EXHIBIT 10.61
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CREDIT AGREEMENT
DATED AS OF FEBRUARY 11, 2002
AMONG
AMERICAN COIN MERCHANDISING, INC.,
AS BORROWER,
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS,
MADISON CAPITAL FUNDING LLC,
AS AGENT
AND
THE ROYAL BANK OF SCOTLAND PLC, NEW YORK BRANCH,
AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
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Section 1. Definitions; Interpretation....................................................................1
1.1. Definitions....................................................................................1
1.2. Interpretation................................................................................14
Section 2. Credit Facilities.............................................................................14
2.1. Commitments...................................................................................14
2.1.1. Revolving Loan Commitments...........................................................14
2.1.2. Term Loan Commitments................................................................14
2.2. Loan Procedures...............................................................................14
2.2.1. Loan Types...........................................................................14
2.2.2. Borrowing............................................................................15
2.2.3. Conversion; Continuation.............................................................15
2.3. Letters of Credit.............................................................................16
2.3.1. Commitment...........................................................................16
2.3.2. Application..........................................................................16
2.3.3. Reimbursement Obligations............................................................16
2.3.4. Participations in Letters of Credit..................................................17
2.4. Commitments Several...........................................................................18
2.5. Certain Conditions............................................................................18
2.6. Loan Accounting...............................................................................18
2.6.1. Recordkeeping........................................................................18
2.6.2. Notes................................................................................18
2.7. Interest......................................................................................18
2.7.1. Interest Rates.......................................................................18
2.7.2. Interest Payment Dates...............................................................19
2.7.3. Setting and Notice of LIBOR Rates....................................................19
2.7.4. Computation of Interest..............................................................19
2.8. Fees..........................................................................................19
2.8.1. Commitment Fee.......................................................................19
2.8.2. Letter of Credit Fees................................................................19
2.8.3. Agent's Fees.........................................................................20
2.9. Commitment Reduction..........................................................................20
2.9.1. Voluntary Reduction or Termination of Revolving Loan Commitment......................20
2.9.2. Mandatory Reduction of Revolving Loan Commitment.....................................20
2.9.3. All Reductions of Revolving Loan Commitment..........................................20
2.10. Prepayment....................................................................................20
2.10.1. Voluntary Prepayment.................................................................20
2.10.2. Mandatory Prepayment.................................................................20
2.10.3. All Prepayments......................................................................21
2.10.4. Prepayment Fee.......................................................................21
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2.11. Repayment.....................................................................................22
2.11.1. Revolving Loans......................................................................22
2.11.2. Term A Loan..........................................................................22
2.11.3. Term B Loan..........................................................................23
2.12. Payment.......................................................................................24
2.12.1. Making and Settlement of Payments....................................................24
2.12.2. Application of Certain Payments......................................................24
2.12.3. Payment Dates........................................................................24
2.12.4. Set-off..............................................................................24
2.12.5. Proration of Payments................................................................25
Section 3. Yield Protection..............................................................................25
3.1. Taxes.........................................................................................25
3.2. Increased Cost................................................................................26
3.3. Inadequate or Unfair Basis....................................................................26
3.4. Change in Law.................................................................................27
3.5. Funding Losses................................................................................27
3.6. Manner of Funding; Alternate Funding Offices..................................................27
3.7. Mitigation of Circumstances; Replacement of Lenders...........................................27
3.8. Conclusiveness of Statements; Survival........................................................28
Section 4. Conditions Precedent..........................................................................28
4.1. Initial Credit Extension......................................................................28
4.1.1. Capitalization.......................................................................28
4.1.2. Initial Loans; Availability..........................................................29
4.1.3. Prior Debt...........................................................................29
4.1.4. Related Transactions.................................................................29
4.1.5. Fees.................................................................................29
4.1.6. Delivery of Loan Documents...........................................................29
4.1.7. Trust Subordinated Debt Documents and Trust Preferred Documents......................31
4.1.8. Senior Debt to EBITDA Ratio..........................................................31
4.1.9. EBITDA...............................................................................31
4.1.10. Accuracy of Information..............................................................31
4.2. All Credit Extensions.........................................................................31
Section 5. Representations and Warranties................................................................31
5.1. Organization..................................................................................32
5.2. Authorization; No Conflict....................................................................32
5.3. Validity; Binding Nature......................................................................32
5.4. Financial Condition...........................................................................32
5.5. No Material Adverse Change....................................................................33
5.6. Litigation....................................................................................33
5.7. Ownership of Properties; Liens................................................................33
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5.8. Capitalization................................................................................33
5.9. Pension Plans.................................................................................33
5.10. Investment Company Act........................................................................34
5.11. Public Utility Holding Company Act............................................................34
5.12. Margin Stock..................................................................................34
5.13. Taxes.........................................................................................34
5.14. Solvency......................................................................................34
5.15. Environmental Matters.........................................................................34
5.16. Insurance.....................................................................................35
5.17. Information...................................................................................35
5.18. Intellectual Property.........................................................................35
5.19. Restrictive Provisions........................................................................35
5.20. Labor Matters.................................................................................36
5.21. No Default....................................................................................36
5.22. Related Agreements............................................................................36
5.23. Subsidiaries..................................................................................37
5.24. Agreements with Managers......................................................................37
Section 6. Affirmative Covenants.........................................................................37
6.1. Information...................................................................................37
6.1.1. Annual Report........................................................................37
6.1.2. Interim Reports......................................................................37
6.1.3. Compliance Certificate...............................................................38
6.1.4. Reports to SEC and Shareholders......................................................38
6.1.5. Notice of Default; Litigation; ERISA Matters.........................................38
6.1.6. Availability Certificate.............................................................39
6.1.7. Management Report....................................................................39
6.1.8. Projections..........................................................................39
6.1.9. Certain Debt Notices.................................................................39
6.1.10. Labor Matters........................................................................39
6.1.11. Other Information....................................................................39
6.2. Books; Records; Inspections...................................................................39
6.3. Maintenance of Property; Insurance............................................................40
6.4. Compliance with Laws; Payment of Taxes and Liabilities........................................41
6.5. Maintenance of Existence......................................................................41
6.6. Employee Benefit Plans........................................................................41
6.7. Environmental Matters.........................................................................41
6.8. Further Assurances............................................................................41
6.9. Interest Rate Protection......................................................................42
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6.10. Trust Subordinated Debt Documents.............................................................42
6.11. Keyman Insurance..............................................................................42
6.12. Audax Subordinated Debt.......................................................................42
Section 7. Negative Covenants............................................................................42
7.1. Debt..........................................................................................42
7.2. Liens.........................................................................................43
7.3. Operating Leases..............................................................................45
7.4. Restricted Payments...........................................................................45
7.5. Mergers; Consolidations; Asset Sales..........................................................46
7.6. Modification of Organizational Documents......................................................47
7.7. Use of Proceeds...............................................................................47
7.8. Transactions with Affiliates..................................................................47
7.9. Inconsistent Agreements.......................................................................47
7.10. Business Activities...........................................................................47
7.11. Investments...................................................................................48
7.12. Restriction of Amendments to Certain Documents................................................50
7.13. Fiscal Year...................................................................................50
7.14. Financial Covenants...........................................................................50
7.14.1. Fixed Charge Coverage Ratio..........................................................50
7.14.2. Interest Coverage Ratio..............................................................50
7.14.3. Senior Debt to EBITDA Ratio..........................................................51
7.14.4. Total Debt to EBITDA Ratio...........................................................52
7.14.5. EBITDA...............................................................................52
7.14.6. Capital Expenditures.................................................................53
Section 8. Events of Default; Remedies...................................................................54
8.1. Events of Default.............................................................................54
8.1.1. Non-Payment of Credit................................................................54
8.1.2. Default Under Other Debt.............................................................54
8.1.3. Bankruptcy; Insolvency...............................................................54
8.1.4. Non-Compliance with Loan Documents...................................................55
8.1.5. Representations; Warranties..........................................................55
8.1.6. Pension Plans........................................................................55
8.1.7. Judgments............................................................................55
8.1.8. Invalidity of Collateral Documents...................................................55
8.1.9. Invalidity of Subordination Provisions...............................................55
8.1.10. Change of Control....................................................................56
8.1.11. Dissolution of Trust.................................................................56
8.2. Remedies......................................................................................56
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Section 9. Agent.........................................................................................57
9.1. Appointment; Authorization....................................................................57
9.2. Delegation of Duties..........................................................................57
9.3. Limited Liability.............................................................................57
9.4. Reliance......................................................................................57
9.5. Notice of Default.............................................................................58
9.6. Credit Decision...............................................................................58
9.7. Indemnification...............................................................................58
9.8. Agent Individually............................................................................59
9.9. Successor Agent...............................................................................59
9.10. Collateral Matters............................................................................59
9.11. Documentation Agent...........................................................................60
Section 10. Miscellaneous.................................................................................60
10.1. Waiver; Amendments............................................................................60
10.2. Notices.......................................................................................60
10.3. Computations..................................................................................61
10.4. Costs; Expenses...............................................................................61
10.5. Indemnification by Borrower...................................................................61
10.6. Marshaling; Payments Set Aside................................................................62
10.7. Nonliability of Lenders.......................................................................62
10.8. Assignments; Participations...................................................................62
10.8.1. Assignments..........................................................................62
10.8.2. Participations.......................................................................63
10.9. Confidentiality...............................................................................64
10.10. Captions......................................................................................64
10.11. Nature of Remedies............................................................................64
10.12. Counterparts..................................................................................65
10.13. Severability..................................................................................65
10.14. Entire Agreement..............................................................................65
10.15. Successors; Assigns...........................................................................65
10.16. Governing Law.................................................................................65
10.17. Forum Selection; Consent to Jurisdiction......................................................65
10.18. Waiver of Jury Trial..........................................................................66
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Annexes
Annex I Commitments and Pro Rata Shares
Annex II Addresses
Exhibits
Exhibit A Form of Assignment Agreement
Exhibit B Form of Compliance Certificate
Exhibit C Form of Availability Certificate
Exhibit D Form of Note
Schedules
Schedule 4.1.3 Prior Debt
Schedule 4.1.6 Collateral Access Agreements
Schedule 5.2 Conflicts with Agreements
Schedule 5.6 Litigation
Schedule 5.8 Capitalization
Schedule 5.16 Insurance
Schedule 5.20 Labor Matters
Schedule 5.23 Subsidiaries
Schedule 7.1 Existing Debt
Schedule 7.2 Existing Liens
Schedule 7.8 Affiliate Transactions
Schedule 7.11 Existing Investments
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CREDIT AGREEMENT
Credit Agreement dated as of February 11, 2002 (as amended, restated or
otherwise modified from time to time, this "Agreement") among American Coin
Merchandising, Inc., a Delaware corporation ("Borrower"), the financial
institutions party hereto from time to time (together with their respective
successors and assigns, "Lenders"), Madison Capital Funding LLC (in its
individual capacity, "Madison"), as Agent for all Lenders and The Royal Bank of
Scotland plc, New York Branch, as Documentation Agent for all Lenders (in its
individual capacity, "Royal Bank").
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
Section 1. Definitions; Interpretation.
1.1. Definitions.
When used herein the following terms shall have the following meanings:
Account has the meaning set forth in the Guarantee and Collateral
Agreement.
Account Debtor means any Person who is obligated to Borrower or any
Restricted Subsidiary with respect to any Account.
Acquisition means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of all or substantially
all of any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a
merger or consolidation or any other combination with another Person (other than
a Person that is already a Subsidiary).
Acquisition Sub means Crane Mergerco Inc., a Delaware corporation.
Adjusted Working Capital means the remainder of (a) the consolidated
current assets of Borrower and the Restricted Subsidiaries minus the amount of
cash and cash equivalents included in such consolidated current assets, minus
(b) the consolidated current liabilities of Borrower and the Restricted
Subsidiaries minus the amount of short-term Debt (including current maturities
of long-term Debt) of Borrower and the Restricted Subsidiaries included in such
consolidated current liabilities.
Advance Multiple means the amount set forth below during the applicable
period set forth below:
Period Advance Multiple Amount
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Closing Date to September 29, 2002 2.70
September 30, 2002 to December 30, 2002 2.50
December 31, 2002 to December 30, 2003 2.25
December 31, 2003 to June 29, 2004 2.00
June 30, 2004 to December 30, 2004 1.75
December 31, 2004 to September 29, 2005 1.50
September 30, 2005 and thereafter 1.25
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Affiliate of any Person means (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person, (b) any officer or director of such Person and (c) with respect to any
Lender, any entity administered or managed by such Lender or an Affiliate or
investment advisor thereof which is engaged in making, purchasing, holding or
otherwise investing in commercial loans. A Person shall be deemed to be
"controlled by" any other Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or
power to direct or cause the direction of the management and policies of such
Person whether by contract or otherwise. Unless expressly stated otherwise
herein, neither Agent nor any Lender shall be deemed an Affiliate of Borrower or
of any Subsidiary.
Agent means Madison in its capacity as agent for all Lenders hereunder
and under the Collateral Documents and any successor thereto in such capacity.
Agreement has the meaning set forth in the Preamble.
Applicable Margin means the applicable rate per annum, all as set forth
in the following table:
Applicable Margin for Applicable Margin for
Loan Facility Base Rate Loans LIBOR Loans
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Revolving Loans 2.00% 3.50%
Term A Loan 2.00% 3.50%
Term B Loan 2.50% 4.00%
Assignment Agreement means an agreement substantially in the form of
Exhibit A.
Attributable Percentage means the percentage of the equity ownership of
a Restricted Subsidiary or joint venture Investment that is directly owned by
Borrower or a Wholly-Owned Restricted Subsidiary of Borrower.
Audax means Audax Mezzanine Fund, L.P.
Audax Subordinated Debt means Borrower's Debt to Audax and certain
other Persons in the aggregate outstanding principal amount of $25,000,000 plus
the aggregate outstanding principal amount of the PIK Notes, plus all accrued
and unpaid interest thereon, in each case evidenced by the Audax Subordinated
Debt Documents.
Audax Subordinated Debt Documents means, collectively, the certain Note
Purchase Agreement of even date herewith among Borrower, Audax, and certain
other Persons, and all other agreements, instruments and documents evidencing or
otherwise relating to the Audax Subordinated Debt, including without limitation
any PIK Notes issued in connection therewith.
Availability Certificate means a certificate substantially in the form
of Exhibit C.
Base Rate means, for any day, the greater of (a) the rate of interest
which is identified as the "Prime Rate" and normally published in the Money
Rates section of The Wall Street Journal (or, if such rate ceases to be so
published, as quoted from such other generally available and recognizable source
as Agent may select) and (b) the sum of the Federal Funds Rate plus 0.5%. Any
change in the Base Rate
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due to a change in such Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in such Prime Rate or the Federal Funds
Rate.
Base Rate Loan means any Loan which bears interest at or by reference
to the Base Rate.
Borrower has the meaning set forth in the Preamble.
Borrowing Availability means, at the time of determination, an amount
equal to the lesser of (a) the Revolving Loan Commitment minus Revolving
Outstandings and (b) the result of (i) the sum of (A) EBITDA for the 12 month
period preceding such time of determination plus (B) with respect to each
Restricted Subsidiary, business or division acquired during such 12 month
period, Pro Forma EBITDA for the portion of such 12 month period that is prior
to the consummation of each applicable Acquisition, multiplied by (ii) the
Advance Multiple minus (iii) outstanding Senior Debt.
Business Day means any day on which commercial banks are open for
commercial banking business in Chicago, Illinois and New York, New York, and, in
the case of a Business Day which relates to a LIBOR Loan, on which dealings are
carried on in the London interbank eurodollar market.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of Borrower, but excluding (a) expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (i)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced or (b) expenditures made in connection with Acquisitions
permitted under Section 7.11(k).
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Cash Equivalent Investment means, at any time, (a) any evidence of
Debt, maturing not more than one year after such time, issued or guaranteed by
the United States Government or any agency thereof, (b) commercial paper, or
corporate demand notes, in each case rated at least A-1 by Standard & Poor's
Ratings Group or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc., (c) any certificate of
deposit (or time deposit represented by a certificate of deposit) or banker's
acceptance maturing not more than one year after such time, or any overnight
Federal Funds transaction that is issued or sold by a commercial banking
institution that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than $500,000,000), (d)
any repurchase agreement entered into with any commercial banking institution of
the nature referred to in clause (c) above which (i) is secured by a fully
perfected security interest in any obligation of the type described in any of
clauses (a) through (c) above and (ii) has a market value at the time such
repurchase agreement is entered into of not less than 100% of the repurchase
obligation of such commercial banking institution thereunder and (e) shares of
money market, mutual or similar funds which invest exclusively in assets
satisfying the requirements of clauses (a) through (d) of this definition.
Chinese Subsidiary means a Wholly-Owned Restricted Subsidiary of
Borrower formed after the Closing Date under the laws of the Peoples Republic of
China as a buying office, warehouse and distribution center for skill crane
merchandise and directly related businesses.
Closing Date means the date on which all conditions precedent set forth
in Section 4.1 have been satisfied or waived in writing by Agent and Lenders and
the initial Loans are made hereunder.
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Collateral has the meaning set forth in the Guarantee and Collateral
Agreement.
Collateral Access Agreement means an agreement in form and substance
reasonably satisfactory to Agent pursuant to which a mortgagee or lessor of real
property on which Collateral is stored or otherwise located, or a warehouseman,
processor or other bailee of Inventory or other property owned by Borrower or
any Restricted Subsidiary, acknowledges the Liens of Agent, acknowledges that
such Person holds possession of such Collateral for Agent's benefit, and waives
any Liens held by such Person on such property or subordinates such Liens to the
Liens of Agent on such property, and, in the case of any such agreement with a
mortgagee or lessor, permits Agent reasonable access to and use of such real
property during the continuance of an Event of Default to assemble, complete and
sell any Collateral stored or otherwise located thereon.
Collateral Documents means, collectively, the Guarantee and Collateral
Agreement, each Mortgage, each Collateral Access Agreement, and each other
agreement or instrument pursuant to or in connection with which Borrower, any
Restricted Subsidiary or any other Person grants Collateral to Agent for the
benefit of Lenders, each as amended, restated or otherwise modified from time to
time.
Commitment means, as to any Lender, such Lender's Pro Rata Share of the
Revolving Loan Commitment, the Term A Loan Commitment and the Term B Loan
Commitment.
Commitment Fee means the fee payable by Borrower to Lenders pursuant to
Section 2.8.1.
Compliance Certificate means a certificate substantially in the form of
Exhibit B.
Computation Period means each period of four consecutive Fiscal
Quarters ending on the last day of a Fiscal Quarter; provided, that with respect
to the Fixed Charge Coverage Ratio covenant contained in Section 7.14.1 and the
Interest Coverage Ratio covenant contained in Section 7.14.2, the Computation
Period ending March 31, 2002 shall consist of the Fiscal Quarter ending on such
date, the Computation Period ending June 30, 2002 shall consist of the two
Fiscal Quarters ending on such date and the Computation Period ending September
30, 2002 shall consist of the three Fiscal Quarters ending on such date.
Consolidated Net Income means, with respect to Borrower and the
Restricted Subsidiaries for any period, the consolidated net income (or loss) of
Borrower and the Restricted Subsidiaries for such period, excluding any gains
from Dispositions, any extraordinary gains (or losses) and any gains (or losses)
from discontinued operations.
Consultant Expenses means actual out-of-pocket costs and expenses
incurred by Borrower to its consultant in respect of the formation of a possible
Chinese Subsidiary and related issues, up to an aggregate maximum amount of
$150,000.
Contingent Obligation means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
monetary obligation or other monetary liability of any other Person (other than
by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of any Person's obligation in respect of any Contingent Obligation
shall (subject to any limitation set forth therein) be deemed to be the
principal amount of the debt, monetary obligation or other monetary liability
supported thereby.
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Controlled Group means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with
Borrower, are treated as a single employer under Section 414 of the IRC or
Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of
such Person (i) for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments or (ii) evidenced by a bond, debenture,
note or similar instrument, (b) the amount of all obligations of such Person as
lessee under Capital Leases which have been or should be recorded as liabilities
on a balance sheet of such Person in accordance with GAAP, (c) all obligations
of such Person to pay the deferred purchase price of property or services
(excluding trade accounts payable in the ordinary course of business), (d) the
lesser of (i) all indebtedness secured by a Lien on the property of such Person,
whether or not such indebtedness shall have been assumed by such Person or (ii)
the value of such property (as determined by Agent) securing such indebtedness,
if such Person is not liable in respect of such indebtedness, (e) all
obligations, contingent or otherwise, with respect to the face amount of all
letters of credit (whether or not drawn) and banker's acceptances issued for the
account of such Person (including the Letters of Credit), (f) all Hedging
Obligations of such Person, (g) all Contingent Obligations of such Person, (h)
all Debt of any partnership of which such Person is a general partner and (i)
the amount of all obligations of such Person under any synthetic lease
transaction, where such obligations are considered borrowed money indebtedness
for tax purposes but the transaction is classified as an operating lease in
accordance with GAAP.
Default means any event that, if it continues uncured, will, with the
lapse of time or the giving of notice or both, constitute an Event of Default.
Disposition means, as to any asset or right of Borrower or any
Restricted Subsidiary, (a) any sale, lease, assignment or other transfer for
value thereof (other than to Borrower or any Restricted Subsidiary), (b) any
loss, destruction or damage thereof or (c) any actual or threatened
condemnation, confiscation, requisition, seizure or taking thereof, in each case
excluding (i) assets subject to a Disposition which are replaced within 180 days
with assets performing the same or a similar function, (ii) Dispositions in any
Fiscal Year, the Net Cash Proceeds of which do not in the aggregate exceed
$500,000, (iii) sales and leasebacks permitted pursuant to Section 7.2.5(b)(vii)
and (iv) the sale or other transfer of Inventory in the ordinary course of
business.
Documentation Agent means Royal Bank in its capacity as documentation
agent for all Lenders hereunder.
Dollar and $ mean lawful money of the United States of America.
EBITDA means, for any period, Consolidated Net Income for such period
plus, to the extent deducted for such period in determining such Consolidated
Net Income, Interest Expense, income tax expense, depreciation, amortization,
other non-cash charges, management, consulting and similar fees to the extent
permitted pursuant to Section 7.4(iii)(a) and, with respect only to periods that
include portions of the 2002 Fiscal Year, (i) Consultant Expenses incurred
during portions of the 2002 Fiscal Year included in such period, (ii)
termination costs of up to $250,000 incurred within 30 days of the Closing Date
in connection with the termination of the consulting arrangement with ▇▇▇▇
▇▇▇▇▇▇▇▇, and (iii) without duplication, transaction fees and expenses relating
to this Agreement and the Related Transactions occurring on the Closing Date, to
the extent expensed on or after the Closing Date, which amount of EBITDA shall
be adjusted, without duplication with the calculation of Pro Forma EBITDA, by
identifiable and verifiable actual or pro forma one-time nonrecurring items,
such as excess owner compensation, severance and one-time transaction-related
expenses related to any Acquisition or joint venture Investment permitted to be
made under Section 7.11 hereof, in each case to the extent approved
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by Agent and Requisite Lenders, which approval shall not be unreasonably
withheld; provided that, notwithstanding anything to the contrary contained
herein, for each of the calendar months listed below, EBITDA shall be deemed to
be the amount set forth below opposite such month:
Calendar Month EBITDA
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January 2001 $1,605,287
February 2001 $1,872,959
March 2001 $2,486,544
April 2001 $1,792,028
May 2001 $2,055,997
June 2001 $2,020,211
July 2001 $2,229,461
August 2001 $2,112,894
September 2001 $1,551,037
October 2001 $2,114,080
November 2001 $2,201,730
December 2001 $2,855,607
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
liability or responsibility for violation of any Environmental Law, or for
release or injury to the environment.
Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any governmental authority,
in each case relating to any matter arising out of or relating to health and
safety, or pollution or protection of the environment or workplace, including
any of the foregoing relating to the presence, use, production, generation,
handling, transport, treatment, storage, disposal, distribution, discharge,
release, control or cleanup of any Hazardous Substance.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
Event of Default means any of the events described in Section 8.1.
Excess Cash Flow means, for any period, the remainder of (a) the sum of
(i) EBITDA for such period, plus (ii) any net decrease in Adjusted Working
Capital during such period, minus (b) the sum, without duplication, of (i)
scheduled repayments of principal of the Term Loans made during such period,
plus (ii) cash Interest Expense during such period, plus (iii) voluntary
prepayments of the Term Loans pursuant to Section 2.10.1 during such period,
plus (iv) cash payments (not financed with the proceeds of Debt (exclusive of
the Term Loans or the Revolving Loans)) made in such period with respect to
Capital Expenditures permitted under Section 7.14.6, plus (v) all federal,
state, local and foreign income taxes paid in cash by Borrower and the
Restricted Subsidiaries, or paid in cash by Holdings on account of the income of
Borrower and the Restricted Subsidiaries, during such period, plus (vi)
management, consulting and similar fees paid during such period to the extent
permitted pursuant to Section 7.4(iii)(a), plus (vii) any net increase in
Adjusted Working Capital during such period.
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Excess Cash Flow Percentage means (a) 50% for each Fiscal Year for
which the Senior Debt to EBITDA Ratio was less than 1.50 to 1.00 and (b) 75% for
each Fiscal Year for which the Senior Debt to EBITDA Ratio as greater than or
equal to 1.50 to 1.00.
Federal Funds Rate means, for any day, a rate per annum (rounded upward
to the nearest 1/100th of 1%) equal to the rate published by the Federal Reserve
Bank of New York on the preceding Business Day or, if no such rate is so
published, the average rate per annum, as determined by Agent, quoted for
overnight Federal Funds transactions last arranged prior to such day.
Fee Letter means, that certain letter agreement dated of even date
herewith by Agent and acknowledged by Borrower, as amended, restated or
otherwise modified from time to time.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
Fiscal Year means the fiscal year of Borrower and the Restricted
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year.
Fixed Charge Coverage Ratio means, for any Computation Period, the
ratio of (a) the total for such period of (i) EBITDA minus (ii) machine
placement fees paid in cash to customers during such Computation Period minus
(iii) all Capital Expenditures during such Computation Period minus (iv) cash
taxes paid during such Computation Period minus (v) recurring management,
consulting and similar fees paid during such Computation Period, to (b) the sum
for such Computation Period of (i) Interest Expense paid in cash during the
Computation Period plus (ii) required payments of Debt (including the Term Loans
but excluding the Revolving Loans) during the Computation Period.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means, as to any Person, all Debt of such Person that
matures more than one year from the date of its creation (or is renewable or
extendible, at the option of such Person, to a date more than one year from such
date).
GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
Guarantee and Collateral Agreement means the Guarantee and Collateral
Agreement dated as of the Closing Date by each Loan Party signatory thereto in
favor of Agent and Lenders, as amended, restated or otherwise modified from time
to time.
Hazardous Substances means hazardous waste, hazardous substance,
pollutant, contaminant, toxic substance, oil, hazardous material, chemical or
other substance regulated by any Environmental Law.
Hedging Obligation means, with respect to any Person, any liability of
such Person under any interest rate, currency or commodity swap agreement, cap
agreement or collar agreement, and any other agreement or arrangement designed
to protect a Person against fluctuations in interest rates, currency exchange
rates or commodity prices.
Holdings means ACMI Holdings, Inc., f/k/a Crane Mergerco Holdings,
Inc., a Delaware corporation.
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Interest Coverage Ratio means, for any Computation Period, the ratio of
(a) EBITDA for such Computation Period, to (b) Interest Expense paid in cash
during such Computation Period.
Interest Expense means for any period the consolidated interest expense
of Borrower and the Restricted Subsidiaries for such period (including all
imputed interest on Capital Leases and including all interest paid by Borrower
in respect of the Trust Subordinated Debt).
Interest Period means, as to any LIBOR Loan, the period commencing on
the date such Loan is borrowed or continued as, or converted into, a LIBOR Loan
and ending on the date one, two, three or six months thereafter, as selected by
Borrower pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided that:
(a) if any Interest Period would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the following Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the preceding
Business Day; (b) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period shall end on the last Business Day of the calendar month at the end of
such Interest Period; (c) Borrower may not select any Interest Period for a
Revolving Loan which would extend beyond the scheduled Termination Date; and (d)
Borrower may not select any Interest Period for a Term Loan if, after giving
effect to such selection, the aggregate principal amount of all Term Loans
having Interest Periods ending after any date on which an installment of the
Term Loans is scheduled to be repaid would exceed the aggregate principal amount
of the Term Loans scheduled to be outstanding after giving effect to such
repayment.
Inventory has the meaning set forth in the Guarantee and Collateral
Agreement.
Investment means (a) the purchase of any debt or equity security of any
Person, (b) the making of any loan or advance to any Person, (c) becoming
obligated with respect to a Contingent Obligation in respect of obligations of
any Person (other than travel and similar advances to employees in the ordinary
course of business) or (d) the making of an Acquisition.
IRC means the Internal Revenue Code of 1986, as amended.
Issuing Lender means a Lender which is an issuer of Letters of Credit
hereunder and its successors and assigns, all in such capacity.
Legal Costs means, with respect to any Person, (a) all reasonable fees
and charges of any counsel, accountants, auditors, appraisers, consultants and
other professionals to such Person, (b) the reasonable allocable cost of
internal legal services of such Person and all reasonable disbursements of such
internal counsel and (c) all court costs and similar legal expenses.
Lenders has the meaning set forth in the Preamble.
Letter of Credit has the meaning set forth in Section 2.3.1.
Letter of Credit Fee means the fee payable by Borrower to Lenders
pursuant to Section 2.8.2.
LIBOR Loan means any Loan which bears interest at a rate determined by
reference to the LIBOR Rate.
LIBOR Rate means, with respect to any LIBOR Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to (a) the rate of interest which is identified and normally published
in the money rates section of the The Wall Street Journal (or, if such rate
ceases to be so published, as quoted from such other generally available and
recognizable source as
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Agent may select) as the offered rate for deposits in Dollars two Business Days
prior to the first day of such Interest Period (for a period comparable to such
Interest Period and for an amount comparable to the amount of such LIBOR Loan),
divided by (b) the sum of one minus the daily average during such Interest
Period of the aggregate maximum reserve requirement (expressed as a decimal)
then imposed under Regulation D of the FRB for "Eurocurrency Liabilities" (as
defined therein).
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan Documents means this Agreement, the Notes, the Letters of Credit,
the Collateral Documents, the Fee Letter and all documents, instruments and
agreements now or hereafter delivered in connection with the foregoing, all as
amended, restated or otherwise modified from time to time.
Loan Party means Holdings, Borrower and each Restricted Subsidiary.
Loans means Revolving Loans and Term Loans.
Madison has the meaning set forth in the Preamble.
Margin Stock means any "margin stock" as defined in Regulation T, U or
X of the FRB.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business or properties of the Loan Parties taken as a whole, (b) a material
impairment of the ability of any Loan Party to perform any of its Obligations
under any Loan Document or (c) a material adverse effect upon any substantial
portion of the Collateral under the Collateral Documents or upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document.
Merger means the merger of Acquisition Sub with and into Target, with
Borrower being the surviving entity, all pursuant to the terms of the applicable
Related Agreements.
Mortgage means a mortgage, deed of trust, leasehold mortgage or similar
instrument granting Agent, for its benefit and the benefit of Lenders, a Lien on
real property (or interest in real property) of Borrower or any Restricted
Subsidiary, each as amended, restated or otherwise modified from time to time.
Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which Borrower or any member of the Controlled
Group may have any liability.
Net Cash Proceeds means:
(a) with respect to any Disposition, the aggregate cash
proceeds (including cash proceeds received pursuant to policies of
insurance and by way of deferred payment of principal pursuant to a
note, installment receivable or otherwise, but only as and when
received) received by Borrower or any Restricted Subsidiary pursuant to
such Disposition net of (i) the direct costs relating to such
Disposition (including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably estimated by
Borrower to be payable as a result thereof (after taking into account
any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be applied to the repayment of
any Debt secured by a
-▇-
▇▇▇▇ on the asset subject to such Disposition (other than the Loans)
and (iv) with respect to any Disposition described in clause (b) or (c)
of the definition thereof, all money actually applied within 180 days
to repair, replace or reconstruct damaged property or property affected
by loss, destruction, damage, condemnation, confiscation, requisition,
seizure or taking, all of the costs and expenses reasonably incurred in
connection with the collection of such proceeds, award or other
payments, and any amounts retained by or paid to parties having
superior rights to such proceeds, awards or other payments; and
(b) with respect to any issuance of equity securities, other
than common stock issued (i) to Sponsor, (ii) to members of Borrower's
management (directly or pursuant to stock options or other similar
rights to receive equity securities), or (iii) in connection with an
Acquisition permitted pursuant to Section 7.11(k) hereof, the aggregate
cash proceeds received by Holdings, Borrower or any Restricted
Subsidiary pursuant to such issuance, net of the direct costs relating
to such issuance (including sales and underwriter's commission).
Note means a promissory note substantially in the form of Exhibit D, as
the same may be amended, restated or otherwise modified from time to time.
Obligations means all obligations (monetary (including post-petition
interest, allowed or not) or otherwise) of any Loan Party under this Agreement,
any other Loan Document, any Collateral Document or any other document or
instrument executed in connection herewith or therewith and, in the case of
Borrower, all Hedging Obligations permitted hereunder which are owed to any
Lender or its Affiliate, in each case howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due.
Operating Lease means any lease of (or other agreement conveying the
right to use) any real or personal property by Borrower or any Restricted
Subsidiary, as lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which Borrower or any member of the Controlled Group may
have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Person means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
PIK Notes means any pay-in-kind interest notes from time to time issued
by Borrower pursuant to the terms of the Audax Subordinated Debt Documents.
Prior Debt means the Debt listed on Schedule 4.1.3.
Pro Forma EBITDA means, with respect to any Restricted Subsidiary,
business or division acquired in an Acquisition or joint venture Investment
permitted to be made under Section 7.11 hereof, the Attributable Percentage of
EBITDA for such Restricted Subsidiary, business, division or joint venture for
the portion of the most recent twelve (12) month period that fell prior to the
consummation of such Acquisition or Investment and for which financial
statements are made available to Agent at the time of determination thereof,
adjusted by identifiable and verifiable actual or pro forma one-time
nonrecurring
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items, such as excess owner compensation, severance and one-time
transaction-related expenses of the acquired business, in each case to the
extent approved by Agent and Required Lenders, which approval shall not be
unreasonably withheld.
Pro Rata Revolving Share means, with respect to any Lender, the
applicable percentage (as adjusted from time to time in accordance with the
terms hereof) specified opposite such Lender's name on Annex I which corresponds
to the Revolving Loan Commitment, which percentage shall be with respect to
Revolving Outstandings if the Revolving Loan Commitment has terminated.
Pro Rata Share means, with respect to any Lender, the applicable
percentage (as adjusted from time to time in accordance with the terms hereof)
specified opposite such Lender's name on Annex I which corresponds to the
Revolving Loan Commitment, the Term A Loan Commitment or the Term B Loan
Commitment, which applicable percentage shall be with respect to Revolving
Outstandings if the Revolving Loan Commitment has terminated, the Term A Loan if
the Term A Loan Commitment has terminated, and the Term B Loan if the Term B
Loan Commitment has terminated.
Related Agreements means collectively, (a) the Agreement and Plan of
Merger dated as of September 9, 2001 among Holdings, Acquisition Sub and Target,
and all agreements, instruments and documents related thereto, (b) the Audax
Subordinated Debt Documents, (c) the Trust Subordinated Debt Documents, (d) the
Trust Preferred Documents and (e) the Services and Fee Agreement.
Related Transactions means the transactions contemplated by the Related
Agreements, including without limitation the Merger.
Required Lenders means Lenders having Pro Rata Shares the aggregate
Dollar equivalent amount of which equals or exceeds 51% of the outstanding Loans
(other than Revolving Loans, at any time when the Revolving Loan Commitment is
outstanding) and Commitments, collectively.
Restricted Subsidiary means each Subsidiary of Borrower other than
those classified by Borrower as Unrestricted Subsidiaries.
Revolving Loan Commitment means $10,000,000, as reduced from time to
time pursuant to Section 2.9.
Revolving Loans has the meaning set forth in Section 2.1.1.
Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.
Royal Bank has the meaning set forth in the preamble.
Senarc means Senarc, Inc., a Texas corporation.
Senarc Debt means Borrower's Debt to Senarc in the original principal
amount of $614,625, evidenced by the Senarc Debt Documents.
Senarc Debt Documents means, collectively, the certain Subordinated
Promissory Note dated March 30, 2001 executed by Borrower in favor of Senarc,
and all other agreements, instruments and documents evidencing, securing or
otherwise relating to the Senarc Debt.
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Senior Debt means all Debt of Borrower and the Restricted Subsidiaries
other than Subordinated Debt and intercompany Debt permitted under Sections
7.1(c) and 7.1(d), but specifically including the Senarc Debt.
Senior Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (a) Senior Debt as of such day to (b) the total of (i)
EBITDA for the Computation Period ending on such day and (ii) Pro Forma EBITDA
for the portion of such Computation Period that is prior to the consummation of
any applicable Acquisitions.
Services and Fee Agreement means the Services and Fee Agreement of even
date herewith among Borrower and Sponsor.
Sponsor means Wellspring Capital Partners II, L.P. and Knightsbridge
Holdings LLC, d/b/a ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
Stated Amount means, with respect to any Letter of Credit at any date
of determination, (a) the maximum aggregate amount available for drawing
thereunder under any and all circumstances, plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.
Subordinated Debt means (a) the Audax Subordinated Debt, (b) the Trust
Subordinated Debt and (c) any other unsecured Debt of Borrower which has
subordination terms, covenants, pricing and other terms which have been approved
in writing by Required Lenders.
Subsidiary means, with respect to any Person, a corporation,
partnership, limited liability company or other entity of which such Person
owns, directly or indirectly, such number of outstanding shares or other equity
interests as to have more than 50% of the ordinary voting power for the election
of directors or other managers of such corporation, partnership, limited
liability company or other entity. Unless the context otherwise requires, each
reference to Subsidiaries herein shall be a reference to Subsidiaries of
Borrower. For clarification, the Trust shall not be considered a Subsidiary of
Borrower for purposes of this Agreement.
Target means American Coin Merchandising, Inc., a Delaware corporation,
prior to the consummation of the Merger.
Term A Loan Commitment means $25,000,000.
Term A Loan Maturity Date means February 11, 2007 or such earlier date
on which the Commitments terminate pursuant to Section 8.
Term A Loans has the meaning set forth in Section 2.1.2.
Term B Loan Commitment means $30,000,000.
Term B Loan Maturity Date means February 11, 2008 or such earlier date
on which the Commitments terminate pursuant to Section 8.
Term B Loans has the meaning set forth in Section 2.1.2.
Term Loans means the Term A Loans and the Term B Loans, collectively.
Termination Date means February 11, 2007 or such earlier date on which
the Commitments terminate pursuant to Section 2.9 or 8.
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Total Debt means all Debt of Borrower and the Restricted Subsidiaries,
determined on a consolidated basis, excluding (a) Debt of Borrower to Restricted
Subsidiaries and Debt of Restricted Subsidiaries to Borrower or to other
Restricted Subsidiaries and (b) the Trust Subordinated Debt.
Total Debt to EBITDA Ratio means, as of the last day of any Fiscal
Quarter, the ratio of (a) Total Debt as of such day to (b) the total of (i)
EBITDA for the Computation Period ending on such day and (ii) Pro Forma EBITDA
for the portion of such Computation Period that is prior to the consummation of
any applicable Acquisitions.
Trust means American Coin Merchandising Trust I, a statutory business
trust created under the laws of the state of Delaware.
Trust Agreement means the certain Amended and Restated Trust Agreement
dated as of September 22, 1998 among Borrower, Wilmington Trust Company, as
Property Trustee and Delaware Trustee and the Administrative Trustees named
therein.
Trust Preferred Documents means, collectively, the Trust Agreement, the
Trust Preferred Securities issued pursuant thereto, the Trust Preferred
Guarantee and all other agreements, instruments and documents evidencing or
otherwise relating thereto.
Trust Preferred Guarantee means the Guarantee Agreement among Borrower,
as Guarantor and Wilmington Trust Company, as Trustee, in connection with the
Trust Preferred Securities.
Trust Preferred Securities means the Ascending Rate Cumulative Trust
Preferred Securities issued by Trust pursuant to the Trust Agreement and the
other Trust Preferred Documents.
Trust Subordinated Debentures means the Junior Subordinated Deferrable
Interest Debentures issued by Borrower to the Trust in connection with the Trust
Subordinated Debt.
Trust Subordinated Debt means Borrower's Debt to Trust in the aggregate
outstanding principal amount of $17,000,000, evidenced by the Trust Subordinated
Debt Documents.
Trust Subordinated Debt Documents means, collectively, the certain
Junior Subordinated Indenture dated as of September 28, 1998 between Borrower
and Wilmington Trust Company, as Trustee, the Junior Subordinated Debentures
issued pursuant thereto, and all other agreements, instruments and documents
evidencing or otherwise relating to the Trust Subordinated Debt.
Unrestricted Subsidiary means each Subsidiary of Borrower as to which
Borrower has notified Agent in writing, on or prior to the date of formation or
Acquisition by Borrower or another Subsidiary of such Subsidiary, that Borrower
has elected to designate such Subsidiary as an Unrestricted Subsidiary for
purposes of this Agreement, and as to which Borrower has not subsequently
notified Agent in writing to change such designation to that of a Restricted
Subsidiary. Without the consent of all Lenders, (a) no Restricted Subsidiary may
be at any time be redesignated as an Unrestricted Subsidiary and (b) the Chinese
Subsidiary may not be designated as an Unrestricted Subsidiary.
Wholly-Owned Subsidiary means, as to any Person, another Person all of
the equity interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by such Person and/or another Wholly-Owned
Subsidiary of such Person.
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1.2. Interpretation.
In the case of this Agreement and each other Loan Document, (a) the
meanings of defined terms are equally applicable to the singular and plural
forms of the defined terms; (b) Annex, Exhibit, Schedule and Section references
are to such Loan Document unless otherwise specified; (c) the term "including"
is not limiting and means "including but not limited to"; (d) in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including"; (e) unless
otherwise expressly provided in such Loan Document, (i) references to agreements
and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation shall be construed as
including all statutory and regulatory provisions amending, replacing,
supplementing or interpreting such statute or regulation; (f) this Agreement and
the other Loan Documents may use several different limitations, tests or
measurements to regulate the same or similar matters, all of which are
cumulative and each shall be performed in accordance with its terms; and (g)
this Agreement and the other Loan Documents are the result of negotiations among
and have been reviewed by counsel to Agent, Borrower, Lenders and the other
parties thereto and are the products of all parties; accordingly, they shall not
be construed against Agent or Lenders merely because of Agent's or Lenders'
involvement in their preparation.
Section 2. Credit Facilities.
2.1. Commitments.
On and subject to the terms and conditions of this Agreement, each
Lender, severally and for itself alone, agrees as follows:
2.1.1. Revolving Loan Commitments.
Each Lender will make loans to Borrower on a revolving basis
("Revolving Loans") from time to time until the Termination Date in such
Lender's applicable Pro Rata Revolving Share of such aggregate amounts as
Borrower may request from all Lenders; provided that, after giving effect to
such Revolving Loans, the Revolving Outstandings will not at any time exceed
Borrowing Availability.
2.1.2. Term Loan Commitments.
Each Lender agrees to make (a) a loan to Borrower (each such
loan, a "Term A Loan") on the Closing Date in such Lender's applicable Pro Rata
Share of the Term A Loan Commitment and (b) a loan to Borrower (each such loan,
a "Term B Loan") on the Closing Date in such Lender's applicable Pro Rata Share
of the Term B Loan Commitment. The Commitments of Lenders to make Term Loans
shall expire concurrently with the making of the Term Loans on the Closing Date.
Term Loans which are repaid or prepaid by Borrower, in whole or in part, may not
be reborrowed.
2.2. Loan Procedures.
2.2.1. Loan Types.
Each Loan shall be either a Base Rate Loan or a LIBOR Loan, as
Borrower shall specify in the related notice of borrowing or conversion pursuant
to Section 2.2.2 or 2.2.3. Base Rate Loans and LIBOR Loans may be outstanding at
the same time, provided that not more than seven different Interest Periods
shall exist among outstanding LIBOR Loans at any one time. All borrowings,
conversions and repayments of Revolving Loans shall be effected so that each
Lender will have a ratable share (according
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to its Pro Rata Revolving Share) of all Revolving Loans and all Interest Periods
of all Revolving Loans that are LIBOR Loans.
2.2.2. Borrowing.
Borrower shall give written notice or telephonic notice
(followed immediately by written confirmation thereof) to Agent of each proposed
borrowing not later than (a) in the case of a Base Rate Loan borrowing, 12:00
noon Chicago time on the proposed date of such borrowing, and (b) in the case of
a LIBOR Loan borrowing, 12:00 noon Chicago time at least three Business Days
prior to the proposed date of such borrowing. Each such notice shall be
effective upon receipt by Agent, shall be irrevocable, and shall specify the
date, amount and type of borrowing and, in the case of a LIBOR Loan borrowing,
the initial Interest Period therefor. Promptly upon receipt of such notice,
Agent shall advise each Lender with a Revolving Loan Commitment thereof. Not
later than 1:00 p.m. Chicago time on the date of a proposed borrowing, each
Lender shall provide Agent at the office specified by Agent with immediately
available funds covering such Lender's applicable Pro Rata Share of such
borrowing and, so long as Agent has not received written notice that the
conditions precedent set forth in Section 4 with respect to such borrowing have
not been satisfied, Agent shall pay over the funds received by Agent to Borrower
on the requested borrowing date. Each borrowing shall be on a Business Day. Each
Base Rate Loan borrowing shall be in an aggregate amount of at least $100,000
and an integral multiple of $50,000, and each LIBOR Loan borrowing shall be in
an aggregate amount of at least $100,000 and an integral multiple of at least
$50,000.
2.2.3. Conversion; Continuation.
(a) Subject to Section 2.2.1, Borrower may, upon irrevocable
written notice to Agent in accordance with clause (b) below, elect (i) as of any
Business Day, to convert any Loans (or any part thereof in an aggregate amount
of not less than $100,000 or a higher integral multiple of $50,000) into Loans
of the other type or (ii) as of the last day of the applicable Interest Period,
to continue any LIBOR Loans having Interest Periods expiring on such day (or any
part thereof in an aggregate amount not less than $100,000 or a higher integral
multiple of $50,000) for a new Interest Period; provided that any conversion of
a LIBOR Loan on a day other than the last day of an Interest Period therefor
shall be subject to Section 3.5.
