EXHIBIT 10.13
$130,000,000
CREDIT AGREEMENT
DATED AS OF OCTOBER 13, 1999
AMONG
BLACKBAUD, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT,
FLEET NATIONAL BANK,
AS DOCUMENTATION AGENT
AND
FIRST UNION SECURITIES, INC.,
AS SYNDICATION AGENT
ARRANGED BY:
DEUTSCHE BANK SECURITIES INC.
AND
FIRST UNION SECURITIES, INC.
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS......................................................................... 2
1.1 Certain Defined Terms.............................................................. 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. 27
1.3 Other Definitional Provisions and Rules of Construction............................ 27
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.......................................... 28
2.1 Commitments; Making of Loans; the Register; Notes................................... 28
2.2 Interest on the Loans............................................................... 35
2.3 Fees................................................................................ 39
2.4 Repayments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments....................................................... 40
2.5 Use of Proceeds..................................................................... 48
2.6 Special Provisions Governing Eurodollar Rate Loans.................................. 49
2.7 Increased Costs; Taxes; Capital Adequacy............................................ 51
2.8 Obligation of Lenders and Issuing Lenders to Mitigate; Replacement of Lender........ 55
SECTION 3. LETTERS OF CREDIT................................................................... 56
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein....... 56
3.2 Letter of Credit Fees............................................................... 59
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.................. 59
3.4 Obligations Absolute................................................................ 62
3.5 Indemnification; Nature of Issuing Lenders' Duties.................................. 63
3.6 Increased Costs and Taxes Relating to Letters of Credit............................. 64
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT........................................... 65
4.1 Conditions to Term Loans and Initial Revolving Loans and Swing Line Loans........... 65
4.2 Conditions to All Loans............................................................. 71
4.3 Conditions to Letters of Credit..................................................... 72
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES............................................ 73
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries....... 73
5.2 Authorization of Borrowing, etc..................................................... 74
5.3 Financial Condition................................................................. 75
5.4 No Material Adverse Change; No Restricted Junior Payments........................... 75
5.5 Title to Properties; Liens; Real Property........................................... 75
5.6 Litigation; Adverse Facts........................................................... 76
5.7 Payment of Taxes.................................................................... 76
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts........ 77
5.9 Governmental Regulation............................................................. 77
5.10 Securities Activities............................................................... 77
5.11 Employee Benefit Plans.............................................................. 77
5.12 Certain Fees........................................................................ 78
5.13 Employee Matters.................................................................... 79
5.14 Solvency............................................................................ 79
5.15 Matters Relating to Collateral...................................................... 79
5.16 Related Agreements.................................................................. 80
5.17 Disclosure.......................................................................... 80
5.18 Intellectual Property............................................................... 80
5.19 Environmental Protection............................................................ 81
5.20 Year 2000........................................................................... 82
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS..................................................... 82
6.1 Financial Statements and Other Reports.............................................. 82
6.2 Corporate Existence, etc............................................................ 88
6.3 Payment of Taxes and Claims; Tax Consolidation...................................... 88
6.4 Maintenance of Properties; Insurance................................................ 89
6.5 Inspection Rights; Lender Meeting................................................... 89
6.6 Compliance with Laws, etc........................................................... 90
6.7 Environmental Disclosure and Inspection; Remedial Action
Regarding Hazardous Materials....................................................... 90
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
by Certain Subsidiaries and Future Subsidiaries; Auxiliary Pledge Agreements;
Collateral.......................................................................... 91
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral................................................................. 92
6.10 Interest Rate Protection............................................................ 94
6.11 Deposit Accounts and Cash Management Systems........................................ 95
6.12 Year 2000........................................................................... 95
SECTION 7. COMPANY'S NEGATIVE COVENANTS........................................................ 95
7.1 Indebtedness........................................................................ 96
7.2 Liens and Related Matters........................................................... 97
7.3 Investments; Joint Ventures......................................................... 98
7.4 Contingent Obligations.............................................................. 100
7.5 Restricted Junior Payments.......................................................... 100
7.6 Financial Covenants................................................................. 101
