EXHIBIT 10.27
EXECUTION COPY
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JOSTENS, INC.
____________________________________
CREDIT AGREEMENT
dated as of May 10, 2000
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$645,000,000
Senior Secured Credit Facility
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CHASE SECURITIES INC.,
DEUTSCHE BANK SECURITIES INC., and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
as Co-Lead Arrangers,
BANKERS TRUST COMPANY,
as Syndication Agent,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
as Documentation Agent,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS................................................................ 2
1.1 Defined Terms............................................................... 2
1.2 Other Definitional Provisions............................................... 22
SECTION 2. TERM LOANS................................................................. 23
2.1 Term Loans.................................................................. 23
2.2 Repayment of Term Loans..................................................... 23
2.3 Use of Proceeds............................................................. 23
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS........................... 23
3.1 Revolving Credit Commitments................................................ 23
3.2 Commitment Fee.............................................................. 24
3.3 Proceeds of Revolving Credit Loans.......................................... 24
3.4 Swing Line Commitment....................................................... 24
3.5 Issuance of Letters of Credit............................................... 25
3.6 Participating Interests..................................................... 26
3.7 Procedure for Opening Letters of Credit..................................... 26
3.8 Payments in Respect of Letters of Credit.................................... 26
3.9 Letter of Credit Fees....................................................... 27
3.10 Letter of Credit Reserves................................................... 27
3.11 Further Assurances.......................................................... 28
3.12 Obligations Absolute........................................................ 28
3.13 Assignments................................................................. 29
3.14 Participations.............................................................. 29
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS..................................... 29
4.1 Procedure for Borrowing..................................................... 29
4.2 Conversion and Continuation Options......................................... 30
4.3 Changes of Commitment Amounts............................................... 30
4.4 Optional and Mandatory Prepayments; Repayments of Term Loans................ 31
4.5 Interest Rates and Payment Dates............................................ 35
4.6 Computation of Interest and Fees............................................ 35
4.7 Certain Fees................................................................ 35
4.8 Inability to Determine Interest Rate........................................ 36
4.9 Pro Rata Treatment and Payments............................................. 36
4.10 Illegality.................................................................. 38
4.11 Requirements of Law......................................................... 39
4.12 Indemnity................................................................... 41
4.13 Repayment of Loans; Evidence of Debt........................................ 41
4.14 Replacement of Lenders...................................................... 42
4.15 Appointment of the Company and Reliance on Representation of the Company.... 43
SECTION 5. REPRESENTATIONS AND WARRANTIES............................................. 43
5.1 Financial Condition......................................................... 43
5.2 No Change................................................................... 44
5.3 Existence; Compliance with Law.............................................. 44
5.4 Power; Authorization........................................................ 44
5.5 Enforceable Obligations..................................................... 45
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Page
5.6 No Legal Bar............................................................................ 45
5.7 No Material Litigation.................................................................. 45
5.8 Investment Company Act.................................................................. 45
5.9 Federal Regulation...................................................................... 46
5.10 No Default.............................................................................. 46
5.11 Taxes................................................................................... 46
5.12 Subsidiaries............................................................................ 46
5.13 Ownership of Property; Liens............................................................ 46
5.14 ERISA................................................................................... 47
5.15 Collateral Documents.................................................................... 47
5.16 Copyrights, Patents, Permits, Trademarks and Licenses................................... 48
5.17 Environmental Matters................................................................... 48
5.18 Accuracy and Completeness of Information................................................ 49
5.19 Year 2000............................................................................... 49
SECTION 6. CONDITIONS PRECEDENT................................................................... 50
6.1 Conditions to Initial Loans and Letters of Credit....................................... 50
6.2 Conditions to All Loans and Letters of Credit........................................... 53
SECTION 7. AFFIRMATIVE COVENANTS.................................................................. 54
7.1 Financial Statements.................................................................... 54
7.2 Certificates; Other Information......................................................... 55
7.3 Payment of Obligations.................................................................. 56
7.4 Conduct of Business and Maintenance of Existence........................................ 56
7.5 Maintenance of Property; Insurance...................................................... 56
7.6 Inspection of Property; Books and Records; Discussions.................................. 57
7.7 Notices................................................................................. 57
7.8 Environmental Laws...................................................................... 58
7.9 Additional Collateral................................................................... 59
7.10 Pledge of Certain Subsidiaries.......................................................... 60
SECTION 8. NEGATIVE COVENANTS..................................................................... 60
8.1 Indebtedness............................................................................ 60
8.2 Limitation on Liens..................................................................... 62
8.3 Limitation on Contingent Obligations.................................................... 64
8.4 Prohibition of Fundamental Changes...................................................... 65
8.5 Prohibition on Sale of Assets........................................................... 65
8.6 Limitation on Investments, Loans and Advances........................................... 66
8.7 Capital Expenditures.................................................................... 68
8.8 Interest Rate Agreements................................................................ 69
8.9 Debt to EBITDA........................................................................... 69
8.10 Interest Coverage....................................................................... 70
8.11 Limitation on Dividends................................................................. 71
8.12 Transactions with Affiliates............................................................ 72
8.13 Limitation on Changes in Fiscal Year.................................................... 73
8.14 Limitation on Lines of Business......................................................... 73
8.15 Amendments to Certain Documents......................................................... 73
8.16 Limitation on Prepayments and Amendments of Certain Debt................................ 73
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SECTION 9. EVENTS OF DEFAULT...................................................................... 73
SECTION 10. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENT; THE
DOCUMENTATION AGENT AND THE ISSUING LENDER........................................... 76
10.1 Appointment.......................................................................... 76
10.2 Delegation of Duties................................................................. 76
10.3 Exculpatory Provisions............................................................... 76
10.4 Reliance by Administrative Agent..................................................... 76
10.5 Notice of Default.................................................................... 77
10.6 Non-Reliance on Administrative Agent, Syndication Agent, Documentation
Agent and Other Lenders............................................................ 77
10.7 Indemnification...................................................................... 78
10.8 The Administrative Agent in its Individual Capacity.................................. 78
10.9 Successor Administrative Agent....................................................... 78
10.10 Issuing Lender as Issuer of Letters of Credit........................................ 78
10.11 Administrative Agent as Joint and Several Creditor................................... 78
SECTION 11. MISCELLANEOUS........................................................................ 79
11.1 Amendments and Waivers............................................................... 79
11.2 Notices.............................................................................. 80
11.3 No Waiver; Cumulative Remedies....................................................... 81
11.4 Survival of Representations and Warranties........................................... 81
11.5 Payment of Expenses and Taxes........................................................ 81
11.6 Successors and Assigns; Participations and Assignments............................... 83
11.7 Adjustments; Set-off................................................................. 85
11.8 Counterparts......................................................................... 86
11.9 Governing Law; No Third Party Rights................................................. 86
11.10 Submission to Jurisdiction; Waivers.................................................. 86
11.11 Releases............................................................................. 87
11.12 Interest............................................................................. 87
11.13 Special Indemnification.............................................................. 88
11.14 Permitted Payments and Transactions.................................................. 88
SCHEDULES
Schedule I List of Addresses for Notices; Lending Offices; Commitment
Amounts
Schedule II Pricing Grid
Schedule 5.7 Litigation
Schedule 5.12 Subsidiaries
Schedule 5.13 Fee and Leased Properties
Schedule 5.15(b) UCC Filing Offices
Schedule 5.16 Trademarks and Copyrights
Schedule 8.1(a) Existing Indebtedness
Schedule 8.2(h) Existing Liens
Schedule 8.3(d) Existing Contingent Obligations
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B-1 Form of Tranche A Term Note
EXHIBIT B-2 Form of Tranche B Term Note
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EXHIBIT C Form of Swing Line Note
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Collateral Agreement
EXHIBIT F Form of Subsidiary Guarantee
EXHIBIT G Form of L/C Participation Certificate
EXHIBIT H Form of Swing Line Loan Participation Certificate
EXHIBIT I Form of Subsection 4.11(d)(2) Certificate
EXHIBIT J-1 Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
EXHIBIT J-2 Form of Opinion of General Counsel to the Company
EXHIBIT K-1 Form of Borrower Closing Certificate
EXHIBIT K-2 Form of Credit Parties Closing Certificate
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CREDIT AGREEMENT, dated as of May 10, 2000, among JOSTENS, INC., a
Minnesota corporation (the "Company"), AMERICAN YEARBOOK COMPANY, INC., a Kansas
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corporation and Subsidiary of the Company, as joint and several borrowers
hereunder (together with the Company, the "Borrowers" and, individually, a
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"Borrower"), the several lenders from time to time parties hereto (the
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"Lenders"), CHASE SECURITIES INC., DEUTSCHE BANK SECURITIES INC. and ▇▇▇▇▇▇▇
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SACHS CREDIT PARTNERS L.P., as Co-Lead Arrangers (in such capacities, the "Co-
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Lead Arrangers"), BANKERS TRUST COMPANY, as syndication agent (in such capacity,
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the "Syndication Agent"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as documentation
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agent (in such capacity, the "Documentation Agent"), and THE CHASE MANHATTAN
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BANK, a New York banking corporation, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent").
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W I T N E S S E T H:
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WHEREAS, pursuant to the Agreement and Plan of Merger, as amended,
between the Company and Saturn Acquisition Corporation, a Minnesota corporation
("MergerCo"), dated as of December 27, 1999 (the "Merger Agreement"), MergerCo
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will merge with and into the Company and consummate a recapitalization
transaction (the merger and the recapitalization collectively, the "Merger");
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WHEREAS, pursuant to the Merger, and subject to the terms and
conditions set forth in the Merger Agreement, the existing shareholders of the
Company will receive cash consideration equal to $25.25 per share for their
shares of the Company (other than retained shares);
WHEREAS, the shareholders of the Company approved the Merger and the
terms of the Merger Agreement on May 9, 2000;
WHEREAS, after giving effect to the Merger, Investcorp, together with
certain affiliated entities and other international investors arranged by
Investcorp, certain members of senior management of the Company, DB Capital
Investors and First Union Leveraged Capital (collectively, the "Investor
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Group"), will own and control, indirectly, approximately 94% of the outstanding
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common stock of the Company (the remaining amount being retained by certain
members of the Company's pre-merger shareholders); and
WHEREAS, to refinance the Company's existing indebtedness and to
finance the cash purchase price for the Company's existing shares purchased
pursuant to the Merger, as well as for general corporate purposes, the
Borrowers, jointly and severally, have requested that the Lenders establish a
$150,000,000 six-year Tranche A Term Loan Facility, a $345,000,000 eight-year
Tranche B Term Loan Facility and a $150,000,000 six-year Revolving Credit
Facility pursuant to which term loans and revolving credit loans may be made to
the Borrowers and letters of credit may be issued for the account of the
Borrowers;
NOW, THEREFORE, the Borrowers, the Administrative Agent, the Co-Lead
Arrangers, the Syndication Agent, the Documentation Agent and the Lenders agree
as follows:
SECTION 1. DEFINITIONS
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1.1 Defined Terms. As used in this Agreement, the terms defined in the
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caption hereto shall have the meanings set forth therein, and the following
terms have the following meanings:
"Accepting Tranche B Lenders": as defined in subsection 4.4(e).
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"Adjustment Date": as defined in the definition of Applicable Margin.
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"Administrative Agent": as defined in the Preamble hereto.
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"Affiliate": of any Person (a) any Person (other than a Subsidiary)
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which, directly or indirectly, is in control of, is controlled by, or is
under common control with such Person, or (b) any Person who is a director
or officer (i) of such Person, (ii) of any Subsidiary of such Person or
(iii) of any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or indirect,
(x) to vote 25% or more of the securities having ordinary voting power for
the election of directors of such Person, whether by ownership of
securities, contract, proxy or otherwise, or (y) to direct or cause the
direction of the management and policies of such Person, whether by
ownership of securities, contract, proxy or otherwise.
"Agents": the collective reference to the Syndication Agent, the
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Documentation Agent and the Administrative Agent.
"Agreement": this Credit Agreement, as amended, supplemented or
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modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
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upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of (a)
the Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on such
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day plus 1/2 of 1%. For purposes hereof: "Prime Rate" shall mean the
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rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate in effect at its principal office in
New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Administrative Agent in connection with extensions
of credit to debtors); "Base CD Rate" shall mean the sum of (a) the product
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of (i) the Three-Month Secondary CD Rate and (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the CD Reserve
Percentage and (b) the CD Assessment Rate; "Three-Month Secondary CD Rate"
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shall mean, for any day, the secondary market rate for three-month
certificates of deposit reported as being in effect on such day (or, if
such day shall not be a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal
Reserve Bank of New York (which rate will, under the current practices of
the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so
reported on such day or such next preceding Business Day, the average of
the secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately 10:00
A.M., New York City time, on such day (or, if such day shall not be a
Business Day, on the next preceding Business Day) by the Administrative
Agent from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; and "Federal Funds Effective Rate"
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shall mean, for any day, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by
it. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Alternate Base Rate Loans": Loans at such time as they are made
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and/or being maintained at a rate of interest based upon the Alternate Base
Rate.
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"Applicable Margin": for Term Loans, Revolving Credit Loans and Swing
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Line Loans of the Types set forth below, the rate per annum set forth under
the relevant column heading opposite such Loans below:
Alternate
Base Rate Eurodollar
Loans Loans
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Tranche A Term Loans: 2.00% 3.00%
Tranche B Term Loans: 2.50% 3.50%
Revolving Credit Loans: 2.00% 3.00%
Swing Line Loans: 2.00% Not applicable
; provided that, from and after the first anniversary of the Closing Date,
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the Applicable Margin with respect to Tranche A Term Loans, Revolving
Credit Loans and Swing Line Loans will be adjusted on each Adjustment Date
(as defined below) to the applicable rate per annum set forth in the
pricing grid attached hereto as Schedule II based on the Leverage Ratio as
determined from the relevant financial statements delivered pursuant to
subsection 7.1. Changes in the Applicable Margin resulting from changes in
the Leverage Ratio shall become effective on the date (the "Adjustment
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Date") on which such financial statements are delivered to the Lenders (but
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in any event not later than the 50th day after the end of each of the first
three quarterly periods of each fiscal year or the 95th day after the end
of each fiscal year as the case may be) and shall remain in effect until
the next change to be effected pursuant to this definition; provided that
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(a) the Applicable Margin shall be initially the rate per annum set forth
under the relevant column heading above; (b) if for any reason the
financial statements required by subsection 7.1 are not timely delivered to
the Lenders, (i) during the period from the date upon which such financial
statements were required to be delivered until the date upon which they
actually are delivered, the Applicable Margin shall be the Applicable
Margin in effect immediately prior to the date such financial statements
were due, and (ii) if such financial statements, when actually delivered,
would have required an increase in the Applicable Margin over the
Applicable Margin in effect immediately prior to the date such financial
statements were due, the Company shall promptly following the delivery of
such financial statements pay to the Lenders and the Administrative Agent
any additional amounts of interest or fees which would have been payable on
any previous Interest Payment Date had such higher Applicable Margin been
in effect from the date such financial statements were required to be
delivered; (c) any change in the Applicable Margin as a result of a change
in the Leverage Ratio shall apply to all Loans for each day during the
period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change in
the Applicable Margin; and (d) if an Event of Default exists on any
Adjustment Date or other date upon which the Applicable Margin would
otherwise be adjusted hereunder, the Applicable Margin shall in no event be
reduced on such Adjustment Date or other date from the Applicable Margin in
effect immediately prior to such Adjustment Date or other date until such
Event of Default is cured or waived.
"Asset Sale": any sale, sale-leaseback, or other disposition by the
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Company or any of its Subsidiaries restricted by subsection 8.5 of any of
its property or assets, including the stock of any Subsidiary, except sales
and dispositions permitted by subsections 8.5(a), (b), (c), (f), (g) and
(j).
"Assignee": as defined in subsection 11.6(c).
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"Assignment and Acceptance": an assignment and acceptance
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substantially in the form of Exhibit D.
"Available Revolving Credit Commitment": as to any Lender, at a
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particular time, an amount equal to (a) the amount of such Lender's
Revolving Credit Commitment at such time less (b) the sum of (i) the
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aggregate unpaid principal amount at such time of all Revolving Credit
Loans made by such Lender pursuant to subsection 3.1, (ii) such Lender's
Revolving Credit Commitment Percentage of the aggregate unpaid principal
amount at such time of all Swing Line Loans; provided that for purposes of
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calculating the Revolving Credit Commitments pursuant to subsection 3.2 the
amount referred to in this clause (ii) shall be zero, (iii) such Lender's
L/C Participating Interest in the aggregate amount available to be drawn at
such time under all outstanding Letters of Credit issued by the Issuing
Lender and (iv) such Lender's Revolving Credit Commitment Percentage of the
aggregate outstanding amount of L/C Obligations; collectively, as to all
the Lenders, the "Available Revolving Credit Commitments."
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"Bankers Trust": Bankers Trust Company, a New York banking
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corporation, and its successors.
"Bankruptcy Code": Title I of the Bankruptcy Reform Act of 1978, as
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amended and codified at Title 11 of the United States Code.
"Base Amount": as defined in Subsection 8.7 hereof.
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"Board": the Board of Governors of the Federal Reserve System,
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together with any successor.
"Borrower": as defined in the Preamble hereto.
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"Borrowing Date": any Business Day specified in a notice pursuant to
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(a) subsection 3.4 or 4.1 as a date on which the Company requests the Swing
Line Lender or the Lenders to make Loans hereunder or (b) subsection 3.5 as
a date on which the Company requests the Issuing Lender to issue a Letter
of Credit hereunder.
"Bridge Commitment Letter": the Commitment Letter and term sheet
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relating thereto dated as of December 24, 1999 by and between Investcorp
Investment Equity Limited, on its behalf and on behalf of certain of its
affiliates and other investors and Bankers Trust, UBS ▇▇ ▇▇▇▇▇▇▇▇ Branch,
Chase and Goldman.
"Bridge Loan Agreement": the Bridge Loan Agreement that may be
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entered into pursuant to the Bridge Commitment Letter, as the same may be
amended, supplemented or otherwise modified from time to time in accordance
with its terms and the terms of this Agreement.
"Bridge Subordinated Debt": the subordinated bridge loans or exchange
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notes of the Company outstanding from time to time pursuant to the Bridge
Loan Agreement or the indenture contemplated thereby.
"Business Day": a day other than a Saturday, Sunday or other day on
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which commercial banks in New York City are authorized or required by law
to close.
"Capital Expenditures": for any period, all amounts which would, in
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accordance with GAAP, be set forth as capital expenditures (exclusive of
any amount attributable to capitalized
5
interest) on the consolidated statement of cash flows or other similar
statement of the Company and its Subsidiaries for such period but shall
exclude (a) any expenditures made with the proceeds of condemnation or
eminent domain proceedings affecting real property or with insurance
proceeds and (b) any expenditures made in connection with subsection 8.5(g)
or (h); provided that any Capital Expenditures financed with the proceeds
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of any Indebtedness permitted hereunder (other than Indebtedness incurred
hereunder) shall be deemed to be a Capital Expenditure only in the period
in which, and by the amount which, any principal of such Indebtedness is
repaid.
"Capital Stock": any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equivalents": (a) securities issued or directly and fully
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guaranteed or insured by the United States or any agency or instrumentality
thereof having maturities of not more than six months from the date of
acquisition, (b) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any Lender or with any domestic (in the case of
any investments, acquisitions or holdings by the Borrowers or their
Domestic Subsidiaries) commercial bank or trust company having capital and
surplus in excess of $300,000,000, (c) repurchase obligations with a term
of not more than seven days for underlying securities of the types
described in clauses (a) and (b) entered into with any financial
institution meeting the qualifications specified in clause (b) above, (d)
commercial paper having the highest rating obtainable from S&P or ▇▇▇▇▇'▇
and in each case maturing within one year after date of acquisition; (e)
investment funds investing 95% of their assets in securities of the type
described in clauses (a) through (d) above, (f) readily marketable direct
obligations issued by any state of the United States or any political
subdivision thereof having one of the two highest rating categories
obtainable from either S&P or ▇▇▇▇▇'▇ and (g) indebtedness with a rating of
"A" or higher from S&P or "A2" or higher from ▇▇▇▇▇'▇.
"CD Assessment Rate": for any day the net annual assessment rate
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(rounded upwards, if necessary, to the next 1/100 of 1%) determined by the
Administrative Agent to be payable on such day to the Federal Deposit
Insurance Corporation or any successor ("FDIC") for FDIC's insuring time
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deposits made in Dollars at offices of the Administrative Agent in the
United States.
"CD Reserve Percentage": for any day, that percentage (expressed as a
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decimal) which is in effect on such day, as prescribed by the Board for
determining maximum reserve requirement for a Depositary Institution (as
defined in Regulation D of the Board) in respect of new non-personal time
deposits in Dollars having a maturity of 30 days or more.
"Certificate of Designation": the Certificate of Designation of the
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redeemable, payment-in-kind preferred stock of Jostens, Inc. to be filed
upon consummation of the Merger.
"Change in Law": with respect to any Lender, the adoption of, or
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change in, any law, rule, regulation, policy, guideline or directive
(whether or not having the force of law) or any change in the
interpretation or application thereof by any Governmental Authority having
jurisdiction over such Lender, in each case after the Closing Date.
"Change of Control": shall be considered to have occurred if (i) at
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any time prior to an IPO by the Company: Investcorp or any of its
Affiliates (provided that, for purposes of this
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definition only, the reference to 25% in the definition of Affiliate
contained in subsection 1.1 shall be deemed to be 51%) or Subsidiaries, any
member of the Investor Group, any Person that is a member of the senior
management of the Company, or any entity the majority of the equity
ownership interests of which is owned by such senior management of the
Company, shall cease to own, directly or indirectly, in the aggregate, at
least 51% of the issued and outstanding voting stock of the Company, free
and clear of all Liens, (ii) at any time after an IPO by the Company: if
any Person (other than Investcorp, any of its Affiliates or Subsidiaries,
any member of the Investor Group, any Person that is a member of the senior
management of the Company, any entity the majority of the equity ownership
interests of which is owned by such senior management of the Company or any
Person acting in the capacity of an underwriter), whether singly or in
concert with one or more Persons, shall, directly or indirectly, have
acquired, or acquire the power (x) to vote or direct the voting of 30% or
more, on a fully diluted basis, of the outstanding common stock of the
Company or (y) to elect or designate for election a majority of the Board
of Directors of the Company by voting power, contract or otherwise, or
(iii) a Specified Change of Control shall have occurred.
"Chase": The Chase Manhattan Bank, a New York banking corporation,
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and its successors.
"Closing Date": the date (which shall be on or prior to June 30,
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2000) on which the Lenders make their initial Loans or the Issuing Lender
issues the initial Letter of Credit.
"Co-Lead Arrangers": as defined in the Preamble hereto.
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"Code": the Internal Revenue Code of 1986, as amended from time to
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time.
"Collateral": all assets of the Credit Parties, now owned or
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hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Agreement": the Collateral Agreement, substantially in
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the form of Exhibit E, to be made by the Borrowers and their Domestic
Subsidiaries from time to time parties thereto in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as the same
may be amended, modified or supplemented from time to time.
"Commercial L/C": a commercial documentary Letter of Credit under
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which the Issuing Lender agrees to make payments in Dollars for the account
of the Company, on behalf of the Company or a Subsidiary of the Company, in
respect of obligations of the Company or such Subsidiary in connection with
the purchase of goods or services in the ordinary course of business.
"Commitment": as to any Lender at any time, such Lender's Swing Line
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Commitment, Tranche A Term Loan Commitment, Tranche B Term Loan Commitment
and/or Revolving Credit Commitment; collectively, as to all the Lenders,
the "Commitments."
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"Commitment Fee Rate": 1/2 of 1% per annum; provided, that from and
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after the first anniversary of the Closing Date and so long as no Event of
Default has occurred and is continuing, the Commitment Fee Rate will be
determined pursuant to the pricing grid attached hereto as Schedule II
based upon the Leverage Ratio as determined from the relevant financial
statements delivered pursuant to subsection 7.1.
"Commitment Percentage": as to any Lender at any time, its Term Loan
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Commitment Percentage or its Revolving Credit Commitment Percentage, as the
context may require.
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"Commodity Hedging Agreements": any futures contract or other similar
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agreement or arrangement designed to protect a Borrower against
fluctuations in commodities prices and not for purposes of speculation.
"Commonly Controlled Entity": an entity, whether or not incorporated,
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which is under common control with the Company within the meaning of
Section 4001 of ERISA or is part of a group which includes the Company and
which is treated as a single employer under Section 414(b) or (c) of the
Code.
"Company": as defined in the Preamble hereto.
-------
"Consolidated Current Assets": at a particular date, all amounts
---------------------------
which would, in conformity with GAAP, be included under current assets on a
consolidated balance sheet of the Company and its Subsidiaries as at such
date.
"Consolidated Current Liabilities": at a particular date, all amounts
--------------------------------
which would, in conformity with GAAP, be included under current liabilities
on a consolidated balance sheet of the Company and its Subsidiaries as at
such date, excluding the current portion of long-term debt and the entire
outstanding principal amount of the Revolving Credit Loans.
"Consolidated EBITDA": for any period, the Consolidated Net Income of
-------------------
the Company and its Subsidiaries for such period, plus, without duplication
----
and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) total income tax
expense, (b) interest expense, amortization or writeoff of debt discount,
debt issuance, warrant and other equity issuance costs and commissions,
discounts, redemption premium and other fees and charges associated with
the Loans, letters of credit permitted hereunder, Financing Leases
(excluding any precious metals leases) or the acquisition or repayment of
any debt securities of the Company or its Subsidiaries permitted hereunder,
and net costs associated with Interest Rate Agreements to which a Borrower
is a party in respect of the Loans (including commitment fees and other
periodic bank charges), (c) costs of surety bonds, (d) depreciation and
amortization expense, (e) amortization of inventory write-up under APB 16,
amortization of intangibles (including, but not limited to, goodwill and
costs of interest-rate caps and the cost of non-competition agreements) and
organization costs, (f) non-cash amortization of Financing Leases, (g)
franchise taxes, (h) management fees paid as contemplated by subsection
11.14 and charges related to management fees prepaid in connection with the
Transactions, (i) all cash dividend payments (and non-cash dividend
expenses) on any series of preferred stock, (j) any expenses incurred in
connection with any merger, any acquisition or joint venture permitted
herein, including, without limitation, the Transactions (including any
payments of success/transition bonuses to management of the Company in
connection therewith), (k) any other write-downs, write-offs, minority
interests and other non-cash charges or expenses, (l) any non-cash
restructuring or other type of non-cash special charge or reserve, (m)
expenses and charges related to any equity offering, (n) expenses
consisting of internal software development costs that are expensed during
the period but could have been capitalized in accordance with GAAP, (o)
securitization expense and (p) nonrecurring litigation or claim settlement
charges or expenses; provided that (i) the cumulative effect of a change in
--------
accounting principles (effected either through cumulative effect adjustment
or a retroactive application) shall be excluded, (ii) the net income of any
Person acquired in a pooling of interests transaction for any period prior
to the date of such acquisition shall be excluded, (iii) the impact of
foreign currency and hedging translations and transactions shall be
excluded, (iv) all other extraordinary or non-recurring gains, losses and
charges shall be excluded and (v) up to $5,000,000 of the amount of
expenditures made in any fiscal year of the Company in respect of
subsection 8.6(h) shall be excluded.
8
"Consolidated Indebtedness": at a particular date, all Indebtedness
-------------------------
other than Indebtedness described in clauses (b) or (c) of the definition
of "Indebtedness" included in this subsection 1.1 of the Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP at
such date.
"Consolidated Net Income": for any period, net income of the Company
-----------------------
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP; provided that: (i) the net income (but not loss) of any Person that
--------
is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid in cash to the Company or a wholly owned Subsidiary
and (ii) the net income of any Subsidiary shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by
that Subsidiary of that net income is prohibited or not permitted at the
date of determination.
"Contingent Obligation": as to any Person, any obligation of such
---------------------
Person guaranteeing or in effect guaranteeing any Indebtedness ("primary
-------
obligations") of any other Person (the "primary obligor") in any manner,
----------- ---------------
whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent (a) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, that the term Contingent Obligation shall not include
--------
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount (based on
the maximum reasonably anticipated net liability in respect thereof as
determined by the Company in good faith) of the primary obligation or
portion thereof in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated net
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by the Company in good faith.
"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Credit Documents": the collective reference to this Agreement, the
----------------
Notes, the Security Agreements, the Mortgages and the Guarantees.
"Credit Parties": the collective reference to the Borrowers and each
--------------
of their respective direct and indirect Subsidiaries other than any Foreign
Subsidiaries of the Borrowers (or any other United States Person).
"Default": any of the events specified in Section 9, whether or not
-------
any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Documentation Agent": as defined in the Preamble hereto.
-------------------
"Dollars" and "$": refers to lawful money of the United States.
------- -
9
"Domestic Subsidiary": as to any Person, any Subsidiary of such
-------------------
Person other than a Foreign Subsidiary of such Person.
"Environmental Laws": any and all foreign, Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority or requirements of
law (including, without limitation, common law) regulating or imposing
liability or standards of conduct concerning environmental or public health
protection matters, including, without limitation, Hazardous Materials, as
now or may at any time hereafter be in effect.