(b) Borrower shall give written or telephonic notice (followed
immediately by written confirmation thereof) to Agent of each proposed
conversion or continuation not later than (i) in the case of conversion into
Base Rate Loans, 12:00 noon Chicago time on the proposed date of such conversion
and (ii) in the case of conversion into or continuation of LIBOR Loans, 12:00
noon Chicago time at least three Business Days prior to the proposed date of
such conversion or continuation, specifying in each case: (i) the proposed date
of conversion or continuation; (ii) the aggregate amount of Loans to be
converted or continued; (iii) the type of Loans resulting from the proposed
conversion or continuation; and (iv) in the case of conversion into, or
continuation of, LIBOR Loans, the duration of the requested Interest Period
therefor.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Loans, Borrower has failed to select timely a new Interest Period to be
applicable to such LIBOR Loans, Borrower shall be deemed to have elected to
convert such LIBOR Loans into Base Rate Loans effective on the last day of such
Interest Period.
(d) Agent will promptly notify each applicable Lender of its
receipt of a notice of conversion or continuation pursuant to this Section 2.2.3
or, if no timely notice is provided by Borrower, of the details of any automatic
conversion.
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2.3. Letters of Credit.
2.3.1. Commitment.
At the request of Borrower, Issuing Lender will issue from
time to time before the date which is 30 days prior to the Termination Date (a)
letters of credit and/or (b) participation agreements confirming payment to
issuers (reasonably acceptable to Issuing Lender) of letters of credit, in each
case for the account of Borrower and containing terms and conditions which are
consistent with this Agreement and reasonably satisfactory to Issuing Lender
(each such letter of credit or participation agreement, a "Letter of Credit").
After giving effect to each such issuance, (i) the aggregate Stated Amount of
all Letters of Credit shall not at any time exceed $3,000,000 and (ii) Revolving
Outstandings will not at any time exceed Borrowing Availability.
2.3.2. Application.
Borrower shall give notice to Agent and Issuing Lender of the
proposed issuance of each Letter of Credit on a Business Day which is at least
five Business Days (or such lesser number of days as Agent and Issuing Lender
shall agree) prior to the proposed date of issuance of such Letter of Credit.
Each such notice shall be accompanied by a Letter of Credit application in
Issuing Lender's form (or, as the case may be, in the form of application of the
underlying letter of credit), duly executed by Borrower and in all respects
reasonably satisfactory to Agent and Issuing Lender, together with such other
documentation as Agent or Issuing Lender may reasonably request in support
thereof, it being understood that each Letter of Credit application (or, as the
case may be, form of application of underlying letter of credit) shall specify,
among other things, the date on which the proposed Letter of Credit is to be
issued, and the expiration date of such Letter of Credit (which shall not be
later than the earlier to occur of (a) one year after the date of issuance
thereof and (b) 30 days prior to the scheduled Termination Date). So long as
Issuing Lender has not received written notice that the conditions precedent set
forth in Section 4 with respect to the issuance of such Letter of Credit have
not been satisfied, Issuing Lender shall issue such Letter of Credit on the
requested issuance date. Issuing Lender shall promptly advise Agent of the
issuance of each Letter of Credit and of any amendment thereto, extension
thereof or event or circumstance changing the amount available for drawing
thereunder. In the event of any inconsistency between the terms of any Letter of
Credit application and the terms of this Agreement, the terms of this Agreement
shall control. Issuing Lender shall deliver to Agent upon its request a list of
all outstanding Letters of Credit issued by Issuing Lender, together with such
information related thereto as Agent may reasonably request.
2.3.3. Reimbursement Obligations.
(a) Borrower hereby unconditionally and irrevocably agrees to
reimburse Issuing Lender for each payment or disbursement made by Issuing Lender
under any Letter of Credit honoring any demand for payment made thereunder, in
each case within 2 Business Days after Borrower has been notified that such
payment or disbursement has been made. Issuing Lender shall promptly notify
Borrower and Agent whenever any demand for payment is made under any Letter of
Credit. Any amount not reimbursed on the date of such payment or disbursement
(whether or not through the making of a Loan pursuant to Section 2.3.4) shall
bear interest from the date of such payment or disbursement to the date that
Issuing Lender is reimbursed by Borrower therefor, payable on demand, at the
interest rate per annum from time to time in effect for Revolving Loans which
are Base Rate Loans plus 2%.
(b) Borrower's reimbursement obligations hereunder shall be
irrevocable and unconditional under all circumstances, including (i) any lack of
validity or enforceability of any Letter of Credit, this Agreement or any other
Loan Document, (ii) the existence of any claim, set-off, defense or other right
which any Loan Party may have at any time against a beneficiary named in a
Letter of Credit,
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any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), Agent, Issuing Lender, any Lender or any other
Person, whether in connection with any Letter of Credit, this Agreement, any
other Loan Document, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between any Loan Party and
the beneficiary named in any Letter of Credit), (iii) the validity, sufficiency
or genuineness of any document which Issuing Lender (or, as applicable, the
issuer of any underlying letter of credit) has determined complies on its face
with the terms of the applicable Letter of Credit (or, if applicable, underlying
letter of credit), even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement therein
shall have been untrue or inaccurate in any respect, or (iv) the surrender or
impairment of any security for the performance or observance of any of the terms
hereof. None of the foregoing, however, shall constitute a waiver by Borrower of
any of its rights hereunder or at law, or preclude independent action by
Borrower on account of its rights.
2.3.4. Participations in Letters of Credit.
(a) Concurrently with the issuance of each Letter of Credit,
Issuing Lender shall be deemed to have sold and transferred to each other
Lender, and each other Lender shall be deemed irrevocably and unconditionally to
have purchased and received from Issuing Lender, without recourse or warranty,
an undivided interest and participation, to the extent of such Lender's Pro Rata
Revolving Share, in such Letter of Credit and Borrower's reimbursement
obligations with respect thereto. If Borrower does not pay any reimbursement
obligation when due, then Borrower shall be deemed to have immediately requested
that Lenders make a Revolving Loan which is a Base Rate Loan in a principal
amount equal to such reimbursement obligation. Agent shall promptly notify
Lenders of such deemed request and, without the necessity of compliance with the
requirements of Section 2.2.2 or 4.2, each Lender shall make available to Agent
its Pro Rata Revolving Share of such Loan. The proceeds of such Loan shall be
paid over by Agent to Issuing Lender (or, at Agent's discretion, to the issuer
of any letter of credit in respect of which Issuing Lender has delivered a
participation agreement) for the account of Borrower in satisfaction of such
reimbursement obligations.
(b) If Issuing Lender makes any payment or disbursement under
any Letter of Credit and (i) Borrower has not reimbursed Issuing Lender in full
for such payment or disbursement in accordance with Section 2.3.3, (ii) a
Revolving Loan may not be made pursuant to Section 2.3.4(a) or (iii) any
reimbursement received by Issuing Lender from Borrower is or must be returned or
rescinded upon or during any bankruptcy or reorganization of any Loan Party or
otherwise, each other Lender shall be irrevocably and unconditionally obligated
to pay to Agent for the account of Issuing Lender its Pro Rata Revolving Share
of such payment or disbursement (but no such payment shall diminish the
Obligations of Borrower under Section 2.3.3). Upon notice from Issuing Lender to
Agent that it has not received any such amount, Agent shall promptly notify each
such other Lender thereof. To the extent any Lender shall not have made such
amount available to Agent by 2:00 p.m. Chicago time on the Business Day on which
such Lender receives notice from Agent of such payment or disbursement (it being
understood that any such notice received after 12:00 noon Chicago time on any
Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to Agent for
Issuing Lender's account forthwith on demand, for each day from the date such
amount was to have been delivered to Agent to the date such amount is paid, at a
rate per annum equal to (x) for the first 3 days after demand, the Federal Funds
Rate from time to time in effect and (y) thereafter, the Base Rate from time to
time in effect for Revolving Loans. Any Lender's failure to make available to
Agent its Pro Rata Revolving Share of any such payment or disbursement shall not
relieve any other Lender of its obligation hereunder to make available to Agent
such other Lender's Pro Rata Revolving Share of such payment, but no Lender
shall be responsible for the failure of any other Lender to make available to
Agent such other Lender's Pro Rata Revolving Share of any such payment or
disbursement.
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2.4. Commitments Several.
The failure of any Lender to make a requested Loan on any date shall
not relieve any other Lender of its obligation (if any) to make a Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make any Loan to be made by such other Lender.
2.5. Certain Conditions.
Notwithstanding any other provision of this Agreement, no Lender shall
have an obligation to make any Loan, or to permit the continuation of or any
conversion into any LIBOR Loan, and Issuing Lender shall not have any obligation
to issue any Letter of Credit, if (i) an Event of Default or Default exists or
(ii) the funding of such Loan or issuance of such Letter of Credit (as
applicable) would cause the Revolving Outstandings to exceed Borrowing
Availability.
2.6. Loan Accounting.
2.6.1. Recordkeeping.
Agent, on behalf of each Lender, shall record in its records
the date and amount of each Loan made by each Lender, each repayment or
conversion thereof and, in the case of each LIBOR Loan, the dates on which each
Interest Period for such Loan shall begin and end. The aggregate unpaid
principal amount so recorded shall be rebuttably presumptive evidence of the
principal amount of the Loans owing and unpaid. The failure to so record any
such amount or any error in so recording any such amount shall not, however,
limit or otherwise affect the Obligations of Borrower hereunder or under any
Note to repay the principal amount of the Loans hereunder, together with all
interest accruing thereon.
2.6.2. Notes.
At the request of any Lender, the Loans of such Lender shall
be evidenced by a Note, with appropriate insertions, payable to the order of
such Lender in a face principal amount equal to the sum of such Lender's Pro
Rata Share of the Revolving Loan Commitment plus the principal amount of such
Lender's Term Loans.
2.7. Interest.
2.7.1. Interest Rates.
Borrower promises to pay interest on the unpaid principal
amount of each Loan for the period commencing on the date of such Loan until
such Loan is paid in full as follows: (a) at all times while such Loan is a Base
Rate Loan, at a rate per annum equal to the sum of the Base Rate from time to
time in effect plus the Applicable Margin from time to time in effect; and (b)
at all times while such Loan is a LIBOR Loan, at a rate per annum equal to the
sum of the LIBOR Rate applicable to each Interest Period for such Loan plus the
Applicable Margin from time to time in effect; provided that (i) at any time an
Event of Default exists, if requested by Required Lenders, the Applicable Margin
corresponding to each Loan shall be increased by 2% (and, in the case of
Obligations not subject to an Applicable Margin, such Obligations shall bear
interest at the Base Rate applicable to Revolving Loans plus the Applicable
Margin for Base Rate Loans plus 2%), (ii) such increase may thereafter be
rescinded by Required Lenders, notwithstanding Section 10.1, and (iii) upon the
occurrence of an Event of Default under Section 8.1.1 or 8.1.3, such increase
shall occur automatically.
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2.7.2. Interest Payment Dates.
Accrued interest on each Base Rate Loan shall be payable in
arrears on the last day of each calendar month and at maturity. Accrued interest
on each LIBOR Loan shall be payable on the last day of each Interest Period
relating to such Loan (and, in the case of a LIBOR Loan with an Interest Period
in excess of three months, on the last day of each three-month interval of such
Interest Period), upon a prepayment of such Loan in accordance with Section 2.10
and at maturity. After maturity and at any time an Event of Default exists,
accrued interest on all Loans shall be payable on demand.
2.7.3. Setting and Notice of LIBOR Rates.
The applicable LIBOR Rate for each Interest Period shall be
determined by Agent, and notice thereof shall be given by Agent promptly to
Borrower and each Lender. Each determination of the applicable LIBOR Rate by
Agent shall be conclusive and binding upon the parties hereto, in the absence of
demonstrable error. Agent shall, upon written request of Borrower or any Lender,
deliver to Borrower or such Lender a statement showing the computations used by
Agent in determining any applicable LIBOR Rate hereunder.
2.7.4. Computation of Interest.
Interest shall be computed for the actual number of days
elapsed on the basis of a year of 360 days. The applicable interest rate for
each Base Rate Loan shall change simultaneously with each change in the Base
Rate.
2.8. Fees.
2.8.1. Commitment Fee.
For the period from the Closing Date to the Termination Date,
Borrower agrees to pay to Agent, for the account of each Lender according to
such Lender's Pro Rata Revolving Share (as adjusted from time to time), a
Commitment Fee equal to 0.50% per annum multiplied by the average daily unused
amount (for the determination period) of the Revolving Loan Commitment. For
purposes of calculating usage under this Section 2.8.1, the Revolving Loan
Commitment shall be deemed used to the extent of the aggregate principal amount
of all outstanding Revolving Loans plus the Stated Amount of all Letters of
Credit. The Commitment Fee shall be payable in arrears on the last day of each
calendar quarter and on the Termination Date for any period then ending for
which the Commitment Fee shall not have previously been paid. The Commitment Fee
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days.
2.8.2. Letter of Credit Fees.
(a) Borrower agrees to pay to Agent, for the account of each
Lender according to such Lender's Pro Rata Revolving Share (as adjusted from
time to time), a Letter of Credit Fee equal to the Applicable Margin in effect
from time to time for Revolving Loans which are LIBOR Rate Loans multiplied by
the Stated Amount of each Letter of Credit. Each Letter of Credit Fee shall be
payable in arrears on the last day of each calendar quarter (or such later date
on which such Letter of Credit expires or is terminated) and on the Termination
Date, for the period from the date of the issuance of each Letter of Credit (or
the last day on which the Letter of Credit Fee was paid with respect thereto) to
the date such payment is due or, if earlier, the date on which such Letter of
Credit expired or was terminated. Each Letter of Credit Fee shall be computed
for the actual number of days elapsed on the basis of a year of 360 days.
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(b) In addition, with respect to each Letter of Credit,
Borrower agrees to pay to Issuing Lender, for its own account, (i) such fees and
expenses as Issuing Lender customarily requires (or, as the case may be, is
required to pay to the issuer of the letter of credit) in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fronting fee in the amount and at
the times agreed to by Borrower and Issuing Lender.
2.8.3. Agent's Fees.
Borrower agrees to pay to Agent, pursuant to the Fee Letter
and as otherwise agreed to from time to time by Borrower and Agent, fees in the
amounts and at the times agreed to between Borrower and Agent.
2.9. Commitment Reduction.
2.9.1. Voluntary Reduction or Termination of Revolving Loan Commitment.
Borrower may from time to time on at least five Business Days'
prior written notice received by Agent (which shall promptly advise each Lender
thereof) permanently reduce the Revolving Loan Commitment to an amount not less
than the Revolving Outstandings. Any such reduction shall be in an amount not
less than $1,000,000 or a higher integral multiple of $500,000. Concurrently
with any reduction of the Revolving Loan Commitment to zero, Borrower shall pay
all interest on the Revolving Loans, all commitment fees and all letter of
credit fees and shall cash collateralize in full all Obligations arising with
respect to the Letters of Credit in a manner acceptable to Agent.
2.9.2. Mandatory Reduction of Revolving Loan Commitment.
On the date of any mandatory prepayment pursuant to Section
2.10.2, the Revolving Loan Commitment shall be permanently reduced by the amount
of such mandatory prepayment applied to prepay the Revolving Loans pursuant to
Section 2.10.2.
2.9.3. All Reductions of Revolving Loan Commitment.
All reductions of the Revolving Loan Commitment shall reduce
the Revolving Loan Commitments pro rata among Lenders according to their
respective Pro Rata Revolving Shares.
2.10. Prepayment.
2.10.1. Voluntary Prepayment.
Borrower may from time to time, on at least one Business Day's
written notice or telephonic notice (followed immediately by written
confirmation thereof) to Agent (which shall promptly advise each Lender thereof)
not later than 12:00 noon Chicago time on such day, prepay the Loans in whole or
in part. Any such partial prepayment shall be in an amount equal to $500,000 or
a higher integral multiple of $100,000.
2.10.2. Mandatory Prepayment.
(a) Borrower shall (x) prepay the Term Loans until paid in
full and (y) thereafter repay the Revolving Loans in each case, at the following
times and in the following amounts:
(i) concurrently with the receipt by Borrower or any
Restricted Subsidiary of any Net Cash Proceeds from any Disposition, in
an amount equal to such Net Cash Proceeds, it being
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understood that any portion of the Net Cash Proceeds of a Disposition
that Borrower or the applicable Restricted Subsidiary intends to use to
replace the assets subject to such Disposition within 180 days after
such Disposition with assets performing the same or similar function,
shall not be deemed to have been received by Borrower or such
Restricted Subsidiary until the expiration of such 180 day period
without reemployment of such amounts;
(ii) concurrently with the receipt by Holdings, Borrower or
any Restricted Subsidiary of any Net Cash Proceeds from any issuance of
its equity securities (unless made pursuant to Section 7.10), in an
amount equal to such Net Cash Proceeds; and
(iii) within 90 days after the end of each Fiscal Year
(commencing with Fiscal Year 2002), in an amount equal to the Excess
Cash Flow Percentage of Excess Cash Flow for such Fiscal Year.
(b) If on any day the Revolving Outstandings exceed Borrowing
Availability, whether pursuant to a reduction of the Revolving Loan Commitment
pursuant to Section 2.9.2 or otherwise, Borrower shall immediately prepay
Revolving Loans and/or cash collateralize the outstanding Letters of Credit in a
manner acceptable to Agent, or do a combination of the foregoing, in an amount
sufficient to eliminate such excess.
2.10.3. All Prepayments.
(a) Any prepayment of a LIBOR Loan on a day other than the
last day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 3.5. All prepayments of a
Loan shall be applied first to that portion of such Loan comprised of Base Rate
Loans and then to that portion of such Loan comprised of LIBOR Loans, in direct
order of Interest Period maturities. All prepayments of Term Loans shall be
applied pro rata among the Term Loans according to the principal amounts thereof
and, as to each Term Loan, pro rata to the remaining installments thereof.
(b) Borrower shall give written notice or telephonic notice
(followed immediately by written confirmation thereof) to Agent not later than
12:00 noon Chicago time at least one Business Day prior to each mandatory
prepayment pursuant to clause (a) of Section 2.10.2, and Agent shall promptly
notify each Lender of such notice. Notwithstanding anything to the contrary
contained in this Section 2.10 and so long as the Term A Loan is outstanding,
each Lender of the Term B Loan may elect not to have such Lender's Pro Rata
Share of the Term B Loan prepaid in the case of a prepayment pursuant hereto by
notice to Agent received not later 3:00 p.m. Chicago time one Business Day prior
to the date of such prepayment. The amount of any such prepayment which would
have been applied to the Term B Loan of any Lender but for such elections shall
be applied to the Term A Loan of such Lender until paid in full and, thereafter,
to the Term B Loan of such Lender, all otherwise in accordance with clause (a)
above.
2.10.4. Prepayment Fee.
Together with each prepayment of the Loans, other than a
mandatory prepayment pursuant to Section 2.10.2 or a prepayment of the Revolving
Loans, but including any prepayment of the Loans after an Event of Default
voluntarily committed or caused by Borrower, Borrower shall pay to Agent, for
the account of Lenders in accordance with their respective Pro Rata Shares of
the Loans being prepaid, a prepayment fee calculated as follows: (a) for any
such prepayment occurring on or prior to the first anniversary of the Closing
Date, 2% of the aggregate principal amount being prepaid and (b) for any such
prepayment occurring after the first anniversary of the Closing Date and on or
prior to the third anniversary of the Closing Date, 1% of the aggregate
principal amount bring prepaid. No prepayment fee shall be due in respect of any
such prepayment occurring (i) after the third anniversary of the Closing
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Date, (ii) at a time when any Lender is in default of its funding obligations
under this Agreement or (iii) at a time when Borrower would otherwise be
required to pay to any Lender any increased costs described in Section 3 hereof.
2.11. Repayment.
2.11.1. Revolving Loans.
The Revolving Loans shall be paid, for the account of each
Lender according to its Pro Rata Revolving Share, in full on the Termination
Date. Repayments of the Revolving Loans, other than (a) in connection with a
voluntary reduction or termination of the Revolving Loan Commitment pursuant to
Section 2.9.1 or (b) after an Event of Default voluntarily committed or caused
by Borrower as described in Section 2.10.4, shall not result in a prepayment fee
pursuant to Section 2.10.4 and shall not reduce the Revolving Loan Commitment,
and may be reborrowed by Borrower pursuant to the terms of this Agreement.
2.11.2. Term A Loan.
The Term A Loan shall be paid, for the account of each Lender
according to its Pro Rata Share thereof, in the installments and on the dates
set forth below:
Date Installment
---- -----------
June 30, 2002 $1,000,000
September 30, 2002 $1,000,000
December 31, 2002 $1,000,000
March 31, 2003 $1,000,000
June 30, 2003 $1,000,000
September 30, 2003 $1,000,000
December 31, 2003 $1,000,000
March 31, 2004 $1,000,000
June 30, 2004 $1,275,000
September 30, 2004 $1,275,000
December 31, 2004 $1,275,000
March 31, 2005 $1,275,000
June 30, 2005 $1,475,000
September 30, 2005 $1,475,000
December 31, 2005 $1,475,000
March 31, 2006 $1,475,000
June 30, 2006 $1,500,000
September 30, 2006 $1,500,000
December 31, 2006 $1,500,000
February 11, 2007 $1,500,000
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Notwithstanding the foregoing, the outstanding principal balance of the Term A
Loan shall be paid in full on the Term A Loan Maturity Date.
2.11.3. Term B Loan.
The Term B Loan shall be paid, for the account of each Lender
according to its Pro Rata Share thereof, in the installments and on the dates
set forth below:
Date Installment
---- -----------
June 30, 2002 $ 75,000
September 30, 2002 $ 75,000
December 31, 2002 $ 75,000
March 31, 2003 $ 75,000
June 30, 2003 $ 75,000
September 30, 2003 $ 75,000
December 31, 2003 $ 75,000
March 31, 2004 $ 75,000
June 30, 2004 $ 75,000
September 30, 2004 $ 75,000
December 31, 2004 $ 75,000
March 31, 2005 $ 75,000
June 30, 2005 $ 75,000
September 30, 2005 $ 75,000
December 31, 2005 $ 75,000
March 31, 2006 $ 75,000
June 30, 2006 $ 75,000
September 30, 2006 $ 75,000
December 31, 2006 $ 75,000
March 31, 2007 $ 75,000
June 30, 2007 $7,125,000
September 30, 2007 $7,125,000
December 31, 2007 $7,125,000
February 11, 2008 $7,125,000
Notwithstanding the foregoing, the outstanding principal balance of the Term B
Loan shall be paid in full on the Term B Loan Maturity Date.
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2.12. Payment.
2.12.1. Making and Settlement of Payments.
All payments of principal of or interest on the Notes, and of
all fees, shall be made by Borrower to Agent in immediately available funds at
the office specified by Agent not later than 1:00 p.m. Chicago time on the date
due, and funds received after that hour shall be deemed to have been received by
Agent on the following Business Day. Agent shall promptly remit to each Lender
its share of all principal payments received in collected funds by Agent for the
account of such Lender. On the first Business Day of each week or more
frequently as Agent may elect (each such day being a "Settlement Date"), Agent
will notify each Lender of the amount of such Lender's actual share of the
Revolving Loans as of the close of business of the Business Day immediately
preceding the Settlement Date. In the event that payments are necessary to
adjust the amount of such Lender's actual share of the Revolving Loans to equal
such Lender's Pro Rata Share of the Revolving Loans as of any Settlement Date,
such Lender will pay to Agent, or Agent will pay to such Lender (as applicable)
the amount necessary in same day funds by wire transfer to the other's account
not later than 2:00 p.m. Chicago time on the Business Day following the
Settlement Date. On the first Business Day of each month (each, an "Interest
Settlement Date"), Agent will notify each Lender of the amount of such Lender's
applicable Pro Rata Share of interest and fees on each Loan as of the end of the
last day of the immediately preceding month. Provided that such Lender has made
all payments required to be made by it under this Agreement, Agent will pay to
such Lender, by wire transfer to such Lender's account not later than 2:00 p.m.