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.................... 103
7.8 Consolidated Capital Expenditures................................................... 104
7.9 Sales and Lease-Backs............................................................... 104
7.10 Sale or Discount of Receivables..................................................... 105
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TABLE OF CONTENTS
(CONTINUED)
PAGE
7.11 Transactions with Shareholders and Affiliates....................................... 105
7.12 Disposal of Subsidiary Stock........................................................ 105
7.13 Conduct of Business................................................................. 105
7.14 Amendments or Waivers of Certain Related Agreements; Amendments
of Documents Relating to Subordinated Indebtedness.................................. 106
7.15 Fiscal Year......................................................................... 106
7.16 Related Entities.................................................................... 106
SECTION 8. EVENTS OF DEFAULT................................................................... 106
8.1 8.1 Failure to Make Payments When Due............................................... 106
8.2 Default in Other Agreements......................................................... 107
8.3 Breach of Certain Covenants......................................................... 107
8.4 Breach of Warranty.................................................................. 107
8.5 Other Defaults Under Loan Documents................................................. 107
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc................................ 107
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.................................. 108
8.8 Judgments and Attachments........................................................... 108
8.9 Dissolution......................................................................... 108
8.10 Employee Benefit Plans.............................................................. 108
8.11 Change in Control................................................................... 109
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations........... 109
SECTION 9. AGENTS.............................................................................. 110
9.1 Appointment......................................................................... 110
9.2 Powers and Duties; General Immunity................................................. 111
9.3 Representations and Warranties; No Responsibility For Appraisal
of Creditworthiness................................................................. 113
9.4 Right to Indemnity.................................................................. 113
9.5 Successor Administrative Agent and Swing Line Lender................................ 113
9.6 Collateral Documents and Guaranties................................................. 114
SECTION 10. MISCELLANEOUS....................................................................... 115
10.1 Assignments and Participations in Loans and Letters of Credit....................... 115
10.2 Expenses............................................................................ 117
10.3 Indemnity........................................................................... 118
10.4 Set-Off; Security Interest in Deposit Accounts...................................... 119
10.5 Ratable Sharing..................................................................... 120
10.6 Amendments and Waivers.............................................................. 120
10.7 Independence of Covenants........................................................... 122
10.8 Notices............................................................................. 122
10.9 Survival of Representations, Warranties and Agreements.............................. 122
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............................... 123
10.11 Marshalling; Payments Set Aside..................................................... 123
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TABLE OF CONTENTS
(CONTINUED)
PAGE
10.12 Severability........................................................................ 123
10.13 Obligations Several; Independent Nature of Lenders' Rights.......................... 123
10.14 Headings............................................................................ 123
10.15 Applicable Law...................................................................... 124
10.16 Successors and Assigns.............................................................. 124
10.17 Consent to Jurisdiction and Service of Process...................................... 124
10.18 Waiver of Jury Trial................................................................ 125
10.19 Confidentiality..................................................................... 125
10.20 Counterparts; Effectiveness......................................................... 126
Signature pages................................................................................. S-1
iv
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF COMPANY COUNSEL
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-BANK STATUS
XII FORM OF FINANCIAL CONDITION CERTIFICATE
XIII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIV FORM OF COMPANY PLEDGE AGREEMENT
XV FORM OF COMPANY SECURITY AGREEMENT
XVI FORM OF SUBSIDIARY GUARANTY
XVII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XVIII FORM OF SUBSIDIARY SECURITY AGREEMENT
v
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
4.1K CLOSING DATE MORTGAGED PROPERTIES
5.1 SUBSIDIARIES OF COMPANY
5.4 CERTAIN RESTRICTED JUNIOR PAYMENTS
5.5 REAL PROPERTY
5.6 LITIGATION
5.8 MATERIAL CONTRACTS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
vi
BLACKBAUD, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of October 13, 1999 and entered into
by and among BLACKBAUD, INC., a South Carolina corporation (the "COMPANY"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "LENDER" and collectively as "LENDERS"), and BANKERS
TRUST COMPANY ("BTCO"), as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT"), FLEET NATIONAL BANK, as documentation agent for Lenders
(in such capacity, "DOCUMENTATION AGENT") and FIRST UNION SECURITIES, INC., as
syndication agent for Lenders (in such capacity, "SYNDICATION AGENT").