"Environmental Permits": any and all permits, licenses,
---------------------
registrations, notifications, exemptions and any other authorizations
required under any Environmental Law.
"Equity Contribution": as defined in subsection 6.1(c).
-------------------
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Dow ▇▇▇▇▇ Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on Page 3750 of the
Dow ▇▇▇▇▇ Markets screen (or otherwise on such screen), the "Eurodollar
----------
Base Rate" for purposes of this definition shall be determined by reference
---------
to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where its eurodollar and foreign
currency and exchange operations are then being conducted for delivery on
the first day of such Interest Period for the number of days comprised
therein.
"Eurodollar Lending Office": as to any Lender the office of such
-------------------------
Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or being
----------------
maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
------------------------------------------
1.00 - Eurocurrency Reserve Requirements
10
"Event of Default": any of the events specified in Section 9;
----------------
provided that any requirement for the giving of notice, the lapse of time,
--------
or both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Company, commencing
----------------
with the fiscal year ending on December 29, 2001, the excess of (a)
Consolidated EBITDA for such fiscal year over (b) the sum, without
duplication, of (i) the aggregate amount actually paid by the Company and
its Subsidiaries in cash during such fiscal year on account of capital
expenditures or acquisitions (other than capital expenditures made with the
proceeds of eminent domain or condemnation proceedings to the extent such
proceeds are not included in the determination of Consolidated EBITDA for
such fiscal year), (ii) the aggregate amount of payments of principal in
respect of any Indebtedness during such fiscal year (other than any such
payments of principal pursuant to subsections 4.4(b)(i), (ii), (iii) and
(iv) to the extent such amounts are not included in Consolidated EBITDA or
any such payments of principal in respect of any revolving credit facility
to the extent that there is not an equivalent reduction in such facility),
(iii) increases in working capital (excluding any customer deposits)
(calculated as Consolidated Current Assets at the end of such fiscal year
minus Consolidated Current Liabilities as at the end of such fiscal year)
-----
of the Company and its Subsidiaries for such fiscal year (excluding any
increase in cash or Cash Equivalents above an increase deemed in good faith
by the Company to be necessary or desirable for the operation of the
business of the Company and its Subsidiaries), (iv) cash interest expense
(including fees paid in connection with letters of credit and surety bonds
and commitment fees and other periodic bank charges) of the Company and its
Subsidiaries, (v) the amount of taxes actually paid in cash by the Company
and its Subsidiaries for such fiscal year either during such fiscal year or
within a normal payment period thereof, (vi) to the extent added to
Consolidated Net Income of the Company and its Subsidiaries in calculating
Consolidated EBITDA for such fiscal year, the net cash cost of Interest
Rate Agreements, franchise taxes and management fees, (vii) the net income
of any Subsidiary shall be excluded to the extent that such amount is
accounted for under the equity method to the extent cash dividends are not
paid or the declaration or payment of dividends is not permitted without
prior governmental approval (which has not been obtained), (viii) the
dividend actually paid in cash by the Company on March 1, 2000, (ix) the
amount of cash actually paid by the Company and its Subsidiaries in
connection with clauses (b) (without duplication), (g), (h), (i), (j), (m),
(n), (o), (p) and clauses (iii) and (iv) of the proviso in the definition
of Consolidated EBITDA and (x) the amount of any cash actually paid in
connection with reserves established in accordance with GAAP; provided that
--------
to the extent any amount of cash is actually paid by the Company and its
Subsidiaries in connection with clause (p) in the definition of
Consolidated EBITDA in any fiscal year in which the Company does not have
Excess Cash Flow, such amount, to the extent it was not applied to reduce
Consolidated EBITDA in determining the existence of Excess Cash Flow in the
year such amount was paid, may be carried forward to subsequent fiscal
years of the Company and applied once to reduce the amount or any Excess
Cash Flow for any such fiscal years.
"Existing Credit Agreement": the Credit Agreement, dated as of
-------------------------
December 20, 1995, among the Company, the lenders named therein and The
First National Bank of Chicago, as amended.
"Fee Property": as defined in subsection 5.13.
------------
"Financing Lease": (a) any lease of property, real or personal, the
---------------
obligations under which are capitalized on a consolidated balance sheet of
the Company and its consolidated Subsidiaries and (b) any other such lease
to the extent that the then present value of any rental commitment
thereunder should, in accordance with GAAP, be capitalized on a balance
sheet of the lessee.
11
"Foreign Subsidiary": as to any Person, any Subsidiary of such Person
------------------
which is not organized under the laws of the United States or any state
thereof or the District of Columbia.
"GAAP": generally accepted accounting principles in the United States
----
in effect from time to time.
"Goldman": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners, L.P., and its successors.
-------
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantees": the collective reference to the Subsidiary Guarantee
----------
and any guarantee which may from time to time be executed and delivered by
a Subsidiary pursuant to subsection 7.9.
"Hazardous Materials": any hazardous materials, hazardous wastes,
-------------------
hazardous pesticides or hazardous or toxic substances, and any other
material that may give rise to liability under any Environmental Law,
including, without limitation, asbestos, petroleum, any other petroleum
products (including gasoline, crude oil or any fraction thereof),
polychlorinated biphenyls and urea-formaldehyde insulation.
"Indebtedness": of a Person, at a particular date, (a) all
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) the undrawn face amount of all letters
of credit issued for the account of such Person and, without duplication,
all drafts drawn thereunder and unpaid reimbursement obligations with
respect thereto, (c) all liabilities (other than Lease Obligations and
liabilities in connection with reserves established in accordance with
GAAP) secured by any Lien on any property owned by such Person, even though
such Person has not assumed or become liable for the payment thereof, (d)
Financing Leases, (e) all indebtedness of such Person arising under
acceptance facilities, but excluding (i) trade and other accounts payable
and accrued expenses payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than
90 days, as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of such Person, (ii) letters
of credit supporting the purchase of goods in the ordinary course of
business and expiring no more than six months from the date of issuance and
(iii) precious metal leases, whether capital or operating; provided that
--------
obligations in respect of Interest Rate Agreements and Commodity Hedging
Agreements shall not be included in this definition.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
"Interest Coverage Ratio": on the last day of any fiscal quarter of
-----------------------
the Company, the ratio of (a) Consolidated EBITDA for the period of twelve
months ending on such day to (b) cash interest expense (excluding (i) fees
payable on account of letters of credit, (ii) to the extent included in
interest expense in accordance with GAAP, net costs associated with
Interest Rate Agreements to which a Borrower is a party in respect of the
Loans and other periodic bank charges and amortization of debt discount
(including discount of liabilities and reserves established under APB 16),
(iii) interest expense in respect of costs of debt issuance and interest
expense on customer deposits for such period net of interest income and
(iv) interest in respect of
12
seasonal borrowings occurring in the third fiscal quarter of the Company
which seasonal borrowings shall be calculated as the lesser of (i)
$85,000,000 and (ii) the amount of Revolving Credit Loans outstanding on
the date of such calculation, at the applicable interest rate for the
relevant period), in each case, for or during such period on a consolidated
basis for the Company and its Subsidiaries in accordance with GAAP; and
provided, further, that for the periods ending on December 30, 2000 and
-------- -------
March 31, 2001 cash interest expense for the relevant period shall be
deemed to equal actual cash interest expense for such period (excluding
interest in respect of seasonal borrowings occurring in the fiscal quarter
ending on September 30, 2000 which seasonal borrowings shall be calculated
as the lesser of (i) $85,000,000 and (ii) the amount of Revolving Credit
Loans outstanding on the date of such calculation, at the applicable
interest rate for such quarter) multiplied by 2 and 4/3, respectively. For
clarification, cash interest expense does not include the accretion of
interest expense.
"Interest Payment Date": (a) as to Alternate Base Rate Loans, the
---------------------
last day of each March, June, September and December, commencing on the
first such day to occur after any Alternate Base Rate Loans are made or any
Eurodollar Loans are converted to Alternate Base Rate Loans, (b) as to any
Eurodollar Loan in respect of which the Company, as agent for the
Borrowers, has selected an Interest Period of one, two or three months, the
last day of such Interest Period and (c) as to any Eurodollar Loan in
respect of which the Company, as agent for the Borrowers, has selected a
longer Interest Period than the periods described in clause (b), the last
day of each three calendar month interval during such Interest Period and,
in addition, the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
---------------
(a) initially, the period commencing on, as the case may be, the
Borrowing Date or conversion date with respect to such Eurodollar Loan
and ending one, two, three or six months thereafter (or, if and when
available to all the relevant Lenders, nine or twelve months
thereafter) as selected by the Company, as agent for the Borrowers, in
its notice of borrowing as provided in subsection 4.1 or its notice of
conversion as provided in subsection 4.2; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter (or, if and when
available to all the relevant Lenders, nine or twelve months
thereafter) as selected by the Company, as agent for the Borrowers, by
irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest
Period with respect to such Eurodollar Loan;
provided that the foregoing provisions relating to Interest Periods are
--------
subject to the following:
(A) if any Interest Period would otherwise end on a day which is
not a Business Day, that Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be
to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(B) any Interest Period that would otherwise extend beyond (i)
in the case of an Interest Period for a Term Loan, the final Tranche A
or Tranche B Installment Payment Date shall end on such Tranche A or
Tranche B Installment Payment Date or, if such Tranche A or Tranche B
Installment Payment Date shall not be a Business Day, on the next
preceding Business Day; and (ii) in the case of any Interest Period
for a Revolving
13
Credit Loan, the Revolving Credit Termination Date shall end on the
Revolving Credit Termination Date, or if the Revolving Credit
Termination Date shall not be a Business Day, on the next preceding
Business Day;
(C) if the Company shall fail to give notice as provided above
in clause (b), it shall be deemed to have selected a conversion of a
Eurodollar Loan into an Alternate Base Rate Loan (which conversion
shall occur automatically and without need for compliance with the
conditions for conversion set forth in subsection 4.2);
(D) any Interest Period that begins on the last day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(E) the Company shall select Interest Periods so as not to
require a prepayment (to the extent practicable) or a scheduled
payment of a Eurodollar Loan during an Interest Period for such
Eurodollar Loan.
"Interest Rate Agreement": any interest rate swap agreement, interest
-----------------------
rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Investcorp": Investcorp S.A., a Luxembourg corporation.
----------
"Investment Grade Securities": (i) securities issued or directly and
---------------------------
fully guaranteed or insured by the Unites States government or any agency
or instrumentality thereof (other than Cash Equivalents), (ii) debt
securities or debt instruments with a rating of BBB- or higher by S&P or
Baa3 by Moody's or the equivalent of such rating by such rating
organization, or if no rating of S&P's or Moody's then exists, the
equivalent of such rating by any other nationally recognized securities
rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Company and its Subsidiaries and
(iii) investments in any fund that invests exclusively in investments of
the type described in clauses (i) and (ii) which fund may also hold
immaterial amounts of cash pending investment and/or distribution.
"Investor Group": as defined in the Recitals hereto.
--------------
"IPO": as to any Person, any sale by such Person through a public
---
offering of its common (or other voting) stock pursuant to an effective
registration statement (other than a registration statement on Form ▇-▇, ▇-
▇ or any successor or similar form) filed under the Securities Act of 1933,
as amended.
"Issuing Lender": collectively, Chase and any of its Affiliates,
--------------
including Chase Manhattan Bank Delaware, as issuer of the Letters of
Credit; with respect to any Letter of Credit, the term "Issuing Lender"
shall mean the Issuing Lender with respect to such Letter of Credit.
"L/C Application": as defined in subsection 3.5(a).
---------------
"L/C Obligations": the obligations of the Company to reimburse the
---------------
Issuing Lender for any payments made by the Issuing Lender under any Letter
of Credit that have not been reimbursed by the Company pursuant to
subsection 3.8(a).
"L/C Participating Interest": an undivided participating interest in
--------------------------
the face amount of each issued and outstanding Letter of Credit and the L/C
Application relating thereto.
14
"L/C Participation Certificate": a certificate in substantially the
-----------------------------
form of Exhibit G.
"Lease Obligations": of the Company and its Subsidiaries, as of the
-----------------
date of any determination thereof, the rental commitments of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP, if any, under leases for real and/or personal property (net of rental
commitments from sub-leases thereof), excluding however, obligations under
Financing Leases.
"Leased Properties": as defined in subsection 5.13.
-----------------
"Lenders": as defined in the Preamble hereto.
-------
"Letters of Credit": the collective reference to the Commercial L/Cs,
-----------------
the Standby L/Cs, individually, a "Letter of Credit."
----------------
"Leverage Ratio": as defined in subsection 8.9; provided that for
-------------- --------
purposes of calculating the Leverage Ratio, the unencumbered (other than
Liens permitted pursuant to subsection 8.2 (other than subsections 8.2(i)
(only to the extent such Lien is in respect of cash and Cash Equivalents
specifically securing Indebtedness in respect of one or more Commercial
L/Cs and not all Indebtedness under this Agreement generally) and 8.2(l))
cash and Cash Equivalents balances of the Company and its Subsidiaries on
such date shall be deducted from the amount of Consolidated Indebtedness on
such date; provided, further, the amount of cash and Cash Equivalent
-------- -------
balances of Foreign Subsidiaries of the Company which are not Credit
Parties deducted pursuant to the immediately preceding proviso shall not
exceed $7,500,000.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing,
except for the filing of financing statements in connection with Lease
Obligations incurred by the Company or its Subsidiaries to the extent that
such financing statements relate to the property subject to such Lease
Obligations).
"Loans": the collective reference to the Swing Line Loans, the Term
-----
Loans, and the Revolving Credit Loans; individually, a "Loan."
----
"Merger": as defined in the Recitals hereto.
------
"Merger Agreement": as defined in the Recitals hereto.
----------------
"MergerCo": as defined in the Recitals hereto.
--------
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Mortgaged Properties": (a) the Real Property designated as
--------------------
"Mortgaged Property" on Schedule 5.13 and (b) any fee Real Property covered
by a Mortgage delivered pursuant to subsection 7.9(d).
"Mortgages": each of the mortgages and deeds of trust made by any
---------
Credit Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, in a form
15
reasonably acceptable to the Administrative Agent and the Company, as the
same may be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds received by the Company
------------
or any Subsidiary in respect of:
(a) (i) any issuance or borrowing of any debt securities or
loans by the Company or any of its Subsidiaries other than debt or
loans permitted to be incurred or borrowed pursuant to subsection 8.1
or (ii) any issuance by the Company or any of its Subsidiaries of
Capital Stock (excluding any such issuance to any member of the
Investor Group or any Affiliate thereof or any such issuance to
employees of the Company or any of its Subsidiaries);
(b) any Asset Sale, excluding (i) any net proceeds received upon
any condemnation or exercise of rights of eminent domain to the extent
the same shall be deemed not to constitute Net Proceeds pursuant to
the proviso to subsection 8.5(d) and (ii) any proceeds of insurance
received upon any casualty or loss;
(c) any cash received in respect of substantially like-kind
exchanges of property to the extent provided in the proviso to
subsection 8.5(e); and
(d) any cash payments received in respect of promissory notes
delivered to the Company or any of its Subsidiaries in respect of an
Asset Sale delivered to the Company or such Subsidiary in respect of
an Asset Sale;
in each case net of (without duplication) (A) the amount required to repay
any Indebtedness (other than the Loans) secured by a Lien on any assets of
the Company or any of its Subsidiaries that are collateral for any such
debt securities or loans that are sold or otherwise disposed of in
connection with such Asset Sale, (B) the reasonable expenses (including
legal fees and brokers' and underwriters' commissions, lenders fees or
credit enhancement fees, in any case, paid to third parties or, to the
extent permitted hereby, Affiliates) incurred in effecting such issuance or
sale and (C) any taxes reasonably attributable to such sale and reasonably
estimated by the Company or its Subsidiaries to be actually payable.
"Non-Funding Lender": as defined in subsection 4.9(c).
------------------
"Notes": the collective reference to the Swing Line Note, the
-----
Revolving Credit Notes and the Term Loan Notes; each of the Notes, a
"Note."
----
"Offering Memorandum": the offering memorandum dated May 5, 2000 with
-------------------
respect to the Senior Subordinated Notes.
"Participants": as defined in subsection 11.6(b).
------------
"Participating Lender": any Revolving Credit Lender (other than the
--------------------
Issuing Lender) with respect to its L/C Participating Interest in each
Letter of Credit.
"Payment Sharing Notice": a written notice from the Company or any
----------------------
Lender informing the Administrative Agent that an Event of Default has
occurred and is continuing and directing
16
the Administrative Agent to allocate payments thereafter received from or
on behalf of any Borrower in accordance with the provisions of subsection
4.9.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA or any successor.
"Permanent Subordinated Debt": (i) unsecured notes or debentures of
---------------------------
the Company, subordinated to the prior payment of the Loans and the other
obligations under the Credit Documents, that were issued by the Company on
the Closing Date or that may be issued by the Company after the Closing
Date (including the Senior Subordinated Notes); provided that either (x)
--------
such notes or debentures have terms which are as favorable to the Lenders
as the terms set forth in the Bridge Commitment Letter or the Offering
Memorandum and the conditions contained in clauses (i)(y)(b) and (c) of
this definition are met or (y) (a) unless otherwise agreed to by the
Required Lenders, (I) the subordination provisions of which are as
favorable to the Lenders as such provisions set forth in the Bridge
Commitment Letter or the Offering Memorandum and (II) the terms and
conditions thereof (including, without limitation, subordination, covenant
and events of default provisions thereof but excluding any call protection
provisions) taken as a whole shall be at least as favorable to the Company
and the Lenders as such terms and conditions set forth in the Bridge
Commitment Letter or the Offering Memorandum, (b) no covenant contained in
this Agreement or any of the other Credit Documents would be violated on
the proposed issuance date after giving effect to (I) the issuance of such
notes or debentures, (II) the payment of all issuance costs, commissions,
discounts, redemption premiums and other fees and charges associated
therewith, (III) the use of proceeds thereof and (IV) the redemption,
repayment, retirement and repurchase of all Indebtedness of the Company and
its Subsidiaries to be redeemed, repaid or repurchased in connection
therewith and (c) substantially final drafts of the documentation governing
any such notes or debentures, showing the terms thereof, shall have been
furnished to the Administrative Agent at least 5 days prior to the date of
issuance of such notes or debentures and (ii) unsecured notes or debentures
of the Company, subordinated to the prior payment of the Loans and the
other obligations under the Credit Documents, that may be issued by the
Company to refinance previously issued Permanent Subordinated Debt;
provided that (a) unless otherwise agreed to by the Required Lenders, the
--------
interest rate and subordination provisions shall be at least as favorable
to the Company and the Lenders as such provisions of refinanced Permanent
Subordinated Debt and the other terms and conditions thereof (including,
without limitation, the covenant and event of default provisions thereof)
taken as a whole shall be at least as favorable to the Company and the
Lenders as such refinanced Permanent Subordinated Debt and (b) the
conditions contained in clauses (i)(y)(b) and (c) of this definition shall
be met.
"Permitted Liens": Liens permitted to exist under subsection 8.2.
---------------
"Person": an individual, partnership, corporation, business trust,
------
joint stock company, limited liability company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of
whatever nature.
"Photography Division": businesses relating to selling portraits and
--------------------
activity photos.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
17
"Preferred Stock": the preferred stock of the Company described in
---------------
the Certificate of Designation.
"Real Property": each Fee Property and Leased Property listed on
-------------
Schedule 5.13.
"Recognition Division": businesses relating to selling service and
--------------------
related recognition affinity awards to companies or other Persons.
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
-------------------------
"Register": as defined in subsection 11.6(d).
--------
"Related Document": any agreement, certificate, document or
----------------
instrument relating to a Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such Plan is in reorganization as such term is used in
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c) of
----------------
ERISA, other than those events as to which the thirty day notice is waived
under subpart B of PBGC Reg. (S) 4042.
"Required Lenders": at a particular time, the holders of at least 51%
----------------
of the sum of (i) the aggregate unpaid principal amount of the Term Loans,
if any, and (ii) the Revolving Credit Commitments or, if the Revolving
Credit Commitments are terminated, the aggregate unpaid principal amount of
the Revolving Credit Loans, and participations in Swing Line Loans and the
aggregate amount available to be drawn at such time under all outstanding
Letters of Credit and L/C Obligations. The Term Loans and the Revolving
Credit Commitments of any Non-Funding Lender shall be disregarded in
determining Required Lenders at any time.
"Requirement of Law": as to any Person, the Articles or Certificate
------------------
of Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation, order, or
determination of an arbitrator or a court or other Governmental Authority,
in each case, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer": with respect to any Person, the president,
-------------------
treasurer, chief executive officer, the chief operating officer, the chief
financial officer, assistant treasurer, corporate controller or any vice
president of such Person.
"Revolving Credit Commitment": as to any Lender, its obligations to
---------------------------
(i) make Revolving Credit Loans to the Borrowers pursuant to subsection
3.1, (ii) to participate in Swingline Loans and (iii) to purchase its L/C
Participating Interest in any Letter of Credit, in an aggregate amount not
to exceed the amount set forth under such Lender's name in Schedule I
opposite the caption "Revolving Credit Commitment" or in Schedule 1 to the
Assignment and Acceptance by which such Lender acquired its Revolving
Credit Commitment, as the same may be reduced from time to time pursuant to
subsection 4.3 or adjusted pursuant to subsection 11.6(c); collectively, as
to all the Lenders, the "Revolving Credit Commitments". The original
----------------------------
aggregate principal amount of the Revolving Credit Commitments is
$150,000,000.
"Revolving Credit Commitment Percentage": as to any Lender at any
--------------------------------------
time, the percentage of the aggregate Revolving Credit Commitments then
constituted by such Lender's Revolving Credit Commitment.
18
"Revolving Credit Commitment Period": the period from and including
----------------------------------
the Closing Date to but not including the Revolving Credit Termination
Date.
"Revolving Credit Lender": any Lender with a Revolving Credit
-----------------------
Commitment.
"Revolving Credit Loans" as defined in subsection 3.1(a).
----------------------
"Revolving Credit Note": as defined in subsection 4.13(e).
---------------------
"Revolving Credit Termination Date": the earlier of (a) May 31, 2006
---------------------------------
and (b) such other earlier date as the Revolving Credit Commitments shall
terminate hereunder.
"Security Agreements": the collective reference to the Collateral
-------------------
Agreement and any security agreement which may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to
subsection 7.9.
"Security Documents": the collective reference to the Security
------------------
Agreements and the Mortgages.
"Senior Subordinated Note Indenture": the indenture to be entered
----------------------------------
into by the Borrowers in connection with the issuance of the Senior
Subordinated Notes, with such material terms and conditions as are not
materially less favorable to the Lenders than those of the subordinated
bridge loans under the Bridge Commitment Letter or the Offering Memorandum,
together with all instruments and other agreements entered into by the
Borrowers in connection therewith, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with subsection 8.16.
"Senior Subordinated Notes": the senior subordinated notes of the
-------------------------
Company (or any refinancing thereof permitted hereunder) which shall be
issued under the Senior Subordinated Note Indenture and shall have material
terms and conditions not materially less favorable to the Lenders than
those of the subordinated bridge loans under the Bridge Commitment Letter
or the Offering Memorandum.
"Shares": as defined in the Recitals hereto.
------
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard and Poor's Ratings Services, a division of McGraw-
---
Hill Companies, Inc.
"Specified Change of Control": a "Change of Control" as defined from
---------------------------
time to time in the Senior Subordinated Note Indenture, so long as the
Senior Subordinated Note Indenture exists.
"Specified Debt": the (a) Bridge Subordinated Debt and (b) Permanent
--------------
Subordinated Debt.
"Standby L/C": an irrevocable letter of credit under which the
-----------
Issuing Lender agrees to make payments in Dollars for the account of the
Company, on behalf of the Borrowers or any Subsidiary of the Borrowers in
respect of obligations of such Borrower or such Subsidiary incurred
pursuant to contracts made or performances undertaken or to be undertaken
or like
19
matters relating to contracts to which such Borrower or such Subsidiary is
or proposes to become a party in the ordinary course of such Borrower's or
such Subsidiary's business, including, without limiting the foregoing, for
insurance purposes or in respect of advance payments or as bid or
performance bonds or for any other purpose for which a standby letter of
credit might customarily be issued.
"Subsection 4.11(d)(2) Certificate": as defined in subsection
---------------------------------
4.11(d).
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock of each class or
other interests having ordinary voting power (other than stock or other
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, by such Person
or by one or more Subsidiaries of such Person or by such Person and one or
more Subsidiaries of such Person. A Subsidiary shall be deemed wholly-
owned by a Person who owns directly or indirectly all of the voting shares
of stock or other interests of such Subsidiary having voting power under
ordinary circumstances to vote for directors or other managers of such
corporation, partnership or other entity, except for (i) directors'
qualifying shares, (ii) shares owned by multiple shareholders to comply
with local laws and (iii) shares owned by employees. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of each of the
Borrowers; provided that any joint venture or Person in which an investment
--------
is existing on the Closing Date or is made pursuant to subsection 8.6(h)
shall, so long as such investment is maintained in reliance on such
subsection, not be a "Subsidiary" of a Borrower for any purpose of this
Agreement.
"Subsidiary Guarantee": the Subsidiary Guarantee, substantially in
--------------------
the form of Exhibit F, to be made by certain Domestic Subsidiaries of the
Company in favor of the Administrative Agent for the ratable benefit of the
Lenders, as the same may be amended, modified or supplemented from time to
time.
"Supermajority Lenders": at a particular time, the holders of at
---------------------
least 66-2/3% of the sum of (i) the aggregate unpaid principal amount of
the Term Loans, if any, and (ii) the Revolving Credit Commitments or, if
the Revolving Credit Commitments are terminated, the aggregate unpaid
principal amount of the Revolving Credit Loans, and participations in Swing
Line Loans and the aggregate amount available to be drawn at such time
under all outstanding Letters of Credit and L/C Obligations. The Term
Loans and the Revolving Credit Commitments of any Non-Funding Lender shall
be disregarded in determining Supermajority Lenders at any time.
"Swing Line Commitment": the Swing Line Lender's obligation to make
---------------------
Swing Line Loans pursuant to subsection 3.4.
"Swing Line Lender": Chase, in its capacity as lender of the Swing
-----------------
Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
-----------------------------------------
substantially the form of Exhibit H.
"Swing Line Loans": as defined in subsection 3.4(a).
----------------
"Swing Line Note": as defined in subsection 4.13(e).
---------------
"Tender Offer": as defined in the Recitals hereto.
------------
20
"Term Loan" and "Term Loans": as defined in subsection 2.1.
--------- ----------
"Term Loan Commitment Percentage": as to any Lender at any time, the
-------------------------------
percentage of the aggregate Term Loan Commitments then constituted by such
Lender's Term Loan Commitment (or, after the Term Loans are made, the
percentage of the aggregate outstanding principal amount of all Term Loans
then constituted by the aggregate outstanding principal amount of such
Lender's Term Loans).
"Term Loan Commitments": collectively, the Tranche A Term Loan
---------------------
Commitments and the Tranche B Term Loan Commitments; individually, a "Term
----
Loan Commitment."
----------------
"Term Loan Lender": collectively, the Tranche A Lenders and the
----------------
Tranche B Lenders.
"Term Loan Note": a Tranche A Term Note or a Tranche B Term Note, as
--------------
the context shall require, collectively, the "Term Notes."
----------
"Tranche": the collective reference to Eurodollar Loans the then
-------
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day); Tranches may be identified as
"Eurodollar Tranches."
"Tranche A Installment Payment Date": as defined in subsection
----------------------------------
4.4(c).
"Tranche A Lender": each Lender that has a Tranche A Term Loan
----------------
Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Maturity Date": May 31, 2006.
-----------------------
"Tranche A Term Loan": as defined in subsection 2.1.
-------------------
"Tranche A Term Loan Commitment": as to any Tranche A Lender, its
------------------------------
obligation to make a Tranche A Term Loan to the Borrowers pursuant to
subsection 2.1 in an aggregate amount not to exceed the amount set forth
under such Lender's name in Schedule I opposite the caption "Tranche A Term
Loan Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant
to which a Lender acquires its Tranche A Term Loan Commitment, as the same
may be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche A Lenders, the "Tranche A Term Loan Commitments". The original
-------------------------------
aggregate principal amount of the Tranche A Term Loan Commitments is
$150,000,000.
"Tranche A Term Loan Commitment Percentage": as to any Tranche A
-----------------------------------------
Lender at any time, the percentage of the aggregate Tranche A Term Loan
Commitments then constituted by such Lender's Tranche A Term Loan
Commitment (or, after the Tranche A Term Loans are made, the percentage of
the aggregate outstanding principal amount of the Tranche A Term Loans then
constituted by the principal amount of such Tranche A Lender's Tranche A
Term Loan).
"Tranche A Term Note": as defined in subsection 4.13(e).
-------------------
"Tranche B Installment Payment Date": as defined in Section 4.4(d).
----------------------------------
"Tranche B Lender": each Lender that has a Tranche B Term Loan
----------------
Commitment or is the holder of a Tranche B Term Loan.
21
"Tranche B Mandatory Prepayment Date": as defined in subsection
-----------------------------------
4.4(e).
"Tranche B Maturity Date": May 31, 2008.
-----------------------
"Tranche B Prepayment Amount": as defined in subsection 4.4(e).
---------------------------
"Tranche B Prepayment Option Notice": as defined in subsection
----------------------------------
4.4(e).