Chicago time on the next Business Day following the Interest Settlement Date,
such Lender's applicable Pro Rata Share of interest and fees, in each instance,
received by Agent for the immediately preceding month. All payments under
Section 3.2 shall be made by Borrower directly to Lender entitled thereto.
2.12.2. Application of Certain Payments.
Except as set forth in Section 2.10.3, each payment of
principal shall be applied to such Loans as Borrower shall direct by notice to
be received by Agent on or before the date of such payment or, in the absence of
such notice or during a Default or an Event of Default (except where such
payment could be applied to cure such Default or Event of Default), as Agent
shall determine in its discretion. Concurrently with each remittance to any
Lender of its share of any such payment, Agent shall advise such Lender as to
the application of such payment.
2.12.3. Payment Dates.
If any payment of principal or interest with respect to any of
the Loans, or of any fees, falls due on a day which is not a Business Day, then
such due date shall be extended to the immediately following Business Day
(unless, in the case of a LIBOR Loan, such immediately following Business Day is
the first Business Day of a calendar month, in which case such due date shall be
the immediately preceding Business Day) and, in the case of principal,
additional interest shall accrue and be payable for the period of any such
extension.
2.12.4. Set-off.
Borrower agrees that Agent and each Lender have all rights of
set-off and bankers' lien provided by applicable law, and in addition thereto,
Borrower agrees that at any time any Event of Default exists, Agent and each
Lender may apply to the payment of any Obligations of Borrower hereunder,
whether or not then due, any and all balances, credits, deposits, accounts or
moneys of Borrower then or thereafter with Agent or such Lender. Notwithstanding
the foregoing, no Lender shall exercise any rights described in the preceding
sentence without the consent of Agent. The Person exercising such rights shall
notify Borrower thereof promptly after such exercise.
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2.12.5. Proration of Payments.
If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of set-off or otherwise, on
account of (a) principal of or interest on any Loan, but excluding (i) any
payment pursuant to Section 3.7 or 10.8 and (ii) payments of interest on any
Base Rate Loan referred to in the last sentence of Section 3.4, or (b) its
participation in any Letter of Credit) in excess of its applicable Pro Rata
Share of payments and other recoveries obtained by all Lenders on account of
principal of and interest on the Loans (or such participation) then held by
them, then such Lender shall purchase from the other Lenders such participations
in the Loans or sub-participations in Letters of Credit held by them as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be rescinded and the purchase price restored to the
extent of such recovery.
Section 3. Yield Protection.
3.1. Taxes.
(a) All payments of principal and interest on the Loans and
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp, documentary, excise,
property or franchise taxes and other taxes, fees, duties, levies, withholdings
or other charges of any nature whatsoever imposed by any taxing authority,
excluding taxes imposed on or measured by any Lender's net income by the
jurisdiction under which such Lender is organized or conducts business (all
non-excluded items being called "Taxes"). If any withholding or deduction from
any payment to be made by Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then Borrower will: (a) pay
directly to the relevant authority the full amount required to be so withheld or
deducted; (b) promptly forward to Agent an official receipt or other
documentation satisfactory to Agent evidencing such payment to such authority;
and (c) pay to Agent for the account of Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually received by each
Lender will equal the full amount such Lender would have received had no such
withholding or deduction been required. If any Taxes are directly asserted
against Agent or any Lender with respect to any payment received by Agent or
such Lender hereunder, Agent or such Lender may pay such Taxes and Borrower will
promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such Person would have received had such Taxes not been
asserted so long as such amounts have accrued on or after the day which is 90
days prior to the date on which Agent or such Lender first made written demand
therefor.
(b) If Borrower fails to pay any such Taxes when due to the
appropriate taxing authority or, after receipt of written notice from Agent or a
Lender of Borrower's obligation to make any such payment, fails to remit to
Agent, for the account of the respective Lenders, any such required receipts or
other required documentary evidence, Borrower shall indemnify Lenders for any
incremental Taxes, interest or penalties that may become payable by any Lender
as a result of any such failure. For purposes of this Section 3.1, a
distribution hereunder by Agent or any Lender to or for the account of any
Lender shall be deemed a payment by Borrower.
(c) Each Lender that (i) is organized under the laws of a
jurisdiction other than the United States of America and (ii)(A) is a party
hereto on the Closing Date or (B) becomes an assignee of an interest under this
Agreement under Section 10.8.1 after the Closing Date (unless such Lender was
already a Lender hereunder immediately prior to such assignment) shall execute
and deliver to Borrower and Agent one or more (as Borrower or Agent may
reasonably request) Forms W-8ECI, W-8BEN,
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W-8IMY (as applicable) or other applicable form, certificate or document
prescribed by the United States Internal Revenue Service certifying as to such
Lender's entitlement to exemption from withholding or deduction of Taxes.
Borrower shall not be required to pay additional amounts to any Lender pursuant
to this Section 3.1 to the extent that the obligation to pay such additional
amounts would not have arisen but for the failure of such Lender to comply with
this paragraph.
3.2. Increased Cost.
(a) If, after the Closing Date, the adoption of, or any change
in, any applicable law, rule or regulation, or any change in the interpretation
or administration of any applicable law, rule or regulation by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency: (i) shall impose, modify or deem applicable
any reserve (including any reserve imposed by the FRB, but excluding any reserve
included in the determination of the LIBOR Rate pursuant to Section 2.7),
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by any Lender; or (ii) shall impose on any
Lender any other condition affecting its LIBOR Loans, its Note or its obligation
to make LIBOR Loans; and the result of anything described in clauses (i) above
and (ii) is to increase the cost to (or to impose a cost on) such Lender of
making or maintaining any LIBOR Loan, or to reduce the amount of any sum
received or receivable by such Lender under this Agreement or under its Note
with respect thereto, then upon demand by such Lender (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to Agent), Borrower shall pay directly to such Lender such additional
amount as will compensate such Lender for such increased cost or such reduction,
so long as such amounts have accrued on or after the day which is 90 days prior
to the date on which such Lender first made demand therefor.
(b) If any Lender shall reasonably determine that any change
in, or the adoption or phase-in of, any applicable law, rule or regulation
regarding capital adequacy, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or the
compliance by any Lender or any Person controlling such Lender with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or such controlling
Person's capital as a consequence of such Lender's obligations hereunder or
under any Letter of Credit to a level below that which such Lender or such
controlling Person could have achieved but for such change, adoption, phase-in
or compliance (taking into consideration such Lender's or such controlling
Person's policies with respect to capital adequacy) by an amount deemed by such
Lender or such controlling Person to be material, then from time to time, upon
demand by such Lender (which demand shall be accompanied by a statement setting
forth the basis for such demand and a calculation of the amount thereof in
reasonable detail, a copy of which shall be furnished to Agent), Borrower shall
pay to such Lender such additional amount as will compensate such Lender or such
controlling Person for such reduction, so long as such amounts have accrued on
or after the day which is 90 days prior to the date on which such Lender first
made demand therefor.
3.3. Inadequate or Unfair Basis.
If Agent reasonably determines (which determination shall be binding
and conclusive on Borrower) that, by reason of circumstances affecting the
interbank eurodollar market, adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate, then Agent shall promptly notify the
Lenders and Borrower thereof and, so long as such circumstances shall continue,
(a) no Lender shall be under any obligation to make or convert any Base Rate
Loans into LIBOR Loans and (b) on the
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last day of the current Interest Period for each LIBOR Loan, such Loan shall,
unless then repaid in full, automatically convert to a Base Rate Loan.
3.4. Change in Law.
If any change in, or the adoption of any new, law or regulation, or any
change in the interpretation of any applicable law or regulation by any
governmental or other regulatory body charged with the administration thereof,
would make it (or in the good faith judgment of any Lender cause a substantial
question as to whether it is) unlawful for any Lender to make, maintain or fund
LIBOR Loans, then such Lender shall promptly notify each of the other parties
hereto and, so long as such circumstances shall continue, (a) such Lender shall
have no obligation to make or convert any Base Rate Loan into a LIBOR Loan (but
shall make Base Rate Loans concurrently with the making of or conversion of Base
Rate Loans into LIBOR Loans by Lenders which are not so affected, in each case
in an amount equal to the amount of LIBOR Loans which would be made or converted
into by such Lender at such time in the absence of such circumstances) and (b)
on the last day of the current Interest Period for each LIBOR Loan of such
Lender (or, in any event, on such earlier date as may be required by the
relevant law, regulation or interpretation), such LIBOR Loan shall, unless then
repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan
made by a Lender which, but for the circumstances described in the foregoing
sentence, would be a LIBOR Loan shall remain outstanding for the period
corresponding to the Interest Period originally applicable to such LIBOR Loan
absent such circumstances.
3.5. Funding Losses.
Borrower hereby agrees that upon demand by any Lender (which demand
shall be accompanied by a statement setting forth in reasonable detail the basis
for the amount being claimed, a copy of which shall be furnished to Agent),
Borrower will indemnify such Lender against any net loss or expense which such
Lender may sustain or incur (including any net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain any LIBOR Loan), as reasonably determined by
such Lender, as a result of (a) any payment, prepayment or conversion of any
LIBOR Loan of such Lender on a date other than the last day of an Interest
Period for such Loan (including any conversion pursuant to Section 3.3 or 3.4)
or (b) any failure of Borrower to borrow, convert or continue any Loan on a date
specified therefor in a notice of borrowing, conversion or continuation pursuant
to this Agreement. For the purposes of this Section 3.5, all determinations
shall be made as if such Lender had actually funded and maintained each LIBOR
Loan during each Interest Period for such Loan through the purchase of deposits
having a maturity corresponding to such Interest Period and bearing an interest
rate equal to the LIBOR Rate for such Interest Period.
3.6. Manner of Funding; Alternate Funding Offices.
Each Lender shall be entitled to fund and maintain its funding of all
or any part of its Loans in a manner determined by it, in its sole discretion.
Each Lender may, if it so elects, fulfill its commitment to make any LIBOR Loan
by causing any branch or Affiliate of such Lender to make such Loan; provided
that in such event for the purposes of this Agreement such Loan shall be deemed
to have been made by such Lender and the obligation of Borrower to repay such
Loan shall nevertheless be to such Lender and shall be deemed held by it, to the
extent of such Loan, for the account of such branch or Affiliate.
3.7. Mitigation of Circumstances; Replacement of Lenders.
(a) Each Lender shall promptly notify Borrower and Agent of
any event of which it has knowledge which will result in, and will use
reasonable commercial efforts available to it (and not, in such Lender's sole
judgment, otherwise disadvantageous to such Lender) to mitigate or avoid, (i)
any obligation by Borrower to pay any amount pursuant to Section 3.1 or 3.2 or
(ii) the occurrence of any
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circumstances described in Section 3.3 or 3.4 (and, if any Lender has given
notice of any such event described in clause (i) or (ii) above and thereafter
such event ceases to exist, such Lender shall promptly so notify Borrower and
Agent). Without limiting the foregoing, each Lender will designate a different
funding office if such designation will avoid (or reduce the cost to Borrower
of) any event described in clause (i) or (ii) above and such designation would
not, in such Lender's sole judgment, be otherwise disadvantageous to such
Lender. Furthermore, each Lender shall, at Borrower's expense, execute such
documents, perform such further acts and otherwise cooperate with Borrower to
the extent reasonably necessary for Borrower to obtain any refunds or other
amounts in respect of payments or circumstances described in this Section 3.
(b) If Borrower becomes obligated to pay additional amounts to
any Lender pursuant to Section 3.1 or 3.2, or any Lender gives notice of the
occurrence of any circumstances described in Section 3.3 or 3.4, Borrower may,
within 90 days thereafter, designate another bank which is acceptable to Agent
and Issuing Lender in their reasonable discretion (such other bank being called
a "Replacement Lender") to purchase the Loans of such Lender and such Lender's
rights hereunder, without recourse to or warranty by, or expense to, such
Lender, for a purchase price equal to the outstanding principal amount of the
Loans payable to such Lender plus any accrued but unpaid interest on such Loans
and all accrued but unpaid fees owed to such Lender and any other amounts
payable to such Lender under this Agreement, and to assume all the obligations
of such Lender hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Lender shall no longer be a party hereto or have any
rights hereunder (other than rights with respect to indemnities and similar
rights applicable to such Lender prior to the date of such purchase and
assumption) and shall be relieved from all obligations to Borrower hereunder,
and the Replacement Lender shall succeed to the rights and obligations of such
Lender hereunder.
3.8. Conclusiveness of Statements; Survival.
Determinations and statements of any Lender pursuant to Section 3.1,
3.2, 3.3, 3.4 or 3.5 shall be conclusive absent demonstrable error. Lenders may
use reasonable averaging and attribution methods in determining compensation
under Sections 3.1, 3.2 and 3.5, and the provisions of such Sections shall
survive repayment of the Loans, cancellation of the Notes, expiration or
termination of the Letters of Credit and termination of this Agreement.
Section 4. Conditions Precedent.
The obligation of each Lender to make its Loans and of Issuing Lender
to issue Letters of Credit is subject to the following conditions precedent:
4.1. Initial Credit Extension.
The obligation of Lenders to make the initial Loans is, in addition to
the conditions precedent specified in Section 4.2, subject to the following
conditions precedent, each of which shall be satisfactory in all respects to
Agent:
4.1.1. Capitalization.
Concurrently with the initial credit extension hereunder,
Borrower shall have received cash equity contributions in an amount not less
than $28,000,000 and cash proceeds of not less than $25,000,000 from the
issuance of the Audax Subordinated Debt.
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4.1.2. Initial Loans; Availability.
Not more than $5,000,000 in Revolving Loans shall be advanced
on the Closing Date, and after giving effect to the consummation of the Related
Transactions, the funding of the initial Loans, the issuance of the initial
Letters of Credit, and the payment of all closing fees, costs and expenses
related to the Loans and the Related Transactions, on the Closing Date,
Borrowing Availability shall exceed Revolving Outstandings by at least
$5,000,000.
4.1.3. Prior Debt.
The Prior Debt has been (or concurrently with the initial
borrowing will be) paid in full.
4.1.4. Related Transactions.
Borrower has completed (or concurrently with the initial
credit extension hereunder will complete) the Merger, the closing and funding of
the Audax Subordinated Debt, and the actions required pursuant to the Trust
Subordinated Debt Documents and the Trust Preferred Documents in connection with
the Merger, in each case in accordance with the terms of the applicable Related
Agreements (without any amendment thereto or waiver thereunder unless consented
to by Lenders) and in accordance with applicable law. In connection with the
Merger, no more than 7.5% of the holders of Target's stock shall have voted
against consummation of the Merger and elected appraisal rights.
4.1.5. Fees.
Borrower shall have paid all fees, costs and expenses due and
payable on the Closing Date in connection with the Loans and the Related
Transactions.
4.1.6. Delivery of Loan Documents.
Borrower shall have delivered the following documents in form
and substance satisfactory to Agent (and, as applicable, duly executed and dated
the Closing Date or an earlier date satisfactory to Agent):
(a) Agreement. This Agreement.
(b) Notes. Notes, for each Lender requesting a Note.
(c) Collateral Documents. The Guarantee and Collateral
Agreement, all other Collateral Documents, and all instruments, documents,
certificates and agreements executed or delivered pursuant thereto (including
intellectual property assignments and pledged Collateral, with undated
irrevocable transfer powers executed in blank).
(d) Financing Statements. Properly completed Uniform
Commercial Code financing statements and other filings and documents required by
law or the Loan Documents to provide Agent first priority perfected Liens
(subject only to Liens permitted pursuant to Section 7.2) in the Collateral.
(e) Lien Searches. Copies of Uniform Commercial Code search
reports listing all effective financing statements filed against any Loan Party,
with copies of such financing statements.
(f) Collateral Access Agreements. Collateral Access Agreements
reasonably requested by Agent with respect to the Collateral, as set forth on
Schedule 4.1.6.
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(g) Payoff; Release. Payoff letters evidencing repayment in
full of all Prior Debt, termination of all agreements relating thereto and the
release of all Liens granted in connection therewith, with Uniform Commercial
Code or other appropriate termination statements and documents effective to
evidence the foregoing.
(h) Audax Subordinated Debt. A subordination agreement with
respect to the Audax Subordinated Debt and copies of all material Audax
Subordinated Debt Documents known to Borrower.
(i) Availability Certificate. Availability Certificate
reflecting required information as of a date not more than five days prior to
the Closing Date.
(j) Letter of Direction. A letter of direction containing
funds flow information, with respect to the proceeds of the Loans on the Closing
Date.
(k) Authorization Documents. For each Loan Party, such
Person's (i) charter (or similar formation document), certified by the
appropriate governmental authority, (ii) good standing certificates in its state
of incorporation (or formation) and in each other state requested by Agent, in
each case as of a date within 10 days of the Closing Date and certified by the
appropriate governmental authority, and (iii) bylaws (or similar governing
document), resolutions of its board of directors (or similar governing body)
approving and authorizing such Person's execution, delivery and performance of
the Loan Documents to which it is party and the transactions contemplated
thereby, and signature and incumbency certificates of its officers executing any
of the Loan Documents, all certified by its secretary or an assistant secretary
(or similar officer) as being in full force and effect without modification.
(l) Opinions of Counsel. Opinions of counsel for each Loan
Party, including local counsel reasonably requested by Agent, and all other
opinions issued pursuant to the Related Transactions, and Borrower hereby
requests such counsel to deliver such opinions and authorizes Agent and Lenders
to rely thereon.
(m) Insurance. Certificates or other evidence of insurance in
effect as required by Section 6.3(b), with endorsements naming Agent as lender's
loss payee and/or additional insured, as applicable.
(n) Financials. The financial statements, projections and pro
forma balance sheet of Borrower described in Section 5.4.
(o) Consents. Evidence that all necessary consents, permits
and approvals (governmental or otherwise) required for the execution, delivery
and performance by each Loan Party of the Loan Documents and the transactions
described in Section 4.1.4 have been duly obtained and are in full force and
effect.
(p) Certified Documents. Copies of the material Related
Agreements in existence as of the Closing Date and known to Borrower, certified
by Borrower's secretary or an assistant secretary (or similar officer) as being
in true, accurate and complete.
(q) Other Documents. Such other certificates, documents and
agreements as Agent or any Lender may reasonably request.
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4.1.7. Trust Subordinated Debt Documents and Trust Preferred Documents.
Borrower shall have delivered to Agent copies of the Officer's
Certificate and Opinion of Counsel delivered to the Trustee in connection with
the Merger under the terms of the Trust Preferred Documents and the Trust
Subordinated Debt Documents.
4.1.8. Senior Debt to EBITDA Ratio.
The Senior Debt to EBITDA Ratio, determined on a pro forma
basis as of December 31, 2001, for the twelve month period ending on such date,
but including the effect of the consummation of the Loans and the Related
Transactions, shall be no greater than 2.50 to 1.00.
4.1.9. EBITDA.
EBITDA, determined on a pro forma basis as of December 31,
2001, for the twelve month period ending on such date, but including the effect
of the consummation of the Loans and the Related Transactions, shall be equal to
or greater than $24,000,000.
4.1.10. Accuracy of Information.
All information furnished by Borrower and its respective
representatives to Agent or any Lender on or prior to the Closing Date with
respect to the business, management, operations, affairs, condition (financial
or otherwise), assets, property or results of operations of Borrower and its
Subsidiaries shall, to the knowledge of Borrower after due inquiry, be accurate
and complete in all material respects and shall not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained therein not materially misleading in light of the
circumstances under which such statements are made (it being recognized by Agent
and Lender that any projections and forecasts provided by Borrower are based on
good faith estimates and assumptions believed by Borrower to be reasonable as of
the date of the applicable projections and assumptions and that actual results
during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).
4.2. All Credit Extensions.
The obligation of each Lender to make each Loan and of Issuing Lender
to issue each Letter of Credit is subject to the additional conditions precedent
that, both before and after giving effect to any borrowing and the issuance of
any Letter of Credit, (a) the representations and warranties of Borrower and
each Subsidiary set forth in this Agreement and the other Loan Documents shall
be true and correct in all material respects with the same effect as if then
made (except (i) to the extent stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct as of
such earlier date and (ii) for changes therein expressly permitted or expressly
contemplated by this Agreement) and (b) no Event of Default or Default shall
have then occurred and be continuing. Each request by Borrower for the making of
a Loan or the issuance of a Letter of Credit shall be deemed to constitute a
representation and warranty by Borrower that the conditions precedent set forth
in Section 4.2 will be satisfied at the time of the making of such Loan or the
issuance of such Letter of Credit.
Section 5. Representations and Warranties.
To induce Agent and Lenders to enter into this Agreement and to induce
Lenders to make Loans and to issue and participate in Letters of Credit
hereunder, Borrower represents and warrants to Agent and Lenders that, both
before and after giving effect to the Related Transactions:
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5.1. Organization.
Borrower is a corporation validly existing and in good standing under
the laws of the State of Delaware; each other Loan Party is validly existing and
in good standing under the laws of the jurisdiction of its organization; and
each Loan Party is duly qualified to do business in each jurisdiction where,
because of the nature of its activities or properties, such qualification is
required, except for such jurisdictions where the failure to so qualify would
not have a Material Adverse Effect.
5.2. Authorization; No Conflict.
Each of Borrower and each other Loan Party is duly authorized to
execute and deliver each Loan Document to which it is a party, Borrower is duly
authorized to borrow monies hereunder, and each of Borrower and each other Loan
Party is duly authorized to perform its Obligations under each Loan Document to
which it is a party. The execution, delivery and performance by Borrower of this
Agreement and by each of Borrower and each other Loan Party of each Loan
Document to which it is a party, and the borrowings by Borrower hereunder, do
not and will not (a) require any consent or approval of any governmental agency
or authority (other than any consent or approval which has been obtained and is
in full force and effect), (b) conflict with (i) any provision of law, (ii) the
charter, by-laws or other organizational documents of Borrower or any other Loan
Party or (iii) except as listed on Schedule 5.2, any agreement, indenture,
instrument or other document, or any judgment, order or decree, which is binding
upon Borrower or any other Loan Party or any of their respective properties or
(c) require, or result in, the creation or imposition of any Lien on any asset
of Borrower, any Restricted Subsidiary or any other Loan Party (other than Liens
in favor of Agent created pursuant to the Collateral Documents).
5.3. Validity; Binding Nature.
Each of this Agreement and each other Loan Document to which Borrower
or any other Loan Party is a party is the legal, valid and binding obligation of
such Person, enforceable against such Person in accordance with its terms,
subject to bankruptcy, insolvency and similar laws affecting the enforceability
of creditors' rights generally and to general principles of equity.
5.4. Financial Condition.
(a) As of the Closing Date, the audited consolidated financial
statements of Target and its Subsidiaries as at its Fiscal Years ending December
31, 1999 and December 31, 2000, and the unaudited consolidated financial
statements of Target and its Subsidiaries as at September 30, 2001, copies of
each of which have been delivered pursuant hereto, were prepared in accordance
with GAAP (subject, in the case of such unaudited statements, to the absence of
footnotes and to normal year-end adjustments) and present fairly the
consolidated financial condition of such Persons as at such dates and the
results of their operations for the periods then ended.
(b) As of the Closing Date, the consolidated financial
projections (including an operating budget and a cash flow budget) of Borrower
for the 9 year period commencing January 1, 2002 delivered to Agent and Lenders
on or prior to the Closing Date (i) were prepared by Borrower in good faith and
(ii) were prepared in accordance with assumptions which Borrower believes to be
reasonable, and the accompanying consolidated pro forma balance sheet of
Borrower as at the Closing Date, adjusted to give effect to the consummation of
the Related Transactions and the financings contemplated hereby as if such
transactions had occurred on such date, is consistent in all material respects
with such projections.
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5.5. No Material Adverse Change.