R E C I T A L S
WHEREAS, on the Closing Date pursuant to the Recapitalization Agreement
the New Investor Group will purchase an aggregate amount of $155,000,000 of
shares of capital stock of each of the Company and the Related Entities from the
Selling Shareholders, such shares to constitute, upon consummation of the
Recapitalization, all the outstanding shares of capital stock of the Company and
the Related Entities other than approximately $38,508,115 of shares of capital
stock (the "ROLLOVER SHARES") of each of the Company and the Related Entities to
be retained by (or, in the case of the Related Entities' stock, exchanged by the
existing shareholders in the merger contemplated by subsection 7.16) the
Company's and the Related Entities' existing shareholders (the "ROLLOVER
SHAREHOLDERS");
WHEREAS, upon consummation of the Recapitalization, the New Investor
Group will directly or indirectly control not less than 80% of the outstanding
capital stock of the Company and the Related Entities;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company, the proceeds of which will be used (i) together with (a) approximately
$155,000,000 of Cash of the New Investor Group and (b) the Cash proceeds of
approximately $36,126,000 of cash on hand at the Company and the repayment in
full of certain affiliate notes receivable to the Company of approximately
$18,038,000, to purchase approximately $301,302,885 of the Company's capital
stock (including the funding of a cash escrow in accordance with the
Recapitalization Agreement), to refinance the Company's existing Indebtedness in
the approximate amount of $4,723,000, to pay fees and expenses of approximately
$4,800,000 in connection with the Recapitalization, to make certain tax
distributions to the Company's existing shareholders of approximately
$11,782,000 and to make a payment with respect to closing bonuses to members of
Company's management of approximately $2,542,000, and (ii) to provide financing
for working capital and other general corporate purposes of Company and its
Subsidiaries; and
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a first priority Lien on substantially all of its personal property,
including a pledge of all of the capital stock or other equity interests of each
of its Subsidiaries:
1
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree as
follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUIRED INDEBTEDNESS" means Indebtedness of any other Person existing
at the time such other Person is merged with or into Company or any Subsidiary
of Company or becomes a Subsidiary of Company or which is assumed in connection
with the acquisition by Company or a Subsidiary of Company of assets from
another Person, and which is in each case not incurred in connection with, or in
anticipation of, such other Person merging with or into Company or a Subsidiary
of Company or becoming a Subsidiary of Company or such acquisition.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) the offered quotation (rounded upward to the
nearest 1/16 of one percent) to first class banks in the interbank Eurodollar
market by BTCo for U.S. dollar deposits of amounts in same day funds comparable
to the principal amount of the Eurodollar Rate Loan of BTCo for which the
Adjusted Eurodollar Rate is then being determined with maturities comparable to
such Interest Period as of approximately 10:00 a.m. (New York City time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such Interest
Rate Determination Date to any member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and includes any successor Administrative Agent
appointed pursuant to subsection 9.5.
"AFFECTED LENDER" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGENTS" means, collectively, the Administrative Agent, the
Documentation Agent and Syndication Agent and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5A.
2
"AGREEMENT" means this Credit Agreement dated as of October 13, 1999,
as it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" has the meaning assigned to that term in
subsection 2.2A(i)(a).
"APPLICABLE EURODOLLAR RATE MARGIN" has the meaning assigned to that
term in subsection 2.2A(i)(b).
"ASSET SALE" means the sale, lease, assignment or other transfer
(whether voluntary or involuntary (collectively a "transfer")) by Company or any
of its Subsidiaries to any Person other than Company or any of its wholly-owned
Subsidiaries of (i) any of the stock or other equity interest of any of
Company's Subsidiaries, (ii) substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of Company or any of its Subsidiaries
other than (a) inventory sold in the ordinary course of business and (b) any
such other assets to the extent that the aggregate value of such assets sold in
any single transaction or series of related transactions does not exceed
$50,000.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit X annexed hereto.
"AUXILIARY PLEDGE AGREEMENT" means each pledge agreement or similar
instrument governed by the laws of a country other than the United States
executed in accordance with subsection 6.8 by Company or any Domestic Subsidiary
that owns capital stock or other equity interests of the Foreign Subsidiaries
organized in such country in form and substance satisfactory to Administrative
Agent as such Auxiliary Pledge Agreement may be amended, supplemented or
otherwise modified from time to time and "AUXILIARY PLEDGE AGREEMENTS" means all
such pledge agreements, collectively.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate or (y)
the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BTCo" has the meaning assigned to that term in the introduction to the
Agreement.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of South Carolina or the State of New
York or is a day on which banking institutions located in such jurisdiction are
authorized or required by law or other governmental action to close and (ii)
with respect to all notices, determinations, fundings and payments in connection
with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans, any day that is
a Business Day described in clause (i) above and that is also a day for trading
by and between banks in Dollar deposits in the interbank Eurodollar Market.