"Tranche B Term Loan": as defined in subsection 2.1.
-------------------
"Tranche B Term Loan Commitment": as to any Tranche B Lender, its
------------------------------
obligation to make a Tranche B Term Loan to the Borrowers pursuant to
subsection 2.1 in an aggregate amount not to exceed the amount set forth
under such Lender's name in Schedule I opposite the caption "Tranche B Term
Loan Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant
to which a Lender acquires its Tranche B Term Loan Commitment, as the same
may be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche B Lenders, the "Tranche B Term Loan Commitments." The original
-------------------------------
aggregate principal amount of the Tranche B Term Loan Commitments is
$345,000,000.
"Tranche B Term Loan Commitment Percentage": as to any Tranche B
-----------------------------------------
Lender at any time, the percentage of the aggregate Tranche B Term Loan
Commitments then constituted by such Lender's Tranche B Term Loan
Commitment (or, after the Tranche B Term Loans are made, the percentage of
the aggregate outstanding principal amount of the Tranche B Term Loans then
constituted by the principal amount of such Tranche B Lender's Tranche B
Term Loan).
"Tranche B Term Note": as defined in subsection 4.13(e).
-------------------
"Transactions": the collective reference to the Merger, the issuance
------------
of the Senior Subordinated Notes, the Equity Contribution, the repayment of
certain of the Company's existing indebtedness, including, without
limitation, amounts outstanding under the Existing Credit Agreement, and
the making of the Loans on the Closing Date hereunder.
"Transferee": as defined in subsection 11.6(f).
----------
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
----
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, and any subsequent revisions thereof.
"United States": the United States of America.
-------------
"United States Person": any Person organized under the laws of the
--------------------
United States or any state thereof or the District of Columbia.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and
any certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Borrowers and their
22
respective Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP. To the extent there are any
changes in GAAP from the date of this Agreement, the financial covenants set
forth herein at the option of the Company will either (i) continue to be
determined in accordance with GAAP in effect on the Closing Date, as applicable,
or (ii) be adjusted or reset to reflect such changes in GAAP, such adjustments
or resets to be mutually agreed to by the Company and the Administrative Agent.
All references in this Agreement to the 2000 fiscal year of each of the
Borrowers shall mean the fiscal year commencing on January 2, 2000 and ending on
December 30, 2000, and each reference to each subsequent fiscal year of each of
the Borrowers shall refer to the corresponding periods of subsequent calendar
years.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
SECTION 2. TERM LOANS
----------
2.1 Term Loans. Subject to the terms and conditions hereof, (i) each
----------
Tranche A Lender severally agrees to make a loan in Dollars (individually, a
"Tranche A Term Loan"; and collectively, the "Tranche A Term Loans") to the
------------------- --------------------
Borrowers on the Closing Date, in an aggregate principal amount equal to such
Lender's Tranche A Term Loan Commitment and (ii) each Tranche B Lender severally
agrees to make a loan in Dollars (individually, a "Tranche B Term Loan"; and
-------------------
collectively, the "Tranche B Term Loans"; together with the Tranche A Term
--------------------
Loans, the "Term Loans") to the Borrowers on the Closing Date, in an aggregate
----------
principal amount equal to such Lender's Tranche B Term Loan Commitment.
2.2 Repayment of Term Loans. The Borrowers shall repay the Term
-----------------------
Loans as provided in subsection 4.4.
2.3 Use of Proceeds. The proceeds of the Term Loans shall be used to
---------------
repay existing indebtedness (including amounts outstanding under the Existing
Credit Agreement), to finance the Transactions and to pay fees, expenses and
financing costs in connection therewith.
SECTION 3. AMOUNT AND TERMS OF REVOLVING
CREDIT COMMITMENTS
------------------
3.1 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Lender severally agrees to the extent of its Revolving
Credit Commitment to extend credit to the Borrowers from time to time on any
Borrowing Date during the Revolving Credit Commitment Period (i) by purchasing
an L/C Participating Interest in each Letter of Credit issued by the Issuing
Lender and (ii by making loans in Dollars (individually, a "Revolving Credit
----------------
Loan," and collectively, the "Revolving Credit Loans") to the Borrowers from
---- ----------------------
time to time. Notwithstanding the above, in no event shall any Revolving Credit
Loans be made, or Letter of Credit be issued, if the aggregate amount of the
Revolving Credit Loans to be made or Letter of Credit to be issued would, after
giving effect to the use of proceeds, if any, thereof, exceed the aggregate
Available Revolving Credit Commitments nor shall any Letter of Credit be issued
if after giving effect thereto the sum of the undrawn amount of all outstanding
Letters of Credit and the amount of all L/C Obligations would exceed
$15,000,000.
23
(b) During the Revolving Credit Commitment Period, the Borrowers may
use the Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof, and/or by having the Issuing Lender issue Letters
of Credit, having such Letters of Credit expire undrawn upon or if drawn upon,
reimbursing the Issuing Lender for such drawing, and having the Issuing Lender
issue new Letters of Credit.
(c) Each borrowing of Revolving Credit Loans pursuant to the
Revolving Credit Commitments shall be in an aggregate principal amount of the
lesser of (i) $500,000 or a whole multiple of $100,000 in excess thereof in the
case of Alternate Base Rate Loans, and $1,000,000 or a whole multiple of
$500,000 in excess thereof, in the case of Eurodollar Loans, and (ii) the
Available Revolving Credit Commitments, except that any borrowing of Revolving
Credit Loans to be used solely to pay a like amount of Swing Line Loans may be
in the aggregate principal amount of such Swing Line Loans.
3.2 Commitment Fee. The Company agrees to pay to the Administrative
--------------
Agent for the account of each Lender (other than any Non-Funding Lender) a
commitment fee from and including the Closing Date to and including the
Revolving Credit Termination Date computed at the Commitment Fee Rate on the
average daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made (whether or not the Borrowers shall
have satisfied the applicable conditions to borrow or for the issuance of a
Letter of Credit set forth in Section 6). Such commitment fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Revolving Credit Termination Date, commencing on the first such date
to occur following the Closing Date (or, if earlier, the Revolving Credit
Termination Date).
3.3 Proceeds of Revolving Credit Loans. The Borrowers shall use the
----------------------------------
proceeds of Revolving Credit Loans (a) to finance up to $5,000,000 of the
consideration paid in connection with the Merger (in addition to seasonal
working capital usage of up to $40,000,000), (b) to repay existing indebtedness
and (c) for general corporate purposes.
3.4 Swing Line Commitment. (a) Subject to the terms and conditions
---------------------
hereof, the Swing Line Lender agrees, so long as the Administrative Agent has
not received notice that an Event of Default has occurred and is continuing, to
make swing line loans (individually, a "Swing Line Loan"; collectively, the
---------------
"Swing Line Loans") to the Borrowers from time to time during the Revolving
----------------
Credit Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed $10,000,000; provided that no Swing Line Loan may be
--------
made if the aggregate principal amount of the Swing Line Loans to be made would
exceed the aggregate Available Revolving Credit Commitments at such time.
Amounts borrowed by the Borrowers under this subsection 3.4 may be repaid and,
through but excluding the Revolving Credit Termination Date, reborrowed. All
Swing Line Loans shall be made as Alternate Base Rate Loans and shall not be
entitled to be converted into Eurodollar Loans. The Company shall give the
Swing Line Lender irrevocable notice (which notice must be received by the Swing
Line Lender prior to 3:00 P.M., New York City time) on the requested Borrowing
Date specifying the amount of each requested Swing Line Loan, which shall be in
an aggregate minimum amount of $250,000 or a whole multiple of $100,000 in
excess thereof. The proceeds of each Swing Line Loan will be made available by
the Swing Line Lender to the Borrowers by crediting the account of the Borrowers
at the office of the Swing Line Lender with such proceeds. The proceeds of
Swing Line Loans may be used solely for the purposes referred to in subsection
3.3.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may, and on the fifteenth day (or if such day is not a Business Day,
the next Business Day) and last Business Day of each month shall, on behalf of
the Company (which hereby irrevocably directs the Swing Line Lender to act on
its behalf) request each Revolving Credit Lender, including the Swing Line
Lender, to make a Revolving Credit Loan in an amount equal to such Lender's
Revolving Credit Commitment Percentage
24
of the amount of the Swing Line Loans (the "Refunded Swing Line Loans")
-------------------------
outstanding on the date such notice is given. Unless any of the events described
in paragraph (f) of Section 9 shall have occurred (in which event the procedures
of paragraph (c) of this subsection 3.4 shall apply) each such Lender shall make
the proceeds of its Revolving Credit Loan available to the Swing Line Lender for
the account of the Swing Line Lender at the office of the Swing Line Lender
specified in subsection 11.2 (or such other location as the Swing Line Lender
may direct) prior to 12:00 noon (New York City time) in funds immediately
available on the Business Day next succeeding the date such notice is given. The
proceeds of such Revolving Credit Loans shall be immediately applied to repay
the Refunded Swing Line Loans.
(c) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of this subsection 3.4 one of the events described in paragraph
(f) of Section 9 shall have occurred, each Revolving Credit Lender will, on the
date such Loan was to have been made, purchase an undivided participating
interest in the Refunded Swing Line Loan in an amount equal to its Revolving
Credit Commitment Percentage of such Refunded Swing Line Loan. Each such Lender
will immediately transfer to the Swing Line Lender in immediately available
funds, the amount of its participation and upon receipt thereof the Swing Line
Lender will deliver to such Lender a Swing Line Loan Participation Certificate
dated the date of receipt of such funds and in such amount.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's participating interest in a
Refunded Swing Line Loan, the Swing Line Lender receives any payment on account
thereof, the Swing Line Lender will distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's participating
interest was outstanding and funded) in like funds as received; provided that in
--------
the event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it in like funds as such
payment is required to be returned by the Swing Line Lender.
(e) The obligation of each Revolving Credit Lender to purchase
participating interests pursuant to subsection 3.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, any Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of any Borrower; (iv) any breach of this Agreement by any Borrower or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
3.5 Issuance of Letters of Credit. (a) The Company, as agent for
-----------------------------
the Borrowers, may from time to time request the Issuing Lender to issue a
Standby L/C or a Commercial L/C by delivering to the Administrative Agent at its
address specified in subsection 11.2 (or such other location as the Issuing
Lender may direct) a letter of credit application in the Issuing Lender's then
customary form (the "L/C Application") completed to the satisfaction of the
---------------
Issuing Lender, together with the proposed form of such Letter of Credit (which
shall comply with the applicable requirements of paragraph (b) below) and such
other certificates, documents and other papers and information as the Issuing
Lender may reasonably request; provided that if the Issuing Lender informs the
--------
Company that it is for any reason unable to open such Letter of Credit, the
Company, as agent for the Borrowers, may request any Lender to open such Letter
of Credit upon the same terms offered to the Issuing Lender and each reference
to the Issuing Lender for purposes of subsections 3.5 through 3.14, 6.1 and 6.2
shall be deemed to be a reference to such Issuing Lender. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any L/C Application or other document submitted by the Company
to, or entered into by the Company with, the Issuing Lender relating to any
Letter of Credit, the terms and conditions of this Agreement shall control.
25
(b) Each Standby L/C and Commercial L/C issued hereunder shall be
issued for the account of the Company and shall, among other things, (i) be
denominated in Dollars and be in such form requested by the Company as shall be
acceptable to the Issuing Lender in its sole discretion and (ii) have an expiry
date occurring not later than 365 days after the date of issuance of such Letter
of Credit and, in the case of Standby L/Cs, may be automatically renewed on its
expiry date for an additional period equal to the initial term, but in no case
shall any Letter of Credit have an expiry date occurring later than the
Revolving Credit Termination Date. Each L/C Application and each Letter of
Credit shall be subject to the International Standby Practices (ISP 98) of the
International Chamber of Commerce (in the case of Standby L/Cs) or the Uniform
Customs (in the case of Commercial L/Cs) and, to the extent not inconsistent
therewith, the laws of the State of New York.
3.6 Participating Interests. Effective in the case of each Standby
-----------------------
L/C and Commercial L/C (if applicable) as of the date of the opening thereof,
the Issuing Lender agrees to allot and does allot, to itself and each other
Revolving Credit Lender, and each such Lender severally and irrevocably agrees
to take and does take in such Letter of Credit and the related L/C Application
(if applicable), an L/C Participating Interest in a percentage equal to such
Lender's Revolving Credit Commitment Percentage.
3.7 Procedure for Opening Letters of Credit. The Issuing Lender will
---------------------------------------
notify each Lender after the end of each calendar month of any L/C Applications
received by the Issuing Lender from the Company during such month. Upon receipt
of any L/C Application from the Company, the Issuing Lender will process such
L/C Application, and the other certificates, documents and other papers
delivered to the Issuing Lender in connection therewith, in accordance with its
customary procedures and, subject to the terms and conditions hereof, shall
promptly open such Letter of Credit by issuing the original of such Letter of
Credit to the beneficiary thereof and by furnishing a copy thereof to the
Company and, after the end of the calendar month in which such Letter of Credit
was opened, to the other Lenders; provided that no such Letter of Credit shall
--------
be issued if subsection 3.1 would be violated thereby.
3.8 Payments in Respect of Letters of Credit. (a) The Company
----------------------------------------
agrees forthwith upon demand by the Issuing Lender and otherwise in accordance
with the terms of the L/C Application relating thereto, (i) to reimburse the
Issuing Lender for any payment made by the Issuing Lender under any Letter of
Credit issued for the account of the Company and (ii) to pay interest on any
unreimbursed portion of any such payment from the date of such payment until
reimbursement in full thereof at a rate per annum equal to (A) on or prior to
the date which is one Business Day after the day on which the Issuing Lender
demands reimbursement from the Company for such payment, the Alternate Base Rate
plus the Applicable Margin for the Revolving Credit Loans and (B) thereafter,
----
the Alternate Base Rate plus the Applicable Margin for the Revolving Credit
----
Loans plus 2%.
----
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor forthwith upon demand of
the Issuing Lender, and otherwise in accordance with the terms of the L/C
Application relating to such Letter of Credit, the Issuing Lender will promptly
notify each other Revolving Credit Lender. Forthwith upon its receipt of any
such notice, each such other Lender will transfer to the Issuing Lender, in
immediately available funds, an amount equal to such other Lender's pro rata
--- ----
share (based on its Revolving Credit Commitment) of the L/C Obligation arising
from such unreimbursed payment. Promptly, upon its receipt from such other
Lender of such amount, the Issuing Lender will complete, execute and deliver to
such other Lender an L/C Participation Certificate dated the date of such
receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any other Revolving Credit
Lender such other Lender's pro rata share of the L/C Obligation arising
--- ----
therefrom, the Issuing Lender receives any reimbursement on account of such L/C
Obligation or any payment of interest on account thereof, the Issuing Lender
will promptly
26
distribute to such other Lender its pro rata share thereof in like funds as
--- ----
received; provided that in the event that the receipt by the Issuing Lender of
--------
such reimbursement or such payment of interest (as the case may be) is required
to be returned, such other Lender will return to the Issuing Lender any portion
thereof previously distributed by the Issuing Lender to it in like funds as such
reimbursement or payment is required to be returned by the Issuing Lender.
3.9 Letter of Credit Fees. (a) In lieu of any letter of credit
---------------------
commissions and fees provided for in any L/C Application relating to Standby or
Commercial L/Cs (other than standard issuance, amendment and negotiation fees),
the Company agrees to pay the Administrative Agent, for the account of the
Issuing Lender and the Participating Lenders, with respect to each Standby or
Commercial L/C issued for the account of the Company, a Standby or Commercial
L/C fee, as the case may be, equal to the Applicable Margin for Revolving Credit
Loans which are Eurodollar Loans per annum (of which the Issuing Lender shall
retain for its own account, as the issuing bank and not on account of its L/C
Participating Interest therein, 0.25% per annum) on the daily average amount
available to be drawn under each Standby L/C in the case of a Standby L/C and on
the maximum face amount of each Commercial L/C in the case of a Commercial L/C,
in either case, payable, in arrears, on the last day of each fiscal quarter of
the Company. The Administrative Agent will disburse any Standby or Commercial
L/C fees received pursuant to this subsection 3.9(a) to the respective Lenders
promptly following the receipt of any such fees. Notwithstanding the foregoing,
the Company agrees to pay standard issuance, amendment and negotiation fees to
the Issuing Lender.
(b) For purposes of any payment of fees required pursuant to this
subsection 3.9, the Administrative Agent agrees to provide to the Company a
statement of any such fees to be so paid; provided that the failure by the
--------
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.
3.10 Letter of Credit Reserves. (a) If any Change in Law shall
-------------------------
either (i) impose, modify, deem or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued by the
Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding this Agreement (with respect to Letters of Credit) or any Letter of
Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost of the Issuing Lender of issuing or maintaining
any Letter of Credit (which increase in cost shall be the result of the Issuing
Lender's reasonable allocation of the aggregate of such cost increases resulting
from such events), then, upon demand by the Issuing Lender, the Company shall
immediately pay to the Issuing Lender, from time to time as specified by the
Issuing Lender, additional amounts which shall be sufficient to compensate the
Issuing Lender for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the rate applicable to Alternate Base Rate Loans pursuant to subsection
4.5(b). The Company shall not be required to make any payments to the Issuing
Lender for any additional amounts pursuant to this subsection 3.10(a) unless the
Issuing Lender has given written notice to the Company of its intent to request
such payments prior to or within 60 days after the date on which the Issuing
Lender became entitled to claim such amounts. A certificate, setting forth in
reasonable detail the calculation of the amounts involved, submitted by the
Issuing Lender to the Company concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any Change in Law with respect to the Issuing
Lender shall, in the opinion of the Issuing Lender, require that any obligation
under any Letter of Credit be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
the Issuing Lender or any corporation controlling the Issuing Lender, and such
Change in Law shall have the effect of reducing the rate of return on the
Issuing Lender's or such corporation's capital, as the case may be, as a
consequence of the Issuing Lender's obligations under such Letter of Credit to a
level below that which the Issuing Lender or such corporation, as the case may
be, could have
27
achieved but for such Change in Law (taking into account the Issuing Lender's or
such corporation's policies, as the case may be, with respect to capital
adequacy) by an amount deemed by the Issuing Lender to be material, then from
time to time following notice by the Issuing Lender to the Company of such
Change in Law, within 15 days after demand by the Issuing Lender, the Company
shall pay to the Issuing Lender such additional amount or amounts as will
compensate the Issuing Lender or such corporation, as the case may be, for such
reduction. The Issuing Lender agrees that, upon the occurrence of any event
giving rise to the operation of paragraph (a) or (b) of this subsection 3.10
with respect to the Issuing Lender, it will, if requested by the Company and to
the extent permitted by law or by the relevant Governmental Authority, endeavor
in good faith to avoid or minimize the increase in costs or reduction in
payments resulting from such event; provided that such avoidance or minimization
--------
can be made in such a manner that the Issuing Lender, in its sole determination,
suffers no economic, legal or regulatory disadvantage. The Company shall not be
required to make any payments to the Issuing Lender for any additional amounts
pursuant to this subsection 3.10(b) unless the Issuing Lender has given written
notice to the Company of its intent to request such payments prior to or within
60 days after the date on which the Issuing Lender became entitled to claim such
amounts. A certificate, in reasonable detail setting forth the calculation of
the amounts involved, submitted by the Issuing Lender to the Company
concurrently with any such demand by the Issuing Lender, shall be conclusive,
absent manifest error, as to the amount thereof.
(c) The Company and each Participating Lender agree that the
provisions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such Letter
of Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Lender or, in the case of paragraph (b),
any corporation controlling such Participating Lender.
3.11 Further Assurances. The Company hereby agrees, from time to
------------------
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of Letters of Credit hereunder.
3.12 Obligations Absolute. The payment obligations of the Company
--------------------
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other
right which the Company or any of its Subsidiaries may have at any time
against any beneficiary, or any transferee, of any Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Lender, the Administrative Agent or any Lender, or any
other Person, whether in connection with this Agreement, any Credit
Document, the transactions contemplated herein, or any unrelated
transaction;
(ii) any statement or any other document presented under any
Letter of Credit proving to be forged, fraudulent or invalid or any
statement therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or certificate or other document which does
not comply with the terms of such Letter of Credit or is insufficient in
any respect, except where such payment constitutes gross negligence or
willful misconduct on the part of the Issuing Lender; or
28
(iv) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, except for any such circumstances
or happening constituting gross negligence or willful misconduct on the
part of the Issuing Lender.
3.13 Assignments. No Participating Lender's participation in any
-----------
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection 11.6(c)) without the prior written consent of the Issuing Lender,
which consent will not be unreasonably withheld. Such consent may be given or
withheld without the consent or agreement of any other Participating Lender.
Notwithstanding the foregoing, a Participating Lender may subparticipate its L/C
Participating Interest without obtaining the prior written consent of the
Issuing Lender.
3.14 Participations. The obligation of each Revolving Credit Lender
--------------
to purchase participating interests pursuant to subsection 3.6 shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuing Lender, any Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of any Borrower; (iv) any breach of this Agreement by any Borrower or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
--------------------------------------
4.1 Procedure for Borrowing. (a) The Borrowers may borrow under the
-----------------------
Commitments on any Business Day; provided that, with respect to any borrowing,
--------
the Company, as agent for the Borrowers, shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 noon (or, with respect to Swing Line Loans, 3:00 P.M.), New York
City time, (i) three Business Days prior to the requested Borrowing Date if all
or any part of the Loans are to be Eurodollar Loans and (ii) on the requested
Borrowing Date if the applicable notice is received prior to 9:00 A.M.. on such
Borrowing Date and if the borrowing is to be solely of Alternate Base Rate
Loans) and specifying (A) the amount of the borrowing, (B) whether such Loans
are initially to be Eurodollar Loans or Alternate Base Rate Loans or a
combination thereof, (C) if the borrowing is to be entirely or partly Eurodollar
Loans, the length of the Interest Period for such Eurodollar Loans and (D)
whether the Loan is a Term Loan, a Swing Line Loan or Revolving Credit Loan.
Upon receipt of such notice the Administrative Agent shall promptly notify each
affected Lender thereof. Not later than 12:00 noon, New York City time, on the
Borrowing Date specified in such notice, each affected Lender shall make
available to the Administrative Agent at the office of the Administrative Agent
specified in subsection 11.2 (or at such other location as the Administrative
Agent may direct) an amount in immediately available funds equal to the amount
of the Loan to be made by such Lender (except that proceeds of Swing Line Loans
will be made available to the Borrowers in accordance with subsection 3.4(a)).
Loan proceeds received by the Administrative Agent hereunder shall promptly be
made available to the Borrowers by the Administrative Agent's crediting the
account of the Borrowers, at the office of the Administrative Agent specified in
subsection 11.2, with the aggregate amount actually received by the
Administrative Agent from the Lenders and in like funds as received by the
Administrative Agent.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) no more than sixteen Interest Periods shall
be in effect at any one time.
29
4.2 Conversion and Continuation Options. (a) Subject to subsection
-----------------------------------
4.12, the Company, as agent for the Borrowers, may elect from time to time to
convert Eurodollar Loans into Alternate Base Rate Loans by giving the
Administrative Agent irrevocable notice of such election, to be received by the
Administrative Agent prior to 12:00 noon, New York City time, at least three
Business Days prior to the proposed conversion date. The Company, as agent for
the Borrowers, may elect from time to time to convert all or a portion of the
Alternate Base Rate Loans (other than Swing Line Loans) then outstanding to
Eurodollar Loans by giving the Administrative Agent irrevocable notice of such
election, to be received by the Administrative Agent prior to 12:00 noon, New
York City time, at least three Business Days prior to the proposed conversion
date, specifying the Interest Period selected therefor, and, if no Default or
Event of Default has occurred and is continuing, such conversion shall be made
on the requested conversion date or, if such requested conversion date is not a
Business Day, on the next succeeding Business Day. Upon receipt of any notice
pursuant to this subsection 4.2, the Administrative Agent shall promptly notify
each affected Lender thereof. All or any part of the outstanding Loans (other
than Swing Line Loans) may be converted as provided herein; provided that
--------
partial conversions of Alternate Base Loans shall be in the aggregate principal
amount of $500,000 or a whole multiple of $100,000 in excess thereof and the
aggregate principal amount of the resulting Eurodollar Loans outstanding in
respect of any one Interest Period shall be at least $1,000,000 or a whole
multiple of $500,000 in excess thereof.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Company, as
agent for the Borrowers, giving notice to the Administrative Agent, in
accordance with the applicable provisions of the term "Interest Period" set
forth in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans; provided that no Eurodollar Loan may be continued as
--------
such (i) when any Event of Default has occurred and is continuing and the
Administrative Agent or the Required Lenders have, by written notice to the
Company, determined that such a continuation is not appropriate, (ii) if, after
giving effect thereto, subsection 4.1(b) would be contravened or (iii) after the
date that is one month prior to the Revolving Credit Termination Date (in the
case of continuations of Revolving Credit Loans) or the final Installment
Payment Date of the Term Loans.
4.3 Changes of Commitment Amounts. (a) The Company, as agent for
-----------------------------
the Borrowers, shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate or from time to time to
permanently reduce the Revolving Credit Commitments, subject to the provisions
of this subsection 4.3. To the extent, if any, that the sum of the amount of
the Revolving Credit Loans, Swing Line Loans and L/C Obligations then
outstanding and the amounts available to be drawn under outstanding Letters of
Credit exceeds the amount of the Revolving Credit Commitments as then reduced,
the Company, as agent for the Borrowers, shall be required to make a prepayment
equal to such excess amount, the proceeds of which shall be applied, first, to
-----
payment of the Swing Line Loans then outstanding, second, to payment of the
------
Revolving Credit Loans then outstanding, third, to payment of any L/C
-----
Obligations then outstanding, and fourth, to cash collateralize any outstanding
------
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Any such termination of the Revolving Credit Commitments shall be accompanied by
prepayment in full of the Revolving Credit Loans, Swing Line Loans and L/C
Obligations then outstanding and by cash collateralization of any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Upon termination of the Revolving Credit Commitments, any Letter of Credit then
outstanding that has been so cash collateralized shall no longer be considered a
"Letter of Credit" as defined in subsection 1.1 and any L/C Participating
Interests heretofore granted by the Issuing Lender to the Lenders in such Letter
of Credit shall be deemed terminated (subject to automatic reinstatement in the
event that such cash collateral is returned and the Issuing Lender is not fully
reimbursed for any such L/C Obligations) but the Letter of Credit fees payable
under subsection 3.9 shall continue to accrue to the Issuing Lender and the
Participating Lenders (or, in the event of any such automatic reinstatement, as
provided in subsection 3.9) with respect to such Letter of Credit until the
expiry thereof (provided that in lieu of paying a
--------
30
Standby or Commercial L/C fee, as the case may be, equal to the Applicable
Margin for Revolving Credit Loans which are Eurodollar Loans per annum, the
Company shall pay to the Administrative Agent an amount equal to 0.25% per
annum).
(b) In the case of termination of the Revolving Credit Commitments,
interest accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such termination.
Any such partial reduction of the Revolving Credit Commitments shall be in an
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall, in each case, reduce permanently the amount of the Revolving Credit
Commitments then in effect.
4.4 Optional and Mandatory Prepayments; Repayments of Term Loans.
------------------------------------------------------------
(a) Subject to subsection 4.12, the Company, as agent for the Borrowers, may at
any time and from time to time prepay Loans, in whole or in part, without
premium or penalty, by irrevocable notice to the Administrative Agent by 10:00
A.M., New York City time, on the same Business Day (or, in the case of Swing
Line Loans, by irrevocable notice to the Administrative Agent by 12:00 noon, New
York City time, on the same Business Day) in the case of Alternate Base Rate
Loans, and three Business Days' irrevocable notice to the Administrative Agent
in the case of Eurodollar Loans, specifying the date and amount of prepayment
and whether the prepayment is of Revolving Credit Loans or Term Loans. Upon
receipt of such notice the Administrative Agent shall promptly notify each
Lender thereof. If such notice is given, the Borrowers specified in such
prepayment notice shall make such prepayment, and the payment amount specified
in such notice shall be due and payable, on the date specified therein. Partial
prepayments (i) of Term Loans shall be in an aggregate principal amount equal to
the lesser of (A) (I) $1,000,000, or a whole multiple of $500,000 in excess
thereof with respect to Eurodollar Loans or (II) $500,000, or a whole multiple
of $100,000 in excess thereof with respect to Alternate Base Rate Loans and (B)
the aggregate unpaid principal amount of the Term Loans, and (ii) of Revolving
Credit Loans shall be in an aggregate principal amount equal to the lesser of
(A) $1,000,000, or a whole multiple of $500,000 in excess thereof with respect
to Eurodollar Loans or (II) $500,000, or a whole multiple of $100,000 in excess
thereof with respect to Alternate Base Rate Loans and (B) the aggregate unpaid
principal amount of the Revolving Credit Loans, as the case may be. Prepayments
of the Term Loans pursuant to this subsection 4.4(a) shall be applied pro rata
--- ----
to the Tranche A Term Loans and the Tranche B Term Loans, and shall be applied
first, to any installment due to be paid within three months of such prepayment
-----
and, second, ratably to the remaining installments thereof.