Since September 30, 2001, there has been no material adverse change in
the financial condition, operations, assets, business, properties or prospects
of the Loan Parties taken as a whole.
5.6. Litigation.
No litigation (including derivative actions), arbitration proceeding or
governmental investigation or proceeding is pending or, to Borrower's knowledge,
threatened against any Loan Party which could reasonably be expected to have a
Material Adverse Effect, except as set forth in Schedule 5.6. As of the Closing
Date, other than any liability incident to such litigation or proceedings, no
Loan Party has any material Contingent Obligations not listed on Schedule 7.1.
5.7. Ownership of Properties; Liens.
Each of Borrower and each Restricted Subsidiary owns good and, in the
case of real property, marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, except as permitted by Section 7.2.
5.8. Capitalization.
All issued and outstanding equity securities of Borrower and the
Subsidiaries are duly authorized and validly issued, fully paid, non-assessable,
and free and clear of all Liens other than those in favor of Agent, and such
securities were issued in compliance with all applicable state and federal laws
concerning the issuance of securities. Schedule 5.8 sets forth the authorized
equity securities of each Loan Party as of the Closing Date. All of the issued
and outstanding equity of Holdings and each Wholly-Owned Subsidiary is owned as
set forth on Schedule 5.8 as of the Closing Date, all of the issued and
outstanding equity of Borrower is owned by Holdings, and all of the issued and
outstanding equity of each Restricted Subsidiary is, directly or indirectly,
owned by Borrower. As of the Closing Date, except as set forth on Schedule 5.8,
there are no pre-emptive or other outstanding rights, options, warrants,
conversion rights or other similar agreements or understandings for the purchase
or acquisition of any equity interests of Borrower or any Subsidiary.
5.9. Pension Plans.
During the twelve-consecutive-month period prior to the Closing Date or
the making of any Loan or the issuance of any Letter of Credit, (i) no steps
have been taken to terminate any Pension Plan and (ii) no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by any Loan Party of any material liability, fine or penalty. All contributions
(if any) have been made to any Multiemployer Pension Plan that are required to
be made by any Loan Party or any other member of the Controlled Group under the
terms of the plan or of any collective bargaining agreement or by applicable
law; neither any Loan Party nor any member of the Controlled Group has withdrawn
or partially withdrawn from any Multiemployer Pension Plan, incurred any
withdrawal liability with respect to any such plan or received notice of any
claim or demand for withdrawal liability or partial withdrawal liability from
any such plan, and no condition has occurred which, if continued, could result
in a withdrawal or partial withdrawal from any such plan, and neither any Loan
Party nor any member of the Controlled Group has received any notice that any
Multiemployer Pension Plan applicable to any Loan Party is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or
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has been funded at a rate less than that required under Section 412 of the IRC,
that any such plan is or may be terminated, or that any such plan is or may
become insolvent.
5.10. Investment Company Act.
No Loan Party is an "investment company" or a company "controlled" by
an "investment company" or a "subsidiary" of an "investment company", within the
meaning of the Investment Company Act of 1940.
5.11. Public Utility Holding Company Act.
No Loan Party is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935.
5.12. Margin Stock.
No Loan Party is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock. The Obligations are not secured directly or indirectly by
Margin Stock.
5.13. Taxes.
Each Loan Party has filed all tax returns and reports required by law
to have been filed by it and has paid all taxes and governmental charges thereby
shown to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books and
except for any such failures as would not reasonably be expected to have a
Material Adverse Effect.
5.14. Solvency.
On the Closing Date, and immediately prior to and after giving effect
to the issuance of each Letter of Credit and each borrowing hereunder and the
use of the proceeds thereof, with respect to each of Borrower and each
Restricted Subsidiary, individually, (a) the fair value of its assets is greater
than the amount of its liabilities (including contingent and unliquidated
liabilities) as such value is established and liabilities evaluated, (b) the
present fair saleable value of its assets is not less than the amount that will
be required to pay the probable liability on its debts as they become absolute
and matured, (c) it is able to realize upon its assets and pay its debts and
other liabilities (including contingent and unliquidated liabilities) as they
mature in the normal course of business, (d) it does not intend to, and does not
believe that it will, incur debts or liabilities beyond its ability to pay as
such debts and liabilities mature and (e) it is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
its assets would constitute unreasonably small capital.
5.15. Environmental Matters.
The on-going operations of Borrower and each Restricted Subsidiary
comply in all respects with all Environmental Laws, except such non-compliance
which could not (if enforced in accordance with applicable law) reasonably be
expected to result in a Material Adverse Effect. Borrower and each Restricted
Subsidiary have obtained, and maintained in good standing, all licenses,
permits, authorizations and registrations required under any Environmental Law
and necessary for their respective ordinary course operations, and Borrower and
each Restricted Subsidiary are in compliance with all material terms and
conditions thereof, except where the failure to do so could not reasonably be
expected
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to result in material liability to Borrower or any Restricted Subsidiary and
could not reasonably be expected to result in a Material Adverse Effect. To the
best of Borrower's knowledge, none of Borrower, any Restricted Subsidiary or any
of their respective properties or operations is subject to any outstanding
written order from or agreement with any Federal, state or local governmental
authority, nor subject to any judicial or docketed administrative proceeding,
respecting any Environmental Law, Environmental Claim or Hazardous Substance,
except to the extent that the same would not reasonably be expected to result in
a Material Adverse Effect. There are no Hazardous Substances or other conditions
or circumstances existing with respect to any property, or arising from
operations prior to the Closing Date, of Borrower or any Restricted Subsidiary
that would reasonably be expected to result in a Material Adverse Effect.
Neither Borrower nor any Restricted Subsidiary has any underground storage tanks
that are not properly registered or permitted under applicable Environmental
Laws or that are leaking or disposing of Hazardous Substances.
5.16. Insurance.
Borrower and each Restricted Subsidiary and their respective properties
are insured with financially sound and reputable insurance companies which are
not Affiliates of Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar businesses
and owning similar properties in localities where Borrower or such Restricted
Subsidiary operates. A true and complete listing of such insurance as of the
Closing Date, including issuers, coverages and deductibles, is set forth on
Schedule 5.16.
5.17. Information.
All information heretofore or contemporaneously herewith furnished in
writing by Borrower or any Loan Party to Agent or any Lender for purposes of or
in connection with this Agreement and the transactions contemplated hereby is,
and all written information hereafter furnished by or on behalf of any Loan
Party to Agent or any Lender pursuant hereto or in connection herewith will be,
true and accurate in every material respect on the date as of which such
information is dated or certified, and such information, taken as a whole at the
time provided, is not and will not be incomplete by intentionally omitting to
state any material fact necessary to make such information not misleading in
light of the circumstances under which made (it being recognized by Agent and
Lenders that any projections and forecasts provided by Borrower are based on
good faith estimates and assumptions believed by Borrower to be reasonable as of
the date of the applicable projections or assumptions and that actual results
during the period or periods covered by any such projections and forecasts may
differ from projected or forecasted results).
5.18. Intellectual Property.
Borrower and each Restricted Subsidiary owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service ▇▇▇▇ rights and
copyrights as are necessary for the conduct of the business of Borrower and the
Restricted Subsidiaries, without any infringement upon rights of others which
could reasonably be expected to have a Material Adverse Effect.
5.19. Restrictive Provisions.
No Loan Party is a party to any agreement or contract or subject to any
restriction contained in its operative documents which could reasonably be
expected to have a Material Adverse Effect.
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5.20. Labor Matters.
Except as set forth on Schedule 5.20, as of the Closing Date, neither
Borrower nor any Restricted Subsidiary is subject to any labor or collective
bargaining agreement. There are no existing or threatened strikes, lockouts or
other labor disputes involving Borrower or any Restricted Subsidiary that singly
or in the aggregate could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Borrower and the
Restricted Subsidiaries are not in violation of the Fair Labor Standards Act or
any other applicable law, rule or regulation dealing with such matters.
5.21. No Default.
No Event of Default or Default exists or would result from the
incurrence by Borrower of any Debt hereunder or under any other Loan Document.
5.22. Related Agreements.
(a) Borrower has furnished Agent a true and correct copy of
the material Related Agreements in existence as of the Closing Date and known to
Borrower. Each of Borrower and, to Borrower's knowledge, each other party to the
Related Agreements, has duly taken all necessary organizational action to
authorize the execution, delivery and performance of the Related Agreements and
the consummation of transactions contemplated thereby. The Related Transactions
(including the Merger) described in Section 4.1.4 have been consummated in
accordance with the terms of the Related Agreements. The Related Transactions
comply with all applicable legal requirements, and all necessary governmental,
regulatory, creditor, shareholder, partner and, except as set forth on Schedule
5.2, other material consents, approvals and exemptions required to be obtained
by Borrower and, to Borrower's knowledge, each other party to the Related
Agreements in connection with the Related Transactions have been, prior to
consummation of the Related Transactions, duly obtained and are in full force
and effect. As of the date of the Related Agreements, all applicable waiting
periods with respect to the Related Transactions have expired without any action
being taken by any competent governmental authority which restrains, prevents or
imposes material adverse conditions upon the consummation of the Related
Transactions. The execution and delivery of the Related Agreements, and the
consummation of the Related Transactions, did not violate any statute or
regulation of the United States (including any securities law) or of any state
or other applicable jurisdiction, or any order, judgment or decree of any court
or governmental body binding on Borrower or, to Borrower's knowledge, any other
party to the Related Agreements, or result in a breach of, or constitute a
default under, except as set forth on Schedule 5.2, any material agreement,
indenture, instrument or other document, or any judgment, order or decree, to
which Borrower is a party or by which Borrower is bound or, to Borrower's
knowledge, to which any other party to the Related Agreements is a party or by
which any such party is bound. As of the Closing Date, no statement or
representation made in the Related Agreements by Borrower or, to Borrower's
knowledge, any other Person, contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they are made, not misleading.
(b) The subordination provisions of the Subordinated Debt are
enforceable against the holders of the Subordinated Debt by Agent and Lenders.
All Obligations constitute senior Indebtedness entitled to the benefits of the
subordination provisions contained in the Subordinated Debt. Borrower
acknowledges that Agent and each Lender are entering into this Agreement and are
extending the Commitments and making the Loans in reliance upon the
subordination provisions of the Subordinated Debt and this Section 5.22.
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5.23. Subsidiaries.
The Subsidiaries in existence as of the Closing Date are listed on
Schedule 5.23. As of the Closing Date, no such Subsidiary (a) has material
liabilities or material Contingent Obligations or (b) except as set forth on
Schedule 5.23, is an Unrestricted Subsidiary.
5.24. Agreements with Managers.
As of the Closing Date, neither Borrower nor Holdings has entered into
an agreement, whether written or oral, with any of the members of Borrower's or
Holdings' management or any other officer or employee of Borrower or Holdings,
for the purchase by such manager, officer or employee of any equity securities
of Borrower or Holdings or the issuance to any such manager, officer or employee
of equity securities of Borrower or Holdings or warrants or options to purchase
equity securities of Borrower or Holdings.
Section 6. Affirmative Covenants.
Until the expiration or termination of the Commitments and thereafter
until all Obligations (other than contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted) of Borrower hereunder and
under the other Loan Documents are paid in full and all Letters of Credit have
been terminated, Borrower agrees that, unless at any time Required Lenders shall
otherwise expressly consent in writing, it will:
6.1. Information.
Furnish to Agent and each Lender:
6.1.1. Annual Report.
Promptly when available and in any event within 90 days after
the close of each Fiscal Year: (a) a copy of the annual audit report of Borrower
and the Restricted Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets and statements of earnings and cash flows of
Borrower and the Restricted Subsidiaries as at the end of such Fiscal Year,
certified without qualification by independent auditors of recognized standing
selected by Borrower and reasonably acceptable to Agent, together with a
comparison with the budget for such Fiscal Year and a comparison with the
previous Fiscal Year; and (b) a consolidating balance sheet of Borrower and the
Restricted Subsidiaries as of the end of such Fiscal Year and consolidating
statements of earnings and cash flows for Borrower and the Restricted
Subsidiaries for such Fiscal Year, certified by the chief financial officer of
Borrower.
6.1.2. Interim Reports.
(a) Promptly when available and in any event within 45 days
after the end of each Fiscal Quarter, consolidated and consolidating balance
sheets of Borrower and the Restricted Subsidiaries as of the end of such Fiscal
Quarter, together with consolidated and consolidating statements of earnings and
cash flows for such Fiscal Quarter and for the period beginning with the first
day of such Fiscal Year and ending on the last day of such Fiscal Quarter,
together with a comparison with the corresponding period of the previous Fiscal
Year and a comparison with the budget for such period of the current Fiscal
Year, certified by the chief financial officer of Borrower; and (b) promptly
when available and in any event within 30 days after the end of each month,
consolidated and consolidating balance sheets of Borrower and the Restricted
Subsidiaries as of the end of such month, together with consolidated and
consolidating statements of earnings and a consolidated statement of cash flows
for such month and for the period beginning with the first day of such Fiscal
Year and ending on the last day of such month, together with a
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comparison with the corresponding period of the previous Fiscal Year and a
comparison with the budget for such period of the current Fiscal Year, certified
by the chief financial officer of Borrower.
6.1.3. Compliance Certificate.
Contemporaneously with the furnishing of a copy of each annual
audit report pursuant to Section 6.1.1 and each set of quarterly statements
pursuant to Section 6.1.2 (and as required by Section 7.11(k)) a duly completed
Compliance Certificate, with appropriate insertions, dated the date of such
annual report or such quarterly statements, and signed by the chief financial
officer of Borrower, containing (a) a computation of each of the financial
ratios and restrictions set forth in Section 7.14 and to the effect that such
officer has not become aware of any Event of Default or Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it and (b) to the extent distributed to
Borrower's stockholders generally, a written statement of Borrower's management
setting forth a discussion of Borrower's financial condition, changes in
financial condition and results of operations.
6.1.4. Reports to SEC and Shareholders.
Promptly upon the filing or sending thereof, copies of (a) all
regular, periodic or special reports of each Loan Party filed with the
Securities and Exchange Commission, (b) all registration statements of each Loan
Party filed with the Securities and Exchange Commission (other than on Form S-8)
and (c) all proxy statements or other communications made to security holders
generally.
6.1.5. Notice of Default; Litigation; ERISA Matters.
Promptly upon becoming aware of any of the following, written
notice describing the same and the steps being taken by the applicable Loan
Party affected thereby with respect thereto:
(a) the occurrence of an Event of Default or a Default;
(b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by Borrower to Lenders which has been
instituted or, to the knowledge of Borrower, is threatened against any Loan
Party or to which any of the properties of any thereof is subject which could
reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan, or the
failure of any member of the Controlled Group to make a required contribution to
any Pension Plan (if such failure is sufficient to give rise to a Lien under
Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of
any action with respect to a Pension Plan which could result in the requirement
that any Loan Party furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan or
Multiemployer Pension Plan which could result in the incurrence by any member of
the Controlled Group of any material liability, fine or penalty (including any
claim or demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any material increase in the contingent
liability of any Loan Party with respect to any post-retirement welfare plan
benefit, or any notice that any Multiemployer Pension Plan applicable to any
Loan Party is in reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of an excise tax, that any
such plan is or has been funded at a rate less than that required under Section
412 of the IRC, that any such plan is or may be terminated, or that any such
plan is or may become insolvent;
(d) any cancellation or material change in any insurance
maintained by any Loan Party; or
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(e) any other event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or (ii) the
enactment or effectiveness of any law, rule or regulation) which could
reasonably be expected to have a Material Adverse Effect.
6.1.6. Availability Certificate.
Within 30 days of the end of each month, an Availability
Certificate dated as of the end of the most recently ended month and executed by
a chief financial officer of Borrower on behalf of Borrower; provided that at
any time an Event of Default exists, Agent may require Borrower to deliver
Availability Certificates more frequently.
6.1.7. Management Report.
Promptly upon receipt thereof, copies of all detailed
financial and management reports submitted to any Loan Party by independent
auditors in connection with each annual or interim audit made by such auditors
of the books of such Loan Party. Notwithstanding the foregoing, Borrower shall
in no event be required to provide to Agent or any Lender any information
protected by law as a privileged communication resulting from a protected
relationship (including, by way of example, the attorney-client relationship),
so long as such information remains privileged.
6.1.8. Projections.
As soon as practicable, and in any event not later than 30
days prior to the commencement of each Fiscal Year, financial projections for
Borrower and the Restricted Subsidiaries for such Fiscal Year (including monthly
operating and cash flow budgets) prepared in a manner consistent with the
projections delivered by Borrower to Lenders prior to the Closing Date or
otherwise in a manner reasonably satisfactory to Agent, accompanied by a
certificate of a chief financial officer of Borrower on behalf of Borrower to
the effect that (a) such projections were prepared by Borrower in good faith,
(b) Borrower believes the assumptions contained in such projections to be
reasonable and (c) such projections have been prepared in accordance with such
assumptions.
6.1.9. Certain Debt Notices.
Promptly following receipt, copies of any notices (including
notices of default or acceleration) received from any holder or trustee of,
under or with respect to any Subordinated Debt or the Senarc Debt.
6.1.10. Labor Matters.
Promptly upon entering into the same, copies of any labor or
collective bargaining agreements to which Borrower or any Restricted Subsidiary
becomes subject.
6.1.11. Other Information.
Promptly from time to time, such other information concerning
any Loan Party as any Lender or Agent may reasonably request.
6.2. Books; Records; Inspections.
Keep, and cause each Restricted Subsidiary to keep, its books and
records in accordance with sound business practices sufficient to allow the
preparation of financial statements in accordance with GAAP; permit, and cause
each Restricted Subsidiary to permit, at any reasonable time and with
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reasonable notice (or at any time without notice if an Event of Default exists),
Agent (accompanied by any Lender) or any representative thereof to inspect the
properties and operations of Borrower or such Restricted Subsidiary; and permit,
and cause each Restricted Subsidiary to permit, at any reasonable time and with
reasonable notice (or at any time without notice if an Event of Default exists),
Agent (accompanied by any Lender) or any representative thereof to visit any or
all of its offices, to discuss its financial matters with its officers and its
independent auditors (and Borrower hereby authorizes such independent auditors
to discuss such financial matters with any Lender or Agent or any representative
thereof), and to examine (and, at the expense of Borrower or the applicable
Restricted Subsidiary, photocopy extracts from) any of its books or other
records; and permit, and cause each Restricted Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), Agent and its representatives to inspect the
Collateral and other tangible assets of Borrower or such Restricted Subsidiary,
to perform appraisals of the equipment of Borrower or such Restricted
Subsidiary, and to inspect, audit, check and make copies of and extracts from
the books, records, computer data, computer programs, journals, orders,
receipts, correspondence and other data relating to any Collateral. All such
inspections or audits by Agent shall be at Borrower's expense, provided that so
long as no Event of Default or Default exists, Borrower shall not be required to
reimburse Agent for appraisals more frequently than once each Fiscal Year. Agent
and each Lender hereby agrees to use its best efforts to conduct all such
inspections, visits, examinations and audits in a manner that minimizes
interference with the business of Borrower or any such Restricted Subsidiary.
Agent and Lenders shall treat all information obtained during any such
inspection, visit, examination or audit as confidential information subject to
Section 10.9 hereof. Notwithstanding the foregoing, Borrower shall in no event
be required to provide to Agent or Lender any information protected by law as a
privileged communication resulting from a protected relationship (including, by
way of example, the attorney-client relationship), so long as such information
remains privileged.
6.3. Maintenance of Property; Insurance.
(a) Keep, and cause each Restricted Subsidiary to keep, all
property useful and necessary in the business of Borrower or such Restricted
Subsidiary in good working order and condition, ordinary wear and tear excepted.
(b) Maintain, and cause each Restricted Subsidiary to
maintain, with responsible insurance companies, such insurance coverage as shall
be required by all laws, governmental regulations and court decrees and orders
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as is customarily maintained by companies similarly
situated; provided that in any event, Borrower shall use commercially reasonably
efforts to assure that such insurance shall insure against all risks and
liabilities of the type insured against as of the Closing Date and shall have
insured amounts no less than, and deductibles no higher than, those amounts
provided for as of the Closing Date. Upon request of Agent or any Lender,
Borrower shall furnish to Agent or such Lender a certificate setting forth in
reasonable detail the nature and extent of all insurance maintained by Borrower
and the Restricted Subsidiaries. Borrower shall cause each issuer of an
insurance policy to provide Agent with an endorsement (i) showing Agent as a
loss payee with respect to each policy of property or casualty insurance in
respect of (a) each claim in excess of $25,000 and (b) each claim of any size at
any time that an Event of Default is in existence, and naming Agent and each
Lender as an additional insured with respect to each policy of liability
insurance, (ii) providing that 30 days' notice will be given to Agent prior to
any cancellation of, or material reduction or change in coverage provided by or
other material modification to such policy and (iii) reasonably acceptable in
all other respects to Agent. Borrower shall execute and deliver to Agent a
collateral assignment, in form and substance satisfactory to Agent, of each
business interruption insurance policy maintained by Borrower.
(c) Unless Borrower provides Agent with evidence of the
continuing insurance coverage required by this Agreement, Agent may purchase
insurance at Borrower's expense to protect
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Agent's and Lenders' interests in the Collateral. This insurance may, but need
not, protect Borrower's interests. The coverage that Agent purchases may, but
need not, pay any claim that is made against Borrower in connection with the
Collateral. Borrower may later cancel any insurance purchased by Agent, but only
after providing Agent with evidence that Borrower has obtained the insurance
coverage required by this Agreement. If Agent purchases insurance for the
Collateral, as set forth above, Borrower will be responsible for the costs of
that insurance, including interest and any other charges that may be imposed
with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance and the costs of the insurance may
be added to the principal amount of the Loans owing hereunder.
6.4. Compliance with Laws; Payment of Taxes and Liabilities.
(a) Comply, and cause each other Loan Party to comply, in all material
respects with all applicable laws, rules, regulations, decrees, orders,
judgments, licenses and permits, except where failure to comply could not
reasonably be expected to have a Material Adverse Effect; and (b) pay, and cause
each other Loan Party to pay, prior to delinquency, all taxes and other
governmental charges against it or any of its property, as well as claims of any
kind which, if unpaid, could become a Lien on any of its property; provided that
the foregoing shall not require Borrower or any such Loan Party to pay any such
tax or charge so long as it shall contest the validity thereof in good faith by
appropriate proceedings and shall set aside on its books adequate reserves with
respect thereto in accordance with GAAP.
6.5. Maintenance of Existence.
Maintain and preserve, and (subject to Section 7.5) cause each other
Loan Party to maintain and preserve, (a) its existence and good standing in the
jurisdiction of its organization and (b) its qualification to do business and
good standing in each jurisdiction where the nature of its business makes such
qualification necessary, other than any such jurisdiction where the failure to
be qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect.
6.6. Employee Benefit Plans.
Maintain, and cause each other Loan Party to maintain, each Pension
Plan in substantial compliance with all applicable requirements of law and
regulations.
6.7. Environmental Matters.
If any release or disposal of Hazardous Substances shall occur or shall
have occurred on any real property or any other assets of Borrower or any
Restricted Subsidiary, upon learning of such release or disposal, within a
reasonable time thereafter, cause, or direct the applicable Restricted
Subsidiary to cause, the prompt containment and removal of such Hazardous
Substances and the remediation of such real property or other assets as is
necessary to comply with all Environmental Laws and to preserve the value of
such real property or other assets. Without limiting the generality of the
foregoing, Borrower shall, and shall cause each Restricted Subsidiary to, comply
with each valid Federal or state judicial or administrative order requiring the
performance at any real property by Borrower or any Restricted Subsidiary of
activities in response to the release or threatened release of a Hazardous
Substance.
