples of $100,000 in excess of that amount; provided that Revolving Loans
--------
made on any Funding Date as Eurodollar Rate Loans with a particular Interest
Period shall be in an aggregate minimum amount of $1,000,000 and integral
multiples of $50,000 in excess of that amount. Swing Line Loans made on any
Funding Date shall be in an aggregate minimum amount of $100,000 and integral
multiples of $100,000 in excess of that amount. Whenever Company desires that
Lenders make Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). Whenever Company desires that
Swing Line Lender make a Swing Line Loan, it shall deliver to Administrative
Agent a Notice of Borrowing no later than 12:00 Noon (New York City time) on the
proposed Funding Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and type of Loans
requested, (iii) in the case of Swing Line Loans, that such Loans shall be Base
Rate Loans, (iv) in the case of any Revolving Loans, whether such Loans shall be
Base Rate Loans or Eurodollar Rate Loans, (v) in the case of any Loans requested
to be made as Eurodollar Rate Loans, the initial Interest Period requested
therefor and, (vi) that, after giving effect to the Loans requested thereby, the
Total Utilization of Revolving Loan Commitments will not exceed the lesser of
(y) the Revolving Loan Commitments then in effect and (z) the Adjusted Borrowing
Base Amount then in effect. Revolving Loans may be continued as or converted
into Base Rate Loans and Eurodollar Rate Loans in the manner provided in
subsection 2.2D. In lieu of delivering the above-described Notice of Borrowing,
Company may give Administrative Agent telephonic notice by the required time of
any proposed borrowing under this subsection 2.1B; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of
43
Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any Loans
in the event that any of the matters to which Company is required to certify in
the applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Revolving Loans under this Agreement shall
be made by Lenders simultaneously and proportionately to their respective Pro
Rata Shares, it being under stood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender to make the
particular type of Loan requested be increased or decreased as a result of a
default by any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative Agent of a Notice
of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Administrative Agent shall notify each Lender or Swing Line Lender, as the case
may be, of the proposed borrowing. Each Lender shall make the amount of its
Loan available to Administrative Agent not later than 1:00 P.M. (New York City
time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Administrative Agent not later than
2:00 P.M. (New York City time) on the applicable Funding Date, in each case in
same day funds in Dollars, at the Funding and Payment Office. Except as
provided in subsection 2.1A(ii) or subsection 3.3B with respect to Revolving
Loans used to repay Refunded Swing Line Loans or to reimburse any Issuing Lender
for the amount of a drawing under a Letter of Credit issued by it, upon
satisfaction or waiver of the conditions precedent specified in subsections 4.1
(in the case of Loans made on the Closing Date) and 4.2 (in the case of all
Loans), Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds in
Dollars equal to the proceeds of all such Loans received by Administrative Agent
from Lenders or Swing Line Lender, as the case may be, to be credited to the
account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any Lender prior to
the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative
44
Agent, at the customary rate set by Administrative Agent for the correction of
errors among banks for three Business Days and thereafter at the Base Rate. If
such Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Company and
Company shall [immediately [FLEET ISSUE]] pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "REGISTER"). The Register shall be available for inspection by
Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Revolving
Loan Commitment and the Revolving Loans from time to time of each Lender,
the Swing Line Loan Commitment and the Swing Line Loans from time to time
of Swing Line Lender, and each repayment or prepayment in respect of the
principal amount of the Revolving Loans of each Lender or the Swing Line
Loans of Swing Line Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided that
--------
failure to make any such recordation, or any error in such recordation,
shall not affect any Lender's Commitments or Company's Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including the
Notes held by such Lender) the amount of each Revolving Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive
and binding on Company, absent manifest error; provided that failure to
--------
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans; and provided, further that in the event of any
-------- -------
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern and be conclusive and binding on
such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii). Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
45
authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates Fleet to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1D, and Company hereby agrees that, to the extent Fleet serves
in such capacity, Fleet and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under subsection
10.3.
E. OPTIONAL NOTES. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date or at any time thereafter, Company shall execute and deliver
to such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Revolving Loans or Swing Line Loans, substantially in the
form of Exhibit IV or Exhibit V annexed hereto, respectively, with appropriate
---------- ---------
insertions.
2.2 INTEREST ON THE LOANS.
---------------------
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Revolving Loan shall bear interest on the unpaid principal amount
thereof from the date made through but excluding the date of maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base Rate
or the Adjusted Eurodollar Rate. Subject to the provisions of subsection 2.7,
each Swing Line Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate. The applicable basis for
determining the rate of interest with respect to any Revolving Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis for determining the
interest rate with respect to any Revolving Loan may be changed from time to
time pursuant to subsection 2.2D. If on any day a Revolving Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Revolving Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
46
(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin.
----
B. INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, a one-, two-, three- or six-month period or, if
deposits in the interbank Eurodollar market are generally available for such
period (as determined by each Lender making, converting to or continuing such
Eurodollar Rate Loan), a one-week, two-week or twelve-month period; provided
--------
that:
(i) the initial Interest Period for any Eurodollar Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as a Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
--------
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Revolving
Loans shall extend beyond the Revolving Loan Commitment Termination Date;
(vi) Company shall not select an Interest Period of longer than one
week prior to the end of the Initial Period;
(vii) there shall be no more than twelve (12) Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
47
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to but excluding each
Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued on the amount being prepaid) and at maturity (including
final maturity); provided that in the event any Swing Line Loans or any
--------
Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4A, interest accrued on such Swing Line Loans or Revolving Loans through the
date of such prepayment shall be payable on the next succeeding Interest Payment
Date applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Revolving Loans equal to $500,000 and integral multiples of
$100,000 in excess of that amount from Loans bearing interest at a rate
determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that Loans
-------- -------
may not be continued as or converted to Eurodollar Rate Loans with an Interest
Period longer than one month prior to the end of the Initial Period.
Company shall deliver a Notice of Conversion/Continuation at any time after
the Closing Date to Administrative Agent no later than 12:00 Noon (New York City
time) at least one Business Day in advance of the proposed conversion date (in
the case of a conversion to a Base Rate Loan) and at least three Business Days
in advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/ Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to be
converted/continued, (iii) the nature of the proposed conversion/continuation,
(iv) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, the requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, a Eurodollar Rate Loan, that no Potential Event of Default or
Event of Default has occurred and is continuing. In lieu of delivering the
above-described Notice of Conversion/Continuation, Company may give
Administrative Agent telephonic notice by the required time of any proposed
conversion/ continuation under this subsection 2.2D; provided that such notice
--------
shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to Administrative Agent on or before the proposed
conversion/continuation date. Upon receipt of written or telephonic notice of
any proposed conversion/continuation under this subsection 2.2D, Administrative
Agent shall promptly transmit such notice by telefacsimile or telephone to each
Lender.
Neither Administrative Agent nor any Lender shall incur any liability to
Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
48
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Conversion/ Continuation for conversion to, or continuation of, a Eurodollar
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. POST-MATURITY INTEREST. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees arising pursuant to subsection 2.3 owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall, if Requisite Lenders so elect in writing,
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand
at a rate which is 2% per annum in excess of the interest rate otherwise payable
at maturity under this Agreement with respect to the applicable Loans (or, in
the case of any such fees at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement for Base Rate Loans);
provided that, in the case of overdue Eurodollar Rate Loans, upon the expiration
--------
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
--------
day on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
----
A. COMMITMENT FEES. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments multiplied by the Applicable Commitment Fee
-------------
Percentage, such commitment fees to be calculated on the basis of a 360-day year
and the actual number of days elapsed and to be payable quarterly in arrears on
March 15, June 15, September 15
49
and December 15 of each year, commencing on the first such date to occur after
the Closing Date, and on the Revolving Loan Commitment Termination Date.
B. OTHER FEES. Company agrees to pay to Agents such fees in the amounts
and at the times separately agreed upon between Company, Syndication Agent and
Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
---------------------------------------------------------------------
GENERAL PROVISIONS REGARDING PAYMENTS; APPLICATION OF PROCEEDS OF
-----------------------------------------------------------------
COLLATERAL AND PAYMENTS UNDER GUARANTIES.
----------------------------------------
A. PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and integral multiples of $100,000 in excess of
that amount. Company may, upon written or telephonic notice on the date of
prepayment, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in each
case given to Administrative Agent by 12:00 Noon (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing
to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone
to each Lender), at any time and from time to time prepay any Revolving
Loans on any Business Day in whole or in part in an aggregate minimum
amount of $500,000 and integral multiples of $100,000 in excess of that
amount. Notice of prepayment having been given as aforesaid, the principal
amount of the Loans specified in such notice shall become due and payable
on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4A(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments. Company may,
--------------------------------------------------
upon not less than three Business Days' prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit by
telefacsimile or telephone to each Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Loan Commitments in an amount up to the amount by
which the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination or
reduction after giving effect to any concurrent repayment of Loans and
Letter of Credit; provided that any such partial reduction of the Revolving
--------
Loan Commitments shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount. Company's
notice to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
50
(iii) Mandatory Prepayments. The Loans shall be prepaid in the
---------------------
amounts and under the circumstances set forth below, all such prepayments
to be applied as set forth below or as more specifically provided in
subsection 2.4A(iv).
(a) Prepayments From Net Asset Sale Proceeds. No later than the
----------------------------------------
fifth Business Day following the date of receipt by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in respect of any
Asset Sale, Company shall prepay the Loans in an aggregate amount
equal to such Net Asset Sale Proceeds. Notwithstanding the foregoing,
the Net Asset Sale Proceeds shall not be required to repay Loans as
set forth above, to the extent that and so long as such Net Asset Sale
Proceeds are (or a contract is entered into to), within 365 days of
receipt of such proceeds, reinvested in the business of the Company
and its Subsidiaries.
(b) Prepayments from Net Insurance/Condemnation Proceeds. No
----------------------------------------------------
later than the tenth Business Day following the date of receipt by
Administrative Agent or by Company or any of its Subsidiaries of any
Net Insurance/Condemnation Proceeds that are required to be applied to
prepay the Loans pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds minus (if (1) no
-----
Event of Default shall have occurred and be continuing and (2) Company
shall have delivered to Administrative Agent, on or before such tenth
Business Day, the Officers' Certificate described in subsection
6.4C(ii)), any Proposed Insurance Reinvestment Proceeds; provided,
--------
however, that at Company's option, such Proposed Insurance
-------
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans to the full extent thereof. In addition, no later than 365 days
after receipt of any Proposed Insurance Reinvestment Proceeds, Company
shall prepay the Loans in an amount equal to the amount of any such
Proposed Insurance Reinvestment Proceeds that have not theretofore
been applied to the costs of repairing, restoring or replacing the
applicable assets of Company or its Subsidiaries or reinvested in
assets used in the ordinary course of business; provided that Company
--------
shall not be required to make any prepayment of the Loans to the
extent that the sum of Net Asset Sale Proceeds plus Net
----
Insurance/Condemnation Proceeds from the Closing Date through the date
of determination does not exceed 2% of total assets of Company.
(c) Prepayments Due to Issuance of Debt. On the date of receipt
-----------------------------------
by Holdings, Company or any of their respective Subsidiaries of the
Cash proceeds of any Indebtedness, including debt Securities of
Holdings, Company or any of their respective Subsidiaries (other than
the Loans and any other Indebtedness permitted under subsections 7.1
(such proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being the "NET INDEBTEDNESS
PROCEEDS")), Company shall prepay the Loans in an aggregate amount
equal to such Net Indebtedness Proceeds; provided, however, that
-------- -------
payment or acceptance of the amounts provided for in this subsection
2.4A(iii)(c) shall not constitute a waiver of any Event of Default
resulting from the incurrence of such Indebtedness or otherwise
51
prejudice any rights or remedies of Agents or Lenders. If Company is
otherwise required to apply any portion of Net Indebtedness Proceeds
to prepay Indebtedness evidenced by the Term Loans or the Senior
Notes, then notwithstanding anything contained in this Agreement to
the contrary Company shall apply such Net Indebtedness Proceeds to the
prepayment of the Loans so as to eliminate or minimize any obligation
to prepay the Term Loans or the Senior Notes.
(d) Prepayments Due to Issuance of Equity Securities. On the
------------------------------------------------
date of receipt by Holdings or Company of Cash proceeds (any such
proceeds, net of under writing discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "NET EQUITY PROCEEDS") from
the issuance of any equity Securities of Holdings or Company after the
Closing Date (other than (A) capital contributions by Holdings to
Company or any other Subsidiary, (B) issuances of Securities to the
General Partner or Holdings by the Company, or (C) issuances of
Holdings Common Units, Preferred Units or Qualified Preferred Units
(x) to employees, officers, directors and consultants of Holdings and
its Subsidiaries in the ordinary course of business in connection with
their employment by Holdings, Company or its Subsidiaries and (y) to
▇▇▇▇ Investors, their Related Parties or the Existing Investors to the
extent the Cash proceeds thereof are not in excess of $25,000,000 and
(z) as payment of all or any portion of the purchase price of a
business or assets in a Permitted Acquisition), Company shall prepay
the Loans in an aggregate amount equal to: (i) 50% (or, if the
Leverage Ratio is not more than 3.5 to 1.0 on the date such Net Equity
Proceeds are received, no such payment shall be made) of such Net
Equity Proceeds if such Net Equity Proceeds are derived from a non-
public sale of equity Securities or partnership interests of Holdings
or Company or (ii) 75% (or, if the Leverage Ratio is not more than 3.5
to 1.0 on the date such Net Equity Proceeds are received, no such
payment shall be made) of such Net Equity Proceeds if such Net Equity
Proceeds are derived from the sale of equity Securities or partnership
interests of Holdings or Company through a public offering. If
Company is otherwise required to apply any portion of Net Equity
Proceeds to prepay Indebtedness evidenced by the Term Loans or the
Senior Notes, then notwithstanding anything contained in this
Agreement to the contrary, Company shall apply such Net Equity
Proceeds to the prepayment of the Revolving Loans so as to eliminate
or minimize any obligation to prepay the Term Loans or the Senior
Notes.
(e) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with any
-----------------------------------------------
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d),
Company shall deliver to Administrative Agent an Officers' Certificate
demonstrating the calculation of the amount (the "NET PROCEEDS
AMOUNT") of the applicable Net Asset Sale Proceeds, Net
Insurance/Condemnation Proceeds, Net Indebtedness Proceeds or Net
Equity Proceeds (as such terms are defined in subsections
2.4A(iii)(a), (b), (c) and (d), respectively), as the case may be,
that gave rise to such prepayment. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater
than the amount set forth in such Officers' Certificate, Company shall
52
promptly make an additional prepayment of the Loans in an amount equal
to the amount of such excess, and Company shall concurrently therewith
deliver to Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting in such
excess.
(f) Prepayments Relating to the Borrowing Base. Company shall
------------------------------------------
from time to time prior to the Revolving Loan Commitment Termination
Date, prepay Revolving Loans and Swing Line Loans (and after all Loans
have been repaid, deposit in a collateral account same day funds in an
amount equal to the Letter of Credit Usage until such time as the
Letters of Credit shall have been terminated and the Letter of Credit
Usage has been reduced to zero or until no payment is otherwise
required under this clause (f)) in such amounts as shall be necessary
so that at all times the Total Utilization of Revolving Loan
Commitments shall not exceed the Adjusted Borrowing Base Amount then
in effect.
(g) Prepayments Due to Restrictions of Revolving Loan
-------------------------------------------------
Commitments. Company shall from time to time prepay first the Swing
------------ -----
Line Loans and second the Revolving Loans to the extent necessary so
------
that the Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
--------------------------
(a) Application of Voluntary Prepayments by Type of Loans and
---------------------------------------------------------
Order of Maturity. Any voluntary prepayments pursuant to subsection
-----------------
2.4A(i) shall be applied as specified by Company in the applicable
notice of prepayment; provided that in the event Company fails to
--------
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied first to repay outstanding Swing Line
-----
Loans to the full extent thereof and second to repay outstanding
------
Revolving Loans to the full extent thereof.
(b) Application of Mandatory Prepayments by Type of Loans. Any
-----------------------------------------------------
amount (the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans pursuant to subsections 2.4A(iii)(a)-(d) shall
be applied first to prepay the Swing Line Loans to the full extent
-----
thereof and second to the extent of any remaining portion of the
------
Applied Amount, to prepay the Revolving Loans to the full extent
thereof.
(c) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Any prepayment shall be applied first to Base Rate Loans
----------
to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection 2.6D.
53
B. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
--------------------------
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 1:00 P.M. (New York City time) on the
date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
[FLEET] due hereunder (subject to sufficient funds being available in its
accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Revolving Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Administrative
Agent shall promptly distribute to each Lender, at its primary address set
forth below its name on the appropriate signature page hereof or at such
other address as such Lender may request, its Pro Rata Share of all such
payments received by Administrative Agent and the commitment fees of such
Lender when received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if,
pursuant to the provisions of subsection 2.6C, any Notice of Conversion/
Continuation is withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(iv) Payments on Business Days. Subject to the provisions of
-------------------------
subsection 2.2B whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
--------
that the failure to make (or any error in the making of) a notation of any
Loan made under
54
such Note shall not limit or otherwise affect the obligations of Company
hereunder or under such Note with respect to any Loan or any payments of
principal or interest on such Note.
C. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER GUARANTIES.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsections 2.4A(iii)(a) and 2.4A(iii)(b) with respect to prepayments from
Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all
proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral under any Collateral Document during the continuation of an
Event of Default may, in the discretion of Administrative Agent, be held by
Administrative Agent as Collateral for, and/or (then or at any time
thereafter) applied in full or in part by Administrative Agent against,
the applicable Secured Obligations (as defined in such Collateral Document)
in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including all expenses, liabilities
and advances made or incurred by Administrative Agent and its agents
and counsel in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations then due and owing
for the benefit of the holders thereof in accordance with the terms of
Intercreditor Agreement; and
(c) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
----------------------------------------
by Administrative Agent under either Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of
priority:
(a) To the payment of the costs and expenses of any collection
or other realization under such the Guaranty, including all expenses,
liabilities and advances made or incurred by Administrative Agent and
its agents and counsel in connection therewith, all in accordance with
the terms of this Agreement and Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
55
(c) thereafter, to the extent of any excess such payments, to
the payment to Holdings or the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a court
of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
---------------
A. INITIAL REVOLVING LOANS. $125,000,000 in aggregate principal amount
of Revolving Loans made on the Closing Date (the "RECAPITALIZATION REVOLVING
LOANS"), together with the proceeds of the Term Loans made on the Closing Date
under the Term Loan Credit Agreement and the proceeds of the debt and equity
capitalization of Holdings and Company described in subsections 4.1D(i), (iii),
and (iv), shall be applied by Holdings and Company to fund the Recapitalization
Financing Requirements.
B. POST CLOSING DATE REVOLVING LOANS AND SWING LINE LOANS. Revolving
Loans and Swing Line Loans made after the Closing Date may be used by Company
for working capital and general corporate purposes, which may include the making
of intercompany loans to any of Company's wholly-owned Subsidiaries, in
accordance with subsection 7.1, for their own working capital and general
corporate purposes (including Consolidated Capital Expenditure) and financing
Permitted Acquisitions.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Holdings or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation U, Regulation T or Regulation X of the Board of Governors of
the Federal Reserve System or any other regulation of such Board or to violate
the Exchange Act, in each case as in effect on the date or dates of such
borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
--------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the interbank Eurodollar market adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such
56
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Administrative Agent notifies Company
and Lenders that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of Conversion/ Continuation given by
Company with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto but shall be made only
after consultation with Company and Administrative Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not having the
force of law even though the failure to comply therewith would not be unlawful)
or (ii) has become impracticable, or would cause such Lender material hardship,
as a result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "AFFECTED LENDER" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to Company and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other Lender). Thereafter (a) the obligation of the Affected Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "AFFECTED
LOANS") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, promptly upon written request by that
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain:
57
(i) if for any reason (other than a default by that Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Subject to its obligations under
subsection 2.8, any Lender may make, carry or transfer Eurodollar Rate Loans at,
to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
-------- -------
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of an Event of Default, (i) Company may not elect to
have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan
after the expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation of, or into, Eurodollar Rate Loans that has
not yet occurred shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
----------------------------------------
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after
58
the date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as may be necessary to compensate such Lender
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or
59
payable by Company to Administrative Agent or any Lender under any of the
Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to
pay is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case may be)
on behalf of and in the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased to
the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal
to what it would have received had no such deduction, withholding or
payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the date hereof (in the case of each Lender listed on the signature pages
hereof) or after the date of the Assignment Agreement pursuant to which
such Lender became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned therein
shall result in an increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(ii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-US LENDER") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such other
times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service Form
1001 or 4224 (or any
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successor forms), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption required
under the Internal Revenue Code or the regulations issued thereunder
to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any
payments to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly executed
by such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the regulations
issued thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any
of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, together with
any other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to
payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any such
forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause (a) or
(b)(1) of this subsection 2.7B(iii); provided that if such Lender
--------
shall have satisfied the requirements of subsection 2.7B(iii)(a) on
the Closing Date (in the case of each Lender listed on the signature
pages hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing
in this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause (c) of
subsection 2.7B(ii) in the event that, as a result of any change in
any applicable law, treaty or governmental rule, regulation or order,
or any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in
subsection 2.7B(iii)(a).
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C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
-----------------------------------------------------
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
--------
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses
payable by Company pursuant to this subsection 2.8 (setting
62
forth in reasonable detail the basis for requesting such amount) submitted by
such Lender or Issuing Lender to Company (with a copy to Administrative Agent)
shall be conclusive absent manifest error.
2.9 DEFAULTING LENDERS.
------------------
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "DEFAULTING LENDER") defaults (a "FUNDING DEFAULT") in its
obligation to fund any Revolving Loan (a "DEFAULTED REVOLVING LOAN") in
accordance with subsection 2.1, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including the
granting of any consents or waivers) with respect to any of the Loan Documents,
(ii) to the extent permitted by applicable law, until such time as the Default
Excess (as defined below) with respect to such Defaulting Lender shall have been
reduced to zero, (a) any voluntary prepayment of the Revolving Loans pursuant to
subsection 2.4A(i) shall, if Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving Loan
Exposure of such Defaulting Lender were zero, and (b) any mandatory prepayment
of the Revolving Loans pursuant to subsection 2.4A(iii) shall, if Company so
directs at the time of making such mandatory prepayment, be applied to the
Revolving Loans of other Lenders (but not to the Revolving Loans of such
Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
For purposes of this Agreement, (I) "DEFAULT PERIOD" means, with respect
to any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"DEFAULT EXCESS" means, with respect to any Defaulting Lender, the excess, if
63
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights and
remedies which Company may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.1 REMOVAL OR REPLACEMENT OF A LENDER.
----------------------------------
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "INCREASED-COST LENDER") shall give notice
to Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect,
and (c) such Lender shall fail to withdraw such notice within five Business
Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"NON-CONSENTING LENDER") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "TERMINATED LENDER") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
64
(i) elect to (a) terminate the Revolving Loan Commitment, if any, of
such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3, subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
--------
any Loans outstanding at the time of such termination, the written consent
of Administrative Agent and Requisite Lenders (which consent shall not be
unreasonably withheld or delayed) shall be required in order for Company to
make the election set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "REPLACEMENT LENDER") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
--------
Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
--------
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
--------
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
---------------------------------------------------------------------
THEREIN.
-------
A. LETTERS OF CREDIT. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii) and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that one or more Lenders issue Letters of Credit for the
account of
65
Company for the purposes specified in the definitions of Commercial Letters of
Credit and Standby Letters of Credit; provided that all such Commercial Letters
--------
of Credit shall provide for sight drawings. Subject to the terms and conditions
of this Agreement and in reliance upon the representations and warranties of
Company herein set forth, any one or more Lenders may, but (except as provided
in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit
in accordance with the provisions of this subsection 3.1; provided that Company
--------
shall not request that any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $25,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
--------
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
-------- -------
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension; provided, however, that notwithstanding clause (a)
-------- -------
but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to five Business Days prior to the
Revolving Loan Commitment Termination Date) of a Standby Letter of Credit
having an expiration date later than five Business Days prior to the
Revolving Loan Commitment Termination Date if Company, at the time of such
request, makes arrangements in form and substance satisfactory to the
Issuing Lender thereof to cash collateralize such Letter of Credit,
provided that Issuing Lender shall be under no obligation to issue such a
--------
Letter of Credit if it shall reasonably determine that such cash
collateralization arrangements could reasonably be expected to be less
favorable to Issuing Lender than the reimbursement arrangements hereunder
with respect to other Letters of Credit;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance (on a date prior to 30 days prior to the
Revolving Loan Commitment Termination Date) of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; provided, however, that
-------- -------
notwithstanding clause (X) but subject to the other restrictions of this
subsection, Company may request the issuance (on a date prior to 30 days
prior to the Revolving Loan Commitment Termination Date) of a Commercial
Letter of Credit having an expiration date later than the time set forth in
clause (X) if Company, at the time of such request, makes arrangements in
form and
66
substance satisfactory to the Issuing Lender thereof to cash collateralize
such Letter of Credit, provided that Issuing Lender shall be under no
--------
obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably be
expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit; or
(v) any Letter of Credit if, after giving effect to the issuance
thereof, the Total Utilization of Revolving Loan Commitments exceeds the
lesser of (y) the Revolving Loan Commitments then in effect and (z) the
Adjusted Borrowing Base Amount then in effect.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case such
shorter period as may be agreed to by the Issuing Lender in any particular
instance, in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to be
issued, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
--------
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; and provided, further that no
-------- -------
Letter of Credit shall require payment against a conforming draft to be
made thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which such draft
is required to be presented is located) that such draft is presented if
such presentation is made after 10:00 A.M. (in the time zone of such office
of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by Administrative
-------------------------------
Agent of a Notice of Issuance of Letter of Credit pursuant to subsection
3.1B(i) requesting the
67
issuance of a Letter of Credit, in the event Administrative Agent elects to
issue such Letter of Credit, Administrative Agent shall promptly so notify
Company, and Administrative Agent shall be the Issuing Lender with respect
thereto. In the event that Administrative Agent, in its sole discretion,
elects not to issue such Letter of Credit, Administrative Agent shall
promptly so notify Company, whereupon Company may request any other Lender
to issue such Letter of Credit by delivering to such Lender a copy of the
applicable Notice of Issuance of Letter of Credit. Any Lender so requested
to issue such Letter of Credit shall promptly notify Company and
Administrative Agent whether or not, in its sole discretion, it has elected
to issue such Letter of Credit, and any such Lender which so elects to
issue such Letter of Credit shall be the Issuing Lender with respect
thereto. In the event that all other Lenders shall have declined to issue
such Letter of Credit, notwithstanding the prior election of Administrative
Agent not to issue such Letter of Credit, Administrative Agent shall be
obligated to issue such Letter of Credit and shall be the Issuing Lender
with respect thereto, notwithstanding the fact that the Letter of Credit
Usage with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line Loans,
may exceed Administrative Agent's Revolving Loan Commitment then in effect;
provided that Administrative Agent shall not be obligated to issue any
--------
Letter of Credit denominated in a foreign currency which in the judgment
of Administrative Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
----------------------------
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each Lender of the
amount of such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of each
------------------
calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to each other Lender a report setting forth
for such calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender's Pro Rata Share
(with respect to the Revolving Loan Commitments) of the maximum amount which
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is or at any time may become available to be drawn thereunder. On the Revolving
Loan Commitment Termination Date, the Issuing Lender shall be deemed to, and
hereby agrees to, irrevocably repurchase from each Lender such Lender's
participation in the Letters of Credit issued by such Issuing Lender pursuant to
the last proviso to subsection 3.1A(iii) or the last proviso to subsection
3.1A(iv) to the extent any such Letter of Credit remains outstanding and any
amounts remain undrawn thereunder.
3.2 LETTER OF CREDIT FEES.
---------------------
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to the product of (x) the Applicable Eurodollar Rate Margin
and (y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 15, June 15, September 15 and
December 15 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Commercial Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Lenders having Revolving
Loan Exposure, equal to the product of (x) the Applicable Eurodollar Rate
Margin and (y) the daily amount available to be drawn under such Commercial
Letter of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) each March 15, June 15,
September 15 and December 15 of each year and computed on the basis of a
360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (2) any amount described in such clauses which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) or (ii)(b) of this subsection 3.2, Administrative Agent shall distribute
to each Lender its Pro Rata Share of such amount.
69
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
------------------------------------------------------------------
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such honored drawing;
provided that, anything contained in this Agreement to the contrary
--------
notwithstanding, (i) unless Company shall have notified Administrative Agent and
such Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such Issuing Lender for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of Borrowing to
Administrative Agent requesting Lenders to make Revolving Loans that are Base
Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in
the case of a drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to the applicable
Exchange Rate) equal to the amount of such honored drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse such Issuing Lender for the amount
of such honored drawing; and provided, further that if for any reason proceeds
-------- -------
of Revolving Loans are not received by such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing over the aggregate amount of
such Revolving Loans, if any, which are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to make Revolving
Loans on the terms and conditions set forth in this Agreement, and Company shall
retain any and all rights it may have against any Lender resulting from the
failure of such Lender to make such Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF
CREDIT.
(i) Payment by Lenders. In the event that Company shall fail for any
------------------
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount (calculated, in the case of a drawing under a Letter of Credit
denominated in a currency other than Dollars, by reference to the
applicable Exchange Rate) equal to the amount of any drawing honored by
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share
70
of the Revolving Loan Commitments. Each Lender shall make available to such
Issuing Lender an amount equal to its respective participation, in Dollars
and in same day funds, at the office of such Issuing Lender specified in
such notice, not later than 12:00 Noon (New York City time) on the first
business day (under the laws of the jurisdiction in which such office of
such Issuing Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender fails to make available to such
Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection 3.3C,
such Issuing Lender shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the rate customarily used by
such Issuing Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this subsection
3.3C shall be deemed to prejudice the right of any Lender to recover from
any Issuing Lender any amounts made available by such Lender to such
Issuing Lender pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent jurisdiction that
the payment with respect to a Letter of Credit by such Issuing Lender in
respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From Company.
---------------------------------------------------------------
In the event any Issuing Lender shall have been reimbursed by other Lenders
pursuant to sub section 3.3C(i) for all or any portion of any drawing
honored by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Lender's Pro Rata Share of all payments subsequently
received by such Issuing Lender from Company in reimbursement of such
honored drawing when such payments are received. Any such distribution
shall be made to a Lender at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay to each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount is reimbursed by Company (including
any such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B) at a rate equal to (a) for the period from the date such
drawing is honored to but excluding the Reimbursement Date, the Base Rate
plus the Applicable Base Rate Margin for Revolving Loans and (b)
----
thereafter, if Requisite Lenders so elect in writing pursuant to the
provision of subsection 2.2E of this Agreement, a rate which is 2% per
annum in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this sub section 3.3D(i) shall be computed on
the basis of a 365-day or 366-day year, as the case may be, for the actual
number of days elapsed in the period during which it accrues and shall be
payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
71
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
---------------------------------------------------
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing honored under a Letter of
Credit issued by it, (a) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender would have
been entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such Letter
of Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Lenders pursuant to sub section 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under sub
section 3.3C(i) with respect to such honored drawing such other Lender's
Pro Rata Share of any interest received by such Issuing Lender in respect
of that portion of such honored drawing so reimbursed by other Lenders for
the period from the date on which such Issuing Lender was so reimbursed by
other Lenders to but excluding the date on which such portion of such
honored drawing is reimbursed by Company. Any such distribution shall be
made to a Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such Lender
may request.
3.4 OBLIGATIONS ABSOLUTE.
--------------------
The obligation of Company to reimburse each Issuing Lender for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to subsection 3.3B and the obligations of Lenders
under subsection 3.3C(i) shall be unconditional and irrevocable and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a beneficiary or
any transferee of any Letter of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Holdings or one
of its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect;
(iv) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries;
72
(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question (as determined by a final judgment of a court of competent
jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
--------------------------------------------------
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith, gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
73
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising out of the bad faith, gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender for which such Issuing Lender is not
otherwise compensated hereunder; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
74
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO INITIAL LOANS.
---------------------------
The obligations of Lenders to make the Revolving Loans to be made on the
Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of the Agreement of Limited Partnership or
Certificate or Articles of Incorporation of such Person, together with a
good standing certificate from the Secretary of State of its jurisdiction
of formation or incorporation and each other state in which such Person is
qualified as a foreign Person to do business (except, with respect to Loan
Parties, other than Company, any such other state or states in which
failure to be qualified could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect (provided that no
--------
such state shall be a state in which real property of the applicable Loan
Party is located)) and, to the extent generally available, a certificate or
other evidence of good standing or existence as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to the
Closing Date;
(ii) Copies of the Bylaws of each such Person that is a corporation,
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary;
75
(iii) Resolutions of the Board of Directors, general partner or other
authorizing body of such Person approving and authorizing the execution,
delivery and performance of the Loan Documents and Related Agreements to
which it is a party, certified as of the Closing Date by the secretary or
an assistant secretary or general partner of such Person as being in full
force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such Person is
a party; and
(vi) Such other documents as any Agent may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since March 31, 1998, no Material Adverse
Effect (in the opinion of any Agent) shall have occurred.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The organizational structure of Holdings
-------------------
and its Subsidiaries, after giving effect to the Recapitalization
Transactions, shall be as set forth on Schedule 4.1C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and its Subsidiaries, after giving effect to the
Recapitalization Transactions, shall be reasonably satisfactory to the
Agents in all respects and as set forth on Schedule 4.1C annexed hereto.
-------------
(iii) Employment Agreement. The Agents shall have received a duly
--------------------
executed copy of, and shall be reasonably satisfied with the form and
substance of, the Employment Agreement.
D. PROCEEDS OF DEBT AND EQUITY CAPITALIZATION OF HOLDINGS AND COMPANY.
(i) Equity Capitalization. On or before the Closing Date, ▇▇▇▇
---------------------
Investors, their Related Parties, the Existing Investors and the Other
Investors shall have made the Equity Contribution.
(ii) Term Loans. On the Closing Date, Company shall have borrowed
----------
$50,000,000 in aggregate principal amount of Term Loans under the Term Loan
Credit Agreement.
(iii) Senior Notes. On or before the Closing Date, Company and
------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Corporation shall have issued and sold for Cash not
less than $155,000,000 in aggregate principal amount of Senior Notes.
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(iv) Senior Discount Debentures. On or before the Closing Date,
--------------------------
Holdings and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation shall have issued
and sold for Cash the Senior Discount Debentures providing gross Cash
proceeds to Holdings and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation of not
less than $25,000,000.
(v) Preferred Units. On or before the Closing Date, Holdings shall
---------------
have issued Preferred Units having a liquidation value of $22,500,000 in
connection with the Recapitalization Transactions.