------
(b) (i) So long as any Term Loans are outstanding, if, subsequent to
the Closing Date, the Company or any of its Subsidiaries shall issue any Capital
Stock (other than warrants issued in connection with the issuance of Preferred
Stock or the Senior Subordinated Notes), 50% of the Net Proceeds thereof
(excluding amounts provided by the Investor Group or their Affiliates or by
management employees of such issuer) shall be promptly applied toward the
prepayment of the Term Loans pro rata to the Tranche A Term Loans and Tranche B
--- ----
Term Loans (with such application being made first, to any installment due to be
-----
paid within three months of such prepayment and, second, ratably to the
------
remaining installments thereof); provided that Net Proceeds of such issuance
--------
shall be deemed to be Net Proceeds of such issuance for purposes of this
subsection 4.4(b)(i) only after deducting therefrom any cash proceeds therefrom
actually applied to the redemption of (a) any then outstanding aggregate
principal amount of Bridge Subordinated Debt (including all accrued interest on
such subordinated bridge loans and the amount of all expenses, premium or
penalties associated therewith) and (b) up to 35% of the Specified Debt under
any "equity clawback" provisions and (c) the redemption of up to 35% of the
Preferred Stock under any "equity clawback" provisions and the payment of any
expenses, premium or penalties or accrued interest with respect thereto.
(ii) If, subsequent to the Closing Date, the Company or any of
its Subsidiaries shall incur or permit the incurrence of any Indebtedness (other
than Indebtedness permitted pursuant to subsection 8.1, unless otherwise
specified in such subsection), 100% of the Net Proceeds thereof shall be
31
promptly applied toward the prepayment of the Term Loans pro rata to the Tranche
--- ----
A Term Loans and Tranche B Term Loans (with such application being made first,
-----
to any installment due to be paid within three months of such prepayment and,
second, ratably to the remaining installments thereof).
------
(iii) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall incur or permit the incurrence of any Indebtedness permitted
pursuant to subsection 8.1(c)(ii) in excess of the Permitted Specified Debt
Amount (as defined in subsection 8.1(c)(ii)), 100% of the Net Proceeds thereof
shall be promptly applied toward the prepayment of the Tranche B Term Loans
(with such application being made first, to any installment due to be paid
within three months of such prepayment and, second, ratably to the remaining
installments thereof).
(iv) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net Proceeds
shall be promptly applied toward the prepayment of the Term Loans pro rata to
--- ----
the Tranche A Term Loans and Tranche B Term Loans (with such application being
made first, to any installment due to be paid within three months of such
prepayment and, second, ratably to the remaining installments thereof); provided
------ --------
that such Net Proceeds need not be applied to the prepayment of the Term Loans
until the earlier of the date that the aggregate amount of Net Proceeds received
by the Borrower or any of its Subsidiaries from any Asset Sales exceeds
$1,000,000 (and has not yet been applied to the prepayment of the Term Loans
hereunder) and the date which is six months after the last application of Net
Proceeds pursuant to this subsection 4.4(b)(iv).
(v) If for any fiscal year commencing with its fiscal year ending on
December 29, 2001, there shall be Excess Cash Flow for such fiscal year, 50% of
such Excess Cash Flow shall be promptly applied toward prepayment of the Term
Loans pro rata to the Tranche A Term Loans and Tranche B Term Loans (with such
--- ----
application being made first, to any installment due to be paid within three
-----
months of such prepayment and, second, ratably to the remaining installments
------
thereof). Each such prepayment shall be made not later than 120 days after the
end of such fiscal year.
(vi) The Company, as agent for the Borrowers, shall give the
Administrative Agent (which shall promptly notify each Lender) at least one
Business Day's notice of each prepayment or mandatory reduction pursuant to this
subsection 4.4(b) setting forth the date, amount and applicable Borrower
thereof. Except as otherwise may be agreed by the Company, as agent for the
Borrowers and the Required Lenders, any prepayment of Loans pursuant to this
subsection 4.4 shall be applied, first, to any Alternate Base Rate Loans then
-----
outstanding and the balance of such prepayment, if any, to the Eurodollar Loans
then outstanding; provided that prepayments of Eurodollar Loans, if not on the
--------
last day of the Interest Period with respect thereto, shall, at the option of
the Company, as agent for the Borrowers, be prepaid subject to the provisions of
subsection 4.12 or the amount of such prepayment (after application to any
Alternate Base Rate Loans) shall be deposited with the Administrative Agent as
cash collateral for the Loans on terms reasonably satisfactory to the
Administrative Agent and thereafter shall be applied in the order of the
Interest Periods next ending most closely to the date such prepayment is
required to be made and on the last day of each such Interest Period. After
such application, unless an Event of Default shall have occurred and be
continuing, any remaining interest earned on such cash collateral shall be paid
to the Company, as agent for the Borrowers.
(c) The Tranche A Term Loans shall be repaid in consecutive semi-
annual installments on the dates set forth below (each such day, a "Tranche A
---------
Installment Payment Date"), commencing on June 30, 2001, in an aggregate amount
------------------------
equal to the amount specified for each such Tranche A Installment Payment Date:
Installment Payment Date Installment Amount
------------------------ ------------------
32
June 30, 2001 5,000,000
December 31, 2001 10,000,000
June 30, 2002 11,250,000
December 31, 2002 12,500,000
June 30, 2003 13,750,000
December 31, 2003 15,000,000
June 30, 2004 16,250,000
December 31, 2004 17,500,000
June 30, 2005 18,750,000
December 31, 2005 20,000,000
Tranche A Maturity Date 10,000,000
(d) The Tranche B Term Loans shall be repaid in consecutive semi-
annual installments on the dates set forth below (each such day, a "Tranche B
---------
Installment Payment Date"), commencing on June 30, 2001, in an aggregate amount
------------------------
equal to the amount specified for each such Tranche B Installment Payment Date.
Installment Payment Date Installment Amount
------------------------ ------------------
June 30, 2001 500,000
December 31, 2001 1,000,000
June 30, 2002 1,000,000
December 31, 2002 1,000,000
June 30, 2003 1,000,000
December 31, 2003 1,000,000
June 30, 2004 1,000,000
December 31, 2004 1,000,000
June 30, 2005 1,000,000
December 31, 2005 1,000,000
June 30, 2006 25,500,000
December 31, 2006 50,000,000
June 30, 2007 81,250,000
December 31, 2007 112,500,000
Tranche B Maturity Date 66,250,000
Amounts repaid on account of the Term Loans pursuant to this subsection or
otherwise may not be reborrowed. Accrued interest on the amount of any
prepayments shall be paid on the Interest Payment
33
Date next succeeding the date of any partial prepayment and on the date of such
prepayment in the case of a prepayment in full of the Term Loans.
(e) Notwithstanding the provisions of subsection 4.4, with respect to
the amount of any mandatory prepayment described therein that is allocated to
Tranche B Term Loans (such amount, the "Tranche B Prepayment Amount"), at any
---------------------------
time when Tranche A Term Loans remain outstanding, the Administrative Agent
shall promptly provide to each Tranche B Lender a notice (each a "Tranche B
---------
Prepayment Option Notice") as described below. Each Tranche B Prepayment Option
------------------------
Notice shall be in writing, shall refer to this subsection 4.4(e) and shall (i)
set forth the Tranche B Prepayment Amount and the portion thereof that the
applicable Tranche B Lender will be entitled to receive if it accepts such
mandatory prepayment in accordance with this subsection 4.4(e), (ii) state that
the Company is offering to prepay on a specified date (each a "Tranche B
---------
Mandatory Prepayment Date"), which shall be not less than four days or more than
-------------------------
six days after the date of the Tranche B Option Prepayment Notice, the Tranche B
Term Loans of such Tranche B Lender in an amount equal to the portion of the
Tranche B Prepayment Amount indicated in such Tranche B Lender's Tranche B
Prepayment Option Notice as being applicable to such Tranche B Lender, (iii)
request such Tranche B Lender to notify the Company and the Administrative Agent
in writing, no later than the second day prior to the Tranche B Mandatory
Prepayment Date, of such Tranche B Lender's acceptance or rejection of such
offer of prepayment and (iv) inform such Tranche B Lender that failure by such
Tranche B Lender to accept or reject such offer in writing on or before the
second day prior to the Tranche B Mandatory Prepayment Date shall be deemed an
acceptance of such prepayment offer. Each Tranche B Prepayment Option Notice
shall be given by telecopy, confirmed by hand delivery, overnight courier
service or registered or certified mail, in each case addressed as provided in
subsection 11.2. On the Tranche B Mandatory Prepayment Date, the Borrowers
shall pay the Administrative Agent in immediately available funds (i) the
aggregate amount necessary to prepay the portion of the Tranche B Prepayment
Amount in respect of which the Tranche B Lenders have accepted prepayment as
described above (such Tranche B Lenders, the "Accepting Tranche B Lenders"), and
---------------------------
the Administrative Agent shall apply such amount on behalf of such Borrower pro
---
rata against the remaining installments of principal due in respect of the
----
Tranche B Term Loans of the Accepting Tranche B Lenders, and (ii) the aggregate
amount of the portion of the Tranche B Prepayment Amount not accepted by the
Tranche B Lenders, and the Administrative Agent shall apply such amount on
behalf of such Borrower pro rata against the remaining installments of principal
--- ----
due in respect of the Tranche A Term Loans.
4.5 Interest Rates and Payment Dates. (a) Eurodollar Loans shall
--------------------------------
bear interest for each day during each Interest Period applicable thereto,
commencing on (and including) the first day of such Interest Period to, but
excluding, the last day of such Interest Period, on the unpaid principal amount
thereof at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
----
(b) Alternate Base Rate Loans shall bear interest for the period from
and including the date such Loans are made to, but excluding, the maturity date
thereof, or to, but excluding, the conversion date if such Loans are earlier
converted into Eurodollar Loans on the unpaid principal amount thereof at a rate
per annum equal to the Alternate Base Rate plus the Applicable Margin.
----
(c) If all or a portion of (i) the principal amount of any of the
Loans or (ii) any interest payable thereon shall not be paid when due (whether
at the stated maturity, by acceleration or otherwise) such Loan, if a Eurodollar
Loan, shall be converted into an Alternate Base Rate Loan at the end of the
then-current Interest Period for such Eurodollar Loan (which conversion shall
occur automatically and without need for compliance with the conditions for
conversion set forth in subsection 4.2), and any such overdue amount shall,
without limiting the rights of the Lenders under Section 9, bear interest (which
shall be payable on demand) at a rate per annum which is 2% plus the Alternate
----
Base Rate plus the Applicable Margin (or, in the case of a Eurodollar Loan, the
----
Eurodollar Rate for the Interest Period plus
----
34
the Applicable Margin plus 2%, if higher) from the date of such non-payment
----
until paid in full (as well after as before judgment).
(d) Except as otherwise expressly provided for in this subsection
4.5, interest shall be payable in arrears on each Interest Payment Date.
4.6 Computation of Interest and Fees. (a) Interest in respect of
--------------------------------
Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Prime Rate, and all fees hereunder shall be
calculated on the basis of a 365 (or 366 as the case may be) day year for the
actual days elapsed. Interest in respect of Eurodollar Loans and in respect of
Alternate Base Rate Loans at any time that the Alternate Base Rate is determined
by reference to the Base CD Rate or the Federal Funds Effective Rate shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Company and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate is announced
or such change in the Eurocurrency Reserve Requirements becomes effective, as
the case may be. The Administrative Agent shall as soon as practicable notify
the Company and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Company, as agent for the
Borrowers, or any Lender, deliver to the Company or such Lender a statement
showing the quotations used by the Administrative Agent in determining the
Eurodollar Rate.
4.7 Certain Fees. The Company agrees to pay to the Administrative
------------
Agent, for its own account, a non-refundable agent's fee in an amount previously
agreed to with the Administrative Agent, payable in advance on the Closing Date
and on the first day of each fiscal year of the Company thereafter.
4.8 Inability to Determine Interest Rate. In the event that the
------------------------------------
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company, as agent for the Borrowers, has
requested be made as Eurodollar Loans, (ii) any Eurodollar Loans that will
result from the requested conversion of all or part of the Alternate Base Rate
Loans into Eurodollar Loans or (iii) the continuation of any Eurodollar Loan as
such for an additional Interest Period, or (b) dollar deposits in the relevant
amount and for the relevant period with respect to any such Eurodollar Loan are
not generally available to the Lenders in their respective Eurodollar Lending
Offices' interbank eurodollar markets, the Administrative Agent shall forthwith
give telecopy or e-mail notice of such determination, confirmed in writing, to
the Company and the Lenders at least one day prior to, as the case may be, the
requested Borrowing Date, the conversion date or the last day of such Interest
Period. If such notice is given (i) any requested Eurodollar Loans shall be
made as Alternate Base Rate Loans, (ii) any Alternate Base Rate Loans that were
to have been converted to Eurodollar Loans shall be continued as Alternate Base
Rate Loans, and (iii) any outstanding Eurodollar Loans shall be converted on the
last day of the then current Interest Period applicable thereto into Alternate
Base Rate Loans. Until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans shall be made and no Alternate Base Rate
Loans shall be converted to Eurodollar Loans.
35
4.9 Pro Rata Treatment and Payments. (a) Except to the extent
-------------------------------
otherwise provided herein, each borrowing of Loans by the Borrowers from the
Lenders and any reduction of the Commitments of the Lenders hereunder shall be
made pro rata according to the relevant Commitment Percentages of the Lenders
--- ----
with respect to the Loans borrowed or the Commitments to be reduced.
(b) Whenever any payment received by the Administrative Agent under
this Agreement or any Note or any other Credit Document is insufficient to pay
in full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) If the Administrative Agent has not received a Payment
Sharing Notice (or, if the Administrative Agent has received a Payment
Sharing Notice but the Event of Default specified in such Payment Sharing
Notice has been cured or waived in accordance with the provisions of this
Agreement), such payment shall be distributed by the Administrative Agent
and applied by the Administrative Agent and the Lenders in the following
order: first, to the payment of fees and expenses due and payable to the
-----
Administrative Agent under and in connection with this Agreement and the
other Credit Documents; second, to the payment of all expenses due and
------
payable under subsection 11.5, ratably among the Lenders in accordance with
the aggregate amount of such payments owed to each such Lender; third, to
-----
the payment of fees due and payable under subsections 3.2 and 3.9, ratably
among the Lenders in accordance with the Commitment Percentage of each
Lender of the Commitment for which such payment is owed and, in the case of
the Issuing Lender, the amount retained by the Issuing Lender for its own
account pursuant to subsection 3.9; fourth, to the payment of interest then
------
due and payable on the Loans and the L/C Obligations ratably in accordance
with the aggregate amount of interest owed to each such Lender; and fifth,
-----
to the payment of the principal amount of the Loans and the L/C Obligations
which is then due and payable ratably among the Lenders in accordance with
the aggregate principal amount owed to each such Lender; or
(ii) If the Administrative Agent has received a Payment Sharing
Notice which remains in effect, all payments received by the Administrative
Agent under this Agreement or any Note shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the
Lenders in the following order: first, to the payment of all amounts
-----
described in clauses "first" through "third" of the foregoing clause (i) in
----- -----
the order set forth therein; second, to the payment of the interest accrued
------
on all Loans and L/C Obligations, regardless of whether any such amount is
then due and payable, ratably among the Lenders in accordance with the
aggregate accrued interest plus the aggregate principal amount of all Loans
and L/C Obligations then due and payable and owed to such Lender; and
third, to the payment of the principal amount of all Loans and L/C
-----
Obligations, regardless of whether any such amount is then due and payable,
ratably among the Lenders in accordance with the aggregate principal amount
owed to such Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to make a
------------------
Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan or (y) given notice to the Company or the Administrative
Agent that it will not make, or that it has disaffirmed or repudiated any
obligation to make, any Revolving Credit Loan, in each case by reason of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, or otherwise, (i) any payment made on account of the principal
of the Revolving Credit Loans outstanding shall be made as follows:
(A) in the case of any such payment made on any date when and to the
extent that in the determination of the Administrative Agent the Borrowers
would be able under the terms and conditions hereof to reborrow the amount
of such payment under the Commitments and to satisfy any applicable
conditions precedent set forth in Section 6 to such reborrowing, such
36
payment shall be made on account of the outstanding Revolving Credit Loans
held by the Lenders other than the Non-Funding Lender pro rata according to
--- ----
the respective outstanding principal amounts of the Revolving Credit Loans
of such Lenders; and
(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders pro rata according
--- ----
to the respective outstanding principal amounts of such Revolving Credit
Loans; and
(ii) any payment made on account of interest on the Revolving Credit Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
--- ----
interest due and payable on the Revolving Credit Loans with respect to which
such payment is being made. Each Borrower agrees to give the Administrative
Agent such assistance in making any determination pursuant to subparagraph
(i)(A) of this paragraph as the Administrative Agent may reasonably request.
Any such determination by the Administrative Agent shall be conclusive and
binding on the Lenders.
(d) All payments (including prepayments) to be made by any Borrower
on account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders at the Administrative Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States and in immediately
available funds. The Administrative Agent shall promptly distribute such
payments in accordance with the provisions of subsection 4.9(b) upon receipt in
like funds as received. If any payment hereunder (other than payments on
Eurodollar Loans) would become due and payable on a day other than a Business
Day, such payment shall become due and payable on the next succeeding Business
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (and with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension), unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount which would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent in
accordance with subsection 4.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Company, as agent for the Borrowers,
a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection 4.9(e)
shall be conclusive absent manifest error. If such Lender's Commitment
Percentage of such borrowing is not in fact made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with interest
thereon at the rate per annum applicable to Alternate Base Rate Loans hereunder
(in lieu of any otherwise applicable interest), on demand, from the Borrowers,
without prejudice to any rights which any such Borrower or the Administrative
Agent may have against such Lender hereunder. Nothing contained in this
subsection 4.9 shall relieve any Lender which has failed to make available its
ratable portion of any borrowing hereunder from its obligation to do so in
accordance with the terms hereof.
(f) The failure of any Lender to make the Loan to be made by it on
any Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing
37
Date, but no Lender shall be responsible for the failure of any other Lender to
make the Loan to be made by such other Lender on such Borrowing Date.
(g) All payments and optional prepayments (other than prepayments as
set forth in subsection 4.11 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $1,000,000
or a whole multiple of $500,000 in excess thereof.
4.10 Illegality. Notwithstanding any other provision herein, if (i)
----------
any Change in Law occurring after the date that any lender becomes a Lender
party to this Agreement, shall make it unlawful for such Lender to make or
maintain Eurodollar Loans as contemplated by this Agreement, the commitment of
such Lender hereunder to make Eurodollar Loans or to convert all or a portion of
Alternate Base Rate Loans into Eurodollar Loans shall forthwith be suspended
until such time, if any, as such illegality shall no longer exist and such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Alternate Base Rate Loans for the duration of the respective
Interest Periods (or, if permitted by applicable law, at the end of such
Interest Periods) and all payments of principal which would otherwise be applied
to such Eurodollar Loans shall be applied instead to such Lender's Alternate
Base Rate Loans. The Borrowers hereby agree to pay any Lender, promptly upon
its demand, any amounts payable pursuant to subsection 4.12 in connection with
any conversion in accordance with this subsection 4.10 (such Lender's notice of
such costs, as certified in reasonable detail as to such amounts to the Company
through the Administrative Agent, to be conclusive absent manifest error).
4.11 Requirements of Law. (a) In the event that any Change in Law or
-------------------
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
occurring after the date that any lender becomes a Lender party to this
Agreement:
(i) does or shall subject any such Lender or its Eurodollar
Lending Office to any tax of any kind whatsoever with respect to this
Agreement, any Note or any Eurodollar Loans made by it, or change the basis
of taxation of payments to such Lender or its Eurodollar Lending Office of
principal, the commitment fee, interest or any other amount payable
hereunder (except for (x) net income and franchise taxes imposed on the net
income of such Lender or its Eurodollar Lending Office by the jurisdiction
under the laws of which such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction
in which such Lender's Eurodollar Lending Office is located or any
political subdivision or taxing authority thereof or therein, including
changes in the rate of tax on the overall net income of such Lender or such
Eurodollar Lending Office, and (y) taxes resulting from the substitution of
any such system by another system of taxation; provided that the taxes
--------
payable by Lenders subject to such other system of taxation are not
generally charged to borrowers from such Lenders having loans or advances
bearing interest at a rate similar to the Eurodollar Rate);
(ii) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other acquisition
of funds by, any office of such Lender which are not otherwise included in
the determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other condition;
38
and the result of any of the foregoing is to increase the cost to such Lender or
its Eurodollar Lending Office of making, converting, renewing or maintaining
advances or extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Borrowers shall promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such additional cost or reduced
amount receivable which such Lender deems to be material as determined by such
Lender with respect to such Eurodollar Loans, together with interest on each
such amount from the date demanded until payment in full thereof at a rate per
annum equal to the Alternate Base Rate plus 1%.
(b) In the event that any Change in Law occurring after the date that
any lender becomes a Lender party to this Agreement with respect to any such
Lender shall, in the opinion of such Lender, require that any Commitment of such
Lender be treated as an asset or otherwise be included for purposes of
calculating the appropriate amount of capital to be maintained by such Lender or
any corporation controlling such Lender, and such Change in Law shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital, as the case may be, as a consequence of such Lender's obligations
hereunder to a level below that which such Lender or such corporation, as the
case may be, could have achieved but for such Change in Law (taking into account
such Lender's or such corporation's policies, as the case may be, with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time following notice by such Lender to the Company of such Change
in Law as provided in paragraph (c) of this subsection 4.11, within 15 days
after demand by such Lender, the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
on an after-tax basis, as the case may be, for such reduction.
(c) The Borrowers shall not be required to make any payments to any
Lender for any additional amounts pursuant to this subsection 4.11 unless such
Lender has given written notice to the Company, through the Administrative
Agent, of its intent to request such payments prior to or within 60 days after
the date on which such Lender became entitled to claim such amounts. If any
Lender has notified the Company through the Administrative Agent of any
increased costs pursuant to paragraph (a) of this subsection 4.11, the Borrowers
at any time thereafter may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly notify the Lenders thereof), and
subject to subsection 4.12, prepay (or convert into Alternate Base Rate Loans)
all (but not a part) of the Eurodollar Loans then outstanding. Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
paragraph (a) of this subsection 4.11 with respect to such Lender, it will, if
requested by the Company to the extent permitted by law or by the relevant
Governmental Authority, endeavor in good faith to avoid or minimize the increase
in costs or reduction in payments resulting from such event (including, without
limitation, endeavoring to change its Eurodollar Lending Office); provided, that
--------
such avoidance or minimization can be made in such a manner that such Lender, in
its sole determination, suffers no economic, legal or regulatory disadvantage.
If any Lender requests compensation from any Borrower under this subsection
4.11, the Company, as agent for the Borrowers may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
thereafter to make or continue Loans of the Type with respect to which such
compensation is requested, or to convert Loans of any other Type into Loans of
such Type, until the Requirement of Law giving rise to such request ceases to be
in effect; provided that such suspension shall not affect the right of such
--------
Lender to receive the compensation so requested.
(d) Each Lender (and in case of an Assignee on the date it becomes a
Lender) that is not a United States Person (as defined in Section 7701(a)(30) of
the Code) for federal income tax purposes either (1) in the case of a Lender
that is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i)
represents to each Borrower (for the benefit of the Borrowers and the
Administrative Agent) that under applicable law and treaties no taxes are
required to be withheld by any Borrower or the Administrative Agent with respect
to any payments to be made to such Lender in respect of the Loans or the L/C
Participating Interests, (ii) agrees to furnish to the Company, with a copy to
the Administrative
39
Agent, either U.S. Internal Revenue Service Form W-8ECI or U.S. Internal Revenue
Service Form W-8BEN (wherein such Lender claims entitlement to complete
exemption from U.S. federal withholding tax on all interest payments hereunder)
and (iii) agrees (for the benefit of the Borrowers and the Administrative
Agent), to the extent it may lawfully do so at such times, to provide the
Company, with a copy to the Administrative Agent, a new Form W-8ECI or Form W-
8BEN upon the expiration or obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Lender, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption or (2) in the case of a Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, (i) agrees to furnish to
the Company, with a copy to the Administrative Agent, (A) a certificate
substantially in the form of Exhibit I hereto (any such certificate, a
"Subsection 4.11(d)(2) Certificate") and (B) two accurate and complete original
---------------------------------
signed copies of Internal Revenue Service Form W-8BEN, certifying to such
Lender's legal entitlement at the Closing Date (or, in the case of an Assignee,
on the date it becomes a Lender) to an exemption from U.S. withholding tax under
the provisions of Section 881(c) of the Code with respect to all payments to be
made under this Agreement, and (ii) agrees, to the extent legally entitled to do
so, upon reasonable request by the Company, to provide to the Company (for the
benefit of the Borrowers and the Administrative Agent) such other forms as may
be required in order to establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under this Agreement.
Notwithstanding any provision of this subsection 4.11 or 4.9(d) to the contrary,
the Borrowers shall have no obligation to pay any amount to or for the account
of any Lender (or the Eurodollar Lending Office of any Lender) on account of any
taxes pursuant to this subsection 4.11, to the extent that such amount results
from (i) the failure of any Lender to comply with its obligations pursuant to
this subsection 4.11, (ii) any representation or warranty made or deemed to be
made by any Lender pursuant to this subsection 4.11(d) proving to have been
incorrect, false or misleading in any material respect when so made or deemed to
be made or (iii) any Change in Law or compliance by any Lender with any request
or directive (whether or not having the force of law) from any central bank or
other Governmental Authority, the effect of which would be to subject to any
taxes any payment made pursuant to this Agreement to any Lender making the
representation and covenants set forth in subsection 4.11(d)(2), which payment
would not be subject to such taxes were such Lender eligible to make and comply
with, and actually made and complied with, the representation and covenants set
forth in subsection 4.11(d)(1) hereinabove.
(e) A certificate in reasonable detail as to any amounts submitted by
such Lender, through the Administrative Agent, to the Company, shall be
conclusive in the absence of manifest error. The covenants contained in this
subsection 4.11 shall survive the termination of this Agreement and repayment of
the Loans.
4.12 Indemnity. The Borrowers agree to indemnify each Lender and to
---------
hold such Lender harmless from any loss or expense (but without duplication of
any amounts payable as default interest) which such Lender may sustain or incur
as a consequence of (a) default by any Borrower in payment of the principal
amount of or interest on any Eurodollar Loans of such Lender, including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder, (b) default by any Borrower in making a borrowing
after the Company, as agent for the Borrowers, has given a notice in accordance
with subsection 4.1 or in making a conversion of Alternate Base Rate Loans to
Eurodollar Loans or in continuing Eurodollar Loans as such, in either case,
after the Company, as agent for the Borrowers, has given notice in accordance
with subsection 4.2, (c) default by any Borrower in making any prepayment after
the Company, as agent for the Borrowers has given a notice in accordance with
subsection 4.4 or (d) a payment or prepayment of a Eurodollar Loan or conversion
(including without limitation, as a result of subsection 4.4 and/or a conversion
pursuant to subsection 4.10) of any Eurodollar Loan into an Alternate Base Rate
Loan, in either case on a day which is not the last day of an Interest Period
with respect thereto, including, but not limited to, any such loss or expense
arising from
40
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain its Eurodollar Loans hereunder (but excluding loss of profit).
This covenant shall survive termination of this Agreement and repayment of the
Loans.
4.13 Repayment of Loans; Evidence of Debt. (a) The Borrowers hereby
------------------------------------
unconditionally promise to pay to the Administrative Agent for the account of
each Lender (i) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date, (ii) the principal
amount of the Tranche A Term Loan of such Lender, in eleven consecutive
installments, payable on each Tranche A Installment Payment Date, in accordance
with subsection 4.4(c) (or the then unpaid principal amount of such Tranche A
Term Loan on the date that the Tranche A Term Loans become due and payable
pursuant to Section 9), (iii) the principal amount of the Tranche B Term Loan of
such Lender, in fifteen consecutive installments, payable on each Tranche B
Installment Payment Date, in accordance with subsection 4.4(d) (or the then
unpaid principal amount of such Tranche B Term Loan on the date that the Tranche
B Term Loans become due and payable pursuant to Section 9), and (iv) the then
unpaid principal amount of the Swing Line Loans of the Swing Line Lender on the
Revolving Credit Termination Date. The Borrowers hereby further agree to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum and on the dates set forth in subsection 4.5.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 11.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Revolving Credit Loan, Tranche A Term Loan and
Tranche B Term Loan made hereunder, the Type thereof and each Interest Period
applicable thereto, (ii) the applicable Borrower, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iv) both the amount of any sum received
by the Administrative Agent hereunder from the Borrowers and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 4.13(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of the Borrowers therein recorded; provided that the failure of any
--------
Lender or the Administrative Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of any
Borrower to repay (with applicable interest) the Loans made to such Borrower by
such Lender or to repay any other obligations in accordance with the terms of
this Agreement.