6.8. Further Assurances.
Take, and cause each Restricted Subsidiary to take, such actions as are
necessary or as Agent or the Required Lenders may reasonably request from time
to time to ensure that the Obligations of Borrower and each Restricted
Subsidiary under the Loan Documents are secured by substantially all of the
assets of Borrower and each Restricted Subsidiary (as well as all equity
interests of each Restricted
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Subsidiary) and guaranteed by each Restricted Subsidiary (including, promptly
upon the acquisition or creation thereof, any Restricted Subsidiary acquired or
created after the Closing Date), in each case including (a) the execution and
delivery of guaranties, security agreements, pledge agreements, mortgages, deeds
of trust, financing statements and other documents, and the filing or recording
of any of the foregoing and (b) the delivery of certificated securities and
other Collateral with respect to which perfection is obtained by possession.
Notwithstanding the foregoing, Borrower shall only be required to provide or
caused to be provided the foregoing items with respect to Chinese Subsidiary to
the extent that the same is required by Agent and Required Lenders.
6.9. Interest Rate Protection.
Enter into, not later than 60 days after the Closing Date, an interest
rate protection mechanism with a term of at least three years on an ISDA
standard form with one or more Lenders or Affiliates thereof or with
counterparties reasonably acceptable to Agent to hedge the interest rate with
respect to not less than 50% of the principal amount of the Term Loans, in form
and substance reasonably satisfactory to Agent.
6.10. Trust Subordinated Debt Documents.
If an Event of Default exists at the time that any interest payment is
due under the Trust Subordinated Debentures or would be caused by the making of
such interest payment, exercise its rights under the Trust Subordinated
Debentures, to the maximum extent available, to defer payment of such interest.
6.11. Keyman Insurance.
Within 90 days after the Closing Date, Borrower shall use commercially
reasonable efforts to obtain, and shall thereafter maintain, keyman life
insurance on the life of its chief executive officer, in such amounts as
Borrower reasonably determines to be appropriate, the proceeds of which
insurance shall be collaterally assigned to Agent, as security for the
Obligations. In connection therewith, Borrower shall deliver to Agent a
certified copy of the underlying insurance policy or policies and executed
collateral assignments thereof, in each case in form and substance satisfactory
to Agent in its reasonable judgment.
6.12. Audax Subordinated Debt.
Borrower shall exercise its options pursuant to the Audax Subordinated
Debt Documents, as in existence on the Closing Date, to cause interest accruing
on the Audax Subordinated Debt in excess of 13% per annum to be paid by the
issuance of "PIK Notes" (as defined in the Audax Subordinated Debt Documents, as
in existence on the Closing Date).
Section 7. Negative Covenants.
Until the expiration or termination of the Commitments and thereafter
until all Obligations (other than contingent indemnification obligations to the
extent no claim giving rise thereto has been asserted) of Borrower hereunder and
under the other Loan Documents are paid in full and all Letters of Credit have
been terminated, Borrower agrees that, unless at any time Required Lenders shall
otherwise expressly consent in writing, it will:
7.1. Debt.
Not, and not permit any Restricted Subsidiary to, create, incur, assume
or suffer to exist any Debt, except:
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(a) Obligations under this Agreement and the other Loan
Documents;
(b) Debt not otherwise permitted hereunder secured by Liens
permitted by Section 7.2(d), and extensions, renewals and refinancings thereof;
provided that the aggregate principal amount of all such Debt at any time
outstanding shall not exceed $500,000;
(c) Debt of Borrower to any domestic Wholly-Owned Restricted
Subsidiary or Debt of any domestic Wholly-Owned Restricted Subsidiary to
Borrower or another domestic Wholly-Owned Restricted Subsidiary;
(d) Debt of Chinese Subsidiary to Borrower not in excess of
$500,000 at any time outstanding, less the amount of all Investments made in
Chinese Subsidiary pursuant to Section 7.11(b);
(e) intentionally omitted;
(f) Hedging Obligations incurred in favor of a Lender or an
Affiliate thereof for bona fide hedging purposes and not for speculation;
(g) Debt (including Contingent Obligations) described on
Schedule 7.1 as of the Closing Date, and any extension, renewal, refunding or
refinancing thereof so long as the principal amount thereof is not increased;
(h) the Trust Subordinated Debt in an aggregate outstanding
principal amount not at any time exceeding $17,000,000, together with all
accrued and unpaid interest thereon;
(i) the Audax Subordinated Debt in an aggregate outstanding
principal amount not at any time exceeding $25,000,000 plus the aggregate
outstanding amount of any PIK Notes issued in connection therewith, and all
accrued and unpaid interest thereon;
(j) the Senarc Debt in an aggregate outstanding principal
amount not at any time exceeding $460,340.96, together with all accrued and
unpaid interest thereon;
(k) Contingent Obligations arising (i) with respect to
customary indemnification obligations in favor of sellers in connection with
Acquisitions permitted under Section 7.5 and purchasers in connection with
dispositions permitted under Section 7.5(b), (ii) in the ordinary course of
business by Borrower or any of its Restricted Subsidiaries guaranteeing
obligations of Borrower or any of its domestic Restricted Subsidiaries, (iii) in
favor of customers in the ordinary course of business as a result of product
warranties and (iv) in connection with unfunded pension fund and other employee
benefit plan obligations, to the extent the same are not yet required to be
funded;
(l) Debt incurred in connection with Acquisitions permitted
pursuant to Section 7.11(k); provided that the requirements of clause (vii) of
such Section are satisfied; and
(m) other Debt, in addition to the Debt listed above, in an
aggregate outstanding principal amount not at any time exceeding $500,000, less
the aggregate outstanding principal amount of the Senarc Debt at such time (but
in no event less than zero).
7.2. Liens.
Not, and not permit any Restricted Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
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(a) Liens for taxes or other governmental charges not at the
time delinquent or thereafter payable without penalty or being contested in good
faith by appropriate proceedings and, in each case, for which it maintains
adequate reserves;
(b) Liens arising in the ordinary course of business (such as
(i) Liens of carriers, warehousemen, mechanics, landlords and materialmen and
other similar Liens imposed by law and Liens of landlords imposed pursuant to
the underlying leases, and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social security
(excluding Liens arising under ERISA) or in connection with statutory liens in
the ordinary course (such as for payment of inventory or wages) for claims not
overdue or being contested in good faith, surety, stay, customs and appeal
bonds, bids, performance bonds and similar obligations) for sums not overdue or
being contested in good faith by appropriate proceedings and not involving any
borrowed money or the deferred purchase price of property (other than inventory
acquired in the ordinary course of business) or services and, in each case, for
which it maintains adequate reserves;
(c) Liens (i) described on Schedule 7.2 as of the Closing Date
or (ii) securing refinancing Debt permitted pursuant to Section 7.1(g) to the
extent the Debt being refinanced is secured by the same or similar assets;
(d) subject to the limitation set forth in Section 7.1(b), (i)
Liens arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof by Borrower or any Restricted Subsidiary (and not created in
contemplation of such acquisition) and (iii) Liens that constitute purchase
money security interests on any property securing debt incurred for the purpose
of financing all or any part of the cost of acquiring such property, provided
that any such Lien attaches to such property within 60 days of the acquisition
thereof and attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar
Liens, for sums not exceeding $250,000 arising in connection with court
proceedings; provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively contested
in good faith and by appropriate proceedings;
(f) easements, rights of way, zoning, restrictions, minor
defects or irregularities in title and other similar Liens not interfering in
any material respect with the ordinary conduct of the business of Borrower or
any Restricted Subsidiary;
(g) Liens arising under the Loan Documents;
(h) the replacement, extension or renewal of any Lien
permitted by clause (c)(i) above upon or in the same property subject thereto
arising out of the extension, renewal or replacement of the Debt secured thereby
(without increase in the amount thereof);
(i) any interest or title of a lessor or sublessor under any
lease entered into by Borrower or any of its Restricted Subsidiaries in the
ordinary course of its business and covering only the assets so leased;
(j) Liens arising from precautionary Uniform Commercial Code
financing statements filed under any lease permitted by this Agreement or the
other Loan Documents;
(k) Liens incurred in connection with Debt permitted pursuant
to Section 7.1(a), (c) or (d);
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(l) Liens on the Inventory, and certain equipment and
contracts, acquired by Borrower in connection with its acquisition of Senarc,
that secure the Senarc Debt; and
(m) Liens not otherwise permitted by this Section 7.2 so long
as (i) the Debt secured by such Liens is permitted under Section 7.1, (ii) the
aggregate outstanding principal amount of the Debt secured by such Liens does
not exceed $250,000, less the aggregate outstanding principal amount of the
Senarc Debt at such time (but in no event less than zero) and (iii) the
aggregate fair market value (as of the date each such Lien is incurred) of the
assets subject thereto does not exceed $250,000, less the aggregate fair market
value of the assets securing the Senarc Debt at the time such Senarc Debt was
incurred (but in no event less than zero).
Lenders hereby authorize Agent, and Agent hereby agrees, upon request therefor
by Borrower, to execute documents reasonably acceptable to Agent in order to
subordinate Agent's Lien on any newly acquired property subject to a Lien
permitted under Section 7.2(d).
7.3. Operating Leases.
Not permit the aggregate amount of all rental payments under Operating
Leases made (or scheduled to be made) by Borrower and the Restricted
Subsidiaries (on a consolidated basis) to exceed $4,000,000 in any Fiscal Year.
7.4. Restricted Payments.
Not, and not permit any other Loan Party, to, (a) make any dividend or
distribution to any of its equity holders in respect of their equity interests,
(b) purchase or redeem any of its equity interests or any warrants, options or
other rights in respect thereof, (c) pay any management, consulting or similar
fees to any of its equity holders or any Affiliate thereof, (d) make any
redemption, prepayment (whether mandatory or optional), defeasance, repurchase
or any other payment in respect of any Subordinated Debt or the Senarc Debt,
including without limitation any redemption or prepayment of the Trust
Subordinated Debentures or the Trust Preferred Securities (whether pursuant to
the Trust Preferred Guarantee or otherwise) or (e) set aside funds for any of
the foregoing. Notwithstanding the foregoing, (i) any Wholly-Owned Restricted
Subsidiary may pay dividends or make other distributions to Borrower or to a
domestic Wholly-Owned Restricted Subsidiary; (ii) so long as no Event of Default
exists or would result therefrom, Borrower may make distributions to Holdings to
permit Holdings to pay federal and state income taxes then due and owing by
Holdings (or its equity holders), so long as the amount of such distributions
shall not be greater, nor the receipt by Borrower of tax benefits less, than
they would have been had Borrower not filed consolidated income tax returns with
such Person; (iii) so long as no Event of Default or Default exists or would
result therefrom, Borrower may (a) pay fees to Sponsor pursuant to the Services
and Fee Agreement in an aggregate amount not exceeding $500,000 in any Fiscal
Year (exclusive of transaction costs paid pursuant to the Services and Fee
Agreement on the Closing Date in respect of the Loans and the Related
Transactions), plus reasonable out-of-pocket expenses as provided in the
Services and Fee Agreement, (b) make (i) regularly scheduled payments of
interest in respect of the Audax Subordinated Debt (but only at a rate not in
excess of 13% per annum), to the extent permitted under the applicable
subordination agreement, (ii) redemption of up to $1,900,000 of the principal
amount of the Audax Subordinated Debt on February 22, 2007, to the extent
permitted under the applicable subordination agreement, (iii) quarterly
redemptions of the principal amount of the Audax Subordinated Debt on the 22nd
day of each February, May, August and November commencing on May 22, 2007, in
the amount and to the extent permitted on the applicable subordination
agreement, and (iv) any additional payment in respect of the Audax Subordinated
Debt that may be permitted under the applicable subordination agreement; and
issue PIK Notes "Initial AHYDO Warrants" and "Subsequent AHYDO Warrants" (as
each is defined in the Audax Subordinated Debt Documents, as in existence on the
Closing Date, in each case, from time to time pursuant to the terms of the Audax
Subordinated Debt Documents, as in existence
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on the Closing Date, and (c) make regularly scheduled payments of interest in
respect of Subordinated Debt (other than the Audax Subordinated Debt), or any
other payment that may be permitted under the applicable subordination agreement
or subordination provisions; (iv) make regularly scheduled payments of interest
and principal in respect of the Senarc Debt, or any other payment that may be
permitted under the Senarc Debt Documents, (v) any Loan Party may make non-cash
payments in the form of common stock (or preferred stock on which dividends are
payable solely in kind or in common stock) on such Loan Party's securities; (vi)
the Loan Parties may consummate the Related Transactions; (vii) so long as no
Event of Default exists or would result therefrom, Borrower may make
distributions to Holdings to permit Holdings to purchase Holding's common stock
or common stock options from present or former officers or employees of
Holdings, Borrower or any Restricted Subsidiary upon the death, disability of
termination of employment of such officer or employee, provided, that the
aggregate amount of payments by Holdings in connection with such purchases
subsequent to the date hereof (net of any proceeds received by HOLDINGS
subsequent to the date hereof in connection with resales of any common stock or
common stock options so purchased) shall not exceed the Annual Repurchase Amount
for such year. The "Annual Repurchase Amount" shall be $250,000 per year;
provided, that any unused portion of the Annual Repurchase Amount for any year
may be carried forward to subsequent years, so long as the aggregate amount of
payments in any single year does not exceed $500,000; (vii) so long as no Event
of Default exists or would result therefrom, and so long as permitted under the
subordination provisions applicable thereto, Borrower may make payments under
the Trust Preferred Guarantee of the obligations of the Trust under the Trust
Preferred Securities; and (viii) so long as no Event of Default exists or would
result therefrom, Borrower may make distributions to Holding to permit Holdings
to pay (A) reasonable directors' fees and expenses paid to and indemnity
provided on behalf of directors and officers of Holdings, as determined in good
faith by Holdings' Board of Directors and (B) compensation to officers of
Holdings, as determined in good faith by Holdings' Board of Directors.
7.5. Mergers; Consolidations; Asset Sales.
(a) Not, and not permit any other Loan Party to, be a party to
any merger or consolidation, except for (i) the Merger, (ii) any such merger or
consolidation of any Restricted Subsidiary into Borrower or any domestic
Wholly-Owned Restricted Subsidiary and (iii) Acquisitions permitted under
Section 7.11.
(b) Not, and not permit any Restricted Subsidiary to, sell,
transfer, convey or lease all or any part of its assets or equity interests, or
sell or assign with or without recourse any receivables, except for (i) sales
and dispositions of assets excluded from the definition of the term Disposition;
(ii) so long as no Event of Default is in existence, Dispositions of obsolete or
worn out property in the ordinary course of business; (iii) Dispositions
relating to the sale of Cash Equivalent Investments in the ordinary course of
business; (iv) Dispositions of assets by any Restricted Subsidiary to Borrower
or any other Wholly-Owned Restricted Subsidiary of Borrower or such Restricted
Subsidiary, subject to Agent's Lien on such assets; (v) settlements of property,
casualty and condemnation claims relating to assets of Borrower or a Restricted
Subsidiary of Borrower, subject to Agent's Lien on the proceeds of such claims;
(vi) licenses and sublicenses of intellectual property granted in the ordinary
course of business, subject to Agent's Lien on such assets; (vii) sales and
leasebacks covering property with an aggregate fair market value during the term
of this Agreement not exceeding $500,000; (viii) subleases of properties which
do not, in the aggregate, result in sublease payments in excess of $250,000 per
year and (ix) issuances of equity securities that do not cause a breach of
Section 8.1.10 and that are not otherwise prohibited by this Agreement.
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7.6. Modification of Organizational Documents.
Not permit the charter, by-laws or other organizational documents of
any Loan Party to be amended or modified in any way which could reasonably be
expected to materially adversely affect the interests of Agent or any Lender.
7.7. Use of Proceeds.
Use the proceeds of the Loans, and the Letters of Credit, solely to
finance the Related Transactions and related closing costs and expenses, for
working capital, for Acquisitions permitted by Section 7.11, for Capital
Expenditures and for other general business purposes; and not use or permit any
proceeds of any Loan to be used, either directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of "purchasing or carrying" any
Margin Stock.
7.8. Transactions with Affiliates.
Not, and not permit any Loan Party to, enter into, or cause, suffer or
permit to exist any transaction, arrangement or contract not otherwise permitted
under this Agreement with any of its other Affiliates other than Borrower and
the Restricted Subsidiaries, which is on terms which are less favorable than are
obtainable from any Person which is not one of its Affiliates, except (i)
reasonable directors' fees and expenses paid to and indemnity provided on behalf
of directors and officers of Holdings, Borrower or any of Borrower's Restricted
Subsidiaries, as determined in good faith by the applicable Board of Directors;
(ii) reasonable compensation paid to officers of Holdings, Borrower or any of
Borrower's Restricted Subsidiaries, as determined in good faith by the
applicable Board of Directors; (iii) the execution and delivery of the Related
Agreements and the consummation of the transactions contemplated thereby and/or
permitted pursuant to Section 7.4, including but not limited to the incurrence
and payment on the Closing Date of all fees and expenses (including fees and
expenses payable to or on behalf of Sponsor or Holdings pursuant to the Services
and Fee Agreement) in connection THEREWITH; (iv)(A) the fees and out-of-pocket
expenses described in Section 7.4, (B) so long as no Default or Event of Default
shall have occurred and be continuing, payments to the Sponsor of customary
transaction fees in connection with Acquisitions, to the extent such fees are
approved by Required Lenders in their sole discretion, and (C) payments in
respect of indemnification obligations of Borrower under the Services and Fee
Agreement, (v) the agreements listed on Schedule 7.8 as of the Closing Date and
(vi) Debt permitted under Sections 7.1(c), (d), (h) and (l) and Investments
permitted under Sections 7.11(a), (b), (c), (d), (k), (m), (n) and (q).
7.9. Inconsistent Agreements.
Not, and not permit any other Loan Party to, enter into any agreement
containing any provision which would (a) be violated or breached by any
borrowing by Borrower hereunder or by the performance by any Loan Party of any
of its Obligations hereunder or under any other Loan Document, (b) prohibit any
Loan Party from granting to Agent and Lenders a Lien on any of its assets or (c)
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (i) pay dividends or make other
distributions to Borrower or any other Restricted Subsidiary, or pay any Debt
owed to Borrower or any other Restricted Subsidiary, (ii) make loans or advances
to Borrower or any Restricted Subsidiary or (iii) transfer any of its assets or
properties to Borrower or any Restricted Subsidiary.
7.10. Business Activities.
Not, and not permit any Restricted Subsidiary to, (i) engage in any
line of business other than the businesses engaged in on the Closing Date and
businesses reasonably related thereto or (ii) engage in any
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activities that would require such Person to obtain a license from the
Washington State Gambling Commission, other than a license to operate commercial
amusement games. Not, and not permit any other Loan Party to, issue any equity
interest other than (a) any issuance of shares of Holdings' common equity
securities pursuant to any employee or director option program, benefit plan or
compensation program, (b) any issuance by a Restricted Subsidiary to Borrower or
another Restricted Subsidiary in accordance with Section 7.4 and (c) any
issuance by Holdings that does not violate Section 8.1.10.
7.11. Investments.
Not, and not permit any Restricted Subsidiary to, make or permit to
exist any Investment in any other Person, except the following:
(a) contributions by Borrower or any domestic Restricted
Subsidiary to the capital of any domestic Wholly-Owned Restricted Subsidiary, so
long as the recipient of any such capital contribution has guaranteed the
Obligations and such guaranty is secured by a pledge of all of its equity
interests and substantially all of its real and personal property, in each case
in accordance with Section 6.8;
(b) contributions by Borrower to the capital of Chinese
Subsidiary, in an aggregate amount not in excess of $500,000, less all Debt of
Chinese Subsidiary to Borrower pursuant to Section 7.1(d);
(c) Investments by Borrower in one or more Unrestricted
Subsidiaries in an aggregate amount not in excess of $250,000 for each
Unrestricted Subsidiary and $1,000,000 in the aggregate for all Unrestricted
Subsidiaries;
(d) Investments constituting Debt permitted by Section 7.1(c)
or 7.1(d);
(e) Contingent Obligations constituting Debt permitted by
Section 7.1 or Liens permitted by Section 7.2;
(f) Cash Equivalent Investments;
(g) bank deposits in the ordinary course of business;
(h) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(i) Investments listed on Schedule 7.11 as of the Closing
Date;
(j) any purchase or other acquisition by Borrower or any
domestic Wholly-Owned Restricted Subsidiary of the assets, equity interests or
debt of any Restricted Subsidiary;
(k) any Acquisition by Borrower or any domestic Wholly-Owned
Restricted Subsidiary where (i) the business or division acquired are for use,
or the Person acquired is engaged, in the businesses engaged in by Borrower and
the Restricted Subsidiaries on the Closing Date, (ii) in the case of the
Acquisition of any Person, the Board of Directors of such Person has approved
such Acquisition and all of the equity interests of such Person are being
acquired, (iii) immediately before and after giving effect to such Acquisition
and the Loans made pursuant thereto, no Event of Default or Default shall exist,
(iv) Borrower is in pro forma compliance with Section 7.14 calculated on a pro
forma basis for the most recent 4 fiscal quarter period then ended, but
including the effect of the proposed
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Acquisition and the Loans made pursuant thereto, as reflected in a Compliance
Certificate delivered to Agent at least three Business Days prior to the
consummation of such Acquisition, (v) the aggregate consideration to be paid by
Borrower and the Subsidiaries (including any Debt assumed or issued in
connection therewith, the amount thereof to be calculated in accordance with
GAAP) in connection with such Acquisition, together with such consideration paid
in connection with all other Acquisitions completed since the Closing Date, is
less than or equal to $25,000,000, (vi) the Total Debt to EBITDA Ratio,
calculated on a pro forma basis for the most recent 12 month period then ended,
but including the effect of the proposed Acquisition and the Loans made pursuant
thereto, as reflected in a Compliance Certificate delivered to Agent at three
Business Days prior to the consummation of such Acquisition, would be at least
25 basis points lower than the Total Debt to EBITDA Ratio for the most recent 12
month period then ended, but excluding the effect of the proposed Acquisition
and the Loans made pursuant thereto, (vii) the proposed Acquisition shall be
financed solely with a combination of the proceeds of the issuance by Holdings
of equity securities, the proceeds of Subordinated Debt issued by Borrower and
the proceeds of unsecured Debt issued by Holdings and that is subordinated to
the Obligations, so long as (A) such Subordinated Debt or Debt accounts for no
more than 50% of the cash portion of the purchase price for such Acquisition and
(B) the terms of (including without limitation subordination, covenants and
pricing terms), and documents evidencing, such Subordinated Debt or Debt are
reasonably acceptable to Required Lenders, (viii) reasonably prior to such
Acquisition, Agent shall have received complete executed or conformed copies of
each material document, instrument and agreement to be executed in connection
with such Acquisition, (ix) not less than ten Business Days prior to such
Acquisition, Agent and Lenders shall have received an acquisition summary with
respect to the Person and/or business or division to be acquired, such summary
to include a reasonably detailed description thereof (including financial
information) and operating results (including financial statements for the most
recent 12 month period for which they are available and as otherwise available),
the terms and conditions, including economic terms, of the proposed Acquisition,
and Borrower's calculation of Pro Forma EBITDA relating thereto, (x) Agent and
Required Lenders shall have approved Borrower's computation of Pro Forma EBITDA
for the Person to be acquired, which approval shall not be unreasonably
withheld, (xi) consents have been obtained in favor of Agent and Lenders to the
collateral assignment of rights and indemnities under the related acquisition
documents and opinions of counsel for the Loan Parties and (if delivered to the
Loan Party) the selling party in favor of Agent and Lenders have been delivered
and (xii) Required Lenders have consented to such Acquisition, which consent
shall not be unreasonably withheld; provided, that Required Lenders shall be
entitled to grant or withhold their consent to the consummation of any
Acquisition involving Consolidated Route, Inc. in their absolute discretion.