(vi) Use of Proceeds. Company shall have provided evidence
---------------
reasonably satisfactory to Agents that the proceeds of the debt and equity
capitalization of Holdings and Company described in the immediately
preceding clauses (i), (ii), (iii), (iv) and (v) have been irrevocably
committed, prior to the application of the proceeds of the Recapitalization
Revolving Loans, to the payment of a portion of the Recapitalization
Financing Requirements.
E. RELATED AGREEMENTS; TERM LOAN CREDIT DOCUMENTS.
(i) The ▇▇▇▇ Advisory Services Agreement and the Related Agreements
shall each be reasonably satisfactory in form and substance to Agents.
(ii) Agents shall each have received a fully executed or conformed
copy of the ▇▇▇▇ Advisory Services Agreement, and each Related Agreement
and any documents executed in connection therewith, and the ▇▇▇▇ Advisory
Services Agreement, and each Related Agreement shall be in full force and
effect and no provision thereof related to payments thereunder shall have
been modified or waived in any respect determined by any of the Agents to
be material, in each case without the consent of Agents.
(iii) Agents shall each have received a fully executed or conformed
copy of the Term Loan Credit Documents, including the Term Loan Credit
Agreement (and all exhibits and schedules thereto), any promissory notes
evidencing the Term Loans and the Intercreditor Agreement, each of which
shall be in form and substance reasonably satisfactory to Agents, and each
such agreement and promissory note shall be in full force and effect.
F. MATTERS RELATING TO EXISTING INDEBTEDNESS OF HOLDINGS AND ITS
SUBSIDIARIES.
(i) Termination of Existing Credit Agreement and Related Liens;
-----------------------------------------------------------
Existing Letters of Credit. On the Closing Date, Company and its
--------------------------
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreement, (b) terminated any commitments to lend
or make other extensions of credit thereunder, (c) delivered to Agents all
documents or instruments necessary to release any Liens securing
Indebtedness or other obligations of Holdings and its Subsidiaries
thereunder, and (d) made arrangements reasonably satisfactory to Agents
with respect to the cancellation or credit support of any letters of credit
outstanding thereunder or the issuance of Letters of Credit to support the
obligations of Holdings and its Subsidiaries with respect thereto.
77
(ii) No Existing Indebtedness to Remain Outstanding. Agents shall
----------------------------------------------
have received an Officers' Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1F, the
Loan Parties shall have no Indebtedness outstanding to Persons other than
the Loan Parties, other than Indebtedness under the Loan Documents, the
Term Loans, the Senior Discount Debentures, the Senior Notes and
Indebtedness set forth on Schedule 7.1 annexed hereto.
------------
G. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Holdings and Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary in connection with the Recapitalization Transactions, and the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Holdings and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization Transactions, and each of the foregoing
shall be in full force and effect, in each case other than those the failure to
obtain or maintain which, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Recapitalization Transactions or the financing
thereof. No action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be
pending, and the time for any applicable agency to take action to set aside its
consent on its own motion shall have expired.
H. CONSUMMATION OF RECAPITALIZATION TRANSACTIONS.
(i) All conditions to the Recapitalization Transactions shall have
been satisfied pursuant to documentation, including, without limitation,
the Recapitalization Agreement, reasonably satisfactory to Agents or the
fulfillment of such conditions shall have been waived with the consent of
Agents, such consent not to be unreasonably withheld;
(ii) The aggregate Cash consideration paid to the holders of equity
interests in Company in respect of such equity interests in connection with
the Recapitalization Transaction shall not exceed $130,100,000 (subject to
adjustment as set forth in the Recapitalization Agreement);
(iii) Transaction Costs shall not exceed $27,000,000; and
(iv) Agents shall have received an Officers' Certificate of Company
and Holdings to the effect set forth in clauses (i)-(iii) above and stating
that Company and Holdings will proceed to consummate the Recapitalization
Transactions immediately upon the making of the initial Loans.
I. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES; ETC. Agents
shall have received from Holdings, Company and each applicable Subsidiary
Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
----------------------
(each a "CLOSING DATE MORTGAGE" and, collectively, the "CLOSING DATE
MORTGAGES"), in proper
78
form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Property Asset listed in Schedule 4.II
-------------
annexed hereto (each a "CLOSING DATE MORTGAGED PROPERTY" and, collectively,
the "CLOSING DATE MORTGAGED PROPERTIES") together with an assignment of
rents and leases with respect to each of the Closing Date Mortgaged
Properties;
(ii) Opinions of Local Counsel. An opinion of counsel (which counsel
-------------------------
shall be reasonably satisfactory to Agents) in West Virginia with respect
to the enforceability of the form(s) of Closing Date Mortgages to be
recorded in such state and such other matters as any Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Agents; provided, however, that Agents may determine in their reasonable
-------- -------
discretion that an opinion of counsel in any one or more of such states
shall not be required hereunder;
(iii) Title Insurance. (a) ALTA mortgagee title insurance policies or
---------------
unconditional commitments therefor (the "CLOSING DATE MORTGAGE POLICIES")
issued by the Title Company with respect to the Closing Date Mortgaged
Properties listed in Part A of Schedule 4.II annexed hereto, in amounts not
-------------
less than the respective amounts designated therein with respect to any
particular Closing Date Mortgaged Properties, insuring fee simple title to,
or a valid leasehold interest in, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that the
applicable Closing Date Mortgages create valid and enforceable First
Priority mortgage Liens on the respective Closing Date Mortgaged Properties
encumbered thereby, subject to standard survey exceptions, which Closing
Date Mortgage Policies (1) shall include an endorsement for mechanics'
liens, for future advances (in each case, if available) under this
Agreement and for any other matters reasonably requested by any of Agents
and (2) shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to Agents; and (b) evidence
reasonably satisfactory to Agents that such Loan Party has (i) delivered to
the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Closing Date Mortgages in
the appropriate real estate records;
(iv) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to subsection 4.II(iii); and
(v) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a surveyor's note on a survey or a report from
a flood hazard search firm, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification
from Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the
79
community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the event
any such Flood Hazard Property is located in a community that participates
in the National Flood Insurance Program, evidence that Company has obtained
flood insurance in respect of such Flood Hazard Property to the extent
required under the applicable regulations of the Board of Governors of the
Federal Reserve System.
J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent not
otherwise satisfied pursuant to subsection 4.1I, Agents shall have received
evidence satisfactory to it that Holdings, Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the reasonable opinion of Agents,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Administrative
---------------------------------
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates, Instruments and Certificates of Title.
---------------------------------------------------------
Delivery to Administrative Agent of (a) certificates (which certificates
shall be accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to Administrative
Agent) representing all capital stock pledged pursuant to the Pledge and
Security Agreement, (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral and (c) except as otherwise set forth in
the Pledge and Security Agreement, certificates of title, indicating
thereon the Lien created under the Pledge and Security Agreement with
respect to any item of equipment covered by a certificate of title issued
under a statute of any state requiring such indication of such security
interest as a condition of perfection thereof;
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Administrative Agent of (a) the results of a recent search, by a Person
reasonably satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which
may have been made with respect to any personal or mixed property of any
Loan Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements or fixture filings
disclosed in such search (other than any such financing statements or
fixture filings in respect of Liens permitted to remain outstanding
pursuant to the terms of this Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed
80
by each applicable Loan Party with respect to all personal and mixed
property Collateral of such Loan Party, for filing in all jurisdictions as
may be necessary or, in the opinion of Agents, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be recorded with
the PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral; and
(vi) Opinions of Local Counsel. Delivery to Agents of an opinion of
-------------------------
counsel under the laws of each jurisdiction for which an opinion is
delivered under subsection 4.1I(ii) and in which any Loan Party or any
personal or mixed property Collateral is located with respect to the
creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed by
the laws of such jurisdiction regarding such security interests as
Syndication Agent and Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent.
K. ENVIRONMENTAL REPORTS. Agents shall have received an environmental
assessment report in form and substance reasonably satisfactory to Agents
addressing each of the Facilities listed in Schedule 4.1K annexed hereto
-------------
prepared by ENVIRON Corporation (or another firm reasonably satisfactory to
Agents).
L. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before the
Closing Date, Lenders shall have received from Company (i) audited consolidated
financial statements of Company and its Subsidiaries for Fiscal Years 1995, 1996
and 1997, consisting of consolidated balance sheets and the related consolidated
statements of income, partners capital and cash flows for such Fiscal Years,
(ii) unaudited consolidated financial statements of Company and its Subsidiaries
for each fiscal month and Fiscal Quarter ended subsequent to the date of the
most recent financial statements delivered pursuant to clause (i), consisting of
consolidated balance sheets and the related consolidated statements of income,
partner's capital, and cash flows for such periods, all in reasonable detail and
certified by the principal financial officer or principal accounting officer of
Company that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (iii) pro forma consolidated balance sheets of Company
and its Subsidiaries as at the date of the most recent consolidated balance
sheet delivered pursuant to clause (ii), prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization Transactions, the related
financings and the other transactions contemplated by the Loan Documents and the
Related Agreements as if such transactions had occurred on such date, which pro
forma financial statements shall be in form and substance reasonably
satisfactory to Lenders.
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M. FINANCIAL PROJECTIONS. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Agents and Lenders
for Company and its Subsidiaries for the period from the Closing Date through
December 2006.
N. SOLVENCY ASSURANCES. On the Closing Date, Agents and Lenders shall
have received (i) a letter from ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., dated the Closing Date and
addressed to Agents and Lenders, in form and substance reasonably satisfactory
to Agents and with appropriate attachments, and (ii) a Financial Condition
Certificate dated the Closing Date, substantially in the form of Exhibit XI
----------
annexed hereto (with such changes thereto as shall be approved by Agents in the
exercise of their reasonable discretion) and with appropriate attachments, in
each case demonstrating that, after giving effect to the consummation of the
Recapitalization Transactions, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, Holdings and its
Subsidiaries will be Solvent.
O. EVIDENCE OF INSURANCE. Agents shall have received a certificate from
Company's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to subsection 6.4 is in full force
and effect and that Administrative Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent required under
subsection 6.4.
P. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for Loan Parties, and of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC, special Pennsylvania
counsel for Loan Parties, in form and substance reasonably satisfactory to
Agents and their counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VII annexed
-----------
hereto and as to such other matters as or Agents and acting on behalf of Lenders
may reasonably request and (ii) evidence satisfactory to Agents that Loan
Parties have requested such counsel to deliver such opinions to Lenders.
Q. OPINIONS OF AGENT'S COUNSEL. Lenders shall have received originally
executed copies of one or more favorable written opinions of O'Melveny & ▇▇▇▇▇
LLP, counsel to Agents, dated as of the Closing Date, substantially in the form
of Exhibit VIII annexed hereto and as to such other matters as Agents may
------------
reasonably request.
R. OPINIONS OF COUNSEL DELIVERED UNDER RELATED AGREEMENTS. Agents and
their counsel shall have received copies of each of the opinions of counsel
delivered to the parties under the Related Agreements, together with a letter
from each such counsel (to the extent not inconsistent with such counsel's
established internal policies) authorizing Lenders to rely upon such opinion to
the same extent as though it were addressed to Lenders.
S. FEES AND EXPENSES. Company shall have paid to Agents and
Administrative Agent, for distribution (as appropriate) to Agents, the fees
payable on the Closing Date referred to in subsection 2.3 and all reasonable
expenses for which invoices have been presented on or before the Closing Date.
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T. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officers' Certificate, in form and substance
reasonably satisfactory to Agents, to the effect that the representations and
warranties in Section 5 hereof are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations and warranties
were true, correct and complete in all material respects on and as of such
earlier date) and that Holdings and Company shall have performed in all material
respects all agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by them on or before the Closing Date
except as otherwise disclosed to and agreed to in writing by Agents and
Requisite Lenders.
U. BORROWING BASE CERTIFICATE; APPRAISALS. Company shall have delivered
(a) a Borrowing Base Certificate dated as of the Closing Date demonstrating a
Borrowing Base Amount as of such date of not less than $275,000,000 and (b)
appraisals from independent third-party appraiser in form and substance
reasonably satisfactory to Agents confirming the valuations of assets to be
included in the calculation of the Borrowing Base Amount.
V. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Agents and their
counsel shall be reasonably satisfactory in form and substance to Agents and
such counsel, and Agents and such counsel shall have received all such
counterpart originals or certified copies of such documents as Agents may
reasonably request.
Notwithstanding anything herein to the contrary, it is understood and
agreed that the documents and other items set forth on Schedule 6.11 annexed
-------------
hereto shall be delivered after the Closing Date in accordance with and to the
extent required under subsection 6.11.
Each Lender, by delivering its signature page to this Agreement and funding
its Recapitalization Revolving Loan on the Closing Date, shall be deemed to have
acknowledged receipt of, and consented to and approved, each Loan Document and
each other document required to be approved by Agents, Requisite Lenders or
Lenders, as applicable.
4.2 CONDITIONS TO ALL LOANS.
-----------------------
The obligations of Lenders to make Loans on each Funding Date are subject
to the following further conditions precedent:
A. Administrative Agent shall have received on or before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, chief operating officer, president, the principal financial officer,
the principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
83
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) After making the Loans requested on such Funding Date, the
Total Utilization of Revolving Loan Commitments shall not exceed the lesser
of (y) the Revolving Loan Commitments then in effect and (z) the Adjusted
Borrowing Base Amount then in effect;
(iv) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of Holdings or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Holdings or Company in writing pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed
in any such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the reasonable opinion
of Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect or be inconsistent with the financial statements,
balance sheets or financial projections delivered in accordance with
subsection 4.1L or 4.1M; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
84
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of Letter
of Credit, in each case signed by the chief executive officer, chief
operating officer, president, the principal financial officer, the
principal accounting officer or the treasurer of Company or by any
authorized employee of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Administrative
Agent, together with all other information specified in subsection 3.1B(i)
and such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Letter of
Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Holdings and Company represent and
warrant to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
----------------------------------------------------------------
SUBSIDIARIES.
------------
A. ORGANIZATION AND POWERS. Each Corporate Loan Party is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and each Partnership Loan Party is a duly
organized and validly existing limited partnership under the laws of its
jurisdiction of formation and is in good standing in such jurisdiction in each
case as of the Closing Date as specified in Schedule 5.1 annexed hereto. Each
------------
Loan Party has all requisite corporate or partnership (as applicable) power and
authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents and
Related Agreements to which it is a party and to carry out the transactions
contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Corporate Loan Party is
qualified to do business and in good standing, and each Partnership Loan Party
is authorized as a foreign partnership to do business, in every jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or
in good standing has not had and will not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
85
D. SUBSIDIARIES. All of the Subsidiaries of Holdings as of the Closing
Date are identified in Schedule 5.1 annexed hereto. The capital stock or other
------------
equity interests of each of Holdings' Subsidiaries any portion of which is
pledged under the Collateral Documents is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock or other equity interests
constitutes Margin Stock. The limited and general partnership interests of each
of the Subsidiaries identified in Schedule 5.1 annexed hereto which are limited
------------
partnerships are duly and validly issued. Each of the Subsidiaries of Holdings
is duly organized or formed, validly existing and in good standing under the
laws of its respective jurisdiction of organization or formation, has all
requisite corporate, limited liability company or partnership power and
authority to own and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do business and
in good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate,
limited liability company or partnership power and authority has not had and
will not have a Material Adverse Effect. Schedule 5.1 annexed hereto (as so
------------
supplemented) correctly sets forth, as of the Closing Date, the ownership
interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of
Holdings identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents and the Related Agreements have been duly authorized by
all necessary corporate, limited liability company and/or partnership (as
applicable) action on the part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan Parties
of the Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws (or other
analogous organizational document) of Holdings or any of its Subsidiaries or any
order, judgment or decree of any court or other agency of government binding on
Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of Holdings or any of its Subsidiaries; provided that
--------
with respect to only the Related Agreements, any such conflict or default could
not be reasonably expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Holdings or any of its Subsidiaries (other than any Permitted
Encumbrances or Liens, created under any of the Loan Documents in favor of
Collateral Agent on behalf of Lenders and lenders under the Term Loan Credit
Agreement), or (iv) require any approval of stockholders or partners or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to Lenders or
the failure of which to obtain could not reasonably be expected to have a
Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions
86
contemplated by the Loan Documents do not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body except to the extent obtained
or made and except for those filings necessary to perfect Liens under the
Collateral Documents, other filings to effect releases of Liens on the Closing
Date and other filings made in the ordinary conduct of business. The execution,
delivery and performance by Loan Parties of the Related Agreements to which they
are parties and the consummation of the transactions contemplated by such
Related Agreements in the manner set forth therein do not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except (i) to the extent obtained or made or (ii) where the failure to
obtain or make any of the foregoing, individually or in the aggregate, is not
reasonably likely to have a Material Adverse Effect.
D. BINDING OBLIGATION. Each of the Loan Documents and Related Agreements
has been duly executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
E. VALID ISSUANCE OF PARTNERSHIP UNITS, SENIOR NOTES AND SENIOR DISCOUNT
DEBENTURES.
(i) Common Units and Preferred Units. The Common Units and
--------------------------------
Preferred Units to be issued on the Closing Date have been duly and validly
issued and fully paid on such date. The issuance and sale of such Common
Units and Preferred Units have either (a) been registered or qualified
under applicable federal and state securities laws or (b) are exempt
therefrom.
(ii) Senior Notes. Company has the power and authority to issue the
------------
Senior Notes. The Senior Notes, when issued and paid for, will be the
legally valid and binding obligations of Company, enforceable against
Company in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Senior Notes, when issued and
sold in the manner contemplated by the Related Agreements on the Closing
Date, will either (a) have been registered or qualified under applicable
federal and state securities laws or (b) be exempt therefrom.