(e) Each Borrower agrees that, upon the request to the Administrative
Agent by any Lender, such Borrower will execute and deliver to such Lender (i) a
promissory note of such Borrower evidencing the Revolving Credit Loans of such
Lender, substantially in the form of Exhibit A with appropriate insertions as to
date and principal amount (a "Revolving Credit Note"), (ii) a promissory note of
---------------------
such Borrower evidencing the Tranche A Term Loan of such Lender, substantially
in the form of Exhibit B-1 with appropriate insertions as to date and principal
amount (a "Tranche A Term Note"), (iii) a promissory note of such Borrower
-------------------
evidencing the Tranche B Term Loan of such Lender, substantially in the form of
Exhibit B-2 with appropriate insertions as to date and principal amount (a
"Tranche B Term Note"), and/or (iv) in the case of the Swing Line Lender, a
-------------------
promissory note of the Company evidencing the Swing Line Loans of the Swing Line
Lender, substantially in the form of Exhibit C with appropriate insertions as to
date and principal amount (the "Swing Line Note").
---------------
41
4.14 Replacement of Lenders. In the event any Lender or the Issuing
----------------------
Lender is a Non-Funding Lender, exercises its rights pursuant to subsection
4.10 or requests payments pursuant to subsections 3.10 or 4.11, the Company, as
agent for the Borrowers, may require, at the Borrowers' expense (including
payment of any processing fees under subsection 11.6(e)) and subject to
subsection 4.12, such Lender or the Issuing Lender to assign, at par plus
accrued interest and fees, without recourse (in accordance with subsection 11.6)
all of its interests, rights and obligations hereunder (including all of its
Commitments and the Loans and other amounts at the time owing to it hereunder
and its Notes and its interest in the Letters of Credit) to a bank, financial
institution or other entity specified by the Company; provided that (i) such
--------
assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other Governmental Authority, (ii) the Company shall have
received the written consent of the Administrative Agent, which consent shall
not unreasonably be withheld, to such assignment, (iii) the Borrowers shall have
paid to the assigning Lender or the Issuing Lender all monies other than
principal, interest and fees accrued and owing hereunder to it (including
pursuant to subsections 3.10, 4.10, 4.11 and 4.12) and (iv) in the case of a
required assignment by the Issuing Lender, the Letters of Credit shall be
canceled and returned to the Issuing Lender.
4.15 Appointment of the Company and Reliance on Representation of the
----------------------------------------------------------------
Company. Each Borrower hereby appoints the Company as its agent for all purposes
-------
hereunder, and each Borrower agrees that the Administrative Agent and the
Lenders may rely on any representation, warranty, certificate, notice, document
or telephone request which purports to be executed or made, and which the
Administrative Agent or the Lenders in good faith believe to have been executed
or made, by the Company or any of its authorized officers, and each Borrower
further agrees to indemnify and hold the Administrative Agent and the Lenders
harmless for any action, including the making of the borrowings hereunder, and
any loss or expense, taken or incurred by any of them as a result of their good
faith reliance upon any such representations, warranty, certificate, notice,
document or telephone request. All obligations of the Borrowers under this
Agreement or any notes, instruments or agreements entered in connection
herewith, shall be joint and several obligations of each of the Borrowers.
SECTION 5. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Lenders to enter into this Agreement and to
make the Loans and to induce the Issuing Lender to issue, and the Participating
Lenders to participate in, the Letters of Credit, each Borrower hereby
represents and warrants to each Lender and the Administrative Agent as of the
Closing Date and as of the making of any extension of credit hereunder:
5.1 Financial Condition. (a) The audited consolidated balance sheet
-------------------
of the Company and its consolidated Subsidiaries as at January 1, 2000, and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by and accompanied by an unqualified report from
Ernst & Young LLP, present fairly the consolidated financial condition of the
Company and its consolidated Subsidiaries as at such date, and the consolidated
results of its operations and its consolidated cash flows for the respective
fiscal years then ended.
(b) The unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at April 1, 2000, and the related unaudited
consolidated statements of income and cash flows for the three-month period
ended on each such date, certified by a Responsible Officer of the Company,
copies of which have heretofore been furnished to each Lender, present fairly
the consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the three-month period then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The Company and its Subsidiaries do not have any
material Contingent Obligations, contingent liabilities and liabilities for
42
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.
(c) The unaudited consolidated pro forma balance sheet of the Company
--- -----
and its consolidated Subsidiaries, as of January 1, 2000, certified by a
Responsible Officer of the Company (the "Pro Forma Balance Sheet"), copies of
-----------------------
which have been furnished to each Lender, is the unaudited balance sheet of the
Company and its consolidated Subsidiaries adjusted to give effect (as if such
events had occurred on the date set forth therein) to (i) the Transactions and
(ii) the incurrence of the Loans and the issuance of the Letters of Credit to be
incurred or issued, as the case may be, on the Closing Date and all Indebtedness
that the Company and its consolidated Subsidiaries expect to incur, and the
payment of all amounts the Company and its consolidated Subsidiaries expect to
pay, in connection with the Transactions. The Pro Forma Balance Sheet, together
with the notes thereto, were prepared based on good faith assumptions in
accordance with GAAP and is based on the best information available to the
Company as of the date of delivery thereof and reflects on a pro forma basis the
--- -----
financial position of the Company and its consolidated Subsidiaries as of
January 1, 2000, as adjusted, as described above, assuming that the events
specified in the preceding sentence had actually occurred as of January 1, 2000.
5.2 No Change. Since January 1, 2000, (a) there has been no change,
---------
and (as of the Closing Date only) no development or event which has had or could
reasonably be expected to have a material adverse effect on (i) the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole, (ii) the ability of the Company
and its Subsidiaries to perform their obligations under the Credit Documents and
with respect to the other financings contemplated hereby or (iii) the rights and
remedies of the Lenders under the Credit Documents and (b) no dividends or other
distributions (other than the dividend paid March 1, 2000) have been declared,
paid or made upon the Capital Stock of the Company nor has any of the Capital
Stock of the Company been redeemed, retired, repurchased or otherwise acquired
for value by the Company or any of its Subsidiaries, except in connection with
the Transactions and as permitted under this Agreement.
5.3 Existence; Compliance with Law. Each of the Company and its
------------------------------
Subsidiaries (a) is duly organized and validly existing under the laws of the
jurisdiction of its incorporation, (b) has full power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to use its corporate name and to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, (c) is duly qualified and in good standing
(to the extent such concept is applicable in the applicable jurisdiction) to do
business in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties makes such qualification
necessary, except such jurisdictions where the failure so to qualify would not
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole and (d) is in compliance with all applicable statutes, laws, ordinances,
rules, orders, permits and regulations of any governmental authority or
instrumentality, domestic or foreign (including, without limitation, those
related to Hazardous Materials and substances), except where noncompliance would
not have a material adverse effect on the business, assets, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries taken
as a whole. Neither the Company nor any of its Subsidiaries has received any
written communication from a Governmental Authority that alleges that the
Company or any of its Subsidiaries is not in compliance with federal, state,
local or foreign laws, ordinances, rules and regulations except to the extent
such noncompliance, individually or in the aggregate, would not
43
reasonably be expected to have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
5.4 Power; Authorization. Each of the Company and its Subsidiaries
--------------------
has the power and authority to make, deliver and perform each of the Credit
Documents to which it is a party, and each Borrower has the power and authority
and legal right to borrow hereunder and to have Letters of Credit issued for its
account hereunder. Each of the Company and its Subsidiaries has taken all
necessary action to authorize the execution, delivery and performance of each of
the Credit Documents to which it is or will be a party and each Borrower has
taken all necessary action to authorize the borrowings hereunder and the
issuance of Letters of Credit for its account hereunder. No consent or
authorization of, or filing with, any Person (including, without limitation, any
Governmental Authority) is required in connection with the execution, delivery
or performance by the Company or any of its Subsidiaries, or for the validity or
enforceability in accordance with its terms against the Company or any of its
Subsidiaries, of any Credit Document except for consents, authorizations and
filings which have been obtained or made and are in full force and effect and
except (i) such consents, authorizations and filings, the failure to obtain or
perform (x) which would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole and (y) which would not adversely
affect the validity or enforceability of any of the Credit Documents or the
rights or remedies of the Administrative Agent or the Lenders thereunder, and
(ii) such filings as are necessary to perfect the Liens of the Lenders created
pursuant to this Agreement and the Security Documents.
5.5 Enforceable Obligations. This Agreement and the Merger Agreement
-----------------------
have been, and each of the other Credit Documents and any other agreement to be
entered into by any Credit Party pursuant to the Merger Agreement will be, duly
executed and delivered on behalf of each Credit Party that is party thereto.
This Agreement and the Merger Agreement each constitutes, and each of the other
Credit Documents and any other agreement to be entered into by any Credit Party
pursuant to the Merger Agreement will constitute upon execution and delivery,
the legal, valid and binding obligation of each Credit Party that is party
thereto, and is enforceable against each Credit Party that is party thereto in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
5.6 No Legal Bar. The execution, delivery and performance of each
------------
Credit Document, the incurrence or issuance of and use of the proceeds of the
Loans and of drawings under the Letters of Credit and the transactions
contemplated by the Merger Agreement and the Credit Documents, (a) will not
violate any Requirement of Law or any Contractual Obligation applicable to or
binding upon each of the Company or any Subsidiary of the Company or any of
their respective properties or assets, in any manner which, individually or in
the aggregate, (i) would have a material adverse effect on the ability of the
Company or any such Subsidiary taken as a whole to perform its obligations under
the Credit Documents and the Merger Agreement and any other agreement to be
entered into pursuant to the Merger Agreement, to which it is a party, (ii)
would give rise to any liability on the part of the Administrative Agent or any
Lender, or (iii) would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company and
its Subsidiaries taken as a whole, and (b) will not result in the creation or
imposition of any Lien on any of its properties or assets pursuant to any
Requirement of Law applicable to it, as the case may be, or any of its
Contractual Obligations, except for the Liens arising under the Security
Documents and Permitted Liens.
5.7 No Material Litigation. Other than as disclosed in the Offering
----------------------
Memorandum or as set forth on Schedule 5.7 (i) no litigation by, investigation
known to the Company by, or proceeding of, any Governmental Authority is pending
against the Company or any of its Subsidiaries (including after giving effect to
the Transactions) with respect to the validity, binding effect or enforceability
of the
44
Merger Agreement, any Credit Document, the Loans made hereunder, the use of
proceeds thereof, or of any drawings under a Letter of Credit and the other
transactions contemplated hereby or by the Merger Agreement and (ii) no
lawsuits, claims, proceedings or investigations are pending or, to the best
knowledge of the Company, threatened as of the Closing Date against or affecting
the Company or any of its Subsidiaries or any of their respective properties,
assets, operations or businesses (including after giving effect to the
Transactions), in which there is a probability of an adverse determination, and
is reasonably likely, if adversely decided, to have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
5.8 Investment Company Act. Neither the Company nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
5.9 Federal Regulation. No part of the proceeds of any of the Loans
------------------
or any drawing under a Letter of Credit will be used for any purpose which
violates the provisions of Regulation T, U or X of the Board. Neither the
Company nor any of its Subsidiaries is engaged or will engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under said Regulation U.
5.10 No Default. The Company and each of its Subsidiaries have
----------
performed all material obligations required to be performed by them under their
respective Contractual Obligations (including after giving effect to the
Transactions) and they are not (with or without the lapse of time or the giving
of notice, or both) in breach or default in any respect thereunder, except to
the extent that such breach or default would not have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole. Neither the
Company nor any of its Subsidiaries (including after giving effect to the
Transactions) is in default under any material judgment, order or decree of any
Governmental Authority, domestic or foreign, applicable to it or any of its
respective properties, assets, operations or business, except to the extent that
any such defaults would not, in the aggregate, have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
5.11 Taxes. Each of the Company and its Subsidiaries (including after
-----
giving effect to the Transactions) has filed or caused to be filed all material
tax returns which, to the knowledge of the Company, are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves (or other
sufficient provisions) in conformity with GAAP have been provided on the books
of the Company or its Subsidiaries (including after giving effect to the
Transactions), as the case may be); and no tax Lien has been filed, and, to the
knowledge of the Company, no written claim is being asserted, with respect to
any such tax, fee or other charges.
5.12 Subsidiaries. After giving effect to the consummation of the
------------
Transactions, the Subsidiaries of the Company and their jurisdictions of
incorporation on the Closing Date shall be as set forth on Schedule 5.12.
5.13 Ownership of Property; Liens. As of the Closing Date and as of
----------------------------
the making of any extension of credit hereunder (subject to transfers and
dispositions of property permitted under subsection 8.5), each of the Company
and its Subsidiaries has good and valid title to all of its material assets
(other than real property or interests in real property) in each case free and
clear of all mortgages,
45
liens, security interests or encumbrances of any nature whatsoever except
Permitted Liens. With respect to real property or interests in real property, as
of the Closing Date, each of the Company and its Subsidiaries has (i) fee title
to all of the real property listed on Schedule 5.13 under the heading "Fee
Properties" (each, a "Fee Property"), and (ii) good and valid title to the
------------
leasehold estates in all of the real property leased by it and, in the case of
any such leasehold estates located in the United States with a base aggregate
annual rent in excess of $50,000, listed on Schedule 5.13 under the heading
"Leased Properties" (each, a "Leased Property"), in each case, free and clear of
---------------
all mortgages, liens, security interests, easements, covenants, rights-of-way
and other similar restrictions of any nature whatsoever, except (A) Permitted
Liens and (B) as to Leased Property, the terms and provisions of the respective
lease therefor, including, without limitation, the matters set forth on Schedule
5.13, and any matters affecting the fee title and any estate superior to the
leasehold estate related thereto. The Fee Properties and the Leased Properties
constitute, as of the Closing Date, all of the real property owned in fee or
leased by the Company and its Subsidiaries in the United States.
5.14 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan that would result
in a material liability to the Company or any of its Subsidiaries, and each Plan
has complied during such period in all material respects with the applicable
provisions of ERISA and the Code. Neither the Company nor any Commonly
Controlled Entity has been involved in any transaction that would cause the
Company or any of its Subsidiaries to be subject to material liability with
respect to a Plan to which the Company or any of its Subsidiaries or any
Commonly Controlled Entity contributed or was obligated to contribute during the
six-year period ending on the date this representation is made or deemed made;
or incurred any material liability under Title IV of ERISA which would become or
remain a material liability of the Company or any of its Subsidiaries after the
Closing Date. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period
that would result in a material liability to the Company or any of its
Subsidiaries. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits that would result in a material liability to the Company
or any of its Subsidiaries. Neither the Company, nor any of its Subsidiaries nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Company, nor any of its Subsidiaries nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Company or any of its Subsidiaries or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made, in either case that would result in a material liability to the
Company or any of its Subsidiaries. To the knowledge of the Company, no such
Multiemployer Plan is in Reorganization or Insolvent. The present value
(determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Company, its Subsidiaries and each Commonly Controlled Entity
for post retirement benefits to be provided to their current and former
employees under Plans which are welfare benefit plans (as defined in Section
3(1) of ERISA) does not, in the aggregate, exceed the assets under all such
Plans allocable to such benefits by an amount that would result in a material
liability to the Company or any of its Subsidiaries except as disclosed in the
audited financial statements of the Company and its consolidated Subsidiaries
provided to the Lenders prior to the Closing Date. For purposes of this
subsection 5.14, a material liability shall exceed $10,000,000.
5.15 Collateral Documents. (a) Upon execution and delivery thereof
--------------------
by the parties thereto, the Collateral Agreement will be effective to create in
favor of the Administrative Agent, for the ratable benefit of the Lenders, a
legal, valid and enforceable security interest in the pledged stock described
therein (to the extent such matter is governed by the law of the United States
or a jurisdiction
46
therein) and, when stock certificates representing or constituting the pledged
stock described in the Collateral Agreement are delivered to the Administrative
Agent, such security interest shall constitute a perfected first lien on, and
security interest in, all right, title and interest of the pledgor party thereto
in the pledged stock described therein (to the extent such matter is governed by
the law of the United States or a jurisdiction therein).
(b) Upon execution and delivery thereof by the parties thereto, the
Collateral Agreement will be effective to create in favor of the Administrative
Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable
security interest in the collateral described therein (to the extent such matter
is governed by the law of the United States or a jurisdiction therein), and
Uniform Commercial Code financing statements have been filed in each of the
jurisdictions listed on Schedule 5.15(b), or arrangements have been made for
such filing in such jurisdictions, and upon such filing, and upon the taking of
possession by the Administrative Agent of any such collateral the security
interests in which may be perfected only by possession, such security interests
will, subject to the existence of Permitted Liens, constitute perfected first
priority liens on, and security interests in, all right, title and interest of
the debtor party thereto in the collateral described therein, except to the
extent that a security interest cannot be perfected therein by the filing of a
financing statement or the taking of possession under the Uniform Commercial
Code of the relevant jurisdiction.
(c) Upon execution and delivery thereof by the relevant Credit Party,
each Mortgage will be effective to create in favor of the Administrative Agent,
for the ratable benefit of the Lenders, a legal, valid and enforceable security
interest in the collateral described therein, and upon recording the Mortgages
in the jurisdictions listed on Schedule 5.13 (or, in the case of a Mortgage
delivered pursuant to subsection 7.9, the jurisdiction in which the property
covered by such Mortgage is located), such security interests will, subject to
the existence of Permitted Liens, constitute first liens on, and perfected
security interests in, all rights, title and interest of the debtor party
thereto in the collateral described therein.
5.16 Copyrights, Patents, Permits, Trademarks and Licenses. Schedule
-----------------------------------------------------
5.16 sets forth a true and complete list as of the Closing Date of all material
registered trademarks, trade names, service marks, patents, pending patent
applications and registered copyrights and applications therefor owned, used or
filed by or licensed to the Company and its Subsidiaries (after giving effect to
the Transactions) and, with respect to registered trademarks (if any), contains
a list of all jurisdictions in which such trademarks are registered or applied
for and all registration and application numbers. Except as set forth on
Schedule 5.16, the Company or one of its Subsidiaries (after giving effect to
the Transactions) owns or has the right to use, registered trademarks, trade
names, service marks, patents, pending patent applications and copyrights and
applications therefor referred to in such Schedule. Except as set forth on
Schedule 5.16, to the best knowledge of the Company, no claims are pending by
any Person with respect to the ownership, validity, enforceability or the
Company's or any Subsidiary's use of any such registered trademarks, trade
names, service marks, patents, pending patent applications and copyrights, or
applications therefor, challenging or questioning the validity or effectiveness
of any of the foregoing, in any jurisdiction, domestic or foreign, except to the
extent such claims could not reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
5.17 Environmental Matters. Other than as disclosed in the Offering
---------------------
Memorandum or except insofar as any exceptions to the following, individually or
in the aggregate, could not reasonably be expected to result in a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole:
(a) to the best knowledge of the Company, the properties owned,
leased, or otherwise operated by the Company or any of its Subsidiaries do
not contain, and have not previously
47
contained, in, on or under, including, without limitation, the soil and
groundwater thereunder, any Hazardous Materials in amounts or
concentrations that constitute or constituted a violation of, or could
reasonably give rise to liability under, Environmental Laws;
(b) to the best knowledge of the Company, the properties owned or
leased, or otherwise operated by the Company or any of its Subsidiaries and
all operations and facilities at such properties are in compliance with all
Environmental Laws, and there is no contamination or violation of any
Environmental Law which could interfere with the continued operation of, or
impair the fair saleable value of, such property;
(c) neither the Company nor any of its Subsidiaries has received or
is aware of any written complaint, notice of violation, alleged violation,
or notice of investigation or of potential liability under Environmental
Laws with regard to the Company or its Subsidiaries, nor does the Company
or any of its Subsidiaries have knowledge that any such action is being
contemplated, considered or threatened;
(d) to the best knowledge of the Company, Hazardous Materials have
not been generated, treated, stored or disposed of at, on or under any
properties presently or formerly owned, leased, or otherwise operated by
the Company or any of its Subsidiaries, nor have any Hazardous Materials
been transported from any such property, or come to be located at any other
property, in violation of or in a manner that could reasonably give rise to
liability under any Environmental Laws; and
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the best knowledge of the Company, threatened
under any Environmental Law to which the Company or any of its Subsidiaries
is a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements, other than permits authorizing operations by the
Company or any of its Subsidiaries, outstanding under any Environmental
Law.
5.18 Accuracy and Completeness of Information. The factual statements
----------------------------------------
contained in the financial statements referred to in subsection 5.1, the Credit
Documents (including the schedules thereto), the Merger Agreement and any other
certificates or documents furnished or to be furnished to the Administrative
Agent or the Lenders from time to time in connection with this Agreement, taken
as a whole, do not and will not, to the best knowledge of the Company, as of the
date when made, 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
misleading in light of the circumstances in which the same were made, all except
as otherwise qualified herein or therein, such knowledge qualification being
given only with respect to factual statements made by Persons other than the
Company or any of its Subsidiaries; provided that with respect to projected
--------
financial information, the Company represents only that such information has
been and will be prepared in good faith based upon assumptions (in accordance
with GAAP) believed by the Company to be reasonable at the time.
5.19 Year 2000. Any reprogramming required to permit the proper
---------
functioning, in and following the year 2000, of the Company's computer systems,
as so reprogrammed, has been completed in all material respects. The cost to
the Company of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) has not
and would not reasonably be expected to result in a Default or Event of Default
or a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its Subsidiaries taken as
a whole. The computer and management information systems of the Company is and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient to
48
permit the Company to conduct its businesses without resulting in a material
adverse effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
SECTION 6. CONDITIONS PRECEDENT
--------------------
6.1 Conditions to Initial Loans and Letters of Credit. The
-------------------------------------------------
obligation of each Lender to make its Loans, and the obligation of the Issuing
Lender to issue any Letter of Credit, on the Closing Date are subject to the
satisfaction, or waiver by such Lender, immediately prior to or concurrently
with the making of such Loans or the issuance of such Letters of Credit, as the
case may be, of the following conditions:
(a) Agreement; Notes. The Administrative Agent shall have received
----------------
(i) a counterpart of this Agreement for each Lender duly executed and
delivered by a duly authorized officer of each Borrower, (ii) for the
account of each Revolving Credit Lender requesting the same pursuant to
subsection 4.13, a Revolving Credit Note of the Borrowers conforming to the
requirements hereof and executed by a duly authorized officer of each
Borrower, (iii) for the account of each Tranche A Term Loan Lender
requesting the same pursuant to subsection 4.13, a Tranche A Term Note,
conforming to the requirements hereof and executed by a duly authorized
officer of each Borrower, (iv) for the account of each Tranche B Term Loan
Lender requesting the same pursuant to subsection 4.13, a Tranche B Term
Note, conforming to the requirements hereof and executed by a duly
authorized officer of each Borrower, and (v) if requested by Chase, for the
account of Chase, a Swing Line Note, conforming to the requirements hereof
and executed by a duly authorized officer of the Company.
(b) Transactions. (i) The Transactions shall be consummated
------------
simultaneously pursuant to the Merger Agreement with all fees, costs and
expenses incurred in connection therewith not to exceed approximately
$82,000,000 (provided that if such fees exceed $82,000,000, the Investor
--------
Group shall contribute any such excess amount) and (ii) no material
provision of the Merger Agreement shall have been amended, supplemented,
waived or otherwise modified in any material respect without the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld.
(c) Capitalization; Capital Structure. (i) MergerCo shall have
---------------------------------
received directly or indirectly (A) at least $275,000,000 in equity from
the Investor Group (which includes equity retained by existing shareholders
of up to $20,000,000) and up to $60,000,000 of Preferred Stock (the "Equity
------
Contribution"), and (B) the Company and MergerCo shall have collectively
------------
received at least $215,871,750 in gross cash proceeds from the issuance of
the Specified Debt.
(ii) The terms, conditions and documentation of the Senior
Subordinated Note Indenture and of all equity securities (excluding any
Preferred Stock) of the Company or any of its Subsidiaries to be
outstanding at or after the Closing Date, the certificate of incorporation,
by-laws, other governing documents and the corporate and capital structure
of the Company and its Subsidiaries (excluding the identity and amount of
equity contribution of any member of the Investor Group), in each case
after giving effect to the consummation of the Transactions, shall be in
form and substance as set forth in the Offering Memorandum or otherwise
acceptable to the Administrative Agent.
(iii) The terms, conditions and documentation of the Preferred
Stock to be outstanding at or after the Closing Date after giving effect to
the consummation of the
49
Transactions, shall be in form and substance as set forth in the
Certificate of Designation or otherwise acceptable to the Administrative
Agent.
The execution and delivery of this Agreement by the Lenders and the
Administrative Agent shall be deemed to evidence the satisfaction of the
Lenders and the Administrative Agent with such of the matters referenced
and in clauses (i) and (ii) of this paragraph (c) as shall have been
disclosed and made available to the Administrative Agent prior to the date
hereof.
(d) Financial Statements. The Administrative Agent shall have
--------------------
received the financial statements described in subsection 5.1.
(e) Fees. The Administrative Agent, the Co-Lead Arrangers and the
----
Lenders shall have received all fees, expenses and other consideration
presented for payment required to be paid or delivered on or before the
Closing Date.
(f) Lien Searches; Lien Perfection. (i) The Administrative Agent
------------------------------
shall have received the results of a search of Uniform Commercial Code, tax
and judgment filings made with respect to the Company and its Subsidiaries
in the jurisdictions set forth on Schedule 5.15(b), together with copies of
financing statements disclosed by such searches and such searches shall
disclose no Liens on any assets encumbered by any Security Document, except
for Liens permitted hereunder or, if unpermitted Liens are disclosed, the
Administrative Agent shall have received satisfactory evidence of the
release of such Liens and (ii) the Administrative Agent shall have received
duly executed financing statements on Form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens created
by the Security Documents.
(g) Environmental. The Agents shall be reasonably satisfied, based
-------------
upon the results of the environmental diligence conducted by the
Administrative Agent and its advisors in cooperation with the Company, with
respect to environmental hazards, conditions or liabilities to which the
Company or any of its Subsidiaries may be subject (the execution and
delivery of this Agreement by the Lenders and the Administrative Agent
being deemed to evidence the satisfaction of the Administrative Agent with
such due diligence as shall have been disclosed and made available to the
Administrative Agent prior to the date hereof).
(h) Collateral Agreement. The Administrative Agent shall have
--------------------
received the Collateral Agreement executed and delivered by a duly
authorized officer of the parties thereto, together with stock certificates
representing 100% (or 65%, in the case of Foreign Subsidiaries of the
Company) of all issued and outstanding certificated shares of Capital Stock
of each Subsidiary of the Company (excluding Jostens Can Investments B.V.,
a Netherlands corporation and Jostens International Holdings B.V., a
Netherlands corporation), and undated stock powers for each certificate,
executed in blank and delivered by a duly authorized officer of the
applicable pledgor and the acknowledgment and consent of the issuer
thereunder in the form annexed thereto.
(i) Indebtedness. After giving effect to the Transactions, the
------------
Company and its Subsidiaries shall have no (i) outstanding preferred stock
(other than up to $60,000,000 of Preferred Stock issued to the Investor
Group on the Closing Date) and (ii) Indebtedness other than any
Indebtedness permitted under Section 8.1 hereof.
(j) Subsidiary Guarantee. The Administrative Agent shall have
--------------------
received a Subsidiary Guarantee, executed and delivered by a duly
authorized officer of each of the Subsidiaries of the Company (other than
Foreign Subsidiaries of the Borrower).
50
(k) Merger Agreement. The Administrative Agent shall have received
----------------
the Merger Agreement, executed and delivered by a duly authorized officer
of the parties thereto and in form and substance reasonably satisfactory to
the Administrative Agent, with no material change to such agreement from
the copy thereof delivered to the Administrative Agent prior to the Closing
Date.
(l) Legal Opinions. The Administrative Agent shall have received,
--------------
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, (i) an opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the
Credit Parties, in substantially the form of Exhibit J-1, (ii) an opinion
of the general counsel of the Company, in substantially the form of Exhibit
J-2, and (iii) an opinion of local counsel in each of Minnesota and Kansas,
each with such changes thereto as may be approved by the Administrative
Agent and its counsel.
(m) Closing Certificate. The Administrative Agent shall have
-------------------
received a Closing Certificate of each Borrower and each other Credit Party
dated the Closing Date, in substantially the form of Exhibits K-1 and K-2,
respectively, with appropriate insertions and attachments, in form and
substance satisfactory to the Administrative Agent and its counsel,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary (or other appropriate officers or representatives) of
the Borrowers and their Subsidiaries, respectively.
(n) Solvency Certificate. The Administrative Agent shall have
--------------------
received a certificate of the chief financial officer of the Company in
form and substance reasonably satisfactory to it which shall document the
solvency of the Company and its Subsidiaries after giving effect to the
consummation of the Transactions and the other transactions and related
financings contemplated hereby.
(o) Insurance. The Administrative Agent shall have received (i) a
---------
schedule describing all insurance (including but not limited to business
interruption insurance as reasonably requested by the Administrative Agent)
maintained by the Company and its Subsidiaries pursuant to subsection 7.5
and (ii) binders (or other customary evidence as to the obtaining and
maintenance by the Company of such insurance) for each policy set forth on
such schedule insuring against casualty and other usual and customary
risks.
(p) Other Agreements. The Administrative Agent shall have received
----------------
each additional document or instrument reasonably requested by the Required
Lenders.