(l) extensions of trade credit in the ordinary course of
business;
(m) loans and advances to employees of Borrower or any
Restricted Subsidiary of Borrower in the ordinary course of business (including,
without limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for Borrower and Restricted Subsidiaries of Borrower not to
exceed $250,000 at any one time outstanding, plus Investments of up to $600,000
in the aggregate in the form of loans made by Borrower to Borrower's senior
management in order to permit such Persons to purchase equity securities of
Holdings;
(n) Investments constituting any portion of the Related
Transactions;
(o) Hedging Obligations permitted or required under this
Agreement; and
(p) in addition to Investments otherwise expressly permitted
by this Section, Investments by Borrower or any of its Restricted Subsidiaries
in an aggregate amount (valued at cost) not to exceed $250,000 during the term
of this Agreement.
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7.12. Restriction of Amendments to Certain Documents.
Not amend or otherwise modify, or waive any rights, or suffer to occur
any amendment or other modification or waiver, under (a) any Related Agreement,
(b) any provisions of any agreement, instrument or document evidencing or
securing any of the Subordinated Debt, including without limitation any of the
Audax Subordinated Debt Documents or the Trust Subordinated Debt Documents, (c)
the Senarc Debt Documents or (d) any provisions of the Trust Preferred
Documents, in each case, other than amendments, modifications and waivers not
adverse to the interests of Agent or any Lender, as determined by Agent in its
reasonable judgment.
7.13. Fiscal Year.
Not change its Fiscal Year.
7.14. Financial Covenants.
7.14.1. Fixed Charge Coverage Ratio.
Not permit the Fixed Charge Coverage Ratio for any Computation
Period to be less than the applicable ratio set forth below for such Computation
Period:
Computation Fixed Charge
Period Ending Coverage Ratio
------------- --------------
March 31, 2002 1.05 : 1.0
June 30, 2002 1.05 : 1.0
September 30, 2002 1.05 : 1.0
December 31, 2002 1.10 : 1.0
March 31, 2003 1.10 : 1.0
June 30, 2003 1.10 : 1.0
September 30, 2003 1.10 : 1.0
December 31, 2003 1.10 : 1.0
March 31, 2004 and each June 30, September 30, 1.15 : 1.0
December 31 and March 31 thereafter
7.14.2. Interest Coverage Ratio.
Not permit the Interest Coverage Ratio for any Computation
Period to be less than the applicable ratio set forth below for such Computation
Period:
Computation Interest
Period Ending Coverage Ratio
------------- --------------
March 31, 2002 2.50 : 1.0
June 30, 2002 2.50 : 1.0
September 30, 2002 2.50 : 1.0
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December 31, 2002 2.60 : 1.0
March 31, 2003 2.60 : 1.0
June 30, 2003 2.80 : 1.0
September 30, 2003 2.80 : 1.0
December 31, 2003 3.00 : 1.0
March 31, 2004 3.00 : 1.0
June 30, 2004 3.25 : 1.0
September 30, 2004 3.25 : 1.0
December 31, 2004 3.50 : 1.0
March 31, 2005 3.50 : 1.0
June 30, 2005 3.50 : 1.0
September 30, 2005 3.75 : 1.0
December 31, 2005 3.75 : 1.0
March 31, 2006 and each June 30, September 30, 4.00 : 1.0
December 31 and March 31 thereafter
7.14.3. Senior Debt to EBITDA Ratio.
Not permit the Senior Debt to EBITDA Ratio as of the last day
of any Computation Period to exceed the applicable ratio set forth below for
such Computation Period:
Computation Senior Debt to
Period Ending EBITDA Ratio
------------- --------------
March 31, 2002 2.70 : 1.0
June 30, 2002 2.70 : 1.0
September 30, 2002 2.50 : 1.0
December 31, 2002 2.25 : 1.0
March 31, 2003 2.25 : 1.0
June 30, 2003 2.25 : 1.0
September 30, 2003 2.25 : 1.0
December 31, 2003 2.00 : 1.0
March 31, 2004 2.00 : 1.0
June 30, 2004 1.75 : 1.0
September 30, 2004 1.75 : 1.0
December 31, 2004 1.50 : 1.0
March 31, 2005 1.50 : 1.0
June 30, 2005 1.50 : 1.0
September 30, 2005 and each December 31, March 31, 1.25 : 1.0
June 30 and September 30 thereafter
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7.14.4. Total Debt to EBITDA Ratio.
Not permit the Total Debt to EBITDA Ratio as of the last day
of any Computation Period to exceed the applicable ratio set forth below for
such Computation Period:
Computation Total Debt to
Period Ending EBITDA Ratio
------------- ------------
March 31, 2002 3.95 : 1.0
June 30, 2002 3.95 : 1.0
September 30, 2002 3.75 : 1.0
December 31, 2002 3.50 : 1.0
March 31, 2003 3.50 : 1.0
June 30, 2003 3.50 : 1.0
September 30, 2003 3.50 : 1.0
December 31, 2003 3.25 : 1.0
March 31, 2004 3.25 : 1.0
June 30, 2004 3.00 : 1.0
September 30, 2004 3.00 : 1.0
December 31, 2004 2.75 : 1.0
March 31, 2005 2.75 : 1.0
June 30, 2005 2.75 : 1.0
September 30, 2005 and each December 31, March 31, 2.50 : 1.0
June 30 and September 30 thereafter
7.14.5. EBITDA.
Not permit the total of (i) EBITDA for any Computation Period
plus (ii) Pro Forma EBITDA for the portion of such Computation Period that is
prior to the consummation of any applicable Acquisitions, to be less than the
applicable amount set forth below for such Computation Period:
Computation
Period Ending EBITDA
------------- ------
March 31, 2002 $20,750,000
June 30, 2002 $21,000,000
September 30, 2002 $21,250,000
December 31, 2002 $21,500,000
March 31, 2003 $21,750,000
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June 30, 2003 $22,000,000
September 30, 2003 $22,250,000
December 31, 2003 $22,500,000
March 31, 2004 $22,750,000
June 30, 2004 $23,000,000
September 30, 2004 $23,250,000
December 31, 2004 $23,500,000
March 31, 2005 $23,750,000
June 30, 2005 $24,000,000
September 30, 2005 $24,250,000
December 31, 2005 $24,500,000
March 31, 2006 $24,750,000
June 30, 2006 $25,000,000
September 30, 2006 $25,250,000
December 31, 2006 $25,500,000
March 31, 2007 $25,750,000
June 30, 2007 $26,000,000
September 30, 2007 $26,250,000
December 31, 2007 $26,500,000;
provided, that the minimum required EBITDA set forth above for each Computation
Period during which an Acquisition or joint venture Investment is consummated
pursuant to Section 7.11, or that occurs after such Acquisition or joint venture
Investment has been consummated, shall be increased by an amount equal to 85% of
Pro Forma EBITDA with respect to the Restricted Subsidiary, business or division
acquired, or joint venture Investment made, at the time of such Acquisition or
consummation.
7.14.6. Capital Expenditures.
Not permit the aggregate amount of all Capital Expenditures
made by Borrower and the Restricted Subsidiaries in any Fiscal Year to exceed
the applicable amount set forth below for such Fiscal Year:
Capital
Fiscal Year Expenditures
----------- ------------
2002 $7,000,000
2003 $8,500,000
2004 $8,500,000
2005 $9,500,000
2006 $9,500,000
2007 $9,500,000
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If Borrower does not utilize the entire amount of Capital Expenditures permitted
in any Fiscal Year, Borrower may carry forward to the immediately succeeding
Fiscal Year only, 50% of such unutilized amount (with Capital Expenditures made
by Borrower in such succeeding Fiscal Year applied last to such unutilized
amount).
Section 8. Events of Default; Remedies.
8.1. Events of Default.
Each of the following shall constitute an Event of Default under this
Agreement:
8.1.1. Non-Payment of Credit.
Default in the payment when due of the principal of any Loan;
or default, and continuance thereof for two Business Days, in the payment when
due of any interest, fee or reimbursement obligation with respect to any Letter
of Credit; or default, and continuance thereof for two Business Days after
notice of such default has been given to Borrower by Agent, in the payment when
due of any other amount payable by Borrower hereunder or under any other Loan
Document.
8.1.2. Default Under Other Debt.
Any default shall occur under the terms applicable to any Debt
of any Loan Party (other than the Trust Subordinated Debt, the Audax
Subordinated Debt or the Senarc Debt) in an aggregate amount (for all such Debt
so affected and including undrawn committed or available amounts and amounts
owing to all creditors under any combined or syndicated credit arrangement)
exceeding $250,000; or any default shall occur under any of the Trust
Subordinated Debt Documents, the Trust Preferred Documents, the Audax
Subordinated Debt Documents or the Senarc Debt Documents; and, in any case such
default shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable (or require Borrower or
any Restricted Subsidiary to purchase or redeem such Debt or post cash
collateral in respect thereof) prior to its expressed maturity.
8.1.3. Bankruptcy; Insolvency.
Any Loan Party becomes insolvent or generally fails to pay, or
admits in writing its inability or refusal to pay, debts as they become due; or
any Loan Party applies for, consents to, or acquiesces in the appointment of a
trustee, receiver or other custodian such Loan Party or any property thereof, or
makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other
custodian is appointed for any Loan Party or for a substantial part of the
property of any thereof and is not discharged within 60 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
commenced in respect of any Loan Party, and if such case or proceeding is not
commenced by such Loan Party, it is consented to or acquiesced in by such Loan
Party, or remains for 60 days undismissed; or any Loan Party takes any action to
authorize, or in furtherance of, any of the foregoing.
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8.1.4. Non-Compliance with Loan Documents.
(a) Failure by Borrower to comply with or to perform any
covenant set forth in Sections 6.1.5(a), 6.3(b) and (c), 6.5, 6.7, 6.10 and 7;
(b) failure by Borrower to comply with or to perform any covenant set forth in
Sections 6.1.1, 6.1.2, 6.1.3, 6.1.4, 6.1.6 and 6.9 and continuance of such
failure described in this clause (b) for 3 Business Days; provided, that such 3
Business Day cure period shall only be available with respect to up to 3
failures to comply with or perform the covenants contained in each of such
Sections during the term hereof, after which time any further such failure shall
be an immediate Event of Default; or (c) failure by any Loan Party to comply
with or to perform any other provision of this Agreement or any other Loan
Document applicable to it (and not constituting an Event of Default under any
other provision of this Section 8) and continuance of such failure described in
this clause (c) for 30 days.
8.1.5. Representations; Warranties.
Any representation or warranty made by any Loan Party herein
or any other Loan Document is breached or is false or misleading in any material
respect, or any schedule, certificate, financial statement, report, notice or
other writing furnished by any Loan Party to Agent or any Lender in connection
herewith is false or misleading in any material respect on the date as of which
the facts therein set forth are stated or certified.
8.1.6. Pension Plans.
(a) Institution of any steps by any Person to terminate a
Pension Plan if as a result of such termination Borrower or any member of the
Controlled Group could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of
$250,000; (b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under Section 302(f) of ERISA; or (c) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Pension
Plan and the withdrawal liability (without unaccrued interest) to Multiemployer
Pension Plans as a result of such withdrawal (including any outstanding
withdrawal liability that Borrower or any member of the Controlled Group have
incurred on the date of such withdrawal) exceeds $250,000.
8.1.7. Judgments.
Final judgments which exceed $250,000 individually, or an
aggregate of $500,000 shall be rendered against any Loan Party and shall not
have been paid, discharged or vacated or had execution thereof stayed pending
appeal within 30 days after entry or filing of such judgments.
8.1.8. Invalidity of Collateral Documents.
Any Collateral Document shall cease to be in full force and
effect; or any Loan Party (or any Person by or on behalf of any Loan Party)
shall contest in any manner the validity, binding nature or enforceability of
any Collateral Document.
8.1.9. Invalidity of Subordination Provisions.
Any subordination provision in any document or instrument
governing Subordinated Debt, or any subordination provision in any guaranty by
any Loan Party of any Subordinated Debt, shall cease to be in full force and
effect, or any Person (including the holder of any applicable Subordinated Debt)
shall contest in any manner the validity, binding nature or enforceability of
any such provision.
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8.1.10. Change of Control.
(a) Sponsor and its Affiliates shall collectively cease to,
directly or indirectly, own and control at least (i) 50.1% of the outstanding
equity interests of Holdings or (ii) that percentage of the outstanding voting
equity interests of Holdings necessary at all times to elect a majority of the
board of directors (or similar governing body) of Holdings and to direct the
management policies and decisions of Holdings, (b) any Person or "group" (within
the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934
as in effect on the Closing Date) other than Sponsor or any of its Affiliates
shall have acquired a greater beneficial ownership in Holdings' voting equity
interests than that held collectively by Sponsor and its Affiliates, (c) a
majority of Holdings' board of directors (or similar governing body) shall cease
to consist of the directors (or similar parties) of Holdings on the Closing Date
(after giving effect to the Related Transactions) and other directors (or
similar parties) whose nomination for election to Holdings' board of directors
(or similar governing body) is recommended by at least a majority of the
foregoing described directors (or similar parties), (d) Holdings shall cease to
directly own and control 100% of each class of the outstanding equity interests
of Borrower, (e) Borrower shall cease to, directly or indirectly, own and
control 100% of each class of the outstanding equity interests of each
Restricted Subsidiary, other than directors' qualifying shares or (f) a "Change
of Control" shall occur, as defined in the Audax Subordinated Debt Documents.
8.1.11. Dissolution of Trust.
An "Early Dissolution Event" (as defined in the Trust
Agreement) shall occur with respect to the Trust.
8.2. Remedies.
If any Event of Default described in Section 8.1.3 shall occur in
respect of Borrower, the Commitments shall immediately terminate and the Loans
and all other Obligations hereunder shall become immediately due and payable and
Borrower shall become immediately obligated to cash collateralize all Letters of
Credit in a manner acceptable to Agent, all without presentment, demand, protest
or notice of any kind; and, if any other Event of Default shall occur and be
continuing, Agent (upon the written request of Required Lenders) shall declare
the Commitments to be terminated in whole or in part and/or declare all or any
part of the Loans and other Obligations hereunder to be due and payable and/or
demand that Borrower immediately cash collateralize all or any Letters of Credit
in a manner acceptable to Agent, whereupon the Commitments shall immediately
terminate (or be reduced, as applicable) and/or the Loans and other Obligations
hereunder shall become immediately due and payable (in whole or in part, as
applicable) and/or Borrower shall immediately become obligated to cash
collateralize the Letters of Credit (all or any, as applicable) in a manner
acceptable to Agent, all without presentment, demand, protest or notice of any
kind. Agent shall promptly advise Borrower of any such declaration, but failure
to do so shall not impair the effect of such declaration. Notwithstanding the
foregoing, the effect as an Event of Default of any event described in Section
8.1.1 or Section 8.1.3 may only be waived by the written concurrence of each
Lender, and the effect as an Event of Default of any other event described in
this Section 8 may be waived by the written concurrence of Required Lenders. Any
cash collateral delivered hereunder shall be held by Agent (without liability
for interest thereon) and applied to Obligations arising in connection with any
drawing under a Letter of Credit. After the expiration or termination of all
Letters of Credit, such cash collateral shall be applied by Agent to any
remaining Obligations hereunder and any excess shall be delivered to Borrower or
as a court of competent jurisdiction may elect.
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Section 9. Agent.
9.1. Appointment; Authorization.
(a) Each Lender hereby irrevocably appoints, designates and
authorizes Agent to take such action on its behalf under the provisions of this
Agreement and each other Loan Document and to exercise such powers and perform
such duties as are expressly delegated to it by the terms of this Agreement or
any other Loan Document, together with such powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, Agent shall not have any duty or
responsibility except those expressly set forth herein, nor shall Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent.
(b) Issuing Lender shall act on behalf of Lenders (according
to their Pro Rata Revolving Share) with respect to any Letters of Credit issued
by it and the documents associated therewith. Issuing Lender shall have all of
the benefits and immunities (i) provided to Agent in this Section 9 with respect
to any acts taken or omissions suffered by Issuing Lender in connection with
Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to such Letters of
Credit as fully as if the term "Agent", as used in this Section 9, included
Issuing Lender with respect to such acts or omissions and (ii) as additionally
provided in this Agreement with respect to Issuing Lender.
9.2. Delegation of Duties.
Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
Agent shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects with reasonable care.
9.3. Limited Liability.
None of Agent or any of its directors, officers, employees or agents
shall (a) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except to the extent resulting from its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction), or (b) be responsible in any manner to any Lender for any
recital, statement, representation or warranty made by Borrower or any
Subsidiary or Affiliate of Borrower, or any other Loan Party, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document (or the creation,
perfection or priority of any Lien or security interest therein), or for any
failure of Borrower or any other party to any Loan Document to perform its
Obligations hereunder or thereunder. Agent shall not be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of any
of the agreements contained in, or conditions of, this Agreement or any other
Loan Document, or to inspect the properties, books or records of Borrower or any
of Borrower's Subsidiaries or Affiliates or any other Loan Party.
9.4. Reliance.
Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message,
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statement or other document believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrower), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of Required
Lenders as it deems appropriate and, if it so requests, confirmation from
Lenders of their obligation to indemnify Agent against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of Required Lenders and such request and
any action taken or failure to act pursuant thereto shall be binding upon each
Lender.
9.5. Notice of Default.
Agent shall not be deemed to have knowledge or notice of the occurrence
of any Event of Default or Default except with respect to defaults in the
payment of principal, interest and fees required to be paid to Agent for the
account of Lenders, unless Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Event of Default
or Default and stating that such notice is a "notice of default". Agent will
notify Lenders of its receipt of any such notice. Agent shall take such action
with respect to such Event of Default or Default as may be requested by Required
Lenders in accordance with Section 8; provided that unless and until Agent has
received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Event of
Default or Default as it shall deem advisable or in the best interest of
Lenders.
9.6. Credit Decision.
Each Lender acknowledges that Agent has not made any representation or
warranty to it, and that no act by Agent hereafter taken, including any review
of the affairs of the Loan Parties, shall be deemed to constitute any
representation or warranty by Agent to any Lender. Each Lender represents to
Agent that it has, independently and without reliance upon Agent and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties, and made its own decision to enter into this Agreement and to extend
credit to Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon Agent and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Loan
Parties. Except for notices, reports and other documents expressly herein
required to be furnished to Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial or other
condition or creditworthiness of the Loan Parties which may come into the
possession of Agent.
9.7. Indemnification.
Whether or not the transactions contemplated hereby are consummated,
each Lender shall indemnify upon demand Agent and its directors, officers,
employees and agents (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so), pro rata, from and
against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including Legal Costs, except to the extent any thereof
result from the applicable Person's own gross negligence or willful misconduct,
as determined by a court of competent jurisdiction. Without limitation of the
foregoing, each Lender shall reimburse Agent upon demand for its ratable share
of any costs or out-of-pocket expenses (including Legal Costs) incurred by Agent
in connection with the
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preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section 9.7 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit, any foreclosure under, or modification, release or discharge of, any or
all of the Collateral Documents, termination of this Agreement and the
resignation or replacement of Agent.
9.8. Agent Individually.
Madison and its Affiliates may make loans to, issue letters of credit
for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with Borrower and its Subsidiaries and Affiliates and any
other Loan Party as though Madison were not Agent hereunder and without notice
to or consent of any Lender. Each Lender acknowledges that, pursuant to such
activities, Madison or its Affiliates may receive information regarding Borrower
or its Subsidiaries or its Affiliates or any other Loan Party (including
information that may be subject to confidentiality obligations in favor of
Borrower or such Subsidiary or Affiliate or such other Loan Party) and
acknowledge that Agent shall be under no obligation to provide such information
to them. With respect to their Loans (if any), Madison and its Affiliates shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though Madison were not Agent, and the terms "Lender" and
"Lenders" include Madison and its Affiliates, to the extent applicable, in their
individual capacities.
9.9. Successor Agent.
Agent may resign as Agent upon 30 days' notice to Lenders. If Agent
resigns under this Agreement, Required Lenders shall, with (so long as no Event
of Default exists) the consent of Borrower (which shall not be unreasonably
withheld or delayed), appoint from among Lenders a successor agent for Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of Agent, Agent may appoint, after consulting with Lenders and
Borrower, a successor agent from among Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Agent and the term "Agent"
shall mean such successor agent, and the retiring Agent's appointment, powers
and duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 and Sections 10.4 and 10.5
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement. If no successor agent has
accepted appointment as Agent by the date which is 30 days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as Required Lenders appoint a
successor agent as provided for above.
9.10. Collateral Matters.
Lenders irrevocably authorize Agent, at its option and in its
discretion, (a) to release any Lien granted to or held by Agent under any
Collateral Document (i) upon termination of the Commitments and payment in full
of all Loans and all other Obligations and the expiration or termination of all
Letters of Credit; (ii) constituting property sold or to be sold or disposed of
as part of or in connection with any disposition permitted hereunder; or (iii)
subject to Section 10.1, if approved, authorized or ratified in writing by
Required Lenders or all Lenders, as applicable; or (b) to subordinate its
interest in any Collateral to any holder of a Lien on such Collateral which is
permitted by clause (d)(i) or (d)(iii) of Section 7.2 (it being understood that
Agent may conclusively rely on a certificate from Borrower in determining
whether the Debt secured by any such Lien is permitted by Section 7.1(b)). Upon
request by
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Agent at any time, Lenders will confirm in writing Agent's authority to release,
or subordinate its interest in, particular types or items of Collateral pursuant
to this Section 9.10.
9.11. Documentation Agent.
The Documentation Agent identified in the introductory paragraph of
this Agreement, in its capacity as such, shall have no rights, powers, duties or
responsibilities and no rights, powers, duties or responsibilities shall be read
into this Agreement or any other Loan Document or otherwise exist on behalf of
or against such entity, in its capacity as such. If the Documentation Agent
resigns as such agent, no successor documentation agent shall be appointed.
Section 10. Miscellaneous.
10.1. Waiver; Amendments.
No delay on the part of Agent or any Lender in the exercise of any
right, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise by any of them of any right, power or remedy preclude other
or further exercise thereof, or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of this Agreement or the Notes shall in any event be effective unless
the same shall be in writing and approved by Lenders having aggregate Pro Rata
Shares of not less than the aggregate Pro Rata Shares expressly designated
herein with respect thereto or, in the absence of such designation as to any
provision of this Agreement, by Required Lenders, and then any such amendment,
modification, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No amendment, modification, waiver
or consent shall increase any Commitment, extend the date scheduled for payment
of any principal of (except as set forth below) or interest on the Loans or any
fees payable hereunder or reduce the principal amount of any Loan, the rate of
interest thereon or any fees payable hereunder, without, in each case, the
consent of each Lender affected thereby. No amendment, modification, waiver or
consent shall release any party from its guaranty under the Guarantee and
Collateral Agreement or all or any substantial part of the Collateral granted
under the Collateral Documents, change the definition of Required Lenders,
change any provision of this Section 10.1 or reduce the aggregate Pro Rata Share
required to effect any amendment, modification, waiver or consent, without, in
each case, the consent of all Lenders. No provision of Sections 2.10.2 or 2.10.3
with respect to the timing or application of mandatory prepayments of the Loans
shall be amended, modified or waived without the consent of Lenders having a
majority of the aggregate Pro Rata Shares of the Term Loans affected thereby. No
provision of Section 9 or other provision of this Agreement affecting Agent in
its capacity as such shall be amended, modified or waived without the consent of
Agent. No provision of this Agreement relating to the rights or duties of
Issuing Lender in its capacity as such shall be amended, modified or waived
without the consent of Issuing Lender.