(iii) Senior Discount Debentures. Holdings has the power and
--------------------------
authority to issue the Senior Discount Debentures. The Senior Discount
Debentures, when issued and paid for, will be the legally valid and binding
obligations of Holdings, enforceable against Holdings in accordance with
their respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The Senior Discount Debentures, when issued and sold in the
manner contemplated by the Related Agreements
87
on the Closing Date, will either (a) have been registered or qualified
under applicable federal and state securities laws or (b) be exempt
therefrom.
5.3 FINANCIAL CONDITION.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries for each of Fiscal Years 1995,
1996 and 1997 and the related consolidated statements of income, partner's
capital, and cash flows of Company and its Subsidiaries for each such Fiscal
Year and (ii) the unaudited consolidated and consolidating balance sheets of
Company and its Subsidiaries for each fiscal month and Fiscal Quarter ended
subsequent to the date of the most recent financial statements referred to in
clause (i) and the related unaudited consolidated statements of income,
partner's capital, and cash flows of Company and its Subsidiaries for each such
period (except for statements of cash flows for each such monthly period). All
such statements were prepared in conformity with GAAP and fairly present, in all
material respects, the financial position (on a consolidated basis) of the
entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments and the absence of footnotes. On the
Closing Date, Holdings and Company do not (and will not following the funding of
the initial Loans) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not reflected in the foregoing financial statements or the notes thereto
or in the financial projections delivered pursuant to subsection 4.1M and which
in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) of Holdings and any of
its Subsidiaries, taken as a whole.
5.4 NO MATERIAL ADVERSE CHANGE.
--------------------------
Since December 31, 1997 no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
-----------------------------------------
A. TITLE TO PROPERTIES; LIENS. Holdings and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), valid leasehold interests in (in the case of leasehold interests in
real or personal property), valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case subject
to Permitted Encumbrances and Liens permitted under subsection 7.2 and except
for assets described on Schedule 5.5A annexed hereto assets disposed of since
the date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. Except as otherwise permitted by this
Agreement, all such properties and assets are free and clear of Liens.
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B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date, except as specified in Schedule
--------
5.5 annexed hereto, each agreement referenced in clause (ii) of the immediately
---
preceding sentence is in full force and effect and Holdings and Company do not
have knowledge of any default that has occurred and is continuing thereunder
(except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect), and
each such material agreement constitutes the legally valid and binding
obligation of each applicable Loan Party, enforceable against such Loan Party in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Holdings or Company, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries and that, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect. Neither Holdings nor any of
its Subsidiaries (i) is in violation of any applicable laws (including
Environmental Laws) that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect, or (ii) is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, would reasonably be
expected to result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
----------------
Except to the extent permitted by subsection 6.3, all federal, state and
other material tax returns and reports of Holdings and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings and Company know of
no proposed material tax assessment against Holdings or any of its Subsidiaries
which is not being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
--------
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
89
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
--------------------------------------------------------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, compliance with
which could reasonably be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Company only or of Holdings and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
----------------------
A. Holdings and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each of
the respective Employee Benefit Plans, and have performed all their obligations
under each of the respective Employee Benefit Plans. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code
is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur which
has or would reasonably be expected to result in a liability to Holdings or any
of its Subsidiaries in excess of $5,000,000.
90
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
exceed $5,000,000.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans, does not exceed
$5,000,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Holdings,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $10,000,000 required to be made to Company or its
Subsidiaries.
5.12 CERTAIN FEES.
------------
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby, and Holdings and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 ENVIRONMENTAL PROTECTION.
------------------------
Except as set forth on Schedule 5.13 annexed hereto:
-------------
(i) Neither Holdings nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity that, in the case of (a), (b) or (c),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehen sive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law the subject of which would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(iii) To Holdings' and Company's knowledge, there are no and have
been no conditions, occurrences, or Hazardous Materials Activities which
could reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its
91
Subsidiaries that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect;
(iv) Holdings and its Subsidiaries maintain an environmental
management system designed to maintain compliance in all material respects
with Environmental Laws and correct any incidents of non-compliance;
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
5.14 EMPLOYEE MATTERS.
----------------
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 SOLVENCY.
--------
Each Loan Party is and, upon the incurrence of any Obligations by such Loan
Party on any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
------------------------------
A. CREATION, PERFECTION AND PRIORITY OF LIENS. Except as otherwise set
forth in the Pledge and Security Agreement, the execution and delivery of the
Collateral Documents by Loan Parties, together with (i) the actions taken on or
prior to the date hereof pursuant to subsections 4.1I, 4.1J, 6.8 and 6.9 and
(ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements or certificate of title documents delivered to Administrative Agent
for filing or endorsement as the case may be (but not yet filed or endorsed, as
the case may be) and the periodic filing of UCC continuation statements in
respect of UCC financing statements filed by or on behalf of Administrative
Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either
92
(i) the pledge or grant by any Loan Party of the Liens purported to be created
in favor of Administrative Agent pursuant to any of the Collateral Documents or
(ii) the exercise by Administrative Agent of any rights or remedies in respect
of any Collateral (whether specifically granted or created pursuant to any of
the Collateral Documents or created or provided for by applicable law), except
for filings or recordings contemplated by subsection 5.16A and except as may be
required, in connection with the disposition of any Pledged Collateral, by laws
generally affecting the offering and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of Administrative Agent as contemplated by subsection 5.16A, (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office, except with respect to Permitted Encumbrances and Liens
permitted under subsection 7.2A, and (ii) no effective filing covering all or
any part of the IP Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent or Administrative Agent by or on behalf of any Loan Party
with respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all material
respects as of the date supplied.
5.17 RELATED AGREEMENTS.
------------------
A. DELIVERY OF RELATED AGREEMENTS. As of the Closing Date, Company has
delivered to Lenders complete and correct copies of each Related Agreement and
of all exhibits and schedules thereto.
B. SELLER'S WARRANTIES. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
the Company and those parties defined as "Current Owners" to those parties
defined as "Purchasers" in the Recapitalization Agreement is true and correct as
of the date hereof (or as of any earlier date to which such representation and
warranty specifically relates) and will be true and correct as of the Closing
Date (or as of such earlier date, as the case may be), in each case subject to
the qualifications set forth therein and in the schedules to the
Recapitalization Agreement, in each case except to the extent that the cause of
any failure of any such representation or warranty to be true and correct,
either individually or in the aggregate with the causes of the failures of any
other such representations and warranties to be true and correct, would not
reasonably be expected to have a Material Adverse Effect.
C. SURVIVAL. Notwithstanding anything in the Recapitalization Agreement
to the contrary, the representations and warranties of the Current Owners set
forth in subsection 5.17B shall, solely for purposes of this Agreement, survive
the Closing Date for the benefit of Lenders.
93
5.18 DISCLOSURE.
----------
All representations and warranties of Holdings or any of its Subsidiaries
and all information contained in the Confidential Information Memorandum or in
any Loan Document or Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries (other than budgets, projections or pro forma financial
information) for use in connection with the transactions contemplated by this
Agreement, taken as a whole, are true and correct in all material respects as of
the date made and do not omit to state a material fact (known to Holdings or
Company, in the case of any document not furnished by it) necessary in order to
make the statements contained herein or therein (taken as a whole) not
materially misleading as of the date made in light of the circumstances in which
the same were made as at the time made. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Holdings and Company to be reasonable at the time made,
it being recognized by Lenders that such projections as to future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such projections may differ from the projected results. There
are no facts known (or which should upon the reasonable exercise of diligence be
known) to Holdings or Company (other than matters of a general economic nature)
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect and that have not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.19 SUBORDINATION OF PERMITTED SELLER NOTES AND SHAREHOLDER SUBORDINATED NOTES.
--------------------------------------------------------------------------
The subordination provisions of any Permitted Seller Notes and Shareholder
Subordinated Notes or other Subordinated Indebtedness are enforceable against
the holders thereof, and the Loans and other Obligations hereunder are and will
be within the definition of "Senior Indebtedness" or "Senior Debt", or similar
term, as applicable, included in such provisions.
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
--------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to
94
Administrative Agent, with sufficient copies for each Lender (and Administrative
Agent will, after receipt thereof, deliver to each Lender):
(i) Monthly Financials: as soon as available and in any event
------------------
within 30 days after the end of each month ending after the date that is
one month after the Closing Date, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such month and the related
consolidated statements of income of Holdings and its Subsidiaries,
(together with information relating to Consolidated Capital Expenditures
and Asset Sales), for such month and for the period from the beginning of
the then current Fiscal Year to the end of such month, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and certified by the
principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings and its Subsidiaries as at the dates indicated and the results
of their operations for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments and the absence of footnotes;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 50 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income and cash flows of
Holdings and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current
Fiscal Year, all in reasonable detail and certified by the principal
financial officer or principal accounting officer of Holdings that they
fairly present, in all material respects, the financial condition of
Holdings and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments and the
absence of footnotes, and (b) a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter; provided, however, that Company may deliver to Administrative
-------- -------
Agent in lieu of such narrative report copies of the unaudited quarterly
report filed by Holdings with the Securities and Exchange Commission on
Form 10-Q in respect of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 105 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, partner's capital,
and cash flows of Holdings and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial statements,
all in reasonable detail and certified by the principal financial officer
or principal accounting officer of Holdings that they fairly present,
95
in all material respects, the financial condition of Holdings and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, (b) a narrative report
describing the operations of Holdings and its Subsidiaries in the form
prepared for presentation to senior management for such Fiscal Year,
provided, however, that Company may deliver to Administrative Agent in lieu
-------- -------
of such narrative report copies of the report filed by Holdings with the
Securities and Exchange Commission on Form 10-K in respect of such Fiscal
Year, and (c) in the case of such consolidated financial statements, a
report thereon of an Independent Public Accountant, which report shall be
unqualified, shall express no doubts about the ability of Holdings and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material respects,
the consolidated financial position of Holdings and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or
at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of such Officers' Certificate, of
any condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action
Holdings has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
(except in respect of monthly financial statements) with the restrictions
contained in Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the applicable
accounting period;
(v) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Holdings and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been
made, then (1) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of Holdings and
its Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a pro
forma basis as if such change had been in effect during such periods, and
(2) together with
96
each delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change, a written
statement of the principal accounting officer or principal financial
officer of Holdings setting forth the differences (including any
differences that would affect any calculations relating to the financial
covenants set forth in subsection 7.6) which would have resulted if such
financial statements had been prepared without giving effect to such
change;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default of a financial nature has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in the
certificates delivered therewith pursuant to sub division (iv) above is
not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Holdings by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Holdings to analysts
or its security holders or by any Subsidiary of Holdings to analysts or its
security holders other than Holdings or another Subsidiary of Holdings, (b)
all regular and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any, filed by
Holdings or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other written,
publicly announced notices by Holdings or any of its Subsidiaries
concerning material developments in the business of Holdings or any of its
Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible Officer
-----------------------
of Holdings or Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
97
claimed Event of Default or Potential Event of Default, (b) that any Person
has given any notice to Holdings or any of its Subsidiaries or taken any
other action with respect to a claimed default or event or condition of the
type referred to in subsection 8.2, (c) of any condition or event that
would be required to be disclosed in a current report filed by Holdings or
Company with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the date hereof) if Holdings or
Company were required to file such reports under the Exchange Act, or (d)
of the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, an
Officers' Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any Responsible
-------------------------------
Officer of Holdings or Company obtaining knowledge of (a) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Holdings or Company
to Lenders or (b) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Holdings or Company to enable Lenders and their
counsel to evaluate such matters;
(xi) ERISA Events: promptly upon becoming aware of the occurrence
------------
of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Holdings, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan, as Administrative Agent shall reasonably request; (b) all notices
received by Holdings, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) copies
98
of such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and the next succeeding
Fiscal Year (the "FINANCIAL PLAN" for such Fiscal Years), including (a) a
forecasted consolidated balance sheet and forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries for
each such Fiscal Year, together with a pro forma Compliance Certificate for
--- -----
the first such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, and (b) such other information regarding such
projections as Administrative Agent may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the
---------
last day of each Fiscal Year, a report in form and substance satisfactory
to Administrative Agent outlining all material changes made to insurance
coverage maintained as of the Closing Date or the date of the most recent
such report by Holdings and its Subsidiaries;
(xv) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of Holdings, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Holdings
and (b) the ownership and debt and equity capitalization of such
Subsidiary;
(xvi) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated prior to its scheduled term or amended in a
manner that is materially adverse to Holdings or such Subsidiary, as the
case may be, or any new Material Contract is entered into, a written
statement describing such event with copies of such material amendments or
new contracts, and an explanation of any actions being taken with respect
thereto;
(xvii) Borrowing Base Certificate. Commencing August 1998, as soon
--------------------------
as available and in any event within 15 days after the end of each monthly
accounting period (ending on the last day of each calendar month), furnish
to the Administrative Agent a Borrowing Base Certificate as at the last day
of such accounting period; and
(xviii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Holdings or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 CORPORATE/PARTNERSHIP EXISTENCE, ETC.
-------------------------------------
Except as permitted under subsection 7.7, Holdings will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate or partnership existence, as applicable, and all rights and
franchises material to its business; provided, however that neither Holdings nor
-------- -------
any of its Subsidiaries shall be required to preserve any such right or
franchise if the Board of Directors of Holdings or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of Holdings or such Subsidiary, as the case may
99
be, and that the loss thereof is not disadvantageous in any material respect to
Holdings, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
federal, state and other material taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in respect of any
of its income, businesses or franchises before any penalty accrues thereon, and
all claims (including claims for labor, services, materials and supplies) for
material sums that have become due and payable and that by law have or may
become a Lien upon any of its properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto; provided that no such
--------
charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
(1) such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such charge or claim.
B. Holdings will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Holdings or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
--------------------------------------------------------
INSURANCE/CONDEMNATION PROCEEDS.
-------------------------------
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained, at a general maintenance
level at least equal to that in existence as of the Closing Date, in good
repair, working order and condition, ordinary wear and tear and damage by
casualty excepted, all material properties used or useful in the business of
Company and its Subsidiaries (including all Intellectual Property) and from time
to time will make or cause to be made all repairs, renewals and replacements
thereof which are useful, customary or appropriate for companies in similar
businesses; and Company will, and will cause each of its Subsidiaries to, keep
all such material properties, including, without limitation, all Rental
Equipment in the United States other than (i) assets located in the United
States Virgin Islands and (ii) other assets located in Canada or a Caribbean
jurisdiction; provided that the total value of such assets contributed or
otherwise financed by Company or a Permitted Domestic Subsidiary with respect to
a Permitted Foreign Subsidiary or invested by Company and Permitted Domestic
Subsidiaries in such foreign jurisdictions shall not exceed 3% of consolidated
total assets of Company and its Subsidiaries.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of Company
and its Subsidiaries as may customarily be carried or maintained under similar
circumstances by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self-insurance), with
such deductibles, covering such risks and otherwise on such terms and conditions
as shall be customary for Persons similarly situated
100
in the industry. Without limiting the generality of the foregoing, Company will
maintain or cause to be maintained (i) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any applicable
regulations of the Board of Governors of the Federal Reserve System, and (ii)
replacement value property insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are in accordance with normal industry
practice. Each such policy of insurance related to property damage or casualty
shall (a) name Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its interests may appear and (b) in the case of each
business interruption and casualty insurance policy, contain a loss payable
clause or endorsement, reasonably satisfactory in form and substance to
Administrative Agent, that names Administrative Agent for the benefit of Lenders
and lenders under the Term Loan Credit Agreement as the loss payee thereunder
for any covered loss in excess of $5,000,000 in any Fiscal Year and provides for
at least 30 days prior written notice to Administrative Agent of any
modification or cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Casualty Insurance/Condemnation Proceeds. Within ten Business
----------------------------------------
Days of receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds, (a) so long as no Event of Default shall
have occurred and be continuing, and so long as the aggregate amount of Net
Insurance/Condemnation Proceeds received in any Fiscal Year does not exceed
an amount equal to 2% of the consolidated assets of Holdings and its
Subsidiaries, Company may deliver to Administrative Agent an Officers'
Certificate setting forth (1) that portion of such Net
Insurance/Condemnation Proceeds (the "PROPOSED INSURANCE REINVESTMENT
PROCEEDS") that Company or such Subsidiary intends to use (or enter into a
contract to use) within 365 days of such date of receipt to pay or
reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Net Insurance/Condemnation Proceeds were received or
to reinvest in assets used in the ordinary course of the business and (2)
the proposed use of the Proposed Insurance Reinvestment Proceeds and such
other information with respect to such proposed use as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more of
its Subsidiaries to, promptly and diligently apply such Proposed Insurance
Reinvestment Proceeds to pay or reimburse the costs of repairing, restoring
or replacing the assets in respect of which such Proposed Insurance
Reinvestment Proceeds were received, or to reinvest in assets used in the
ordinary course of business of Company or, to the extent the aggregate
amount of Net Insurance/Condemnation Proceeds received in any Fiscal Year
exceeds an amount equal to 2% of the consolidated assets of Holdings and
its Subsidiaries and are not so applied, to prepay the Loans as provided in
subsection 2.4A(iii)(b), and (b) if an Event of Default shall have occurred
and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the Loans as provided in
subsection 2.4A(iii)(b).