(q) Litigation. On the Closing Date, other than as disclosed in the
----------
Offering Memorandum, there shall be no actions, suits, injunctions,
restraining orders or proceedings pending or threatened against any Credit
Party (a) with respect to this Agreement or any other Credit Document or
the transactions contemplated hereby or thereby (including the
Transactions) which would be reasonably expected to have a material adverse
effect on the rights or remedies of the Lenders under the Credit Documents
or on the ability of any Credit Party to perform its respective obligations
to the Lenders hereunder or under any other Credit Document or (b) which
the Administrative Agent or the Required Lenders shall determine could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Lenders hereunder or under any other Credit Document or on
the ability of any Credit Party to perform its respective obligations to
the Lenders hereunder or under any other Credit Document.
(r) Consents, Approvals and Filings. Except for the financing
-------------------------------
statements contemplated by the Collateral Agreement, on the Closing Date,
all necessary governmental and other third party authorizations, consents,
approvals or waivers required in connection with the execution, delivery
and performance by the Credit Parties, and the validity and enforceability
against the
51
Credit Parties, of the Credit Documents to which any of them is a party, or
otherwise in connection with the transactions contemplated by the Credit
Documents and the Merger Agreement, shall have been obtained or made and
remain in full force and effect (except where the failure to do so would
not reasonably be expected to have a material adverse effect on (x) the
business, operations, property, condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole or (y) (I) the validity or
enforceability of this Agreement, any of the Notes or the other Credit
Documents or (II) the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder), and all applicable waiting periods shall
have expired without any action being taken by any competent authority
which restrains or prevents such transactions or imposes materially adverse
conditions upon the consummation of such transactions.
(s) Contractual Restrictions. Neither the Company nor any of its
------------------------
Subsidiaries shall be subject to any Requirement of Law or any contractual
or other restrictions that would be violated by the consummation of the
Transactions or the other transactions hereby, including the granting of
security interests and guarantees required by this Agreement, except to the
extent that any such violation would not reasonably be expected to have a
material adverse effect on (i) the business, assets, condition (financial
or otherwise) or results of operations of the Company and its Subsidiaries
taken as a whole, (ii) (A) the validity or enforceability of this Agreement
or the other Credit Documents, or (B) the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder, or (iii) the
ability of the Company or any of its Subsidiaries taken as a whole to
satisfy their obligations hereunder or thereunder.
(t) Consolidated EBITDA. The Administrative Agent shall be satisfied
-------------------
that Consolidated EBITDA for the twelve month period ending January 1, 2000
shall equal or exceed $123,000,000 from planned continuing operations
(excluding restructuring and special charges and related adjustments taken
by the Company and any charges relating to the Transactions and the other
transactions contemplated hereby), and the Company shall have provided
support for such calculation of a nature that is reasonably satisfactory to
the Administrative Agent.
6.2 Conditions to All Loans and Letters of Credit. The obligation of
---------------------------------------------
each Lender to make any Loan (other than any Revolving Credit Loan the proceeds
of which are to be used to repay Refunded Swing Line Loans) and the obligation
of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made in or pursuant to Section 5 or which are contained in any
other Credit Document shall be true and correct in all material respects on
and as of the date of such Loan or of the issuance of such Letter of Credit
as if made on and as of such date (unless stated to relate to a specific
earlier date, in which case, such representations and warranties shall be
true and correct in all material respects as of such earlier date).
(b) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing on such Borrowing Date or after
giving effect to such Loan to be made or such Letter of Credit to be issued
on such Borrowing Date.
Each borrowing by the Borrowers hereunder and the issuance of each Letter of
Credit by the Issuing Lender hereunder shall constitute a representation and
warranty by the Borrowers as of the date of such borrowing or issuance that the
conditions in clauses (a) and (b) and of this subsection 6.2 have been
satisfied.
52
SECTION 7. AFFIRMATIVE COVENANTS
---------------------
The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or L/C Obligation remains outstanding and unpaid, any
amount (unless cash in an amount equal to such amount has been deposited to a
cash collateral account established by the Administrative Agent) remains
available to be drawn under any Letter of Credit or any other amount is owing to
any Lender or the Administrative Agent hereunder or under any of the other
Credit Documents, it shall, and, in the case of the agreements contained in
subsections 7.3 through 7.6, and 7.8 through 7.9, the Company shall cause each
of its Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent (which
--------------------
furnishing may be made to the Administrative Agent via a secured internet web
page or via delivery of a hard copy to the Administrative Agent with sufficient
copies for each Lender which the Administrative Agent shall promptly furnish to
each Lender):
(a) as soon as available, but in any event within 95 days after the
end of each fiscal year of the Company to end after the Closing Date, a
copy of the consolidated balance sheet of the Company and its consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of stockholders' equity and cash flows and the consolidated
statements of income of the Company and its Subsidiaries for such fiscal
year, setting forth in each case in comparative form the figures for the
previous year and, in the case of the consolidated balance sheet referred
to above, reported on, without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, or
qualification which would affect the computation of financial covenants, by
independent certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly periods of each fiscal
year of the Company to end after the Closing Date, the unaudited
consolidated balance sheet of the Company and its Subsidiaries as at the
end of each such quarter and the related unaudited consolidated statements
of income and cash flows of the Company and its Subsidiaries for such
quarterly period and the portion of the fiscal year of the Company through
such date, setting forth in each case in comparative form the figures for
the corresponding quarter in, and year to date portion of, the previous
year, and the figures for such periods in the budget prepared by the
Company and furnished to the Administrative Agent, certified by the chief
financial officer, controller or treasurer of the Company as being fairly
stated in all material respects;
(c) as soon as available, but in any event not later than 45 days
after the beginning of each fiscal year of the Company to end after the
Closing Date, to which such budget relates, a preliminary consolidated
operating budget for the Company and its Subsidiaries taken as a whole; and
as soon as available, any material revision to or any final revision of any
such preliminary annual operating budget or any such consolidated operating
budget; and
(d) concurrently with the delivery of financial statements pursuant
to subsection 7.1(a) or (b), a certificate of the chief financial officer
or treasurer of the Company setting forth, in reasonable detail, the
computations of Capital Expenditures as of the last day of the fiscal
period covered by such financial statements, the Leverage Ratio as of such
last day, and the Interest Coverage Ratio as of such last day;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and
53
(except in the case of the statements referred to in paragraphs (c) and (d) of
this subsection 7.1) in accordance with GAAP.
7.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent (with sufficient copies for each Lender which the Administrative Agent
shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection 7.1(a), a letter from the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary to express their opinion on such
financial statements no knowledge was obtained of any Default or Event of
Default under subsections 4.4(b), 8.1, 8.3, and 8.5 through 8.11, except as
specified in such letter;
(b) within 15 days of the delivery of the financial statements
referred to in subsections 7.1(a) and (b) (except that the certificate
referred to in clause (iii) below shall be delivered concurrently with such
financial statements), a certificate of the chief financial officer or
treasurer of the Company stating that, to the best of such officer's
knowledge, during such period (i) no Subsidiary has been formed or acquired
(or, if any such Subsidiary has been formed or acquired, the Company has
complied with the requirements of subsection 7.9 with respect thereto),
(ii) neither the Company nor any of its Subsidiaries has changed its name,
its principal place of business, its chief executive office or the location
of any material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect
thereto, (iii) each of the Company and its Subsidiaries has observed or
performed all of its respective covenants and other agreements, and
satisfied every material condition, contained in this Agreement, the Notes
and the other Credit Documents to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate, (iv) showing in detail
as of the end of the related fiscal period the figures and calculations
supporting such statement in respect of clause (e) of subsection 8.1,
clauses (b) and (e) of subsection 8.3 and subsections 8.6 through 8.11 and
any other calculations reasonably requested by the Administrative Agent
with respect to the quantitative aspects of the other covenants contained
herein, (v) if not specified in the financial statements delivered pursuant
to subsection 7.1, specifying the aggregate amount of interest paid or
accrued by the Company and its Subsidiaries, and the aggregate amount of
depreciation, depletion and amortization charged on the books of the
Company and its Subsidiaries, during such accounting period, and (vi)
identify any owned Real Property of the Company or a Domestic Subsidiary of
the Company acquired during such accounting period that, together with any
improvements thereon, has a value of at least $5,000,000;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Company or to any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Company or any of its Subsidiaries made
by such accountants, and, upon the request of any Lender (through the
Administrative Agent), any final comment letter submitted by such
accountants to management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available to
the public generally by the Company or any of its Subsidiaries, if any, and
all regular and periodic reports and all final registration statements and
final prospectuses, if any, filed by the Company or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange Commission
or any Governmental Authority succeeding to any of its functions;
54
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a management summary describing
and analyzing the performance of the Company and its Subsidiaries during
the periods covered by such financial statements;
(f) within 50 days after the end of each fiscal quarter, a summary of
all Asset Sales during such fiscal quarter including the amount of all Net
Proceeds from such Asset Sales not previously applied to prepayments of the
Term Loans pursuant to the proviso to subsection 4.4(b)(iv); and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request (through the Administrative
Agent).
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except (a) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or any of its Subsidiaries, as the case may
be, (b) for delinquent obligations which do not have a material adverse effect
on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole and (c) for
trade and other accounts payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with GAAP
have been established on the books of the Company or any of its Subsidiaries, as
the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in businesses of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all material rights, material privileges,
franchises, copyrights, patents, trademarks and trade names necessary or
desirable in the normal conduct of its business except for rights, privileges,
franchises, copyrights, patents, trademarks and tradenames the loss of which
would not in the aggregate have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole, and except as otherwise permitted
by subsections 8.4 and 8.5; and comply with all applicable Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
7.5 Maintenance of Property; Insurance. (a) Keep all property
----------------------------------
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability and business interruption insurance)
as are usually insured against in the same general area by, companies engaged in
the same or a similar business, and furnish to the Administrative Agent (which
furnishing may be made to the Administrative Agent via a secured internet web
page or via electronic mail), (i) annually, a schedule disclosing (in a manner
substantially similar to that used in the schedule provided pursuant to
subsection 6.1(o) all insurance against products liability risk maintained by
the Company and its Subsidiaries pursuant to this subsection 7.5(b) or otherwise
and (ii) upon written request of any Lender, full information as to the
insurance carried; provided that the Company may implement programs of self
--------
insurance in the ordinary course of business and in accordance with industry
standards for a company of similar size so long as reserves are maintained in
accordance with GAAP for the liabilities associated therewith.
55
7.6 Inspection of Property; Books and Records; Discussions. Keep
------------------------------------------------------
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Requirements of Law; and permit representatives of any Lender upon reasonable
notice (made through the Administrative Agent and no more frequently than
quarterly unless a Default or Event of Default shall have occurred and be
continuing) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be requested upon reasonable notice, and to discuss the
business, operations, assets and financial and other condition of the Company
and its Subsidiaries with officers and employees thereof and with their
independent certified public accountants with prior reasonable notice to, and
coordination with, the chief financial officer or the treasurer of the Company.
7.7 Notices. Promptly give notice to the Administrative Agent (to be
-------
distributed by the Administrative Agent to the Lenders):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Company or any of
its Subsidiaries which default or event of default has not been waived and
would have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole, or any other default or event of default
under any such instrument, agreement, guarantee or other collateral
document which, assuming for the purposes of this subsection 7.7(b) only
that the threshold amount contained in the proviso to clause (e) of Section
9 were $5,000,000, would have constituted a Default or Event of Default
under this Agreement, or (ii) litigation, investigation or proceeding which
may exist at any time between the Company or any of its Subsidiaries and
any Governmental Authority, or receipt of any notice of any environmental
claim or assessment against the Company or any of its Subsidiaries by any
Governmental Authority, which in any such case would have a material
adverse effect on the business, assets, condition (financial or otherwise)
or results of operations of the Company and its Subsidiaries taken as a
whole;
(c) of any litigation or proceeding against the Company or any of its
Subsidiaries (i) in which more than $10,000,000 of the amount claimed is
not covered by insurance, or (ii) in which injunctive or similar relief is
sought which if obtained would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole;
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the Company knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan which Reportable Event could reasonably result in material liability
to the Company and its Subsidiaries taken as a whole or (ii) the
institution of proceedings or the taking of any other action by PBGC, the
Company or any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan and, with respect to a Multiemployer Plan,
the Reorganization or Insolvency of such Plan, in each of the foregoing
cases which could reasonably result in material liability to the Company
and its Subsidiaries taken as a whole, and in addition to such notice,
deliver to the Administrative Agent and each Lender whichever of the
following may be applicable: (A) a certificate of a Responsible Officer of
the Company setting forth details as to such Reportable Event and the
action that the Company or such Commonly Controlled Entity proposes to take
with respect thereto, together with a copy of any notice of such Reportable
Event that may be required to be filed with PBGC,
56
or (B) any notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be;
(e) concurrently with the delivery of the information delivered
pursuant to subsection 7.2(f) and each prepayment required pursuant to
subsection 4.4(b)(iv), of any Asset Sale or substantially like-kind
exchange of real property by the Company or any of its Subsidiaries; and
(f) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection 7.7 shall be accompanied by a statement
of a Responsible Officer of the Company setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Company proposes to take with respect thereto.
7.8 Environmental Laws. (a) (i) Comply with all Environmental Laws
------------------
applicable to it, and obtain, comply with and maintain any and all Environmental
Permits necessary for its operations as conducted and as planned; and (ii) take
reasonable efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors, and invitees comply with all Environmental Laws, and obtain,
comply with and maintain any and all Environmental Permits, applicable to any of
them insofar as any failure to so comply, obtain or maintain as set forth in (i)
and (ii) above could result in a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole. Noncompliance by the Company or
any of its Subsidiaries with any applicable Environmental Law or Environmental
Permit shall be deemed not to constitute a breach of this 7.8(a); provided that,
--------
upon learning of any such noncompliance, the Company and its Subsidiaries shall
promptly undertake reasonable efforts to achieve compliance or to contest by
appropriate proceedings any alleged noncompliance and; provided, further, that,
-------- -------
in any case, such noncompliance, and any other noncompliance with Environmental
Law and any contesting of allegations of noncompliance with Environmental Laws,
individually or in the aggregate, after giving effect to any compliance efforts
undertaken, would not reasonably be expected to give rise to a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole.
(b) Comply in a timely manner with all orders and lawful directives
regarding Environmental Laws issued to the Company or any of its Subsidiaries by
any Governmental Authority, other than such orders and lawful directives as to
which an appeal or other challenge has been timely and properly taken in good
faith and the pendency of any and all such appeals and other challenges could
not reasonably be expected to give rise to a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole.
(c) Maintain, update as appropriate, and implement in all material
respects an environmental program reasonably designed to (i) ensure that the
Company and its Subsidiaries, any of their respective operations (including,
without limitation, disposal), and any properties owned, leased or operated by
any of them, attain and remain in substantial compliance with all applicable
Environmental Laws; (ii) reasonably and prudently manage any liabilities or
potential liabilities that the Company, any of the other Credit Parties, any of
their respective operations (including, without limitation, disposal), and any
properties owned or leased by any of them, may have under all applicable
Environmental Laws; and (iii) ensure that the Company and its Subsidiaries
undertake reasonable efforts to identify, and reasonably evaluate, issues of
compliance with and liability under Environmental Laws prior to acquiring,
directly or indirectly, any ownership or leasehold interest in real property, or
other interest in any real property that could give rise to the Company or any
of its Subsidiaries being subjected to liability under any Environmental Law as
a result of such acquisition.
57
7.9 Additional Collateral. (a) Subject to subsection 7.9(d), with
---------------------
respect to any assets acquired after the Closing Date by the Company or any of
its Domestic Subsidiaries that are intended to be subject to the Lien created by
any of the Security Documents but which are not so subject (but, in any event,
excluding (i) any assets described in paragraph (b) or (c) of this subsection,
(ii) assets acquired or owned pursuant to subsection 8.6(h) and (iii) immaterial
assets, promptly (and in any event within 30 days after the acquisition
thereof): (i) execute and deliver to the Administrative Agent such amendments or
supplements to the relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on such assets, and
(ii) take all actions necessary or advisable to cause such Lien to be duly
perfected to the extent required by such Security Document in accordance with
all applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent.
(b) With respect to any Person that is or becomes a Subsidiary (other
than any Foreign Subsidiary of the Company) that has material assets, promptly
(and in any event within 30 days after such Person becomes a Subsidiary): (i)
execute and deliver to the Administrative Agent, for the benefit of the Lenders,
a new pledge agreement or such amendments to the relevant Security Agreement as
the Administrative Agent reasonably shall deem necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Company or any of its
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers executed and
delivered in blank by a duly authorized officer of the Company or such
Subsidiary, as the case may be, and (iii) cause such new Subsidiary (A) to
become a party to the Subsidiary Guarantee and/or the Collateral Agreement or
such comparable documentation which is in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions necessary
or advisable to cause the Lien created by the Collateral Agreement to be duly
perfected to the extent required by such agreement in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent.
(c) With respect to any Person that is or becomes a Foreign
Subsidiary of the Company and that has material assets, promptly (and in any
event within 30 days after such Person becomes a Subsidiary): (i) execute and
deliver to the Administrative Agent a new pledge agreement or such amendments to
the relevant Security Agreement as the Administrative Agent reasonably shall
deem necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a Lien on the Capital Stock of such Subsidiary which is
owned by the Company or any of its Subsidiaries (provided that in no event shall
more than 65% of the Capital Stock of any such Foreign Subsidiary be required to
be so pledged), and (ii) if such Capital Stock is issued in certificated form,
deliver to the Administrative Agent any certificates representing such Capital
Stock, together with undated stock powers executed and delivered in blank by a
duly authorized officer of the Company or such Subsidiary, as the case may be,
and take or cause to be taken all such other actions under the law of the
jurisdiction of organization of such Foreign Subsidiary as may be necessary or
advisable to perfect such Lien on such Capital Stock, and if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) Upon the request of the Administrative Agent, the Company will,
and will cause its Domestic Subsidiaries to, promptly grant to the
Administrative Agent, within 60 days of such request, security interests and
Mortgages in such owned Real Property of the Company and its Domestic
Subsidiaries as are acquired after the Closing Date by the Company or such
Subsidiary and that, together with any improvements thereon, individually have a
value of at least $5,000,000, as additional security for the obligations of the
Credit Parties under any Credit Document (unless the subject property is already
mortgaged to a third party to the extent permitted by subsection 8.2). Such
Mortgages shall be
58
granted pursuant to documentation reasonably satisfactory in form and substance
to the Administrative Agent and shall constitute valid and enforceable perfected
Liens subject only to Permitted Liens and such other Liens reasonably acceptable
to the Administrative Agent. The Mortgages or instruments related thereto shall
be duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens in favor of the
Administrative Agent required to be granted pursuant to the Mortgages and all
taxes, fees and other charges payable in connection therewith shall be paid in
full. If requested by the Administrative Agent or the Required Lenders, the
Company shall provide a lender's title policy with respect to each such Mortgage
paid for by the Company, issued by a nationally recognized title insurance
company, together with such endorsements, coinsurance and reinsurance as may be
reasonably requested by the Administrative Agent, in form and substance
reasonably acceptable to the Administrative Agent, insuring each Mortgage as a
first lien on the relevant Mortgaged Property and subject only to Liens
expressly agreed to by the Administrative Agent.
7.10 Pledge of Certain Subsidiaries. Deliver to the Administrative
------------------------------
Agent within ten Business Days of the Closing Date (i) evidence of the pledge of
shares representing 65% of all issued and outstanding shares of Capital Stock of
Jostens Can Investments B.V., a Netherlands corporation and Jostens
International Holdings B.V., a Netherlands corporation and (ii) the
acknowledgment and consent of such issuers in the form annexed to the Collateral
Agreement.
SECTION 8. NEGATIVE COVENANTS
------------------
The Company hereby agrees that it shall not, and it shall not permit
any of its Subsidiaries to, directly or indirectly so long as the Commitments
remain in effect or any Loan, Note or L/C Obligation remains outstanding and
unpaid, any amount (unless cash in an amount equal to such amount has been
deposited to a cash collateral account established by the Administrative Agent)
remains available to be drawn under any Letter of Credit or any other amount is
owing to any Lender or the Administrative Agent hereunder or under any other
Credit Document (it being understood that each of the permitted exceptions to
each of the covenants in this Section 8 is in addition to, and not overlapping
with, any other of such permitted exceptions except to the extent expressly
provided):
8.1 Indebtedness. Create, incur, assume or suffer to exist any
------------
Indebtedness, except:
(a) the Indebtedness outstanding on the Closing Date and reflected
on Schedule 8.1(a), including the refinancing of any such Indebtedness on terms
and conditions taken as a whole no less favorable to the Company and its
Subsidiaries or the Lenders;
(b) Indebtedness consisting of the Loans and in connection with the
Letters of Credit and this Agreement;
(c) Indebtedness of the Company in respect of:
(i) (A) up to $225,000,000 aggregate principal amount of Bridge
Subordinated Debt issued on or prior to the Closing Date, and additional
principal amount of Bridge Subordinated Debt issued in lieu of cash
interest on the outstanding Bridge Subordinated Debt and otherwise as
contemplated by the Bridge Loan Agreement upon exchange of Bridge
Subordinated Debt into exchange notes or (B) up to $225,000,000 aggregate
principal amount of Senior Subordinated Notes issued on the Closing Date;
and
(ii) Permanent Subordinated Debt in an aggregate principal amount
at any time outstanding not to exceed the sum of (A) $365,000,000 in
aggregate principal amount of Permanent Subordinated Debt (or any
refinancing thereof permitted hereunder) plus (B) 6% of such amount for
----
related fees and expenses; provided that the Net Proceeds of any such
--------
59
Indebtedness in excess of the then outstanding aggregate principal amount
of the Specified Debt issued or permitted by subsection 8.1(c)(i) plus 6%
----
of such amount for related fees and expenses plus the accreted value of the
----
Senior Subordinated Notes (or any refinancing thereof permitted hereunder)
(including all accrued and accreted interest on such Indebtedness and the
amount of all expenses, premiums or penalties associated therewith) (such
amount the "Permitted Specified Debt Amount") shall be applied to prepay
the Tranche B Term Loans in accordance with subsection 4.4(b)(iii), subject
to the provisions of subsection 4.4(e);
(d) Indebtedness (i) of the Company to any Subsidiary, (ii) of any
Domestic Subsidiary (with respect to which the requirements of subsection 7.9
have been satisfied) to the Company or any other Subsidiary, and (iii) of any
Foreign Subsidiary to the Company or any other Subsidiary in an aggregate
principal amount for all Foreign Subsidiaries at any time outstanding not to
exceed $35,000,000 (plus the sum of any amounts dividended or distributed by any
Foreign Subsidiary to the Company or any Domestic Subsidiary), minus the sum of
-----
the amount of (A) any Indebtedness outstanding pursuant to subsection 8.1(j),
(B) the amount of any investments made in a Foreign Subsidiary pursuant to
subsection 8.6(b)(iv) and (C) the amount of any guarantees of obligations of
Foreign Subsidiaries pursuant to subsection 8.3(c)(ii). For purpose of this
subsection 8.1(d), the payment, or intercompany loans or advances for such
purpose, by the Company or any Subsidiary of expenses and operating costs of the
Company or any Subsidiary (x) incurred in the ordinary course of business
(provided that, any such payment by the Company or any Subsidiary of expenses
---------
and operating costs of Foreign Subsidiaries of the Company pursuant to this
clause shall be promptly repaid by such Foreign Subsidiaries as soon as such
Foreign Subsidiaries have funds available to make such repayment and any such
repayment shall not increase the amount of loans which may be made to such
Foreign Subsidiaries pursuant to clause (iii) of this paragraph) or (y) incurred
in association with the initial establishment, start up and capitalization of
the Company and its Subsidiaries shall not be considered to be a loan, advance,
dividend or other investment, and shall be permitted under this Agreement and
such payments shall not reduce any permitted amounts to be so made as specified
herein;
(e) other unsecured Indebtedness of the Company and its Subsidiaries
in an aggregate principal amount at any one time outstanding not in excess of
$35,000,000;
(f) Indebtedness in respect of letters of credit or surety bonds
(other than Letters of Credit issued hereunder) in an aggregate principal amount
equal to $10,000,000 at any one time outstanding;
(g) (i) Indebtedness of the Company or any of its Subsidiaries
assumed in connection with acquisitions permitted by subsection 8.6(g) (so long
as such Indebtedness was not incurred in anticipation of such acquisitions),
(ii) Indebtedness of newly acquired Subsidiaries of the Company acquired in such
acquisitions (so long as such Indebtedness was not incurred in anticipation of
such acquisition) and (iii) Indebtedness of the Company or any of its
Subsidiaries owed to the seller in any acquisition permitted by subsection
8.6(g) constituting part of the purchase price thereof, all of which
Indebtedness permitted by this subsection 8.1(g) shall not exceed in the
aggregate at any one time $20,000,000 outstanding;
(h) Indebtedness in connection with workmen's compensation
obligations and general liability exposure of the Company and its Subsidiaries;
(i) additional unsecured subordinated Indebtedness of the Company and
its Subsidiaries in an aggregate principal amount at any time outstanding not to
exceed (i) $25,000,000 plus (ii) any additional principal amount of such
----
Indebtedness issued in lieu of cash interest on such outstanding Indebtedness or
any refinancing thereof; provided that (i) no part of the principal amount of
--------
such Indebtedness shall have a maturity date earlier than the one-year
anniversary of the final Tranche B
60
Installment Payment Date, (ii) the non-default cash interest rate thereon shall
not exceed 13% per annum, and (iii) such Indebtedness shall be subordinated to
the obligations of the Credit Parties under the Credit Documents on customary
terms and conditions;
(j) Indebtedness of Foreign Subsidiaries of the Company in an
aggregate principal amount at any time outstanding not in excess of the
equivalent at the date of each incurrence thereof of $35,000,000;
(k) Indebtedness of the Company and its Subsidiaries for industrial
revenue bonds or other similar governmental and municipal bonds, for the
deferred purchase price of newly acquired property and to finance equipment of
the Company and its Subsidiaries (pursuant to purchase money mortgages or
otherwise and whether owed to the seller or a third party) used in the ordinary
course of business (provided such financing is entered into within 180 days of
--------
the acquisition of such property) of the Company and its Subsidiaries in an
amount (based on the remaining balance of the obligations therefor on the books
of the Company and its Subsidiaries) which shall not exceed $25,000,000 in the
aggregate at any one time outstanding and Indebtedness of the Company and its
Subsidiaries in respect of Financing Leases to the extent subsections 8.7 and
8.9 would not be contravened; and
(l) Indebtedness of Jostens Canada in an amount not to exceed the
equivalent of $15,000,000 at the time of incurrence thereof.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets, income or profits, whether now owned
or hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Company or the relevant Subsidiary, as the case may be, in
accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business in
respect of obligations which are not yet due or which are bonded or which are
being contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the Company or the
relevant Subsidiary, as the case may be, in accordance with GAAP;
(c) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments, changes, and
other similar encumbrances or title defects incurred, or leases or subleases
granted to others, in the ordinary course of business, which do not in the
aggregate materially detract from the aggregate value of the properties of the
Company and its Subsidiaries, taken as a whole, or in the aggregate materially
interfere with or adversely affect in any material respect the ordinary conduct
of the business of the Company and its Subsidiaries on the properties subject
thereto, taken as a whole;
61
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents, including Liens pursuant to the Credit
Documents in respect of Interest Rate Agreements, and bankers' liens arising by
operation of law;
(g) Liens on property of the Company or any of its Subsidiaries
created solely for the purpose of securing (i) Indebtedness not exceeding
$20,000,000 in aggregate amount at any time outstanding permitted by subsection
8.1(g) (so long as in the case of clauses (i) and (ii) of subsection 8.1(g) such
Lien was not incurred in anticipation of the related acquisition), (ii)
Indebtedness not exceeding $35,000,000 in aggregate amount at any time
outstanding permitted by subsection 8.1(j), or (iii) Indebtedness permitted by
subsection 8.1(k) representing or incurred to finance, refinance or refund the
purchase price of property; provided that no such Lien incurred in connection
--------
with Indebtedness pursuant to subsection 8.1(g) or 8.1(k) shall extend to or
cover other property of the Company or such Subsidiary other than the respective
property so acquired, and the principal amount of Indebtedness secured by any
such Lien shall at no time exceed the original purchase price of such property;
(h) Liens existing on the Closing Date after giving effect to the
consummation of the Transactions and described in subsection 5.13 or Schedule
8.2(h) (including the extension of any Liens listed on such Schedule relating to
any Indebtedness permitted under subsection 8.1(a) in connection with any
refinancing of such Indebtedness permitted by such subsection and any Liens
securing Indebtedness to be repaid on the Closing Date to the extent the Company
has made arrangements to terminate such Liens in a manner satisfactory to the
Administrative Agent); provided that (i) no such Lien shall extend to or cover
--------
other property of the Company or its Subsidiaries other than the respective
property so encumbered and (ii) the principal amount of Indebtedness secured by
any such Lien shall at no time exceed the original principal amount of the
Indebtedness so secured;
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Commercial L/Cs;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matter of record that have been placed by any
developer, landlord or other third party on property over which the Company or
any of its Subsidiaries has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (ii) any condemnation
or eminent domain proceedings affecting any real property;
(k) Liens in connection with workmen's compensation obligations and
general liability exposure of the Company and its Subsidiaries;
(l) Liens on goods (and proceeds thereof) financed with drawings
under commercial letters of credit securing reimbursement obligations in respect
of such commercial letters of credit issued in accordance with the terms of this
Agreement;
(m) Liens in connection with Indebtedness permitted by subsection
8.1(l); and
(n) Liens in connection with Commodity Hedging Agreements and
Interest Rate Agreements entered into by the Company in the ordinary course of
business.