10.2. Notices.
Except as otherwise provided in Sections 2.2.2 and 2.2.3, all notices
hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown on Annex II or at such other
address as such party may, by written notice received by the other parties, have
designated as its address for such purpose. Notices sent by facsimile
transmission shall be deemed to have been given when sent; notices sent by mail
shall be deemed to have been given three Business Days after the date when sent
by registered or certified mail, postage prepaid; and notices sent by hand
delivery or overnight courier service shall be deemed to have been given when
received. For purposes of Sections 2.2.2 and 2.2.3, Agent shall be entitled to
rely on telephonic instructions from any person that Agent in good faith
believes is an authorized officer or employee of Borrower, and Borrower shall
hold Agent and each other Lender harmless from any loss, cost or expense
resulting from any such reliance.
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10.3. Computations.
Unless otherwise specifically provided herein, any accounting term used
in this Agreement (including in Section 7.14 or any related definition) shall
have the meaning customarily given such term in accordance with GAAP, and all
financial computations (including pursuant to Section 7.14 and the related
definitions, and with respect to the character or amount of any asset or
liability or item of income or expense, or any consolidation or other accounting
computation) hereunder shall be computed in accordance with GAAP consistently
applied; provided that if Borrower notifies Agent that Borrower wishes to amend
any covenant in Section 7.14 (or any related definition) to eliminate or to take
into account the effect of any change in GAAP on the operation of such covenant
(or if Agent notifies Borrower that Required Lenders wish to amend Section 7.14
(or any related definition) for such purpose), then Borrower's compliance with
such covenant shall be determined on the basis of GAAP in effect immediately
before the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant (or related definition) is amended in a manner
satisfactory to Borrower and Required Lenders. The explicit qualification of
terms or computations by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing.
10.4. Costs; Expenses.
Borrower agrees to pay on demand all reasonable out-of-pocket costs and
expenses of Agent (including Legal Costs) in connection with the preparation,
execution, syndication, delivery and administration (including perfection and
protection of Collateral) of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendment, supplement or waiver to any
Loan Document), and all reasonable out-of-pocket costs and expenses (including
Legal Costs) incurred by Agent and each Lender after an Event of Default in
connection with the collection of the Obligations and enforcement of this
Agreement, the other Loan Documents or any such other documents. In addition,
Borrower agrees to pay, and to save Agent and Lenders harmless from all
liability for, any fees of Borrower's auditors in connection with any reasonable
exercise by Agent and Lenders of their rights pursuant to Section 6.2. All
Obligations provided for in this Section 10.4 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit and termination of this Agreement with respect to costs and expenses
incurred prior to such repayment, cancellation, expiration or termination).
10.5. Indemnification by Borrower.
In consideration of the execution and delivery of this Agreement by
Agent and Lenders and the agreement to extend the Commitments provided
hereunder, Borrower hereby agrees to indemnify, exonerate and hold Agent, each
Lender and each of the officers, directors, employees, Affiliates and agents of
Agent and each Lender (each a "Lender Party") free and harmless from and against
any and all actions, causes of action, suits, losses, liabilities, damages and
expenses, including Legal Costs (collectively, the "Indemnified Liabilities"),
incurred by Lender Parties or any of them as a result of, or arising out of, or
relating to (a) any tender offer, merger, purchase of equity interests, purchase
of assets (including the Related Transactions) or other similar transaction
financed or proposed to be financed in whole or in part, directly or indirectly,
with the proceeds of any of the Loans, (b) the use, handling, release, emission,
discharge, transportation, storage, treatment or disposal of any Hazardous
Substance at any property owned or leased by any Loan Party, (c) any violation
of any Environmental Laws with respect to conditions at any property owned or
leased by any Loan Party or the operations conducted thereon, (d) the
investigation, cleanup or remediation of offsite locations at which any Loan
Party or its respective predecessors are alleged to have directly or indirectly
disposed of hazardous substances or (e) the execution, delivery, performance or
enforcement of this Agreement or any other Loan Document by any Lender Party,
except to the extent any such Indemnified Liabilities result from the applicable
Lender Party's own gross negligence or willful misconduct as determined by a
court of competent
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jurisdiction. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. All Obligations provided
for in this Section 10.5 shall survive repayment of the Loans, cancellation of
the Notes, expiration or termination of the Letters of Credit, any foreclosure
under, or any modification, release or discharge of, any or all of the
Collateral Documents and termination of this Agreement.
10.6. Marshaling; Payments Set Aside.
Neither Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Borrower or any other Person or against or in payment of
any or all of the Obligations hereunder. To the extent that Borrower makes a
payment or payments to Agent or any Lender, or Agent or any Lender enforces its
Liens or exercises its rights of set-off, and such payment or payments or the
proceeds of such enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by Agent in its discretion)
to be repaid to a trustee, receiver or any other party in connection with any
bankruptcy, insolvency or similar proceeding, or otherwise, then (a) to the
extent of such recovery, the obligation hereunder or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not
occurred and (b) each Lender severally agrees to pay to Agent upon demand its
ratable share of the total amount so recovered from or repaid by Agent.
10.7. Nonliability of Lenders.
The relationship between Borrower on the one hand and Lenders and Agent
on the other hand shall be solely that of borrower and lender. Neither Agent nor
any Lender shall have any fiduciary responsibility to Borrower. Neither Agent
nor any Lender undertakes any responsibility to Borrower to review or inform
Borrower or any matter in connection with any phase of Borrower's business or
operations. Execution of this Agreement by Borrower constitutes a full, complete
and irrevocable release of any and all claims which Borrower may have at law or
in equity in respect of all prior discussions and understandings, oral or
written, relating to the subject matter of this Agreement and the other Loan
Documents. Neither Agent nor any Lender shall have any liability with respect
to, and Borrower hereby waives, releases and agrees not to ▇▇▇ for, any special,
indirect, punitive or consequential damages or liabilities.
10.8. Assignments; Participations.
10.8.1. Assignments.
(a) Any Lender may at any time assign to one or more Persons
(any such Person, an "Assignee") all or any portion of such Lender's Loans and
Commitments, with the prior written consent of Agent, Issuing Lender (for an
assignment of the Revolving Loans and the Revolving Loan Commitment) and, so
long as no Event of Default exists, Borrower (which consents shall not be
unreasonably withheld or delayed and shall not be required for an assignment by
a Lender to a Lender or an Affiliate of a Lender). Except as Agent may otherwise
agree, any such assignment (other than an assignment by a Lender to a Lender or
an Affiliate of a Lender) shall be in a minimum aggregate amount equal to
$5,000,000 or, if less, the Commitment or the principal amount of the Loan being
assigned. Borrower and Agent shall be entitled to continue to deal solely and
directly with such Lender in connection with the interests so assigned to an
Assignee until Agent shall have received and accepted an effective Assignment
Agreement executed, delivered and fully completed by the applicable parties
thereto and a processing fee of $3,500 payable by such Lender (and not
reimbursable by Borrower); provided, that no such fee will be payable in
connection with an assignment by a Lender to a Lender or an Affiliate of a
Lender. No
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assignment may be made to any Person if at the time of such assignment Borrower
would be obligated to pay, or could reasonably be expected in the future to pay,
any greater amount under Section 3 to the Assignee than Borrower is then
obligated to pay to the assigning Lender under such Sections (and if any
assignment is made in violation of the foregoing, Borrower will not be required
to pay such greater amounts). Any attempted assignment not made in accordance
with this Section 10.8.1 shall be treated as the sale of a participation under
Section 10.8.2. Borrower shall be deemed to have granted its consent to any
assignment requiring its consent hereunder unless Borrower has expressly
objected to such assignment within five Business Days after receipt of notice
thereof.
(b) From and after the date on which the conditions described
above have been met, (i) such Assignee shall be deemed automatically to have
become a party hereto and, to the extent that rights and obligations hereunder
have been assigned to such Assignee pursuant to such Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and (ii) the assigning
Lender, to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment Agreement, shall be released from its rights
(other than its indemnification rights) and obligations hereunder. Upon the
request of the Assignee (and, as applicable, the assigning Lender) pursuant to
an effective Assignment Agreement, Borrower shall execute and deliver to Agent
for delivery to the Assignee (and, as applicable, the assigning Lender) a Note
in the principal amount of the Assignee's Pro Rata Share of the Revolving Loan
Commitment plus the principal amount of the Assignee's Term Loans (and, as
applicable, a Note in the principal amount of the Pro Rata Share of the
Revolving Loan Commitment retained by the assigning Lender plus the principal
amount of the Term Loans retained by the assigning Lender). Each such Note shall
be dated the effective date of such assignment. Upon receipt by the assigning
Lender of such Note, the assigning Lender shall return to Borrower any prior
Note held by it.
(c) Agent, acting solely for this purpose as an agent of
Borrower, shall maintain at one of its offices in the United States a copy of
each Assignment Agreement delivered to it and a register for the recordation of
the names and addresses of each Lender, and the Commitments of, and principal
amount of the Loans owing to, such Lender pursuant to the terms hereof. The
entries in such register shall be conclusive, and Borrower, Agent and Lenders
may treat each Person whose name is recorded therein pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. Such register shall be available for inspection by
Borrower and any Lender, at any reasonable time upon reasonable prior notice to
Agent.
(d) Notwithstanding the foregoing provisions of this Section
10.8.1 or any other provision of this Agreement, (i) any Lender may at any time
pledge or assign a security interest in all or any portion of its rights under
the Agreement and the other Loan Documents, including without limitation its
Loans and its Note, as collateral security to secure obligations to a Federal
Reserve Bank or, as applicable, to such Lender's trustee or agent for the
benefit of holders of obligations owed, or securities issued, by such Lender
(but no such pledge or assignment shall release any Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto; provided, that a trustee or agent described above may become
a Lender hereunder by complying with the provisions of Section 10.8.1(a)).
10.8.2. Participations.
Any Lender may at any time sell to one or more Persons
participating interests in its Loans, Commitments or other interests hereunder
(any such Person, a "Participant"). In the event of a sale by a Lender of a
participating interest to a Participant, (a) such Lender's obligations hereunder
shall remain unchanged for all purposes, (b) Borrower and Agent shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations hereunder and (c) all amounts payable by Borrower shall
be determined as if such Lender had not sold such participation and shall be
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paid directly to such Lender. No Participant shall have any direct or indirect
voting rights hereunder except with respect to any event described in Section
10.1 expressly requiring the unanimous vote of all Lenders or, as applicable,
all affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement which such Lender enters
into with any Participant. Borrower agrees that if amounts outstanding under
this Agreement are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement and with respect to
any Letter of Credit to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement; provided
that such right of set-off shall be subject to the obligation of each
Participant to share with Lenders, and Lenders agree to share with each
Participant, as provided in Section 2.12.5. Borrower also agrees that each
Participant shall be entitled to the benefits of Section 3 as if it were a
Lender (provided that no Participant shall receive any greater compensation
pursuant to Section 3 than would have been paid to the participating Lender if
no participation had been sold).
10.9. Confidentiality.
Agent and each Lender agree to use commercially reasonable efforts
(equivalent to the efforts Agent or such Lender applies to maintain the
confidentiality of its own confidential information) to maintain as confidential
all information provided to them by any Person with respect to the Loan Parties
and designated as confidential, except that Agent and each Lender may disclose
such information (a) to their Affiliates, provided that each such Affiliate
agrees to comply with this Section 10.9; (b) to Persons employed or engaged by
Agent or such Lender in evaluating, approving, structuring or administering the
Loans and the Commitments, provided that each such Person agrees to comply with
this Section 10.9; (c) to any assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this
Section 10.9 (and any such assignee or participant or potential assignee or
participant may disclose such information to Persons employed or engaged by them
as described in clauses (a) through (g) hereof); (d) as required or requested by
any federal or state regulatory authority or examiner, or any insurance industry
association, or as reasonably believed by Agent or such Lender to be compelled
by any court decree, subpoena or legal or administrative order or process; (e)
as, on the advice of Agent's or such Lender's counsel, is required by law; (f)
in connection with the exercise of any right or remedy under the Loan Documents
or in connection with any litigation to which Agent or such Lender is a party;
(g) to any nationally recognized rating agency that requires access to
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender; or (h) that ceases to be confidential
through no fault of Agent or any Lender. Notwithstanding the foregoing, Agent
and each Lender agrees that it will not disclose any information provided to it
by any Person with respect to the Loan Parties and designated as confidential to
any Person that is in direct competition with Borrower and its Subsidiaries.
Borrower consents to the publication by Agent or any Lender of a tombstone or
similar advertising material relating to the financing transactions contemplated
by this Agreement, and Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
10.10. Captions.
Captions used in this Agreement are for convenience only and shall not
affect the construction of this Agreement.
10.11. Nature of Remedies.
All Obligations of Borrower and rights of Agent and Lenders expressed
herein or in any other Loan Document shall be in addition to and not in
limitation of those provided by applicable law. No failure to exercise and no
delay in exercising, on the part of Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of
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any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
10.12. Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement. Receipt by telecopy of any executed
signature page to this Agreement or any other Loan Document shall constitute
effective delivery of such signature page.
10.13. Severability.
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
10.14. Entire Agreement.
This Agreement, together with the other Loan Documents, embodies the
entire agreement and understanding among the parties hereto and supersedes all
prior or contemporaneous agreements and understandings of such Persons, verbal
or written, relating to the subject matter hereof and thereof (except as relates
to the fees described in Section 2.8.3) and any prior arrangements made with
respect to the payment by Borrower of (or any indemnification for) any fees,
costs or expenses payable to or incurred (or to be incurred) by or on behalf of
Agent or Lenders.
10.15. Successors; Assigns.
This Agreement shall be binding upon Borrower, Lenders and Agent and
their respective successors and assigns, and shall inure to the benefit of
Borrower, Lenders and Agent and the successors and assigns of Lenders and Agent.
No other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents. Borrower may not assign or transfer any of
its rights or Obligations under this Agreement without the prior written consent
of Agent and each Lender.
10.16. Governing Law.
THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES.
10.17. Forum Selection; Consent to Jurisdiction.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF
-▇▇-
▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ AND OF THE UNITED STATES DISTRICT COURT FOR
THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE. BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
10.18. Waiver of Jury Trial.
EACH OF BORROWER, AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
[signature pages follow]
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The parties hereto have caused this Agreement to be duly executed and
delivered by their duly authorized officers as of the date first set forth
above.
AMERICAN COIN MERCHANDISING, INC.
By: /s/ W. ▇▇▇▇ ▇▇▇▇
-------------------------------------------
Title: Senior Vice President and Chief
Financial Officer
MADISON CAPITAL FUNDING LLC,
as Agent and a Lender
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Title: Managing Director
THE ROYAL BANK OF SCOTLAND PLC, NEW YORK
BRANCH, as Documentation Agent and a Lender
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Title: Director
COMERICA BANK, as a Lender
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Title: Managing Director
ANTARES CAPITAL CORPORATION, as a Lender
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Title: Managing Director
MIDLAND NATIONAL LIFE INSURANCE COMPANY,
as a Lender
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President, Midland Advisors Company
as agent for Midland National Life Insurance
Company
-67-
EXHIBIT A
Form of Assignment Agreement
This Assignment Agreement (this "Assignment Agreement") is entered into
as of __________ by and between the Assignor named on the signature page hereto
("Assignor") and the Assignee named on the signature page hereto ("Assignee").
Reference is made to the
Credit Agreement dated as of February 11, 2002 (as
amended or otherwise modified from time to time, the "
Credit Agreement") among
American Coin Merchandising, Inc. ("Borrower"), the financial institutions party
thereto from time to time, as Lenders, Madison Capital Funding LLC, as Agent and
The Royal Bank of Scotland plc, New York Branch, as Documentation Agent.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Agreement.
Assignor and Assignee agree as follows:
1. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases
and assumes from Assignor the interests set forth on the schedule attached
hereto, in and to Assignor's rights and obligations under the Agreement as of
the Effective Date (as defined below). Such purchase and sale is made without
recourse, representation or warranty except as expressly set forth herein.
2. Assignor (i) represents that immediately prior to the Effective Date, that it
is the legal and beneficial owner of the interests assigned hereunder free and
clear of any adverse claim, (ii) makes no other representation or warranty and
assumes no responsibility with respect to any statement, warranties or
representations made in or in connection with the Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Agreement, any Loan Documents or any other instrument or document furnished
pursuant thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or any
other Person or the performance or observance by any Loan Party of its
Obligations under the Agreement or the Loan Documents or any other instrument or
document furnished pursuant thereto.
3. Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment Agreement; (ii) confirms that it has received a copy of the
Agreement, together with copies of the most recent financial statements
delivered pursuant thereto and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment Agreement; (iii) agrees that it will, independently and without
reliance upon Agent, Assignor or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the Agreement; (iv)
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers under the Agreement as are delegated to Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (v)
agrees that it will perform in accordance with their terms all obligations which
by the terms of the Agreement are required to be performed by it as a Lender;
(vi) represents that on the date of this Assignment Agreement it is not
presently aware of any facts that would cause it to make a claim under the
Agreement; and (vii) if organized under the laws of a jurisdiction outside the
United States, attaches the forms prescribed by the Internal Revenue Service of
the United States, which have been duly executed, certifying as to Assignee's
exemption from United States withholding taxes with respect to all payments to
be made to Assignee under the Agreement or such other documents as are necessary
to indicate that all such payments are subject to such tax at a rate reduced by
an applicable tax treaty.
4. The effective date for this Assignment Agreement shall be as set forth on the
schedule attached hereto (the "Effective Date"). Following the execution of this
Assignment Agreement, it will be delivered to Agent for acceptance and recording
by Agent pursuant to the Agreement.
A-1
5. Upon such acceptance and recording, from and after the Effective Date, (i)
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment Agreement, have the rights and obligations of a Lender under the
Agreement and (ii) Assignor shall, to the extent provided in this Assignment
Agreement, relinquish its rights and be released from its obligations under the
Agreement.
6. Upon such acceptance and recording, from and after the Effective Date, Agent
shall make all payments in respect of the interest assigned hereby (including
payments of principal, interest, fees and other amounts) to Assignee. Assignor
and Assignee shall make all appropriate adjustments in payments for periods
prior to the Effective Date by Agent or with respect to the making of this
assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
A-2
The parties hereto have caused this Agreement to be executed and
delivered as of the date first written above.
ASSIGNOR:
-------------------------------------------
By:
---------------------------------------
Title:
------------------------------------
ASSIGNEE:
-------------------------------------------
By:
---------------------------------------
Title:
------------------------------------
Consented to:
MADISON CAPITAL FUNDING LLC,
as Agent
By:
---------------------------------------
Title:
------------------------------------
[AMERICAN COIN MERCHANDISING, INC.
BY:
---------------------------------------
TITLE:
------------------------------------
A-3
Schedule to Assignment Agreement
Assignor:
--------------
Assignee:
--------------
Effective Date:
--------------
Credit Agreement dated as of February 11, 2002 among
American Coin Merchandising, Inc., as Borrower, the
financial institutions party thereto from time to
time, as Lenders, Madison Capital Funding LLC, as
Agent and The Royal Bank of Scotland plc, New York
Branch, as Documentation Agent
Interests Assigned:
Revolving Loan
Commitment/Loan Commitment Term A Loan Term B Loan
--------------- --------------- ----------- -----------
Assignor Amounts $ $ $
Amounts Assigned $ $ $
Assignee Amounts
(post-assignment) $ $ $
Assignee Information:
Address for Notices: Address for Payments:
----------------------------------
Bank:
---------------------------------- ---------------------
Attention: ABA #:
-------------------- ---------------------
Telephone: Account #:
-------------------- ---------------------
Telecopy: Reference:
-------------------- ---------------------
A-4
EXHIBIT B
Form of Compliance Certificate
Please refer to the
Credit Agreement dated as of February 11, 2002 (as
amended or otherwise modified from time to time, the "
Credit Agreement") among
the undersigned ("Borrower"), the financial institutions party thereto, Madison
Capital Funding LLC, as Agent and The Royal Bank of Scotland plc, New York
Branch, as Documentation Agent. This certificate (this "Certificate"), together
with supporting calculations attached hereto, is delivered to Agent and Lenders
pursuant to the terms of the
Credit Agreement. Terms used but not otherwise
defined herein are used herein as defined in the
Credit Agreement.
[ENCLOSED HEREWITH IS A COPY OF THE [ANNUAL AUDITED/QUARTERLY/MONTHLY]
REPORT OF BORROWER AS AT ________________ (THE "COMPUTATION DATE"), WHICH REPORT
FAIRLY PRESENTS IN ALL MATERIAL RESPECTS THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS [(SUBJECT TO THE ABSENCE OF FOOTNOTES AND TO NORMAL YEAR-END
ADJUSTMENTS)] OF BORROWER AS OF THE COMPUTATION DATE AND HAS BEEN PREPARED IN
ACCORDANCE WITH GAAP CONSISTENTLY APPLIED.]
Borrower hereby certifies and warrants that the computations set forth
on the schedule attached hereto correspond to the ratios and/or financial
restrictions contained in the Credit Agreement and such computations are true
and correct as at the Computation Date.
Borrower further certifies that no Event of Default or Default has
occurred and is continuing.
Borrower has caused this Certificate to be executed and delivered by
its officer thereunto duly authorized on _____________.
AMERICAN COIN MERCHANDISING, INC.
By:
-------------------------------------
Title:
----------------------------------
B-1
EXHIBIT C
Form of Availability Certificate
Please refer to the Credit Agreement dated as of February 11, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement") among
the undersigned ("Borrower"), the financial institutions party thereto from time
to time, as Lenders, Madison Capital Funding LLC, as Agent and The Royal Bank of
Scotland plc, New York Branch, as Documentation Agent. This certificate (this
"Certificate"), together with supporting calculations attached hereto, is
delivered to Agent and Lenders pursuant to the terms of the Credit Agreement.
Capitalized terms used but not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.
Borrower hereby certifies and warrants that at the close of business on
__________________ (the "Calculation Date"), Borrowing Availability was
$_____________, computed as set forth on the schedule attached hereto.
Borrower has caused this Certificate to be executed and delivered by
its officer thereunto duly authorized on _____________.
AMERICAN COIN MERCHANDISING, INC.
By:
-------------------------------------
Title:
----------------------------------
C-1
EXHIBIT D
Form of Note
February 11, 2002
$ Chicago, Illinois
---------------
The undersigned ("Borrower"), for value received, promises to pay to
the order of _____________ ("Lender") at the principal office of Madison Capital
Funding LLC (the "Agent") in Chicago, Illinois the aggregate unpaid amount of
all Loans made to Borrower by Lender pursuant to the Credit Agreement referred
to below, such principal amount to be payable on the dates set forth in the
Credit Agreement.
Borrower further promises to pay interest on the unpaid principal
amount of each Loan from the date of such Loan until such Loan is paid in full,
payable at the rate(s) and at the time(s) set forth in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of the
United States of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Credit Agreement, dated as of February 11, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement"; terms
not otherwise defined herein are used herein as defined in the Credit
Agreement), among Borrower, the financial institutions (including Lender) party
thereto from time to time, Agent and The Royal Bank of Scotland plc, New York
Branch, as Documentation Agent, to which Credit Agreement reference is hereby
made for a statement of the terms and provisions under which this Note may or
must be paid prior to its due date or its due date accelerated.
This Note is made under and governed by the laws of the State of
Illinois applicable to contracts made and to be performed entirely within such
State.
AMERICAN COIN MERCHANDISING, INC.
By:
-------------------------------------
Title:
----------------------------------
D-1