(ii) Net Insurance/Condemnation Proceeds Received by Administrative
--------------------------------------------------------------
Agent. (a) Within ten Business Days of receipt by Administrative Agent of
-----
any Net Insurance/Condemnation Proceeds as loss payee, if and to the
extent Company or Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them
101
directly) to prepay the Loans pursuant to clause (i) above, Administrative
Agent shall, and Company hereby authorizes Administrative Agent to, apply
such Net Insurance/Condemnation Proceeds to prepay the Loans as provided
in subsection 2.4A(iii)(b), and (b) within ten Business Days of receipt by
Administrative Agent of any Net Insurance/Condemnation Proceeds as loss
payee to the extent the foregoing clause (a) does not apply, Administrative
Agent shall deliver such Net Insurance/Condemnation Proceeds to Company,
and Company shall, or shall cause one or more of its Subsidiaries to, apply
such Net Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or to reinvestment in assets
used in the ordinary course of the business.
6.5 INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE; LENDER
----------------------------------------------------------------------
MEETING.
-------
A. INSPECTION RIGHTS. Holdings shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Holdings or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Holdings or Company may, if they so choose, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested; provided, however, that each Lender shall coordinate with
-------- -------
Administrative Agent the frequency and timing of such visits and inspections so
as to reasonably minimize the burden imposed on Holdings and its Subsidiaries;
and provided further, however, that provided no Potential Event of Default or
-------- ------- -------
Event of Default shall have occurred, there shall be no more than one such visit
by Lenders in any calendar month.
B. AUDITS OF INVENTORY AND ACCOUNTS RECEIVABLE. Holdings shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to (i) conduct one audit of all books,
records, Parts and Supplies Inventory and accounts receivable of Loan Parties
during each twelve-month period after the Closing Date, each such audit to be in
scope and substance reasonably satisfactory to Administrative Agent, and (ii) to
review the results of the initial audit referred to in subsection 6.5D, all upon
reasonable notice and at such reasonable times during normal business hours as
may reasonably be requested.
C. LENDER MEETING. Company will, upon the request of Administrative
Agent or Requisite Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's corporate offices
(or at such other location as may be agreed to by Holdings and Administrative
Agent) at such time as may be agreed to by Company and Administrative Agent.
D. INTERNAL AUDIT. Once each calendar year, Company will provide to
Administrative Agent a copy of Company's internally prepared audit of Eligible
Cranes and Lifting Equipment and Eligible Trucks and Trailers which shall
include physical confirmation of the existence and appropriate titling of each
item of such equipment with an original purchase price or Orderly Liquidation
Value in excess of $250,000.
102
6.6 COMPLIANCE WITH LAWS, ETC.
--------------------------
Holdings shall comply, and shall cause each of its Subsidiaries to comply,
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority (including all Environmental Laws), except where
noncompliance would not reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
-------------------------------------------------------------------
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS AND
--------------------------------------------------------------------------
VIOLATIONS OF ENVIRONMENTAL LAWS.
--------------------------------
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Holdings and Company agree
that Administrative Agent may, (i) at any time a fact, event or condition arises
that, in Administrative Agent's reasonable discretion, Administrative Agent
determines could give rise to environmental liabilities that would materially
adversely affect any material Facility, retain, at Company's expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Company and (ii) in the event (a) Administrative
Agent reasonably believes that Company or Holdings has breached any
representation, warranty or covenant contained in subsection 5.6 (with respect
to Environmental Claims or Environmental Laws), 5.13, 6.6 (with respect to
Environmental Laws) or 6.7 in any material respect or that there has been a
material violation of Environmental Laws at any Facility or by Holdings or any
of its Subsidiaries at any other location conduct its own investigation of such
breach or violation or (b) an Event of Default has occurred and is continuing,
conduct its own investigation of any Facility; provided that, in the case of any
--------
Facility no longer owned, leased, operated or used by Holdings or any of its
Subsidiaries, Company and Holdings shall only be obligated to use their
reasonable best efforts to obtain permission for Administrative Agent's
professional consultant to conduct an investigation of such Facility. For
purposes of conducting an investigation pursuant to clause (ii) of the preceding
sentence, Company and Holdings hereby grant to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Holdings or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Holdings, Company
and Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company and Holdings acknowledge
and agree that (x) they will indemnify and hold harmless Administrative Agent
and each Lender from any costs, losses or liabilities relating to Holdings' or
Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or
103
warranty with respect to such report, and (z) by delivering such report to
Company, neither Administrative Agent nor any Lender is requiring or
recommending the implementation of any suggestions or recommendations contained
in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that could reasonably
be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
--------------------------------------------------
upon the occurrence thereof, written notice describing in reasonable detail
(a) any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws
unless such Release could not reasonably be expected to result in a
Material Adverse Effect, (b) any remedial action taken by Company, Holdings
or any other Person in response to (1) any Hazardous Materials Activities
the existence of which would reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which Holdings
or any of its Subsidiaries has notice that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect, and (c) Company's or Holdings' discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any material
Facility that would reasonably be expected to cause such material Facility
or any part thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws, unless such restrictions could not reasonably be
expected to have a Material Adverse Effect.
(iii) Written Communications Regarding Environmental Claims,
------------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
-------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, would reasonably be expected to give rise
to a Material Adverse Effect, (b) any Release required to be reported to
any federal, state or local governmental or regulatory agency unless such
Release could not reasonably be expected to result in a Material Adverse
Effect, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity unless such Hazardous Materials Activity could not reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
--------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (1)
104
expose Holdings or any of its Subsidiaries to, or result in, Environmental
Claims that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (2) affect the ability of Holdings
or any of its Subsidiaries to maintain in full force and effect all
material Governmental Authorizations required under any Environmental Laws
for their respective operations and (b) any proposed action to be taken by
Holdings or any of its Subsidiaries to modify current operations in a
manner that would reasonably be expected to subject Holdings or any of its
Subsidiaries to any material additional obligations or requirements under
any Environmental Laws where such obligations or reimbursements would
reasonably be expected to have a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. HOLDINGS' AND COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Holdings shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim that would, in either case, reasonably be expected to
have a Material Adverse Effect. In the event Holdings or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Holdings or such Subsidiary shall conduct and complete such
action in material compliance with all applicable Environmental Laws and in
accordance an all material respects with the policies, orders and
directives of all federal, state and local governmental authorities except
when, and only to the extent that, Holdings' or such Subsidiary's liability
with respect to such Hazardous Materials Activity is being contested in
good faith by Holdings or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environ mental Laws. Holdings shall promptly take, and shall cause each of
-------------------
its Subsidiaries promptly to take, any and all reasonable actions necessary
to (i) cure any violation of applicable Environmental Laws by Holdings or
its Subsidiaries where such violation would reasonably be expected to have
a Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Holdings or any of its Subsidiaries (of which
Holdings or any of its Subsidiaries has notice) where such Environmental
Claim would reasonably be expected to have a Material Adverse Effect, and
discharge any material obligations it may have to any Person thereunder.
105
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
-----------------------------------------------------------------
DOCUMENTS BY SUBSIDIARIES AND FUTURE SUBSIDIARIES.
-------------------------------------------------
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Subsidiary which is an Excluded Subsidiary as
of the Closing Date ceases to be an Excluded Subsidiary or any Person becomes a
Subsidiary (other than an Excluded Subsidiary) of Company after the date hereof,
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary to execute and deliver to Administrative Agent counterparts of the
Subsidiary Guaranty and the Pledge and Security Agreement and to take all such
further actions and execute all such further documents and instruments
(including actions, documents and instruments comparable to those described in
subsection 4.1J) as may be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Administrative Agent, together with such Loan Documents pursuant to
clause A above, (i) (y) if such Subsidiary is a corporation (a) certified copies
of such Subsidiary's Certificate or Articles of Incorporation, together with a
good standing certificate from the Secretary of State of the jurisdiction of its
incorporation and each other state in which such Person is qualified as a
foreign corporation to do business and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of each of such
jurisdictions, each to be dated a recent date prior to their delivery to
Administrative Agent, (b) a copy of such Subsidiary's Bylaws, certified by its
secretary or an assistant secretary as of a recent date prior to their delivery
to Administrative Agent, (c) a certificate executed by the corporate secretary
or an assistant corporate secretary of such Subsidiary as to (i) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (ii) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (ii) (z) if such Subsidiary is a limited partnership, (a) from or
with respect to such Subsidiary's General Partner, each of the items required to
be delivered under item (a) of clause (x) above with respect to such General
Partner, if it is a corporation, (b) certified copies of its Certificate of
Limited Partnership, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation or formation, each dated
a recent date prior to their delivery to Administrative Agent, and (c) copies of
its limited partnership agreement, certified as true, correct and in full force
and effect as of the date of its delivery to Administrative Agent, by the
corporate secretary or an assistant secretary of its general partner or an
officer of its limited partner, and (iii) to the extent requested by
Administrative Agent, a favorable opinion of counsel to such Subsidiary, in form
and substance reasonably satisfactory to Administrative Agent and its counsel,
as to (a) the due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be reasonably satisfactory in
form and substance to Administrative Agent and its counsel.
106
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
-------------------------------------------------------------------
PROPERTY COLLATERAL.
-------------------
A. CONFORMING LEASEHOLD INTERESTS. If Holdings or any of its
Subsidiaries acquires any Material Leasehold Property, Holdings shall use
commercially reasonable efforts to, or shall cause such Subsidiary to use
commercially reasonable efforts to, cause such Leasehold Property to be a
Conforming Leasehold Interest and Holdings shall deliver evidence of the
foregoing to Administrative Agent.
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date, in the
event that (i) Holdings or any Subsidiary Guarantor acquires any fee interest in
real property or any Material Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any fee interest in
any Material Real Property Asset or any Material Leasehold Property, in either
case excluding any such Material Real Property Asset or Material Leasehold
Property the encumbrancing of which requires the consent of any applicable
lessor or (in the case of clause (ii) above) then-existing senior lienholder,
where Holdings and its Subsidiaries are unable, after exercising commercially
reasonable efforts, to obtain such lessor's or senior lienholder's consent (any
such non-excluded Material Real Property Asset described in the foregoing clause
(i) or (ii) being an "ADDITIONAL MORTGAGED PROPERTY"), Holdings or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage
-------------------
(an "ADDITIONAL MORTGAGE"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to
-------------------
such Loan Party, in form and substance satisfactory to Administrative Agent
and its counsel, as to the due authorization, execution and delivery by
such Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral related to such Additional Mortgaged
Property) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
(iii) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title Company with
respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property,
107
subject only to standard survey exceptions, which Additional Mortgage
Policy (1) shall include an endorsement for mechanics' liens, for future
advances (in each case, if available) under this Agreement and for any
other matters reasonably requested by Administrative Agent and (2) shall
provide for affirmative insurance and such reinsurance as Administrative
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
satisfactory to Administrative Agent that such Loan Party has (i) delivered
to the Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Additional Mortgage Policy
and (ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Additional Mortgage Policy and all recording and
stamp taxes (including mortgage recording and intangible taxes) payable in
connection with recording the Additional Mortgage in the appropriate real
estate records; provided, however, that Administrative Agent shall allow
for such reasonable revisions to the applicable Mortgage and shall
otherwise take such steps as are reasonable and customary to minimize
recording, mortgage recording, stamp, documentary and intangible taxes, at
Company's cost;
(iv) Title Report. If no Additional Mortgage Policy is required
------------
with respect to such Additional Mortgaged Property, a title report issued
by the Title Company with respect thereto, last updated not more than 30
days prior to the date such Additional Mortgage is to be recorded and
reasonably satisfactory in form and substance to Administrative Agent;
(v) Copies of Documents Relating to Title Exceptions. Copies of
------------------------------------------------
all recorded documents listed as exceptions to title or otherwise referred
to in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vi) Matters Relating to Flood Hazard Properties. (a) To the extent
-------------------------------------------
reasonably requested by the Administrative Agent, evidence, which may be in
the form of a surveyor's note on a survey or a report from a flood hazard
search firm, as to (1) whether such Additional Mortgaged Property is a
Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Holdings or Company has obtained flood insurance in respect
of such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System; and
(vii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent,
108
concerning any environmental hazards or liabilities to which Holdings or
any of its Subsidiaries may be subject with respect to such Additional
Mortgaged Property.
C. REAL ESTATE APPRAISALS. To the extent reasonably requested by the
Administrative Agent, Holdings shall, and shall cause each of its Subsidiaries
to, permit an independent real estate appraiser reasonably satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 INTEREST RATE PROTECTION.
------------------------
At all times after the date which is 90 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Administrative Agent, which
Interest Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate
Component (as hereinafter defined) of the interest costs to Company with respect
to an aggregate notional principal amount of not less than $150,000,000 (based
on the assumption that such notional principal amount was a Eurodollar Rate Loan
with an Interest Period of three months) to a rate equal to not more than 7.5%
per annum. For purposes of this subsection 6.10, the term "UNADJUSTED
EURODOLLAR RATE COMPONENT" means that component of the interest costs to Company
in respect of a Eurodollar Rate Loan that is based upon the rate obtained
pursuant to clause (i) of the definition of Adjusted Eurodollar Rate.
6.11 POST-CLOSING DELIVERIES.
-----------------------
Company shall cause any actions set forth on Schedule 6.11 annexed hereto
-------------
to be taken within the time period(s) specified on such Schedule 6.11 and in
-------------
form and substance reasonably satisfactory to Agents.
6.12 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
--------------------------------------------
Company, and shall cause each of its Subsidiaries to, use and maintain its
Deposit Accounts and cash management systems in a manner reasonably satisfactory
to Administrative Agent and comply with limitations on cash on hand, all as set
forth on Schedule 6.12 annexed hereto.
-------------
6.13 YEAR 2000.
---------
No later than December 31, 1998, Company shall perform all acts reasonably
necessary to ensure that Company and its Subsidiaries become Year 2000
Compliant. Such acts shall include, to the extent reasonably necessary to
become Year 2000 Complaint, performing a comprehensive review and assessment of
all of Company's systems and adopting a detailed plan, with itemized budget, for
the remediation, monitoring and testing of such systems. Company shall,
immediately upon request, provide to Administrative Agent such certifications or
other evidence of Company's
109
compliance with the terms of this paragraph as Administrative Agent may from
time to time require.
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS
Holdings and Company covenant and agree that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Permitted Subsidiaries may become and remain
liable with respect to (a) Indebtedness in respect of Capital Leases and
(b) Indebtedness secured by Liens permitted under subsection 7.2A(ix);
provided that the aggregate amount of Indebtedness described in clauses (a)
--------
and (b), together with the amount of any purchase money Indebtedness and
Capital Lease obligations of the type permitted under subsection 7.1(x),
shall not exceed $10,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any wholly-owned Permitted Subsidiary, and any wholly-owned
Permitted Subsidiary may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary; provided that
--------
(a) all such intercompany Indebtedness shall be evidenced by promissory
notes, (b) all such intercompany Indebtedness owed by Company to any such
Subsidiary shall be subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory notes
or an intercompany subordination agreement, (c) any payment by any such
Subsidiary of Company under any guaranty of the Obligations shall result in
a pro tanto reduction of the amount of any intercompany Indebtedness owed
--- -----
by such Subsidiary to Company or to any of such Subsidiary Guarantors for
whose benefit such payment is made in the case of any Indebtedness incurred
by a
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Permitted Domestic Subsidiary or Permitted Foreign Subsidiary, such
Indebtedness is incurred in accordance with the definitions thereof.
(v) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by the Term Loan Credit Documents;
(vi) Holdings and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by, and with respect to guaranties of,
the Senior Notes and the Senior Discount Debentures;
(vii) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5 to repurchase Securities of Holdings held by
terminated employees and officers;
(viii) Holdings or Company may become and remain liable with respect
to Permitted Seller Notes issued as consideration in Permitted
Acquisitions; provided that the aggregate principal amount of Permitted
--------
Seller Notes issued by both Holdings and Company shall not exceed
$10,000,000 at any time outstanding; provided that Holdings may issue
Permitted Seller Notes in amounts in excess of that otherwise permitted
under this clause (viii) so long as such Permitted Seller Notes shall not
provide for any cash call or cash payment of principal interest prior to
the final maturity of the Loans;
(ix) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xvii), Company or any Permitted Subsidiary acquired pursuant to a
Permitted Acquisition may become or remain liable with respect to
Indebtedness of a Subsidiary of Company existing at the time of acquisition
by Company or a Subsidiary of a Subsidiary or assets pursuant to a
Permitted Acquisition; provided that (a) such Indebtedness was not incurred
--------
in connection with or in anticipation of such Permitted Acquisition, (b)
such Indebtedness does not constitute debt for borrowed money (other than
debt for borrowed money incurred in connection with industrial revenue or
industrial development bond financings), it being understood and agreed
that Capital Lease obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (ix) and (c)
at the time of such Permitted Acquisition such Indebtedness does not exceed
10% of the total value of the assets of the Subsidiary so acquired, or of
the assets so acquired, as the case may be; provided, however, that (a) the
-------- -------
aggregate amount of any such Capital Lease obligations and purchase money
Indebtedness, together with the aggregate amount of other Indebtedness of
the type permitted under subsection 7.1(iii), in each case at any time
outstanding, shall not exceed the maximum amount set forth in such
subsection, and (ii) the aggregate amount of any such Indebtedness other
than Capital Lease obligations and purchase money Indebtedness, together
with other Indebtedness of the type permitted under subsection 7.1(xv), in
each case at any time outstanding, shall not exceed the maximum amount set
forth in such subsection;
(x) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1 annexed hereto;
------------
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(xi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness incurred by the Company or any of its Subsidiaries
arising from agreements providing for indemnification, adjustment of
purchase price or similar obligations, or from guarantees or letters of
credit, surety bonds or performance bonds securing the performance of the
Company or any such Subsidiary pursuant to such agreements, in connection
with acquisitions or dispositions of any business, assets or Subsidiary of
the Company or any of its Subsidiaries;
(xii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness which may be deemed to exist pursuant to any
guarantees, performance, surety, statutory, appeal or similar obligations
obtained in the ordinary course of business;
(xiii) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with deposit accounts;
(xiv) Holdings may become and remain liable with respect to
Indebtedness of Holdings in respect of any Restricted Junior Payment made
to it and permitted hereunder to the extent such Restricted Junior Payment
is recharacterized as a loan instead of a distribution;
(xv) Company and Permitted Subsidiaries may become and remain liable
with respect to Indebtedness not otherwise permitted under this subsection;
provided that the aggregate principal amount of such Indebtedness, together
--------
with the amount of any Indebtedness of the type permitted under subsection
7.1(ix) (other than Capital Lease obligations and purchase money
Indebtedness), shall not exceed $20,000,000 at any time outstanding,
provided further that any portion of such Indebtedness which is secured x)
--------
shall not exceed $10 million in the aggregate, y) shall only be secured by
assets acquired after the Closing Date or assets for which the
Administrative Agent has agreed to release the Lien of the Collateral
Documents, provided, in no event shall such assets be Trucks and Trailers,
--------
Cranes and Lifting Equipment, Accounts or Parts and Supplies Inventory, and
z) shall have terms and provisions no more favorable to the Lender(s) of
such Indebtedness in any material respect to the term and provisions of
this Agreement and the other Loan Documents (any such secured Indebtedness,
the "ADDITIONAL SECURED INDEBTEDNESS") and; provided still further that,
-------- ----- -------
any such Indebtedness outstanding under this clause (xv) in excess of
$10,000,000 shall be unsecured and subordinated to the Loans and the Term
Loan upon terms reasonably acceptable to the Administrative Agent and no
principal payments of such Indebtedness shall be made during the term of
the Loans or the Term Loan; and
(xvi) Subsidiaries of Company may become and remain liable with
respect to Indebtedness consisting of a converted equity Investment by
Company or another Subsidiary of Company in such Subsidiaries; provided
--------
that the underlying equity Investment was permitted hereunder at the time
of such conversion.