8.3 Limitation on Contingent Obligations. Create, incur, assume or
------------------------------------
suffer to exist any Contingent Obligation except:
(a) the Guarantees;
62
(b) other guarantees by the Company incurred in the ordinary course
of business for an aggregate amount not to exceed $5,000,000 at any one time;
(c) guarantees by the Company or any Domestic Subsidiary (i) of
obligations of Domestic Subsidiaries of the Company or the Company and (ii) of
obligations of Foreign Subsidiaries of the Company in an aggregate principal
amount not to exceed $35,000,000 (plus the sum of any amounts dividended or
----
distributed by such Foreign Subsidiaries to the Company or any Domestic
Subsidiary), as reduced by amounts outstanding in accordance with subsections
8.1(d)(iii), 8.1(j) or 8.6(b)(iv); provided that, in each case, if the primary
--------
obligation being guaranteed is subordinated, such guarantees are subordinated to
the Guarantees on substantially the same basis as such primary obligation is
subordinated to the Loans. For purpose of this subsection 8.3(c), the payment,
or intercompany loans or advances for such purpose, by the Company or any
Subsidiary of expenses and operating costs of the Company or any Subsidiary (x)
incurred in the ordinary course of business (provided that, any such payment by
--------
the Company or any Subsidiary of expenses and operating costs of Foreign
Subsidiaries of the Company pursuant to this clause shall be promptly repaid by
such Foreign Subsidiaries as soon as such Foreign Subsidiaries have funds
available to make such repayment and any such repayment shall not increase the
amount of guarantees permitted pursuant to clause (ii) of this paragraph) or (y)
incurred in association with the initial establishment, start up and
capitalization of the Company and its Subsidiaries shall not be considered to be
a loan, advance, dividend or other investment, and shall be permitted under this
Agreement and such payments shall not reduce any permitted amounts to be so made
as specified herein;
(d) Contingent Obligations existing on the Closing Date and described
in Schedule 8.3(d) and Contingent Obligations relating to any Indebtedness
permitted under subsection 8.1(a);
(e) guarantees of obligations to third parties in connection with
relocation of employees of the Company or any of its Subsidiaries, in an amount
which, together with all loans and advances made pursuant to subsection 8.6(f),
shall not exceed $7,500,000 at any time outstanding;
(f) Contingent Obligations in connection with workmen's compensation
obligations and general liability exposure of the Company and its Subsidiaries;
and
(g) subordinated guarantees in respect of (i) Indebtedness permitted
under subsection 8.1(i) and (ii) the Specified Debt issued by Subsidiaries of
the Company which have also issued Guarantees; provided that such subordinated
--------
guarantees are subordinated to the Guarantees on substantially the same basis as
such Indebtedness is subordinated to the Loans.
8.4 Prohibition of Fundamental Changes. Enter into any merger or
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or engage in any type of business other
than of the same general type now conducted by it, except (a) for the
transactions otherwise permitted pursuant to clause (b) of subsection 8.5, (b)
any Domestic Subsidiary of the Company may be merged with and into the Company
or a wholly owned Domestic Subsidiary of the Company, (c) any Foreign Subsidiary
of the Company may be merged with and into the Company or a wholly owned
Subsidiary of the Company, (d) Subsidiaries with a net book value not greater
than $100,000 may be dissolved and (e) any Subsidiary may otherwise be
dissolved; provided that upon dissolution, the assets of such Subsidiary are
--------
transferred to the Company or one of its wholly owned Domestic Subsidiaries (or,
in the case of a dissolution of a Foreign Subsidiary, such assets are
transferred to the Company or one of its wholly owned Subsidiaries) on the terms
and subject to the conditions set forth in subsection 8.5(b).
63
8.5 Prohibition on Sale of Assets. Convey, sell, lease (other than a
-----------------------------
sublease of real property), assign, transfer or otherwise dispose of (including
through a transaction of merger or consolidation of any Subsidiary) any of its
property, business or assets (including, without limitation, other payments and
receivables but excluding leasehold interests), whether now owned or hereafter
acquired, except:
(a) for sales or other dispositions of inventory in the ordinary
course of business;
(b) that the Company or any Subsidiary of the Company may sell,
lease, transfer, or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to, and any Subsidiary of the Company merge
with and into, the Company or a wholly owned Domestic Subsidiary of the Company
(or, in the case of any Foreign Subsidiary of the Company, the Company or a
wholly owned Subsidiary of the Company), and the Company or any Subsidiary of
the Company may sell or otherwise dispose of, or part with control of any or all
of, the Capital Stock of any Subsidiary to a wholly owned Domestic Subsidiary of
the Company or the Company; provided that (i) no such transaction may be
--------
effected if it would result in the transfer of any assets of, or any Capital
Stock of, the Company or a Subsidiary to, or the merger with and into, another
Subsidiary all of the Capital Stock of which owned by the Company or any
Subsidiary has not been pledged to the Administrative Agent and which has not
guaranteed the obligations of the Company, for the benefit of the Lenders, under
the Notes and this Agreement, and granted liens or security interests in favor
of the Administrative Agent, for the benefit of the Lenders, on substantially
all of its assets to secure such guarantee, pursuant to a guarantee, security
agreement and other documentation reasonably satisfactory to the Administrative
Agent and (ii) the Company shall not transfer all or substantially all of its
assets pursuant to this paragraph;
(c) leases of Fee Properties and other real property owned in fee;
(d) any condemnation or eminent domain proceedings affecting any real
property; provided that the parties hereto agree that the net proceeds received
--------
in connection with such proceeding shall be deemed not to constitute "Net
Proceeds" if such net proceeds are reinvested in new or existing properties
within eighteen months;
(e) substantially like-kind exchanges of real property or equipment;
provided that only any cash received by the Company or any Subsidiary of the
--------
Company in connection with such an exchange (net of all costs and expenses
incurred in connection with such transaction or with the commencement of
operation of real property received in such exchange) shall be deemed to be Net
Proceeds and shall be applied as provided for in subsection 4.4(b)(iv);
(f) for the sale or other disposition of any property that, in the
reasonable judgment of the Company has become uneconomic, obsolete or worn out,
and which is sold or disposed of in the ordinary course of business;
(g) for the sale or other disposition of any property the aggregate
amount of the net proceeds received in respect of which shall not exceed
$10,000,000 during the term of this Agreement; and
(h) any sale or disposition of any interest in property; provided
--------
that (i) the net proceeds of any such sale shall constitute Net Proceeds only to
the extent such net proceeds are not reinvested in new or existing properties
within twelve months from the date of such sale, (ii) if the property so sold
constituted Collateral under the Security Documents then any property purchased
with the net proceeds thereof shall be mortgaged or pledged, as the case may be,
for the benefit of the Lenders if required by subsection 7.9 and in accordance
therewith and (iii) the aggregate outstanding amount of net proceeds
64
held by the Company and its Subsidiaries at any time for reinvestment in respect
of any property sold pursuant to this paragraph shall not exceed $15,000,000;
(i) for the sale or other disposition of the Photography Division and
the Recognition Division; provided that (i) 50% of the net proceeds shall
constitute Net Proceeds to be applied to the Term Loans in accordance with
subsection 4.4(b)(iv), (ii) 50% of the net proceeds of any such sale shall
constitute Net Proceeds only to the extent such net proceeds are not reinvested
in new or existing properties within twelve months from the date of such sale
and (iii) if the property so sold constituted Collateral under the Security
Documents then any property purchased with the net proceeds thereof shall be
mortgaged or pledged, as the case may be, for the benefit of the Lenders if
required by subsection 7.9 and in accordance therewith; and
(j) any sale or other disposition of any minority interests in a
joint venture or other Person.
8.6 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment in
(including, without limitation, any acquisition of all or any substantial
portion of the assets, and any acquisition of a business or a product line, of
other companies, other than the acquisition of inventory in the ordinary course
of business), any Person (except to the extent permitted by Section 8.7 or
8.11), except:
(a) loans or advances, to the extent, in each case, the Indebtedness
created thereby is permitted by subsection 8.1(d);
(b) (i) any Subsidiary may make investments in the Company (by way of
capital contribution or otherwise), (ii) the Company and any Subsidiary may make
investments in, or create, any wholly owned Domestic Subsidiary (by way of
capital contribution or otherwise) or make investments permitted by subsection
8.5(b); provided that, in any such case, the requirements of subsection 7.9 are
--------
satisfied, (iii) the Company and any Subsidiary may make investments in any
Subsidiary financed with contributions of equity after the Closing Date directly
or indirectly to the entity making such investment from the Investor Group or
their Affiliates, and (iv) the Company and any Subsidiary may make investments
in, or create, any Foreign Subsidiary (by way of capital contribution or
otherwise) or make investments permitted by subsection 8.5(b); provided that (x)
--------
the requirements of subsection 7.9 are satisfied and (y) the aggregate amount of
all investments in such Foreign Subsidiaries shall not exceed (I) $35,000,000
(plus the sum of any amounts dividended or distributed by such Foreign
----
Subsidiaries to the Company or any Domestic Subsidiary), minus (II) the amount
-----
of any Indebtedness of any Foreign Subsidiary at any such time outstanding in
accordance with subsection 8.1(j) or 8.3(c)(ii);
(c) the Company and its Subsidiaries may (i) invest in, acquire and
hold Cash Equivalents and Investment Grade Securities (ii) make loans in an
aggregate amount at any time outstanding not to exceed $1,000,000 in connection
with a sale of assets permitted by subsection 8.5;
(d) the Company and its Subsidiaries may make payroll advances in the
ordinary course of business (including advances against commissions);
(e) the Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms (provided that
--------
nothing in this clause (e) shall prevent the Company or any of its Subsidiaries
from offering such concessionary trade terms, or from receiving such
investments, in connection with the bankruptcy or reorganization of their
respective suppliers or customers or the
65
settlement of disputes with such customers or suppliers arising in the ordinary
course of business, as management deems reasonable in the circumstances);
(f) the Company or any of its Subsidiaries may make travel and
entertainment advances and relocation and other loans to officers and employees
of the Company or any such Subsidiary; provided that the aggregate principal
--------
amount of all such loans and advances outstanding at any one time, together with
the guarantees of such loans and advances made pursuant to subsection 8.3(e),
shall not exceed $7,500,000 at any one time outstanding; and
(g) the Company and its Subsidiaries may make expenditures to acquire
all or a portion of the Capital Stock or assets of any Person engaged primarily
in one or more businesses in which the Company and its Subsidiaries are engaged
or directly related thereto; provided that, after giving pro forma effect to any
-------- --- -----
such acquisition and the financing thereof, (i) the amount of the expenditures
in connection with such acquisition does not exceed $30,000,000 without the
prior written consent of the Required Lenders, (ii) the provisions of subsection
7.9 are satisfied, (iii) the Company is in compliance with subsections 8.9 and
8.10 as of the end of the immediately preceding fiscal quarter for which the
appropriate financial information is available; provided that the last four
--------
fiscal quarters of Consolidated EBITDA (as may be adjusted for identified post
acquisition cost savings reasonably agreed to by the Company and the
Administrative Agent) of each acquired company, business or group of assets
during the testing period shall be added for purposes of determining compliance
with such subsections, and (iv) no Default or Event of Default has occurred and
is continuing or would result therefrom; and
(h) the Company or any of its Subsidiaries may make investments in,
or loans or investments to or expenditures relating to, joint ventures or other
Persons engaged primarily in one or more businesses in which the Company and its
Subsidiaries are engaged or generally related thereto in an aggregate amount not
to exceed (i) $20,000,000 in the aggregate or (ii) $12,500,000 in the aggregate
in connection with expenditures relating to such investments (plus the sum of
----
(A) any amounts dividended or distributed to the Company or any Domestic
Subsidiary of the Company (whichever party is making such investment, loan or
expenditure) by such joint venture or other Person, (B) the net cash proceeds of
any issuance of Capital Stock by the Company to, or any capital contribution to
the Company by, the Investor Group or its Affiliates (which has not been used to
increase the Base Amount of Capital Expenditures permitted under subsection 8.7
for any period) and/or any incurrence of Indebtedness permitted under subsection
8.1(i) in respect of loans made by the Investor Group or its Affiliates and (C)
any amounts from sales or distributions permitted by subsection 8.5(j));
provided that at the time of and after giving effect thereto no Default or Event
--------
of Default shall have occurred and be continuing or would result therefrom.
For purposes of this subsection 8.6, the payment, or intercompany
loans or advances for such purpose, by the Company or any Subsidiary of expenses
and operating costs of the Company or any Subsidiary (x) incurred in the
ordinary course of business (provided that, any such payment by the Company or
--------
any Subsidiary of expenses and operating costs of Foreign Subsidiaries of the
Company pursuant to this clause shall be promptly repaid by such Foreign
Subsidiaries as soon as such Foreign Subsidiaries have funds available to make
such repayment) or (y) incurred in association with the initial establishment,
start up and capitalization of the Company and its Subsidiaries shall not be
considered to be a loan, advance, dividend or other investment, and shall be
permitted under this Agreement and such payments shall not reduce any permitted
amounts to be so made as specified herein.
8.7 Capital Expenditures. Make or commit to make any Capital
--------------------
Expenditures, except that the Company and its Subsidiaries may make or commit to
make Capital Expenditures not exceeding the amount set forth below (the "Base
----
Amount") for each of the fiscal years or periods of the Company (or other
------
period) set forth below:
66
Fiscal Year
or Period Base Amount
--------- -----------
Closing Date to the end of
FY 2000 $40,000,000
FY 2001 $50,000,000
FY 2002 $32,000,000
FY 2003 $30,000,000
FY 2004 $30,000,000
FY 2005 and thereafter $30,000,000
provided that (i) for any period set forth above, the Base Amount set forth
--------
above may be increased by a maximum of 50% of the Base Amount for any such
period by carrying over to any such period any portion of the Base Amount (as
increased) not spent in the immediately preceding period, (ii) for each period
of the Company, the Base Amount for such period set forth above shall be
increased by the amount of any net cash proceeds from the issuance of Capital
Stock of the Company to, or any capital contribution to the Company by, the
Investor Group or its Affiliates and (iii) for each period of the Company, the
Base Amount for such period set forth above shall be increased in the event any
Person or assets of such Person (an "Acquired Person") is acquired as permitted
---------------
herein by an amount equal to 110% of the amount of capital expenditures
(determined in accordance with GAAP) of such Acquired Person for the twelve
months prior to the date it was acquired ("Acquired Capital Expenditures");
-----------------------------
provided that, with respect to the fiscal year in which such Person becomes an
--------
Acquired Person, the Base Amount shall be increased by the product of (A) the
Acquired Capital Expenditures of such Acquired Person times (B) a fraction, the
-----
numerator of which is the number of days remaining in the fiscal year of the
Company in which such Acquired Person was acquired and the denominator of which
is 365; and provided, further, that, notwithstanding anything to the contrary
-------- -------
herein, additional Capital Expenditures may be made with net proceeds received
in property sales or dispositions under subsection 8.5(g), 8.5(h) or 8.5(i).
8.8 Interest Rate Agreements. Enter into, create, incur, assume or
------------------------
suffer to exist any Interest Rate Agreements or obligations in respect thereof
except in the ordinary course of business for non-speculative purposes.
8.9 Debt to EBITDA. At the last day of any fiscal quarter set forth
--------------
below, permit the ratio (the "Leverage Ratio") of Consolidated Indebtedness
--------------
(excluding seasonal borrowings occurring in the third fiscal quarter of the
Company which shall be calculated as the lesser of (i) $85,000,000 and (ii) the
amount of Revolving Credit Loans outstanding on the date of such calculation) as
of such day to Consolidated EBITDA for the period of twelve months ending on
such day to be greater than the ratio set forth below for such fiscal quarter;
provided that, for purposes of calculating Consolidated EBITDA, any costs
--------
related to employee and business terminations described in the definition of
"consolidated net income" contained in the Offering Memorandum shall be
excluded; and provided further that, with respect to any acquisition permitted
-------- -------
by subsection 8.6(g), the last four fiscal quarters of Consolidated EBITDA (as
may be adjusted for post acquisition cost savings reasonably agreed to by the
Company and the Administrative Agent) of the acquired company shall be added for
the purposes of calculating this ratio:
67
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
2000 Fourth 6.00 to 1.00
2001 First 6.00 to 1.00
Second 5.75 to 1.00
Third 5.75 to 1.00
Fourth 5.50 to 1.00
2002 First 5.25 to 1.00
Second 5.25 to 1.00
Third 5.00 to 1.00
Fourth 4.75 to 1.00
2003 First 4.75 to 1.00
Second 4.50 to 1.00
Third 4.50 to 1.00
Fourth 4.25 to 1.00
2004 First 4.25 to 1.00
Second 4.00 to 1.00
Third 4.00 to 1.00
Fourth 3.75 to 1.00
2005 First 3.50 to 1.00
Second 3.50 to 1.00
Third 3.50 to 1.00
Fourth 3.50 to 1.00
2006 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2007 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2008 First 3.00 to 1.00
8.10 Interest Coverage. At the last day of any fiscal quarter set
-----------------
forth below, permit the Interest Coverage Ratio to be less than the ratio set
forth below for such fiscal quarter; provided that, for purposes of calculating
--------
Consolidated EBITDA, any costs related to employee and business terminations
described in the definition of "consolidated net income" contained in the
Offering Memorandum shall be excluded:
68
Fiscal Year Fiscal Quarter Interest Coverage Ratio
----------- -------------- -----------------------
▇▇▇▇ ▇▇▇▇▇▇ 1.50 to 1.00
2001 First 1.50 to 1.00
Second 1.50 to 1.00
Third 1.50 to 1.00
Fourth 1.65 to 1.00
2002 First 1.70 to 1.00
Second 1.70 to 1.00
Third 1.75 to 1.00
Fourth 1.90 to 1.00
2003 First 1.90 to 1.00
Second 2.00 to 1.00
Third 2.00 to 1.00
Fourth 2.25 to 1.00
2004 First 2.25 to 1.00
Second 2.25 to 1.00
Third 2.25 to 1.00
Fourth 2.50 to 1.00
2005 First 2.75 to 1.00
Second 2.75 to 1.00
Third 2.75 to 1.00
Fourth 2.75 to 1.00
2006 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2007 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2008 First 3.00 to 1.00
8.11 Limitation on Dividends. Declare any dividends on any shares of
-----------------------
any class of Capital Stock, or make any payment on account of, or set apart
assets for a sinking or other analogous fund for, the purchase, redemption,
retirement or other acquisition of any shares of any class of Capital Stock, or
any warrants or options to purchase such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of the Company or
any of its Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Company or to Domestic
Subsidiaries of the Company which are directly or indirectly wholly owned by the
Company (or, in case of Foreign Subsidiaries, to the Company or to Subsidiaries
of the Company which are directly or indirectly wholly owned by the Company) and
any Foreign Subsidiary of the Company organized under the laws of Ireland
69
may pay dividends to its employee shareholders as part of such employee
shareholders' compensation package;
(b) the Company and its Subsidiaries may pay or make dividends or
distributions to any holder of its Capital Stock in the form of additional
shares of Capital Stock of the same class and type;
(c) the Company may repurchase shares of Capital Stock of the Company
owned by former, present or future employees of the Company or its Subsidiaries
or their assigns, estates and heirs; provided that the aggregate amount expended
--------
by the Company pursuant to this clause (c) shall not in the aggregate exceed (i)
$7,500,000 in any fiscal year or (ii) $15,000,000 during the term of this
Agreement, plus any amounts contributed to the Company as a result of resales of
such repurchased shares of Capital Stock;
(d) the Company may redeem Preferred Stock or any outstanding Senior
Subordinated Notes with the proceeds of the issuance of Capital Stock so long as
such proceeds are not required to be applied to prepay any Loans pursuant to
subsection 4.4(b)(i) and provided that the aggregate amount expended by the
--------
Company pursuant to this clause (d) and clause (e) below shall not exceed
$60,000,000 during the term of this Agreement;
(e) subject to compliance with subsection 4.4(b)(v), the Company may
redeem Preferred Stock or any outstanding Senior Subordinated Notes with any
Excess Cash Flow which is not applied to prepay the Term Loans in accordance
with subsection 4.4(b)(v); provided that the aggregate amount expended by the
--------
Company pursuant to clause (d) above and this clause (e) shall not exceed
$60,000,000 during the term of this Agreement;
(f) the Company may repurchase up to 539,592 shares of Class A common
stock of the Company at a purchase price of $25.25 per share (the "Repurchased
Stock") and in connection therewith pay any reasonable transaction costs related
to such repurchase. The Company, at its election, may cancel the Repurchased
Stock or hold the Repurchased Stock in its treasury; and
(g) Notwithstanding anything to the contrary in this Agreement, any
holder of shares of the Company's Class E common stock may exchange such shares
for shares of the Company's Class A common stock at any time.
8.12 Transactions with Affiliates. Enter into any transaction,
----------------------------
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate; provided that nothing in this subsection 8.12 shall prohibit
--------
the Company or its Subsidiaries from engaging in the following transactions: (x)
the performance of the Company's or any Subsidiary's obligations under any
employment contract, collective bargaining agreement, employee benefit plan,
related trust agreement or any other similar arrangement heretofore or hereafter
entered into in the ordinary course of business, (y) the payment of compensation
to employees, officers, directors or consultants in the ordinary course of
business or (z) the maintenance of benefit programs or arrangements for
employees, officers or directors, including, without limitation, vacation plans,
health and life insurance plans, deferred compensation plans, and retirement or
savings plans and similar plans, in each case, in the ordinary course of
business.
8.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
------------------------------------
the Company to end on a day other than on the Saturday closest to December 31 in
any calendar year.
70
8.14 Limitation on Lines of Business. Enter into any business, either
-------------------------------
directly or through any Subsidiary, except for those businesses in which the
Company or any Subsidiary is engaged on the date of this Agreement (or which are
directly related thereto or generally related thereto, including, without
limitation, the provision of goods or services related to educational
institutions, parents and students and the recognition businesses).
8.15 Amendments to Certain Documents. Amend, modify, waive or
-------------------------------
terminate any provisions of the Merger Agreement in a manner which is materially
adverse to the Company or the Lenders, without the consent of the Administrative
Agent, which consent shall not be unreasonably withheld.
8.16 Limitation on Prepayments and Amendments of Certain Debt. (a)
--------------------------------------------------------
Optionally prepay, retire, redeem, purchase, defease or exchange, or make or
arrange for any mandatory prepayment, retirement, redemption, purchase or
defeasance of any Indebtedness outstanding pursuant to subsection 8.1(i) or with
respect to any Specified Debt (other than (x) any redemption of the Specified
Debt with proceeds of Permanent Subordinated Debt as permitted by subsection
8.1(c), (y) any refinancing of the Specified Debt contemplated in the definition
thereof or (z) any redemption of Specified Debt or Preferred Stock (1) with the
proceeds of the issuance of Capital Stock to the extent permitted by subsection
4.4(b)(i) and 8.11(d) or (2) with Excess Cash Flow to the extent permitted by
subsection 8.11(e)), (b) waive, amend, supplement, modify, terminate or release
any of the provisions of any such Indebtedness outstanding pursuant to
subsection 8.1(i) if, after giving effect to such waiver, amendment, supplement,
modification, termination or release, such Indebtedness would not have been
permitted to be incurred pursuant to such subsection, or (c) waive, amend,
supplement, modify, terminate or release any of the provisions with respect to
any Specified Debt without the prior consent of the Administrative Agent, to the
extent that any such waiver, amendment, supplement, modification, termination or
release would be materially adverse to the Lenders.
SECTION 9. EVENTS OF DEFAULT
-----------------
Upon the occurrence and during the continuance of any of the following
events:
(a) Any Borrower shall fail to (i) pay any principal of any Loan or
Note when due in accordance with the terms hereof or thereof or to reimburse the
Issuing Lender in accordance with subsection 3.8 or (ii) pay any interest on any
Loan or Note or any fee or other amount payable hereunder within five days after
any such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any Credit
Party in any Credit Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) The Company shall default in the observance or performance of any
agreement contained in subsection 7.7(a) or 7.9 or Section 8 of this Agreement;
or
(d) Any Credit Party shall default in the observance or performance
of any other covenant or agreement contained in any Credit Document and such
default shall continue unremedied for a period of 30 days; or
(e) The Company or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on or other amounts in respect of any
Indebtedness (other than the Loans, the L/C Obligations and any inter-company
debt) or Interest Rate Agreement or in the payment of any Contingent Obligation,
beyond the period of grace, if any, provided in the instrument or agreement
under
71
which such Indebtedness, Interest Rate Agreement or Contingent Obligation was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness, Interest Rate Agreement or
Contingent Obligation or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness, the party or parties to such
Interest Rate Agreements or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity, any applicable
grace period having expired, such Interest Rate Agreement to be terminated, any
applicable grace period having expired or such Contingent Obligation to become
payable, any applicable grace period having expired; in each case; provided that
--------
the aggregate principal amount of all such Indebtedness, Interest Rate
Agreements and Contingent Obligations under which a default exists or which
would then become due or payable equals or exceeds $15,000,000; or
(f) (i) The Company or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Company or any
of its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced against the
Company or any of its Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or (iv)
the Company or any of its Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) the Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Company or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Company or any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other events or conditions shall occur or exist with respect to a Plan,
and such event or condition, together with all other such events or conditions,
relating to a Plan, if any, would be reasonably likely to subject the Company or
any of its Subsidiaries to any tax, penalty or other liabilities in the
aggregate resulting in a material adverse effect to the Company and its
Subsidiaries taken as a whole; or
72
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability (to
the extent not paid or reserved for or to the extent not covered by insurance or
indemnities to the extent the Company, in its reasonable good faith judgment,
believes that such judgment or decree will be paid when due by the parties
providing such indemnities) of $15,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, paid, stayed or bonded pending
appeal within the time required by the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in full
force and effect or any Credit Party or any of its Subsidiaries shall so assert
in writing, or any Security Document shall cease to be effective to grant a
perfected Lien on the collateral described therein with the priority purported
to be created thereby (other than as a result of any action or inaction on the
part of the Administrative Agent or the Lenders), subject to such exceptions as
may be permitted therein or herein, and in the case of any Security Agreement,
such condition shall continue unremedied for 30 days after notice thereof to the
Company by the Administrative Agent or any Lender; or
(j) There shall have occurred a Change of Control; or
(k) The subordination provisions of any document governing any
Indebtedness permitted under subsection 8.1(c) or 8.1(i) (including, without
limitation, the Senior Subordinated Notes) shall cease, for any reason, to be
valid or any Credit Party or any of its Subsidiaries shall so assert in writing;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Company,
automatically (i) the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes shall immediately become due and payable, and (ii) all
obligations of the Company in respect of the Letters of Credit, although
contingent and unmatured, shall become immediately due and payable and the
Issuing Lender's obligations to issue the Letters of Credit shall immediately
terminate and (b) if such event is any other Event of Default, so long as any
such Event of Default shall be continuing, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare the Commitments
and the Issuing Lender's obligations to issue the Letters of Credit to be
terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable, and (B)
declare all or a portion of the obligations of the Company in respect of the
Letters of Credit, although contingent and unmatured, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and/or
demand that the Company discharge any or all of the obligations supported by the
Letters of Credit by paying or prepaying any amount due or to become due in
respect of such obligations. All payments under this Section 9 on account of
undrawn Letters of Credit shall be made by the Company directly to a cash
collateral account established by the Administrative Agent for such purpose for
application to the Company's reimbursement obligations under subsection 3.8 as
drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement and the Notes as
the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
73
SECTION 10. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENT; THE
----------------------------------------------------
DOCUMENTATION AGENT AND THE ISSUING LENDER
------------------------------------------
10.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints Chase as the Administrative Agent, Bankers Trust as the Syndication
Agent and ▇▇▇▇▇▇▇ as the Documentation Agent under this Agreement and
irrevocably authorizes Chase as Administrative Agent, Bankers Trust as
Syndication Agent and ▇▇▇▇▇▇▇ as Documentation Agent for such Lender to take
such action on its behalf under the provisions of the Credit Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent, the Syndication Agent or the Documentation Agent by the
terms of the Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent, the Syndication Agent and the
Documentation Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Credit Documents or otherwise exist against
the Administrative Agent, the Syndication Agent or the Documentation Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and each of the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care, except as otherwise
provided in subsection 10.3.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor any
----------------------
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in the Credit Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, the Credit Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of the
Credit Documents or for any failure of any Credit Party to perform its
obligations thereunder. The Administrative 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, any Credit
Document, or to inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent shall
--------------------------------
be entitled to rely, and shall be fully protected in relying, upon any Note,
entries maintained in the Register, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Credit Document
unless it shall first receive such advice or concurrence of the Required Lenders
(or, where a higher percentage of the Lenders is expressly required hereunder,
such Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Credit Document in accordance with a request
of the Required Lenders (unless a higher percentage of Lenders is expressly
74
required), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
10.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Company or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
10.6 Non-Reliance on Administrative Agent, Syndication Agent,
--------------------------------------------------------
Documentation Agent and Other Lenders. Each Lender expressly acknowledges that
-------------------------------------
neither the Administrative Agent, the Syndication Agent, the Documentation Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereafter taken, including any review of the affairs of
the Credit Parties, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent, the Syndication Agent, the Documentation Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent, the
Syndication Agent, the Documentation Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under the Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Credit Parties which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitments (or, to the extent such Commitments have been terminated, according
to the respective outstanding principal amounts of the Loans and the L/C
Obligations and the respective obligations, whether as Issuing Lender or a
Participating Lender, under the Letter of Credit), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the Loans) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Credit Documents or any documents contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted by the Administrative Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
--------
portion of such liabilities, obligations, losses, damages, penalties, actions,
75
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this subsection 10.7 shall survive the repayment of the Loans and all other
amounts payable hereunder.