Notwithstanding anything herein to the contrary, y) obligations incurred by
Company and its Subsidiaries in connection with the purchase of new or used
equipment in the ordinary course of
112
business by the Company that is financed on terms of six (6) months or less
shall not be deemed Indebtedness for the purpose of this subsection 7.1 and z)
any Permitted Foreign Subsidiary that does not execute the Subsidiary Guaranty
and the Pledge and Security Agreement may not incur any indebtedness (other that
pursuant to clause (iv) above) pursuant to the foregoing except in connection
with ordinary working capital financing.
7.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Holdings shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens created pursuant to the Collateral Documents in favor of
the Administrative Agent for the benefit of the Lenders and/or the lenders
under the Term Loan Credit Agreement securing Loan Parties' obligations
under this Agreement, the Term Loan Credit Agreement and/or under Hedge
Agreements with any such Lenders and/or lenders or their respective
affiliates; provided that such Liens for the benefit of the lenders under
--------
this Agreement shall at all times secure the Obligations on a First
Priority basis;
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a); provided that no such Lien shall extend to or cover
--------
any Collateral or assets other than the assets subject to such Capital
Leases;
(iv) Liens of landlords arising under lease contracts in the
ordinary course of business;
(v) Liens consisting of rights of set-off and off-set of a
customary nature or bankers' liens on amounts of deposit, whether arising
by contract or operation of law, incurred in the ordinary course of
business;
(vi) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by Company
or any of its Subsidiaries in connection with any letter of intent or
purchase agreement entered into by it;
(vii) Liens incurred in connection with the purchase or shipping of
goods or assets on the related assets and proceeds thereof in favor of the
seller or shipper of such goods or assets.
113
(viii) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
--------
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original purchase price of such asset or the
amount expended to construct or improve such asset, as the case may be; or
(b) to renew, extend or refinance any Indebtedness described in clause (a);
provided that the amount of any such Indebtedness does not exceed the
--------
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; and provided further, that in the case of clause (a) or (b),
-------- -------
(1) such Liens attach solely to the assets financed with such Indebtedness,
(2) no recourse may be had under the Indebtedness secured by such Lien
against any Person other than the borrower of such Indebtedness for the
payment of principal, interest, fees, costs or premium on such Indebtedness
or for any claim based thereon, and (3) the financial covenants under any
Indebtedness secured by such Liens are, in each case, no more restrictive
than those set forth in this Agreement;
(ix) Liens securing Indebtedness permitted pursuant to subsection
7.1(ix) to the extent such Liens were in existence prior to a Permitted
Acquisition;
(x) Liens incurred in connection with the sale or factoring of
accounts receivable by Permitted Foreign Subsidiaries;
(xi) Liens securing Additional Secured Indebtedness;
(xii) Liens securing reimbursement of obligations in respect of
documentary letters of credit; provided, that such Liens attach only to the
documents, the goods covered thereby and the proceeds thereof;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of the Company or any of its Subsidiaries securing such Person's
obligations in respect of bankers' acceptance issued or created or the
account of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods;
(xiv) Liens encumbering customary initial deposits and margin
deposits, and similar Liens attaching to commodity trading accounts or
other brokerage accounts incurred in the ordinary course of business; and
(xv) Other Liens securing Indebtedness in an aggregate amount not to
exceed $1,000,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Holdings or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to
114
be made effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as long
as any such Indebtedness shall be so secured; provided that, notwithstanding the
--------
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Holdings nor any
of its Subsidiaries shall enter into any agreement (other than the Senior Note
Indenture, the Senior Discount Debentures, the Term Loan Credit Agreement or any
other agreement evidencing acquired Indebtedness or any agreement, note or
indenture relating to any Indebtedness under any debt basket, or any other
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO HOLDINGS OR OTHER
SUBSIDIARIES. Except as provided herein, Holdings will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Credit Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing or other agreements entered
into by Company or any of its Subsidiaries in the ordinary course of business,
(e) the Senior Note Indenture, the Senior Discount Debentures, and the Term Loan
Documents or any agreement evidencing acquired Indebtedness and (f) customary
provisions restricting the transfer of assets subject to Liens permitted under
subsections 7.2A.
7.3 INVESTMENTS; JOINT VENTURES.
---------------------------
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Holdings and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Holdings may continue to own the Investments owned by it as of
the Closing Date in Company, and Company and its Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of Company and make additional Investments in Permitted
Subsidiaries (in accordance with the definitions of Permitted Domestic
Subsidiaries and Permitted Foreign Subsidiaries;
115
(iii) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
(iv) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsections 7.1(iv);
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
------------
(vi) Company and its Subsidiaries may make loans and advances to
employees, officers, executives or consultants to Company and its
Subsidiaries in the ordinary course of business of Company and its
Subsidiaries as presently conducted for the purpose of purchasing
Securities of Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection the acquisition of such Securities;
(vii) Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of Company or any such Subsidiary;
(viii) Company and its Subsidiaries may acquire and own Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(ix) Company and its Subsidiaries may make and own Investments
consisting of deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases and may make any
pledges or deposits permitted under subsection 7.2;
(x) Holdings may make equity contributions to the capital of
Company;
(xi) Company and its Permitted Subsidiaries may make and own
Investments in Subsidiaries pursuant to Permitted Acquisitions under
subsection 7.7(xviii);
(xii) Company and its Permitted Subsidiaries may make and own
Investments consisting of notes received in connection with any Asset Sale
or sale of other assets; provided that the aggregate principal amount of
--------
such notes at any time outstanding shall not exceed 1-1/2% of consolidated
total assets of Company and its Subsidiaries and such notes are secured by
a first priority perfected lien on such assets sold;
(xiii) Company and its Permitted Subsidiaries may make and own
Investments in any Person which (a) (1) result in the creation of an
account arising in the ordinary course of Company's or such Permitted
Subsidiary's business or (2) result from the restructure, reorganization or
similar composition of trade account obligations which arose in the
ordinary course of business and which are owing to Company or such
Permitted Subsidiary
116
from financially distressed debtors, and (b) are, in each case, subject to
the Lien in favor of Administrative Agent under the Collateral Documents;
(xiv) Holdings and its Permitted Subsidiaries may make and own
Investments permitted under subsection 7.7;
(xv) Company and its Subsidiaries may make and own Investments in
wholly-owned Permitted Domestic Subsidiaries of Company consisting of
intercompany Indebtedness of such Permitted Subsidiaries converted to
equity Investments, to the extent necessary to maintain the solvency in
accordance with applicable legal requirements of such Permitted Subsidiary,
provided that the underlying intercompany Indebtedness was permitted
--------
hereunder at the time of such conversion;
(xvi) Permitted Foreign Subsidiaries of Holdings may make and own
Investments in Foreign Cash Equivalents;
(xvii) Company and its Permitted Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $10,000,000;
and
(xviii) Company and its Subsidiaries may make and own other
Investments in a Person or business in substantially the same line of
business as the Company and its Permitted Subsidiaries in an aggregate
amount not to exceed at any time an amount equal to the lesser of (y) 50%
of the amount of Net Equity Proceeds and (z) the amount such Net Equity
Proceeds that has not been applied to repay the Loans in accordance with
subsection 2.4A(iii)(d).
7.4 CONTINGENT OBLIGATIONS.
----------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty,
and Holdings may become and remain liable with respect to Contingent
Obligations in respect of the Holdings Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements required under subsection
6.10 or otherwise incurred in the ordinary course of business;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of (a) customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets, (b)
117
endorsements of instruments for deposit or collection in the ordinary
course of business, and (c) standard contractual indemnities entered into
in the ordinary course of business;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Holdings and its Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
------------
hereto;
(vii) Holdings and the Subsidiary Guarantors may become and remain
liable with respect to Contingent Obligations arising under their
guaranties of the Senior Notes and the Term Loans as are required under the
Senior Note Indenture and the Term Loan Credit Documents, respectively;
(viii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees of obligations
of any Subsidiary of Company under any worker's compensation self-insurance
program of such Subsidiary administered in accordance with applicable law
relating to worker's compensation;
(ix) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees by Holdings and
its Subsidiaries of Indebtedness, leases and other contractual obligations
permitted to be incurred by Company or its Subsidiaries; and
(x) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations not otherwise permitted under this
subsection; provided that the maximum aggregate liability, contingent or
--------
otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal amount of
Indebtedness of Company and its Subsidiaries incurred pursuant to
subsection 7.1(xv), shall at no time exceed $20,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
--------------------------
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) any
--------
Subsidiary of Company may pay dividends to its equityholders, (ii) Company may
make dividends to its partners necessary to consummate the Recapitalization
Transactions, (iii) Holdings and Company may make any Restricted Junior
Payments in accordance with the terms of, and only to the extent required by,
the Recapitalization Agreement (iv) Company may make regularly scheduled
payments of principal and interest in respect of the Senior Notes in accordance
with the terms thereof, (v) Company may make Restricted Junior Payments to
Holdings to the extent required for Holdings to make, and Holdings may make,
regularly scheduled payments of interest in respect of the Shareholder
Subordinated Notes in accordance with the terms of, and only to the extent
required by, and subject to the subordination provisions contained in, such
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Shareholder Subordinated Notes, as applicable, (vi) Company may make regularly
scheduled principal and interest payments in respect of Permitted Seller Notes
to the extent permitted under subsection 7.1(viii) in accordance with the terms
of, and subject to the subordination provisions contained in, such Permitted
Seller Notes; (vii) Holdings may pay regularly scheduled distributions on the
Preferred Units and Qualified Preferred Units pursuant to the terms thereof
solely through the issuance of additional shares of such units, or by an
increase in the liquidation preference thereof; (viii) Company may exchange the
Senior Notes as contemplated by the Senior Note Indenture, and Holdings may
exchange the Senior Discount Debentures in accordance with the Senior Discount
Debentures; (ix) Company may make Restricted Junior Payments to Holdings, and
Holdings may make Restricted Junior Payments, (a) in an aggregate amount not to
exceed $1,000,000 in any Fiscal Year, to the extent necessary to permit Holdings
to pay accounting, legal, SEC related, and similar fees and expenses and (b) to
the partners of Holdings and the General Partner for Permitted Tax
Distributions; (x) so long as no Potential Event of Default or Event of Default
shall have occurred and be continuing, Company may make Restricted Junior
Payments to Holdings, and Holdings may make Restricted Junior Payments, to
permit the payment of the ▇▇▇▇ Management Fees under the ▇▇▇▇ Advisory Services
Agreement and (xi) Company may make Restricted Junior Payments to Holdings to
the extent required for Holdings to make, and Holdings may make, Restricted
Junior Payments in an aggregate amount not to exceed $1,500,000 in any Fiscal
Year to the extent necessary to make repurchases of Securities (and options or
warrants to purchase such Securities) of Holdings from employees (a) upon
termination (including by reason of death, disability or retirement) of such
employees or (b) pursuant to a contractual obligation of Holdings or any of its
Subsidiaries; provided however that, such amount for any Fiscal Year shall be
-------- -------
increased by an amount equal to the excess, if any, of such amount for the
previous Fiscal Year (as adjusted in accordance with this proviso) over the
actual amount expended for such previous Fiscal Year; provided further that such
--------
amount shall be reduced by the aggregate amount of all principal and interest
payments made on any Shareholder Subordinated Notes permitted under subsection
7.1(vii) in such Fiscal Year; and, provided still further, that any Restricted
-------- ----- -------
Junior Payments by Company to Holdings permitted under this subsection shall be
applied by Holdings for the purposes specified in this subsection.
7.6 FINANCIAL COVENANTS.
-------------------
A. MINIMUM INTEREST COVERAGE RATIO. Holdings and Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense (excluding therefrom, for purposes of this subsection 7.6A
---------
only, the amount of any amortization of deferred financing costs, interest on
deferred compensation or payments made to obtain Interest Rate Agreements which
would otherwise be included in Consolidated Interest Expense) for any four-
Fiscal Quarter period (including any such four-quarter period commencing prior
to the Closing Date) ending during any of the periods set forth below to be less
than the correlative ratio indicated; provided that, for any measurement of
--------
Consolidated Interest Expense pursuant to this Subsection 7.6A made prior to the
completion of four Fiscal Quarters following the Closing Date, Consolidated
Interest Expense for the relevant Calculation Period shall equal the product of
(i) Consolidated Interest Expense for the period from the Closing Date to the
date of measurement multiplied by (ii) a fraction, the numerator of which is 365
---------- --
and the denominator of which is the number of days during the period from the
Closing Date to the date of measurement.
119
=============================================
MINIMUM
INTEREST COVERAGE
PERIOD RATIO
=============================================
Closing Date - 6/30/99 1.4:1.0
7/1/99 and thereafter 1.5:1.0
=============================================
B. MAXIMUM LEVERAGE RATIO. Holdings and Company shall not permit the
Leverage Ratio as of the last day of any Fiscal Quarter ending after the Closing
Date to exceed 5.1:1.0.
C. MAXIMUM REVOLVER LEVERAGE RATIO. Holdings and Company shall not
permit the Revolver Leverage Ratio as of the last day of any Fiscal Quarter
ending after the Closing Date to Exceed 4.5:1.0.
D. CERTAIN CALCULATIONS. With respect to any period during which a
Permitted Acquisition occurs, for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6, Consolidated Adjusted
EBITDA and Consolidated Interest Expense shall be calculated with respect to
such periods and such New Business on a pro forma basis (including (i) pro forma
adjustments arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a continuing
impact, in each case determined on a basis consistent with Article 11 of
Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission as of January 1, 1997, and (ii)
cost savings resulting from head count reduction, closure of facilities and
similar restructuring charges whether (x) resulting from decisions made by
Company or (y) implemented by the management of the New Business within the six-
month period immediately preceding the closing of such Permitted Acquisition
(provided that the cost savings described in clause (y) are supportable and
quantifiable by the underlying accounting records of such business), which pro
forma adjustments shall be certified by the principal financial officer or
principal accounting officer of Company) using the historical financial
statements of the New Business so acquired or to be acquired and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated (i) as if such Permitted Acquisition, and any acquisitions which
have been consummated during such period, and any Indebtedness or other
liabilities incurred or repaid in connection with any such acquisition had been
consummated or incurred at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans incurred during such period), and (ii)
otherwise in conformity with certain procedures to be agreed upon between
Administrative Agent and Company, all such calculations to be in form and
substance reasonably satisfactory to Administrative Agent.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
----------------------------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Holdings or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, other than in the ordinary course of business,
transfer or otherwise dispose of (other
120
than pursuant to a lease entered into in the ordinary course of business), in
one transaction or a series of transactions, all or any part of its business,
property or assets, whether now owned or hereafter acquired, or acquire by
purchase or otherwise all or substantially all the business, property or fixed
assets of, or stock or other evidence of beneficial ownership of, any other
Person or any division or line of business of any other Person, except:
(i) any Subsidiary of Company may be merged with or into Company or
any Subsidiary Guarantor, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or a
series of transactions, to Company or any Subsidiary Guarantor; provided
--------
that, in the case of such a merger involving Company, Company shall be the
continuing or surviving corporation, and in the case of any other such
merger, such Subsidiary Guarantor shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may make Consolidated Capital
Expenditures in the ordinary course of business;
(iii) Company and its Subsidiaries may dispose of obsolete,
uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
--------
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) subject to subsection 7.12, Company and its Subsidiaries may
make Asset Sales of assets having an aggregate fair market value not in
excess of $5,000,000; provided that the consideration received for such
--------
assets shall be in an amount at least equal to the fair market value
thereof and the proceeds of such Asset Sales shall be applied as required
by subsection 2.4B(iii)(a);
(vi) Company and its Subsidiaries may sell or discount, in each case
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
provided that the aggregate amount of such accounts receivable sold
--------
pursuant to this clause (vi) shall not exceed in any Fiscal Year 10% of the
accounts receivable of Company and its Subsidiaries recorded for the
preceding Fiscal Year;
(vii) Company and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by
Company or any of its Subsidiaries in its capacity as licensor is permitted
to be assigned pursuant to the Collateral Documents (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a Lien
by Company or any of its Subsidiaries pursuant to the Collateral Documents
in the Intellectual Property covered by such license;
121
(viii) Company and its Subsidiaries may dispose of any Excluded
Subsidiary or its assets;
(ix) Company and its Subsidiaries may sell non-core businesses
acquired in connection with Permitted Acquisitions permitted pursuant to
subsection 7.3;
(x) Company and its Subsidiaries may sell or dispose of Cash
Equivalents and other investments permitted under subsection 7.3;
(xi) Company and its Subsidiaries may enter into letters of intent
and purchase agreements with respect to proposed acquisitions so long as
(a) any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits required to be made by the Company or
its Subsidiaries in connection therewith are funded solely with new cash
equity contributions to the Company, (b) there shall be no recourse against
the Company or any of its Subsidiaries in respect of such letters of intent
or purchase agreements other than against any such ▇▇▇▇ ▇▇▇▇▇▇▇ money
deposits and (c) neither the Company nor any of its Subsidiaries shall be
permitted to consummate any acquisition relating to such letter of intent
or purchase agreement without the prior written consent of the
Administrative Agent which consent may be withheld in Administrative
Agent's reasonable discretion except no consent shall be required with
respect to acquisitions made pursuant to subdivision (xiii) of this Section
7.7);
(xii) Holdings and its Subsidiaries may convert (whether by merger,
acquisition or otherwise, including the establishment of new corporations
to do so) from limited partnerships to "C" corporations or limited
liability companies so long as the security interests granted to the
Administrative Agent for the benefit of the Lenders pursuant to the
Collateral Documents shall remain in full force and effect and perfected
(to at least the same extent as in effect immediately prior to such
conversion);
(xiii) Company or any Subsidiary of Company may make other
acquisitions of assets and businesses (including acquisitions of the
capital stock or other equity interests of another Person whether by merger
or purchase), provided that:
--------
(a) immediately prior to and after giving effect to any such
acquisition, Company and its Subsidiaries shall be in compliance with
the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a Subsidiary of Company
or (B) such Person is merged with and into Company or a Subsidiary of
Company (with Company or such Subsidiary being the surviving
corporation in such merger), and in any case, all of the provisions of
subsection 6.8 have been complied with in respect of such Person;
(c) the only consideration paid in connection with such
acquisition shall consist of cash, Common Units, Qualified Preferred
Units or Permitted Seller Notes;
122
(d) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, and (2) no Event of Default or
Potential Event of Default shall have occurred and be continuing at
the time of such acquisition or shall be caused thereby; and Company
shall have delivered to Administrative Agent an Officer's Certificate
(together with supporting information therefor), in form and substance
reasonably satisfactory to Administrative Agent, certifying as to the
foregoing;
(e) any assets acquired pursuant to such acquisition by a Loan
Party shall be subject to a First Priority Lien in favor of
Administrative Agent on behalf of Lenders pursuant to the Collateral
Documents;
(f) the aggregate Acquisition Consideration paid by Company or
any such Subsidiary in any such acquisition does not exceed
$50,000,000; and
(g) Administrative Agent shall have received the following
information with regard to the Permitted Acquisition at least ten (10)
Business Days (or at such later date as such information first becomes
available) prior to the consummation thereof: (y) summary information
prepared by the Company describing the nature of the business or
Person to be acquired, the current draft of the acquisition agreement
and historical financial statements with respect to the business or
Person to be acquired as delivered to the Company; and (z) pro forma
financial statements for the Company and its Subsidiaries for the
immediately preceding and following four-fiscal quarter period
demonstrating compliance on a pro forma basis with the financial
covenants applicable during such periods pursuant to subsection 7.6
and adjustments made to the Borrowing Base Amount in accordance with
Schedule 1.1(i).
---------------
(xiv) any Permitted Foreign Subsidiary of Company may be merged with
or into any wholly-owned Permitted Foreign Subsidiary, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to any wholly-owned
Permitted Foreign Subsidiary; provided that (i) in the case of such a
--------
merger, such wholly-owned Permitted Foreign Subsidiary shall be the
continuing or surviving corporation and (ii) in each case, the stock of
such wholly-owned Permitted Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
(xv) Holdings or its Subsidiaries may sell or issue equity interests
of the Company or any of its Subsidiaries to Holdings, the General Partner
or any of their Subsidiaries;
(xvi) Holdings and its Subsidiaries may consummate the
Recapitalization Transactions; and
123
(xvii) Holdings may issue Common Units, the Preferred Units and
Qualified Preferred Units to the extent not otherwise prohibited under the
provisions of this Agreement.
7.8 FISCAL YEAR
-----------
Holdings and Company shall not change their Fiscal Year-end from December
31.
7.9 SALES AND LEASE-BACKS.
---------------------
Except with respect to Permitted Sale Leaseback Transaction, Company shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter acquired, (i)
which Company or any of its Subsidiaries has sold or transferred or is to sell
or transfer to any other Person (other than Holdings or any of its Subsidiaries)
or (ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by Company or any of its Subsidiaries to any Person (other
than Holdings or any of its Subsidiaries) in connection with such lease.
7.1 SALE OR DISCOUNT OF RECEIVABLES.
-------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided, however, that Company and its Subsidiaries may, in the exercise of
-------- -------
their reasonable business judgment in connection with efforts to collect amounts
owed thereunder, discount or sell (to the extent permitted under subsection
7.7(vi) for less than the face value thereof any accounts receivable.
7.1 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
---------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided that the foregoing restriction shall not apply to (i) any
--------
transaction between Holdings and any of its Subsidiaries or between any of its
Subsidiaries, (ii) any payment from Company to Holdings and the General Partner
expressly permitted under subsection 7.5 and any payment by Holdings permitted
under subsection 7.5, (iii) the payment of ▇▇▇▇ Management Fees under the ▇▇▇▇
Advisory Services Agreement, (iv) any employment agreement entered into by
Holdings or any of its Subsidiaries in the ordinary course of business, (v) any
issuance of Common Units or Preferred Units or Qualified Preferred Units in
connection with employment arrangements, stock options and stock ownership plans
of Holdings or any of its Subsidiaries entered into in the ordinary course of
business and the performance of obligations thereunder, (vi) any of the
Recapitalization Transactions, (vii) reasonable and customary
124
fees, expenses and indemnities paid to members of the Boards of Directors or
Board of Managers, as the case may be, of Holdings and its Subsidiaries, (viii)
the performance of obligations under the Related Agreements, or (ix)
transactions with ▇▇▇ ▇▇▇▇▇▇▇; provided that any amounts received by ▇▇▇ ▇▇▇▇▇▇▇
--------
pursuant to this clause (ix) in excess of salary and other compensation
contractually due to him from Company shall not exceed $50,000 in any Fiscal
Year.
7.1 DISPOSAL OF SUBSIDIARY INTERESTS.
--------------------------------
Except as required under the Collateral Documents and except for any sale
of 100% of the capital stock, partnership interests or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection
7.7(vi), Holdings shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock, partnership interests or other
equity Securities of any of its Subsidiaries, except to qualify directors
if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock, partnership interests or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to Company, another
Subsidiary of Holdings (subject to the restrictions on such disposition
otherwise imposed hereinunder), or to qualify directors if required by
applicable law.
7.1 CONDUCT OF BUSINESS.
-------------------
From and after the Closing Date, Company shall not, and shall not permit
any of its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by Company and its Subsidiaries on the Closing Date and similar or
related or supportive businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders. Neither Holdings nor General Partner shall
engage in any business or have any assets (including Intellectual Property)
other than (i) owning partnership interests of Company, or equity interests of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Holdings Capital Corporation, (ii) with respect to Holdings and
the General Partner the issuance of and activities related to the maintenance
and servicing of Shareholder Subordinated Notes, Permitted Seller Notes, the
Senior Discount Debentures, other debt and guaranty obligations permitted to be
incurred hereunder and the partnership or equivalent equity interests of
Holdings as permitted hereunder, (iii) with respect to Holdings and the General
Partner the entering into, and the performance of its obligations under, the
Pledge and Security Agreement, the Related Agreements to which it is a party,
the ▇▇▇▇ Advisory Services Agreement and the Term Loan Credit Documents to which
it is a party, (iv) the receipt of Cash distributions from Company in accordance
with the provisions hereof, and (v) activities associated with expenses paid
with any dividends paid to Holdings or the General Partner which are permitted
under subsection 7.5. Notwithstanding the foregoing, Holdings and the General
Partner may engage in activities incidental to (a) the maintenance of its
existence in compliance with applicable law, (b) legal, tax and accounting
matters in connection with any of the foregoing activities and (c) entering
into, and performing its obligations under, this Agreement and the Loan
Documents to which it is a party.
125
7.1 AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS; AMENDMENTS OF DOCUMENTS
--------------------------------------------------------------------
RELATING TO SUBORDINATED INDEBTEDNESS AND SENIOR NOTES; DESIGNATION OF
----------------------------------------------------------------------
"DESIGNATED SENIOR DEBT".
------------------------
A. AMENDMENTS OR WAIVERS OF CERTAIN AGREEMENTS. None of Holdings,
Company nor any of their respective Subsidiaries will agree to any amendment to,
or waive any of its rights under, the ▇▇▇▇ Advisory Services Agreement or any
Related Agreement (other than any Related Agreement evidencing or governing the
Senior Notes and any other Subordinated Indebtedness) after the Closing Date if
any such amendment or waiver would, individually or in the aggregate, reasonably
be expected to be materially adverse to Lenders without in each case obtaining
the prior written consent of Requisite Lenders to such amendment or waiver.
B. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS OR
SENIOR NOTES. Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness or Senior Notes, or make any payment consistent with
an amendment thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Subordinated Indebtedness or
Senior Notes, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions of such Subordinated Indebtedness or any guaranty of
any Subordinated Indebtedness or Senior Notes), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness (or a trustee
or other representative on their behalf) which would be materially adverse to
Holdings, Company or Lenders.
C. AMENDMENTS OF TERM LOAN CREDIT DOCUMENTS. Holdings and Company shall
not, and shall not permit any of their respective Subsidiaries to, amend or
otherwise change the terms of any of the Term Loan Credit Documents, or make any
payment consistent with an amendment thereof or a change thereto, that would
have the effect of (i) changing (to earlier dates) any dates upon which payments
of principal or interest are due on the Term Loans, (ii) reducing the percentage
specified in the definition of "Requisite Lenders" in the Term Loan Credit
Agreement, or (iii) changing the prepayment provisions of the Term Loan Credit
Agreement in a manner that disproportionately disadvantages the Lenders relative
to the lenders under the Term Loan Credit Agreement or confers additional rights
on the lenders under the Term Loan Credit Agreement which would be adverse to
Lenders, without the prior written consent of Requisite Lenders under this
Agreement.
126
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT") shall
occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
---------------------------------
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within three Business
Days after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent Obligations
in the individual or aggregate principal amounts referred to in clause (i) above
or (b) any loan agreement, mortgage, indenture or other agreement relating to
such item(s) of Indebtedness or Contingent Obligation(s), if the effect of such
breach or default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder
or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
---------------------------
Failure of Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement;
provided, however, that such failure with respect to the covenants contained in
-------- -------
subsections 7.1, 7.2, 7.3 and 7.4 shall not constitute an Event of Default for
ten days after such failure so long as Company is diligently pursuing the cure
of such failure; or
8.4 BREACH OF WARRANTY.
------------------
Any representation, warranty, certification or other statement made by any
Loan Party in any Loan Document or in any statement or certificate at any time
given by any Loan Party in writing pursuant hereto or thereto or in connection
herewith or therewith shall be false in any material respect on the date as of
which made; or
127
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Holdings, Company or such Loan Party becoming aware of such
default or (ii) receipt by Holdings, Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
-----------------------------------------------------
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar relief shall
be granted under any applicable federal or state law; or (ii) an involuntary
case shall be commenced against Holdings or any of its Subsidiaries (other than
Excluded Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Holdings or any of its Subsidiaries (other than Excluded
Subsidiaries), or over all or a substantial part of its property, shall have
been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) for all or a substantial part of
its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings or any
of its Subsidiaries (other than Excluded Subsidiaries), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
---------------------------------------------------
(i) Holdings or any of its Subsidiaries (other than Excluded Subsidiaries)
shall have an order for relief entered with respect to it or commence a
voluntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking possession by a receiver, trustee
or other custodian for all or a substantial part of its property; or Holdings or
any of its Subsidiaries (other than Excluded Subsidiaries) shall make any
assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other than Excluded Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of its
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
128
8.8 JUDGMENTS AND ATTACHMENTS.
-------------------------
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance from a solvent and unaffiliated insurance
company) shall be entered or filed against Holdings or any of its Subsidiaries
or any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or
8.9 DISSOLUTION.
-----------
Any order, judgment or decree shall be entered against Holdings or any of
its Subsidiaries (other than an Excluded Subsidiary) decreeing the dissolution
or split up of Holdings or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Holdings or any of its Subsidiaries in excess of $7,500,000 during the term of
this Agreement; or
8.11 CHANGE IN CONTROL.
-----------------
(i) Holdings shall cease to own and control 100% of the limited
partnership interests of Company, or General Partner shall cease to own and
control 100% of the general partnership interests of Company; (ii) prior to an
initial public offering by Holdings and General Partner (or any successor
pursuant to subsection ___,) Bain Investors shall cease, directly or indirectly,
to exercise the right to determine and control all matters with respect to which
any stockholders or partners of General Partner or Holdings are entitled to
determine or control, (iii) Bain Investors shall cease to beneficially own,
directly or indirectly, 71% of the economic interests of Holdings or General
Partner owned by Bain Investors on Closing Date; (iv) after an initial public
offering of Holdings and General Partner (or any successor thereto pursuant to
subsection ____,) any Person (other than Bain Investors) shall (y) have a
greater economic or voting interest in Holdings or General Partner (or any
successor thereto pursuant to subsection ___) than Bain Investor's economic or
voting interest in Holdings or General Partner (or any successor thereto
pursuant to subsection ___), or (z) own or control more than 30% of the economic
or voting interest of Holdings or General Partner (or any successor thereto
pursuant to subsection ___); or (v) any "Change of Control" shall occur under
the Senior Notes.
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF OBLIGATIONS.
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At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable),
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shall cease to be in full force and effect (other than in accordance with its
terms) or shall be declared to be null and void, (ii) any Collateral Document
shall cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby and required to be perfected or having a fair market value,
individually or in the aggregate, exceeding $2,000,000, in each case for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party; or
8.13 FAILURE TO CONSUMMATE RECAPITALIZATION.
--------------------------------------
The Recapitalization Transactions contemplated to occur on the Closing Date
shall not be consummated in accordance with this Agreement and the applicable
Related Agreements on the Closing Date, or the Recapitalization Transactions
shall be unwound, reversed or otherwise rescinded in whole or in part for any
reason:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Holdings and Company, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request or with
the written consent of Requisite Lenders, by written notice to Company, declare
all or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
--------
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
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Notwithstanding anything contained in the second preceding paragraph, if at
any time within 60 days after an acceleration of the Loans pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than non-
payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Holdings or Company, and such provisions
shall not at any time be construed so as to grant Holdings or Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
-----------
A. APPOINTMENT OF AGENTS. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. Fleet is hereby appointed Administrative Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Administrative Agent
to act as its agent in accordance with the terms of this Agreement and the other
Loan Documents. DLJ is hereby appointed Documentation Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes Documentation Agent
to act as its agent in accordance with the terms of this Agreement and the
other Loan Documents. Each Lender hereby authorizes and confirms the
appointment by Administrative Agent of Fleet as Collateral Agent under the
Intercreditor Agreement and the other Loan Documents, and each Lender hereby
authorizes Collateral Agent to act as its agent in accordance with the terms of
the Intercreditor Agreement and the other Loan Documents. Each Agent hereby
agrees to act upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and Company shall have no rights as
a third party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Holdings or
any of its Subsidiaries. Each of Syndication Agent and Documentation Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments, all obligations of GSCP, in its
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capacity as Syndication Agent hereunder, shall terminate. DLJ, in its capacity
as Documentation Agent, shall have no obligations hereunder.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "SUPPLEMENTAL COLLATERAL
AGENT" and collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Holdings, Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Holdings or Company shall,
or shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
-----------------------------------
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms
132
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents. Each Agent may exercise such powers, rights and remedies and
perform such duties by or through its agents or employees. No Agent shall have,
by reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect of this
Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any of Agent to Lenders or by or on behalf of
Holdings or Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Holdings or Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component amounts
thereof.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent, in the case of any Agent other than the Administrative
Agent, shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Administrative Agent, in
accordance with the Intercreditor Agreement, and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be)
or in accordance with the Intercreditor Agreement, as the case may be, such
Agent shall be entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Holdings and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so
133
instructed) refraining from acting under this Agreement or any of the other Loan
Documents, in the case of any Agent other than the Administrative Agent, in
accordance with the instructions of Requisite Lenders (or such other Lenders as
may be required to give such instructions under subsection 10.6) or, in the case
of the Administrative Agent, in accordance with the Intercreditor Agreement.
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Holdings, Company or any of their
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and Company for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
------------------------------------------------------------------
CREDITWORTHINESS.
----------------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Holdings and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 RIGHT TO INDEMNITY.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company or Holdings, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as such Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that in no event shall this
--------
134
sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender's Pro Rata Share thereof; and provided,
--------
further, that this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
to the immediately preceding sentence.