10.8 The Administrative Agent in its Individual Capacity. The
---------------------------------------------------
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company and its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers,
duties and liabilities under the Credit Documents as any Lender and may exercise
the same as though it were not the Administrative Agent and the terms "Lender"
and "Lenders" shall include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under the Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall, so long as no Event
of Default has occurred and is continuing, be approved by the Company, which
shall not unreasonably withhold its approval, whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under the
Credit Documents.
10.10 Issuing Lender as Issuer of Letters of Credit. Each Revolving
---------------------------------------------
Credit Lender hereby acknowledges that the provisions of this Section 10 shall
apply to the Issuing Lender, in its capacity as issuer of the Letters of Credit,
in the same manner as such provisions are expressly stated to apply to the
Administrative Agent, except that obligations to indemnify the Issuing Lender
shall be ratable among the Revolving Credit Lenders in accordance with their
respective Revolving Credit Commitments (or, if the Revolving Credit Commitments
have been terminated, the outstanding principal amount of their respective
Revolving Credit Loans and L/C Obligations and their respective participating
interests in the outstanding Letters of Credit).
10.11 Administrative Agent as Joint and Several Creditor. Solely for
--------------------------------------------------
purposes of the pledge of shares of Jostens Can Investments B.V., a Netherlands
corporation and Jostens International Holdings B.V., a Netherlands corporation,
each Borrower and each Lender agree that the Administrative Agent shall be the
joint and several creditor (together with the relevant Lenders) of each
obligation of each Borrower towards each Lender under the Credit Documents, and
that accordingly, the Administrative Agent will have its own independent right
to demand performance by each Borrower of those obligations. However, (i) any
discharge of any such obligation to one of the Administrative Agent or a Lender
shall, to the same extent, discharge the corresponding obligation owing to the
other, and (ii) a Lender and the Administrative Agent shall not, by virtue of
this subsection 10.11, be entitled to pursue each Borrower concurrently for the
same obligation.
SECTION 11. MISCELLANEOUS
-------------
11.1 Amendments and Waivers. Except as otherwise expressly set forth
----------------------
in this Agreement, no Credit Document nor any terms thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of
this subsection 11.1. With the written consent of
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the Required Lenders, the Administrative Agent and the respective Credit Parties
or their Subsidiaries may, from time to time, enter into written amendments,
supplements or modifications hereto for the purpose of adding any provisions to
any Credit Document to which they are parties or changing in any manner the
rights of the Lenders or of any such Credit Party or its Subsidiaries thereunder
or waiving, on such terms and conditions as the Administrative Agent may specify
in such instrument, any of the requirements of any such Credit Document or any
Default or Event of Default and its consequences; provided that:
--------
(a) no such waiver and no such amendment, supplement or modification
shall (i) release all or substantially all of the collateral without the written
consent of all Lenders or (ii) release collateral not required or permitted by
any Credit Document to be released and which, in the aggregate with all other
collateral released pursuant to this clause (a) (ii) (other than collateral
released pursuant to the proviso to this clause (a)) during the calendar year in
which such proposed release would be effected and the immediately preceding
calendar year, has fair market value on the proposed date of release in excess
of 20% of the fair market value of all collateral (including any Guarantee) on
such date without the written consent of the Supermajority Lenders; provided
--------
that, notwithstanding the foregoing, this clause (a) shall not be applicable to
and no consent shall be required for (i) releases of collateral in connection
with any dispositions permitted by subsection 8.5, (ii) releases of collateral
in accordance with subsection 11.11 or (iii) upon the reincorporation of the
Company or any Subsidiary in a new jurisdiction or the creation of a new
Subsidiary of the Company, any release of collateral in connection with the
transfer of such released collateral to such reincorporated entity or new
Subsidiary in compliance with subsection 8.4; provided that the Administrative
--------
Agent, in its sole discretion, determines that such release and transfer,
together with any grant and perfection of a new Lien therein in favor of the
Administrative Agent, will cause no material impairment of the value of the
collateral taken as a whole, after giving effect to such release and transfer;
(b) no such waiver and no such amendment, supplement or modification
shall extend the final maturity date or termination date of any Loan or
Commitment or the scheduled payment date of any installment of any Loan, or
reduce the rate or extend the time of payment of interest thereon, or change the
method of calculating interest thereon, or reduce or extend the time of payment
of any fee payable to the Lenders hereunder, or reduce the principal amount
thereof, or change the amount of any Lender's Commitment or Commitment
Percentage, or amend, modify or waive any provision of subsection 4.9(b) or this
subsection 11.1 or reduce the percentage specified in the definition of Required
Lenders or reduce the percentage specified in the definition of Supermajority
Lenders or consent to the assignment or transfer by any Credit Party of any of
its rights and obligations under any Credit Document, in each case, without the
prior written consent of each Lender directly affected thereby;
(c) no such waiver and no such amendment, supplement or modification
affecting the then Administrative Agent or Issuing Lender shall amend, modify or
waive any provision of Section 10 without the written consent of such
Administrative Agent or Issuing Lender, as the case may be;
(d) without the consent of each of the Lenders which are Revolving
Credit Lenders and/or Tranche B Lenders only, each of the Tranche A Lenders may
amend this Agreement and the Tranche A Term Notes to extend the maturities of
the installments of the Tranche A Term Loans; without the consent of each of the
Lenders which are Revolving Credit Lenders and/or Tranche A Lenders only, each
of the Tranche B Lenders may amend this Agreement and the Tranche B Term Notes
to extend the maturities of the installments of the Tranche B Term Loans; and
without the consent of each of the Lenders which are holders of the Term Loans
only, each of the Revolving Credit Lenders may amend this Agreement and the
Revolving Credit Notes to extend the Revolving Credit Termination Date; and
77
(e) no such waiver, and no such amendment, supplement or modification
shall amend, modify or waive the order of application of prepayments specified
in subsection 4.4(a) or subsections 4.4(b)(i) through 4.4(b)(v) without the
written consent of the holders of at least 51% of each of (i) the aggregate
unpaid principal amount of the Term Loans, if any, and (ii) the Revolving Credit
Commitments or, if the Revolving Credit Commitments are terminated, the
aggregate unpaid principal amount of the Revolving Credit Loans (the Term Loans
and the Revolving Credit Commitments of any Non-Funding Lender to be disregarded
in determining such percentage at any time);
any such waiver and any such amendment, supplement or modification described in
this subsection 11.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party and its Subsidiaries, the Lenders, the
Administrative Agent and the Issuing Lender and all future holders of the Notes
and the Loans. Any extension of a Letter of Credit by the Issuing Lender shall
be treated hereunder as a new Letter of Credit. In the case of any waiver, the
Credit Parties, the Lenders, the Administrative Agent and Issuing Lender shall
be restored to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when sent, confirmation of receipt received, or,
in the case of telex notice, when sent, answerback received, addressed as
follows in the case of the Company and the other Borrower, the Administrative
Agent, and as set forth in Schedule I in the case of any Lender, or to such
other address as may be hereafter notified by the respective parties hereto and
any future holders of the Notes:
The Company and
the other Borrower: Jostens, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent
and Swing Line Lender: The Chase Manhattan Bank
Agent Bank Services
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ floor
New York, New York 10081
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
78
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders pursuant to subsections 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4 shall not
be effective until received and; provided, further, that the failure to provide
-------- -------
the copies of notices to the Company provided for in this subsection 11.2 shall
not result in any liability to the Administrative Agent.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
11.5 Payment of Expenses and Taxes. The Company agrees (a) to pay or
-----------------------------
reimburse the Administrative Agent, the Syndication Agent, the Documentation
Agent and the Co-Lead Arrangers for all their reasonable out-of-pocket costs and
expenses incurred in connection with the development, negotiation, preparation
and execution of the Credit Documents and any other documents prepared in
connection herewith, and the consummation of the transactions contemplated
hereby and thereby, including, without limitation, the reasonable fees and
disbursements of one counsel to the Administrative Agent, the Syndication Agent,
the Documentation Agent and the Co-Lead Arrangers, (b) to pay or reimburse all
of the reasonable expenses, including without limitation, reasonable fees and
expenses of counsel, incurred by the Administrative Agent in connection with the
administration of the facilities provided for herein or in connection with any
amendments, waivers, work-outs or restructurings in respect thereof, (c) to pay
or reimburse the Administrative Agent, the Syndication Agent, the Documentation
Agent, the Co-Lead Arrangers, the Issuing Lender and each Lender for all their
costs and expenses incurred in connection with, and to pay, indemnify, and hold
the Administrative Agent, the Syndication Agent, the Documentation Agent, the
Co-Lead Arrangers, the Issuing Lender and each Lender harmless from and against
any and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever arising out of or in connection with, the enforcement or preservation
of any rights under any Credit Document and any such other documents, including,
without limitation, reasonable fees and disbursements of counsel to the
Administrative Agent, the Co-Lead Arrangers and each Lender incurred in
connection with the foregoing and in connection with advising the Administrative
Agent with respect to its rights and responsibilities under this Agreement and
the documentation relating thereto, (d) to pay, indemnify, and to hold the
Administrative Agent, the Syndication Agent, the Documentation Agent, the Co-
Lead Arrangers and each Lender harmless from any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes (other than withholding taxes), if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, any Credit Document and any such other
documents, and (e) to pay, indemnify, and hold the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Co-Lead Arrangers, the Issuing
Lender and each Lender and their respective Affiliates, officers, directors and
trustees harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable fees and disbursements of counsel) which may be incurred by or
asserted against the Administrative Agent, the Syndication Agent, the
Documentation Agent, the Co-Lead Arrangers, the Issuing Lender or the Lenders
79
or such Affiliates, officers, directors or trustees (x) arising out of or in
connection with any investigation, litigation or proceeding related to this
Agreement, the other Credit Documents, the proceeds of the Loans and the
transactions contemplated by or in respect of such use of proceeds, or any of
the other transactions contemplated hereby, whether or not the Administrative
Agent, the Syndication Agent, the Documentation Agent, the Co-Lead Arrangers,
the Issuing Lender or any of the Lenders or such Affiliates, officers, directors
or trustees is a party thereto, including, without limitation, any of the
foregoing relating to the violation of, noncompliance with or liability under,
any Environmental Law applicable to the Company, any of its Subsidiaries or any
of the facilities and properties owned, leased or operated by the Company or any
of its Subsidiaries, or (y) without limiting the generality of the foregoing, by
reason of or in connection with the execution and delivery or transfer of, or
payment or failure to make payments under, Letters of Credit (it being agreed
that nothing in this subsection 11.5(d)(y) is intended to limit the Company's
obligations pursuant to subsection 3.8) (all the foregoing, collectively, the
"indemnified liabilities"); provided that the Company shall have no obligation
----------------------- --------
hereunder with respect to indemnified liabilities of the Administrative Agent,
the Syndication Agent, the Documentation Agent, the Co-Lead Arrangers, the
Issuing Lender or any Lender or any of their respective Affiliates, officers,
directors and trustees arising from (i) the gross negligence or willful
misconduct of the person seeking indemnification or (ii) legal proceedings
commenced against the Administrative Agent, the Syndication Agent, the
Documentation Agent, the Co-Lead Arrangers, the Issuing Lender or Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such or
(iii) legal proceedings commenced against the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Co-Lead Arrangers, the Issuing
Lender or any such Lender by any Transferee (as defined in subsection 11.6).
Without limiting the foregoing, and to the extent permitted by applicable law,
the Company agrees not to assert, and hereby waives (and shall cause the
Subsidiaries not to assert and to waive) all rights for contribution or any
other rights of recovery with respect to all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever, under or related to Environmental Laws, that
any of them might have by statute or otherwise against the Administrative Agent,
the Syndication Agent, the Documentation Agent, the Co-Lead Arrangers, the
Issuing Lender or any Lender. The agreements in this subsection 11.5 shall
survive repayment of the Loans and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments. (a)
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This Agreement shall be binding upon and inure to the benefit of the Borrowers,
the Lenders, the Administrative Agent, the Syndication Agent, the Documentation
Agent, the Co-Lead Arrangers, all future holders of the Notes and the Loans, and
their respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking, lending or investment business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
------------
participating interests in any Loan owing to such Lender, any participating
interest in the Letters of Credit of such Lender, any Note held by such Lender,
any Commitment of such Lender or any other interest of such Lender hereunder. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Agreement and the Company and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Credit Documents. Each Borrower agrees that if amounts outstanding
under this Agreement and the Notes are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of setoff in respect
of its participating interest in amounts owing under this Agreement and any Note
to the same extent as if
the amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Note; provided that such right of setoff shall be
--------
subject to the obligation of such Participant to share with the Lenders, and the
Lenders agree to share with such Participant, as provided in subsection 11.7.
Each Borrower also agrees that each Participant shall be entitled to the
benefits of subsections 3.10, 4.11 and 4.12 with respect to its participation in
the Letters of Credit and in the Commitments and the Loans outstanding from time
to time as if it were a Lender; provided that no Participant shall be entitled
--------
to receive any greater amount pursuant to any such subsection than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred. Each Lender agrees that the participation
agreement pursuant to which any Participant acquires its participating interest
(or any other document) may afford voting rights to such Participant, or any
right to instruct such Lender with respect to voting hereunder, only with
respect to matters requiring the consent of either all of the Lenders hereunder
or all of the Lenders holding the relevant Term Loans or Revolving Credit
Commitments subject to such participation.
(c) Subject to paragraph (g) of this subsection 11.6, any Lender may,
in the ordinary course of its commercial banking, lending or investment business
and in accordance with applicable law, (i) at any time and from time to time
assign all or any part of its rights and obligations under this Agreement and
the Notes to any Lender or any Affiliate thereof; provided that, in the event of
--------
a sale of less than all of such rights and obligations, such assigning Lender
after any such sale to any other Lender or any Affiliate of such Lender shall
retain Commitments and/or Loans and/or L/C Participating Interests aggregating
at least $5,000,000 (or such lesser amount as the Administrative Agent may
determine) and (ii) with the consent of the Company, as agent for the Borrowers,
and the Administrative Agent (which in each case shall not be unreasonably
withheld or delayed) at any time and from time to time assign to one or more
additional banks, mutual funds or financial institutions or entities (each, an
"Assignee"), all or any part of its rights and obligations under this Agreement
--------
and the Notes, pursuant to an Assignment and Acceptance, executed by such
Assignee, such transferor Lender (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Company, as agent for the
Borrowers, and the Administrative Agent), and delivered to the Administrative
Agent for its acceptance and recording in the Register (as defined below);
provided that (A) each such sale pursuant to clause (ii) of this subsection
--------
11.6(c) shall be in a principal amount of at least $5,000,000 (or such lesser
amount as the Administrative Agent and the Company, as agent for the Borrowers,
may determine) unless the assigning Lender is transferring all of its rights and
obligations and (B) in the event of a sale of less than all of such rights and
obligations, such Lender after any such sale shall retain Commitments and/or
Loans and/or L/C Participating Interests aggregating at least $5,000,000 (or
such lesser amount as the Administrative Agent and the Company, as agent for the
Borrowers, may determine). Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent of the interest
transferred, as reflected in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of a transferor Lender's rights
and obligations under this Agreement, such transferor Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of the
indemnification provisions set forth in subsection 11.5).
(d) The Administrative Agent, which for purposes of this subsection
11.6(d) only shall be deemed to be the agent of the Borrowers, shall maintain at
the address of the Administrative Agent referred to in subsection 11.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
--------
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrowers, the Administrative Agent and
81
the Lenders shall treat each Person whose name is recorded in the Register as
the owner of a Loan or other obligation hereunder as the owner thereof for all
purposes of this Agreement and the other Credit Documents, notwithstanding any
notice to the contrary. Any assignment of any Loan or other obligation hereunder
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrowers
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof, by the Company, as agent for the
Borrowers, and the Administrative Agent), together with payment to the
Administrative Agent of a registration and processing fee of $4,000 if the
Assignee is not a Lender prior to the execution of such supplement and $1,000
otherwise, the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Company (no such assignment
shall become effective unless and until so recorded); provided that, in the case
--------
of contemporaneous assignments by a Lender to more than one fund managed by the
same investment advisor or an Affiliate of such investment advisor (which funds
are not then Lenders hereunder), only a single $4,000 fee shall be payable for
all such contemporaneous assignments. On or prior to such effective date, the
applicable Borrower at its own expense, shall execute and deliver to the
Administrative Agent (in exchange for any or all of the Term Loan Notes or
Revolving Credit Notes of the assigning Lender, if any) new Term Loan Notes or
Revolving Credit Notes, as the case may be, to the order of such Assignee (if
requested) in an amount equal to the Revolving Credit Commitment or the Term
Loans, as the case may be, assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment or any Term
Loans hereunder, new Term Loan Notes or Revolving Credit Notes, as the case may
be, to the order of the assigning Lender in an amount equal to the Commitment or
such Term Loans, as the case may be, retained by it hereunder (if requested).
Such new Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby.
(f) The Administrative Agent, the Syndication Agent, the
Documentation Agent, the Co-Lead Arrangers and the Lenders agree that they will
use reasonable efforts to protect the confidentiality of any confidential
information concerning the Company and its Subsidiaries and Affiliates.
Notwithstanding the foregoing, each Borrower authorizes each Lender to disclose
(i) to its employees, officers, affiliates and advisors, who shall be bound by
the confidentiality provisions hereof, (ii) to any regulatory authority as
required by law, (iii) in connection with any enforcement or other legal action
and (iv) to any Participant or Assignee (each, a "Transferee") and any
----------
prospective Transferee any and all information in such Lender's possession
concerning the Company and its Subsidiaries which has been delivered to such
Lender by or on behalf of the Company pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of any Borrower in connection with
such Lender's credit evaluation of the Company and its Subsidiaries prior to
becoming a party to this Agreement; provided that each Lender shall cause its
--------
respective prospective Transferees to agree in writing to protect the
confidentiality of any confidential information concerning the Company and its
Subsidiaries and Affiliates.
(g) If, pursuant to this subsection 11.6, any interest in this
Agreement or any Note is transferred to any Transferee which is organized under
the laws of any jurisdiction other than the United States or any State thereof,
the transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the terms of this Agreement
including without limitation subsection 4.11(d).
(h) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute
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assignments and that such provisions do not prohibit assignments creating
security interests, including, without limitation, any pledge or assignment by a
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
11.7 Adjustments; Set-off. (a) If any relevant Lender (a "benefitted
-------------------- ----------
Lender") shall at any time receive any payment of all or part of any of its
------
Loans or L/C Participating Interests, as the case may be, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in clause (f) of Section 9, or otherwise) in a greater proportion
than any such payment to and collateral received by any other relevant Lender,
if any, in respect of such other relevant Lender's Loans or L/C Participating
Interests, as the case may be, or interest thereon, such benefitted Lender shall
purchase for cash from the other relevant Lenders such portion of each such
other relevant Lender's Loans or L/C Participating Interests, as the case may
be, or shall provide such other relevant Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the relevant Lenders; provided that if all or any
--------
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrowers agree that each Lender so purchasing a portion of another Lender's
Loans and/or L/C Participating Interests may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion. The
Administrative Agent shall promptly give the Company notice of any set-off;
provided that the failure to give such notice shall not affect the validity of
--------
such set-off.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to any Borrower, any
such notice being expressly waived by each Borrower to the extent permitted by
applicable law, upon the filing of a petition under any of the provisions of the
federal bankruptcy code or amendments thereto, by or against; the making of an
assignment for the benefit of creditors by; the application for the appointment,
or the appointment, of any receiver of, or of any substantial portion of the
property of; the issuance of any execution against any substantial portion of
the property of; the issuance of a subpoena or order, in supplementary
proceedings, against or with respect to any substantial portion of the property
of; or the issuance of a warrant of attachment against any substantial portion
of the property of; any Borrower to set off and apply against any indebtedness,
whether matured or unmatured, of any Borrower to such Lender, any amount owing
from such Lender to any Borrower, at or at any time after, the happening of any
of the above mentioned events, and as security for such indebtedness, each
Borrower hereby grants to each Lender a continuing security interest in any and
all deposits, accounts or moneys of such Borrower then or thereafter maintained
with such Lender, subject in each case to subsection 11.7(a) of this Agreement.
The aforesaid right of set-off may be exercised by such Lender against any
Borrower or against any trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver or execution, judgment or attachment
creditor of any Borrower, or against anyone else claiming through or against any
Borrower or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition; assignment for the
benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the Company and the Administrative Agent after any
such set-off and application made by such Lender; provided that the failure to
--------
give such notice shall not affect the validity of such set-off and application.
83
11.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent. This Agreement
shall become effective with respect to the Borrowers, the Administrative Agent,
the Syndication Agent, the Documentation Agent and the Lenders when the
Administrative Agent shall have received copies of this Agreement executed by
the Borrowers, the Administrative Agent, the Syndication Agent, the
Documentation Agent and the Lenders, or, in the case of any Lender, shall have
received telephonic confirmation from such Lender stating that such Lender has
executed counterparts of this Agreement or the signature pages hereto and sent
the same to the Administrative Agent.
11.9 Governing Law; No Third Party Rights. This Agreement and the
------------------------------------
Notes and the rights and obligations of the parties under this Agreement and the
Notes shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and, except as
set forth in subsection 11.6, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
11.10 Submission to Jurisdiction; Waivers. (a) Each party to this
-----------------------------------
Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit Documents,
or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in subsection 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to ▇▇▇ in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any
legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
11.11 Releases. The Administrative Agent and the Lenders agree to
--------
cooperate with the Company and its Subsidiaries with respect to any sale or
other disposition permitted by subsection 8.5 and promptly take such action and
execute and deliver such instruments and documents necessary to release the
liens and security interests created by the Security Documents relating to any
of the assets or property affected by any such sale permitted by subsection 8.5,
including, without limitation, any Uniform Commercial Code amendment, release or
termination or partial release or termination statements.
84
11.12 Interest. Each provision in this Agreement and each other
--------
Credit Document is expressly limited so that in no event whatsoever shall the
amount paid, or otherwise agreed to be paid, by any Borrower for the use,
forbearance or detention of the money to be loaned under this Agreement or any
other Credit Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Credit Document which is
for the use, forbearance or detention of such money), exceed that amount of
money which would cause the effective rate of interest to exceed the highest
lawful rate permitted by applicable law (the "Highest Lawful Rate"), and all
-------------------
amounts owed under this Agreement and each other Credit Document shall be held
to be subject to reduction to the effect that such amounts so paid or agreed to
be paid which are for the use, forbearance or detention of money under this
Agreement or such other Credit Document shall in no event exceed that amount of
money which would cause the effective rate of interest to exceed the Highest
Lawful Rate. Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loans or the obligations in
respect of the other Credit Documents are accelerated for any reason, or in the
event of any prepayment of all or any portion of the Loans or the obligations in
respect of the other Credit Documents by any Borrower or in any other event,
earned interest on the Loans and such other obligations of any Borrower may
never exceed the Highest Lawful Rate, and any unearned interest otherwise
payable on the Loans or the obligations in respect of the other Credit Documents
that is in excess of the Highest Lawful Rate shall be canceled automatically as
of the date of such acceleration or prepayment or other such event and (if
theretofore paid) shall, at the option of the holder of the Loans or such other
obligations, be either refunded to such Borrower or credited on the principal of
the Loans. In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Highest Lawful Rate, the Borrowers and the
Lenders shall, to the maximum extent permitted by applicable law, amortize,
prorate, allocate and spread, in equal parts during the period of the actual
term of this Agreement, all interest at any time contracted for, charged,
received or reserved in connection with this Agreement.
11.13 Special Indemnification. Notwithstanding any provision in this
-----------------------
Agreement to the contrary, (A) each Lender, or Transferee of any Lender pursuant
to subsection 11.6(g) of this Agreement, shall indemnify the Borrowers and the
Administrative Agent, and hold each of them harmless against any and all
payments, expenses or taxes which the Borrowers or the Administrative Agent may
become subject to or obligated to pay if and to the extent that, (i) on the
Closing Date or the effective date of transfer, as the case may be, such Lender,
or such Transferee of a Lender pursuant to subsection 11.6(g) of this Agreement,
(a) makes the representation and covenants set forth in subsection 4.11(d) of
this Agreement and the Assignment and Acceptance, and (b) is not in fact also
qualified to make the representation and covenants set forth in subsection
4.11(d) of this Agreement and the Assignment and Acceptance, and (ii) as a
result of any Change in Law or compliance by such Lender, or Transferee, with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority the Borrowers or the Administrative
Agent is required to make any additional payments on account of U.S. withholding
taxes and amounts related thereto with respect to any payments under this
Agreement, any Note, or a Eurodollar Loan, made prior to such Change in Law or
request or directive, none of which payments would have been required if such
Lender, or Transferee, was qualified on the Closing Date or the date of the
transfer, as the case may be, to make the representation and covenants set forth
in subsection 4.11(d) of this Agreement and the Assignment and Acceptance, as
the case may be, and (B) each Lender, or Transferee of any Lender pursuant to
subsection 11.6(g) of this Agreement, agrees that to the extent any amount
payable by such Lender or Transferee pursuant to this subsection 11.13 remains
unpaid on any Interest Payment Date or the date on which any prepayment is made,
the Borrowers shall have the right to set-off against any payment due to such
Lender or Transferee on such date any amounts owing to the Borrowers pursuant to
this subsection 11.13.
11.14 Permitted Payments and Transactions. Notwithstanding any
-----------------------------------
provision to the contrary contained in this Agreement, the Company and its
Subsidiaries shall be permitted to make payments (including fees and expenses)
pursuant to or in respect of, the following agreements, and, in
85
the case of clauses (a) and (d) below, to engage in the following transactions:
(a) (i) the Agreement for Management and Advisory Services, between Investcorp
International, Inc. ("III") and the Company dated as of May 10, 2000, (ii) the
---
Loan Financing Advisory Agreement between III and the Company dated as of
December 28, 1999 and (iii) the Merger Agreement; (b) agreements with any Person
or Persons providing for the payment of customary fees in connection with
serving as a director of the Company or any of its Subsidiaries; (c) agreements
providing for the payment of commercially reasonable fees in connection with any
permitted financing, refinancing, sale, transfer, sale and leaseback or other
permitted disposition of any assets of the Company of any of its Subsidiaries;
(d) the borrowing of any Indebtedness to the extent, and upon the terms and
conditions, the same is expressly permitted under subsection 8.1; (e) agreements
providing for commercially reasonable fees in connection with any permitted
purchase or acquisition of stock or assets by the Company or any of its
Subsidiaries; and (f) agreements relating to the payment of $2,500,000 in fees
to certain members of the Company's management in connection with the provision
of transition services to the Company subsequent to the Merger, as more fully
described in the Offering Memorandum.
[Remainder of Page Left Blank Intentionally]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
JOSTENS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President & Treasurer
AMERICAN YEARBOOK COMPANY, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Treasurer
THE CHASE MANHATTAN BANK, as Administrative
Agent, Issuing Lender and a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
BANKERS TRUST COMPANY, as Syndication Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., as
Documentation Agent and a Lender
By: /s/ [signature illegible]
___________________________________
Name:
Title:
Schedule I to the
Credit Agreement
----------------
Lenders, Addresses and Commitments
Tranche A Tranche B
Revolving Credit Term Loan Term Loan
Commitment Commitment Commitment Total
--------------- --------------- --------------- ---------------
THE CHASE MANHATTAN BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
Telecopy: (212)
[to come]
Total Allocation $150,000,000.00 $150,000,000.00 $345,000,000.00 $645,000,000.00
Schedule II to
the Credit Agreement
--------------------
PRICING GRID
------------
Applicable Margin Applicable Margin Commitment
for Eurodollar Loans for ABR Loans Fee Rate
---------------------- ---------------------- --------------
Tranche A Revolving Tranche A Revolving
Leverage Term Credit Term Credit
Ratio Loans Loans Loans Loans
------------------------------------------------------------------------------------------------------------------------------
greater than 5.50 to 1.00 3.25% 3.25% 2.25% 2.25% .500%
less than 5.50 to 1.00 3.00% 3.00% 2.00% 2.00% .500%
but greater than or equals to 5.00 to
1.00
less than 5.00 to 1.00 2.75% 2.75% 1.75% 1.75% .500%
but greater than or equals to 4.50 to
1.00
less than 4.50 to 1.00 2.50% 2.50% 1.50% 1.50% .500%
but greater than or equals to 4.00 to
1.00
less than 4.00 to 2.25% 2.25% 1.25% 1.25% .375%
1.00 but greater than or equals to
3.50 to 1.00
less than 3.50 to 2.00% 2.00% 2.00% 1.00% .375%
1.00 but greater than or equals to
3.00 to 1.00
less than 3.00 to 1.75% 1.75% 0.75% 0.75% .375%
1.00