9.5 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
----------------------------------------------------
A. SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and
Administrative Agent and signed by Requisite Lenders. Upon any such notice of
resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent with the consent of Company (which consent shall not be unreasonably
withheld). Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of ____ or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Agent in its capacity as Swing
Line Lender, (ii) upon such prepayment, the retiring or removed Administrative
Agent and Swing Line Lender shall surrender any Swing Line Note held by it to
Company for cancellation, and (iii) if so requested by the successor
Administrative Agent and Swing Line Lender in accordance with subsection 2.1E,
Company shall issue a new Swing Line Note to the successor Administrative Agent
and Swing Line Lender substantially in the form of Exhibit VIII annexed hereto,
------------
in the principal amount of the Swing Line Loan Commitment then in effect and
with other appropriate insertions.
C. ADMINISTRATIVE AGENT UNDER TERM LOAN CREDIT AGREEMENT. Any
resignation or removal of Administrative Agent pursuant to subsection 9.5A shall
also constitute the resignation or removal of Fleet for all purposes hereunder
and under the Term Loan Credit Agreement.
9.6 COLLATERAL DOCUMENTS AND GUARANTY.
---------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement;
provided that Administrative Agent shall not enter into or consent to any
--------
material amendment, modification, termination or waiver of the Intercreditor
135
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6). Each
Lender hereby further authorizes Administrative Agent (and under the terms of
the Intercreditor Agreement Administrative Agent is authorized), on behalf of
and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of the Lenders under
the Guaranties, and each Lender agrees to be bound by the terms of each
Collateral Document and each Guaranty; provided that Collateral Agent shall not
--------
enter into or consent to any material amendment, modification, termination or
waiver of the Intercreditor Agreement without the prior consent of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) ; provided further, however, that, without further
-------- ------- -------
written consent or authorization from Lenders, Collateral Agent may execute any
documents or instruments necessary to (a) release any Lien encumbering any item
of Collateral that is the subject of a sale or other disposition of assets
permitted by this Agreement or as permitted or required under the Intercreditor
Agreement or the Collateral Documents or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under subsection 10.6)
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person pursuant to a sale or other disposition permitted hereunder
or as permitted under the Intercreditor Agreement or to which Requisite Lenders
(or such other Lenders as may be required to give such consent under subsection
10.6) have otherwise consented; provided, however, that nothing in this
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subsection shall require consent to release from the Subsidiary Guaranty any
Person which, immediately after such sale, shall be a Subsidiary of Holdings
which is obligated to and will enter into the Subsidiary Guaranty. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
Administrative Agent, Collateral Agent and each Lender hereby agree that (X) no
Lender shall have any right individually to realize upon any of the Collateral
under any Collateral Document or to enforce the Subsidiary Guaranty, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents and the Guaranties may be exercised solely by Collateral Agent for the
benefit of Secured Parties in accordance with the terms thereof, and (Y) in the
event of a foreclosure by Collateral Agent on any of the Collateral pursuant to
a public or private sale, Collateral Agent or any Secured Party may be the
purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party or Secured Parties in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Collateral Agent at such sale.
SECTION 10.
MISCELLANEOUS
10. ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
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A. GENERAL. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or
136
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
--------
shall, without the consent of Company, require Company to file a registration
statement with the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws of any
state; provided, further that no such sale, assignment or transfer described in
--------
clause (i) above shall be effective unless and until an Assignment Agreement
effecting such sale, assignment or transfer shall have been accepted by
Administrative Agent and recorded in the Register as provided in subsection
10.1B(ii); provided, further that no such sale, assignment, transfer or
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participation of any Letter of Credit or any participation therein may be made
separately from a sale, assignment, transfer or participation of a corresponding
interest in the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale, assignment, transfer or participation; and provided,
--------
further that, anything contained herein to the contrary notwithstanding, the
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Swing Line Loan Commitment and the Swing Line Loans of Swing Line Lender may not
be sold, assigned or transferred as described in clause (i) above to any Person
other than a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this subsection
10.1, no Lender shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments or the
Loans, the Letters of Credit or participations therein, or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter
--------------------------------
of Credit or participation therein, or other Obligation may (a) be assigned
in any amount to another Lender, or to an Affiliate of the assigning Lender
or another Lender, with the giving of notice to Company and Administrative
Agent, or (b) be assigned in an aggregate amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate amount
of the Commitments, Loans, Letters of Credit and participations therein,
and other Obligations of the assigning Lender and its Affiliates) to any
other Eligible Assignee with the consent of Company and Administrative
Agent (which consent of Company and Administrative Agent shall not be
unreasonably withheld or delayed); provided that, unless otherwise agreed
--------
to in writing by Company and Administrative Agent, the assigning Lender
shall have, immediately after giving effect to such assignment, not less
than an aggregate amount of $5,000,000 in Commitments, Loans and Letter of
Credit; and provided further, however, that (x) upon the occurrence and
-------- ------- -------
during the continuance of an Event of Default, or (y) in the case of
assignments by GSCP, Fleet or DLJ, assignments may be made without the
consent of Company or Administrative Agent, upon the giving of notice to
Company and Administrative Agent. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning Lender shall
be relieved of its obligations with respect to its Commitments, Loans,
Letters of Credit or participations therein, or other Obligations or the
portion thereof so assigned. The parties to each such assignment shall
execute and deliver to Administrative Agent, for its acceptance and
recording in the Register, an Assignment Agreement, together with a
processing and recordation fee of $500 in the case of assignments pursuant
to clause (a) above and assignments by GSCP or Fleet, and $2000 in the case
of all other assignments and such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding matters
as the assignee under
137
such Assignment Agreement may be required to deliver to Administrative
Agent and the Company pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under subsection 10.9B) and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto; provided that, anything contained in any of the
--------
Loan Documents to the contrary notwithstanding, if such Lender is the
Issuing Lender with respect to any outstanding Letters of Credit such
Lender shall continue to have all rights and obligations of an Issuing
Lender with respect to such Letters of Credit until the cancellation or
expiration of such Letters of Credit and the reimbursement of any amounts
drawn thereunder). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
any Notes hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its
applicable Notes, if any, to Administrative Agent for cancellation, and
thereupon new Notes shall, if so requested by the assignee and/or the
assigning Lenders in accordance with Subsection 2.1E, be issued to the
assignee and/or to the assigning Lender, substantially in the form of
Exhibit IV or Exhibit V annexed hereto, as the case may be, with
---------- ---------
appropriate insertions, to reflect the new Commitments, as the case may be,
of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-----------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the processing and recordation fee referred to in subsection 10.1B(i) and
any forms, certificates or other evidence with respect to United States
federal income tax withholding matters that such assignee may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent has and Company have
consented to the assignment evidenced thereby (in each case to the extent
such consent is required pursuant to subsection 10.1B(i)), (a) accept such
Assignment Agreement by executing a counterpart thereof as provided therein
(which acceptance shall evidence any required consent of Administrative
Agent to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation (ii) a reduction of the principal amount of
or the rate
138
of interest or fees payable on any Loan allocated to such participation, and all
amounts payable by Company hereunder (including amounts payable to such Lender
pursuant to subsections 2.6D, 2.7 and 3.6) or (iii) a release of all or
substantially all of the Collateral shall be determined as if such Lender had
not sold such participation. Company and each Lender hereby acknowledge and
agree that, solely for purposes of subsections 10.4 and 10.5, (a) any
participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS AND FUND TRUSTEES. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Company and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee; provided that (i) no Lender shall, as between Company and such
--------
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (a) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
--------
Whether or not the transactions contemplated hereby are consummated,
Company agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Loan Documents and any consents, amendments
(requested by or for the benefit of Company), waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Syndication Agent (in each case
including allocated costs of internal counsel) in connection with the
negotiation, preparation and execution
139
of the Loan Documents and of the Administrative Agent in connection with any
consents, amendments (requested by or for the benefit of Company), waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all the reasonable costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Collateral Document, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums, and
reasonable fees, expenses and disbursements of counsel to Agents and to
Administrative Agent and of counsel providing any opinions that Agents,
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the
reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) of obtaining and reviewing any appraisals
provided for under subsection 6.9C, any environmental audits or reports provided
for under subsection 4.1K or 6.9B(ix) and any audits or reports provided for
under subsection 6.5B with respect to Inventory and accounts receivable of
Holdings and its Subsidiaries; (vi) all the reasonable costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
consultants, advisors and agents employed or retained by Administrative Agent
and its counsel) in connection with the administration of the Loan Documents,
and the custody or preservation of any of the Collateral as may separately be
agreed to between the Administrative Agent and Company; (vii) all other
reasonable costs and expenses incurred by any of the Agents in connection with
the syndication of the Commitments and the negotiation, preparation and
execution of the Loan Documents and any consents, amendments (requested by or
for the benefit of Company), waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by any of the Agents or the Administrative Agents and Lenders in
enforcing any Obligations of or in collecting any payments due from any Loan
Party hereunder or under the other Loan Documents by reason of such Event of
Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranties) or
in connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
---------
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby are consummated, Company
agrees to defend (subject to Indemnitees' selection of counsel), indemnify, pay
and hold harmless Agents (including Administrative Agent) and Lenders, and the
officers, partners, directors, trustees, employees, agents and affiliates of any
of Agents (including Administrative Agent) and Lenders (collectively called the
"INDEMNITEES"), from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that Company shall not have any obligation to any
--------
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise from the gross negligence, bad faith or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction.
140
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened
by any Person, whether or not any such Indemnitee shall be designated as a party
or a potential party thereto, and any fees or expenses incurred by Indemnitees
in enforcing this indemnity), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee, in any manner relating to or arising out of (i) this
Agreement or the other Loan Documents or the Related Agreements or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranties)), (ii) the statements contained in the commitment
letter executed by any Lender and the Company with respect thereto, or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Holdings or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default each Lender is hereby authorized by
Company at any time or from time to time subject to the consent of
Administrative Agent, without notice to Company or to any other Person (other
than Administrative Agent), any such notice being hereby expressly waived, to
set off and to appropriate and to apply any and all deposits (general or
special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts or payroll accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Company against and on account of the obligations and
liabilities of Company which are then due and payable to that Lender under this
Agreement, the Letters of Credit and participations therein and the other Loan
Documents, including all claims of any nature or description arising out of or
connected with this Agreement, the Letters of Credit and participations therein
or any other Loan Document, irrespective of whether or not that Lender shall
have made any demand hereunder which are then due and payable. Company hereby
further grants to
141
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.4 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.4,
such payments shall not be subject to the provisions of this subsection 10.4.
10.5 RATABLE SHARING.
---------------
Lenders hereby agree among themselves that if any of them shall, whether
by voluntary payment (other than a voluntary prepayment of Loans made and
applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
--------
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.5 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Administrative
Agent any payments otherwise subject to the provisions of this subsection 10.5,
such payments shall not be subject to the provisions of this subsection 10.5.
10.6 AMENDMENTS AND WAIVERS.
----------------------
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective
142
without the written concurrence of Requisite Lenders; provided that no such
--------
amendment, modification, termination, waiver or consent shall, without the
consent of each Lender (with Obligations directly affected in the case of the
following clause (i)): (i) extend the scheduled final maturity of any Loan or
Note, or extend the stated expiration date of any Letter of Credit beyond the
Revolving Loan Commitment Termination Date, or reduce the rate of interest on
any Loan (other than any waiver of any increase in the interest rate applicable
to any Loan pursuant to subsection 2.2E; it being understood that modification
to the financial definitions herein shall not constitute a reduction of the rate
of interest for the purposes of this subsection 10.6) or any commitment fees or
letter of credit fees payable hereunder, or extend the time for payment of any
such interest or fees, or reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the Revolving Loan
Commitments and the Revolving Loans are included on the Closing Date), (iv)
release all or substantially all of the Collateral or Holdings from the Holdings
Guaranty or all or substantially all of the Subsidiary Guarantors from the
Subsidiary Guaranty except as expressly provided in the Loan Documents, or (v)
consent to the assignment or transfer by Company of any of its rights and
obligations under this Agreement; provided, further that no such amendment,
-------- -------
modification, termination or waiver shall (1) increase the Commitments of any
Lender over the amount thereof then in effect, or extend the duration thereof,
without the consent of such Lender (it being understood that no amendment,
modification or waiver of any condition precedent, covenant, Potential Event of
Default or Event of Default shall constitute an increase or extension in the
Commitment of any Lender, and that no increase in the available portion of any
Commitment of any Lender shall constitute an increase in such Commitment of such
Lender); (2) amend, modify, terminate or waive any provision of subsection
2.1A(ii) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans without the consent of Swing Line
Lender; (3) amend, modify, terminate or waive any obligation of Lenders relating
to the purchase of participations in Letters of Credit as provided in subsection
3.1C without the written concurrence of Administrative Agent and of each Issuing
Lender which has a Letter of Credit then outstanding or which has not been
reimbursed for a drawing under a Letter of Credit issued it; or (4) amend,
modify, terminate or waive any provision of Section 9 or 10 as the same applies
to any Agent (including the Administrative Agent), or any other provision of
this Agreement as the same applies to the rights or obligations of any Agent
(including the Administrative Agent), in each case without the consent of such
Agent (including the Administrative Agent).
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
143
10.7 INDEPENDENCE OF COVENANTS.
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
-------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Syndication Agent or
--------
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Holdings, Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company and Holdings set forth in subsections 2.6D,
2.7, 3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
-----------------------------------------------------
No failure or delay on the part of Administrative Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
144
10.11 MARSHALLING; PAYMENTS SET ASIDE.
-------------------------------
None of Administrative Agent, Administrative Agent or any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the extent
that Company makes a payment or payments to Administrative Agent, Administrative
Agent, or Lenders (or to Administrative Agent for the benefit of Lenders), or
Administrative Agent or Lenders enforce any security interests or exercise their
rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause, then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
--------
Section and subsection headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
--------------
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW
▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇▇ REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Holdings' nor Company's rights or obligations hereunder nor any interest therein
may be assigned or delegated by Holdings or Company without the prior written
consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY AND HOLDINGS, FOR THEMSELVES AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS AND COMPANY AT THEIR ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
OTHERWISE.
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10.18 WAIVER OF JURY TRIAL.
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Company and Holdings that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations therein
or by any direct or indirect contractual counterparties (or the professional
advisors thereto) in swap agreements (provided that such counterparties and
--------
advisors are advised of and agree to be bound by the provisions of this
subsection 10.19) or disclosures required or requested by any governmental
agency or representative thereof or by the NAIC or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
--------
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event shall any Lender be
-------- -------
obligated or required to return any materials furnished by Holdings or any of
its Subsidiaries.
147
10.20 COUNTERPARTS; EFFECTIVENESS.
---------------------------
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
148
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
HOLDINGS:
▇▇▇▇▇▇▇ ▇▇▇▇▇ RENTAL HOLDINGS, L.P.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
with a copy to:
▇▇▇▇ Capital, Inc.
Two ▇▇▇▇▇▇ Place
Boston, MA 02116
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By: /s/
------------------------------------
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
-----------------
S-3
FLEET NATIONAL BANK,
individually and as Administrative Agent
By: /s/ ▇▇▇ ▇▇▇▇▇
-------------------------------
Name:▇▇▇ ▇▇▇▇▇
Title:
Notice Address:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇/▇▇/▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
----------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
----------------
with a copy to:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
------------------------
▇-▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇.,
individually and as Documentation Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
Notice Address:
DLJ Capital Funding, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇.
------------------------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------------------
------------------------------------
Attention: ▇▇▇▇ ▇▇▇▇▇▇
--------------
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
--------------
S-5
SCHEDULE 1.1(I)
ADJUSTMENTS TO BORROWING BASE
-----------------------------
[TO BE PROVIDED]
Schedule 1.1(i) - 1
SCHEDULE 1.1(II)
ADDBACKS TO EBITDA
------------------
Without duplication:
(i) Items classified as unusual or nonrecurring gains and losses (including
restructuring costs, severance and relocation costs, any one-time
expenses related to (or resulting from) any merger, recapitalization or
Permitted Acquisition);
(ii) ▇▇▇▇ Management Fees (excluding any portion thereof representing
---------
reimbursement of expenses or fees for acquisitions, financings or
divestitures) paid during such period under the ▇▇▇▇ Advisory Services
Agreement;
(iii) Unrealized gains or losses in respect of Interest Rate Agreements and
the related tax effects;
(iv) Unrealized gains or losses due solely to fluctuations in currency values
and the related tax effects;
(v) Any write-off of deferred financing costs incurred as a result of the
refinancing of the Indebtedness existing immediately prior to the
Closing Date;
(vi) Premiums, penalties and transaction costs in connection with the
refinancing of Indebtedness existing immediately prior to the Closing
Date;
(vii) All one-time cash compensation payments made in connection with the
Recapitalization Transactions and the transaction contemplated hereby
and the Related Agreements;
(viii) Non-recurring cash restructuring charges incurred in connection with the
Recapitalization Transactions and related transactions;
(ix) Non-recurring cash restructuring charges incurred in connection with any
Permitted Acquisition to the extent incurred within six months following
the consummation of such Permitted Acquisition and deducted in
determining Consolidated Net Income, not to exceed the actual historical
EBITDA of the New Business for the immediately preceding four-quarter
period;
(x) to the extent corresponding deductions are made in Consolidated Adjusted
EBITDA, indemnification payments received from third parties and not
otherwise included in the calculation of Consolidated Adjusted EBITDA;
and
(xi) All Transaction Costs.
Schedule 1.1(ii)-1