3
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
invests solely in the type of investments referred to in clauses (i) through
(iv) above or in substantially similar investments and, (b) has a rating of no
less than "AAA" from Moody's and equivalent rating from S&P.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in
the form of Exhibit XI annexed hereto delivered by a Lender to Administrative
Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means the date on or before November 30, 1999, on which
the initial Loans are made.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including capital stock or other equity interests) in which Liens are
purported to be granted pursuant to the Collateral Documents as security for the
Obligations.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by Company and Administrative Agent on the Closing Date,
substantially in the form of Exhibit XIII annexed hereto, as such Collateral
Account Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"COLLATERAL DOCUMENTS" means the Company Pledge Agreement, the Company
Security Agreement, the Collateral Account Agreement, the Subsidiary Pledge
Agreements, the Subsidiary Security Agreements, the Auxiliary Pledge Agreements,
the Mortgages and all other
4
instruments or documents delivered by any Loan Party pursuant to this Agreement
or any of the other Loan Documents in order to grant to Administrative Agent, on
behalf of Lenders, a Lien on any real, personal or mixed property of that Loan
Party as security for the Obligations.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the introduction of
this Agreement.
"COMPANY EMPLOYEE BENEFIT PLAN" means any Employee Benefit Plan which
is maintained or contributed to by Company or any of its Subsidiaries.
"COMPANY PENSION PLAN" means any Pension Plan which is a Company
Employee Benefit Plan.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement executed
and delivered by Company on the Closing Date, substantially in the form of
Exhibit XIV annexed hereto, as such Company Pledge Agreement may thereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XV annexed hereto, as such Company Security Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit VII annexed hereto delivered to Administrative Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the definition of "Landlord
Consent and Estoppel," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, (ii)
Consolidated Interest Expense, (iii) provisions (positive and negative) for
taxes based on income, (iv) total depreciation expense, (v) total amortization
expense, (vi) other non-cash items reducing Consolidated Net Income and (vii)
(a) for the Fiscal Year ending December 31, 1999, (1) an amount not to exceed
$635,000 for the corporate sponsorship of the Charleston Battery, Inc., a
professional soccer team, (2) an amount not to exceed $180,000 in professional
fees, (3) an amount not to exceed $750,000 for expenses associated with
Blackbaud Stadium, (4) an amount not to exceed $5,750,000 for certain
non-recurring expenses related to the Recapitalization, (5) an amount not to
exceed $3,750,000 for the Selling Shareholders' and the Company's transaction
expenses related to the Recapitalization (to the extent deducted to achieve
Consolidated Net
5
Income) and (6) an amount not to exceed $191,000 for certain non-recurring
expenses related to acquisitions consummated by Company prior to the Closing
Date and (b) for the Fiscal Years ending December 31, 1999, 2000, 2001 and 2002,
an amount not to exceed $10,000,000 (plus related payroll taxes) in the
aggregate for all such Fiscal Years, for bonuses paid to members of Company's
management pursuant to the Recapitalization Agreement, less other non-cash items
increasing Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum of
(i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries; provided however up to $300,000 in
non-recurring expenditures related to the Charleston Battery, Inc. and Blackbaud
Stadium made during Fiscal Year 1999 shall not be included as Consolidated
Capital Expenditures for purposes of this definition, plus (ii) to the extent
not covered by clause (i) of this definition, the aggregate of all expenditures
by Company and its Subsidiaries during that period to purchase or develop
computer software or systems (but only to the extent such expenditures are
capitalized on the consolidated balance sheet of Company and its Subsidiaries in
conformity with GAAP).
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, but
excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, but excluding (i) unearned revenue as identified on
Company's balance sheet and (ii) indebtedness permitted in accordance with
subsection 7.1.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Adjusted EBITDA and (b) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Interest Expense, (d) the
provision for current taxes based on income of Company and its Subsidiaries and
payable in cash with respect to such period, (e) Investments permitted in
accordance with subsection 7.3(v), subsection 7.3(viii) and consideration paid
pursuant to subsection 7.3(vi)(b)(z) in connection with a Permitted Acquisition,
(f) Restricted Junior Payments permitted in accordance with subsection 7.5, and
(g) payments directly related to the Recapitalization not to exceed $5,750,000
in the aggregate to the extent such payments were added back to compute
Consolidated Adjusted EBITDA by virtue of clause (vii) of the definition
thereof.
6
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Closing Date; provided that Consolidated Interest
Expense for Fiscal Year 1999 shall mean as at the end of the last Fiscal Quarter
of 1999, Consolidated Interest Expense for such Fiscal Quarter multiplied by
four; provided further that Consolidated Interest Expense for Fiscal Year 2000
shall mean (i) as at the end of the first Fiscal Quarter of 2000, Consolidated
Interest Expense for the period from the beginning of the last Fiscal Quarter of
1999 through the first Fiscal Quarter of 2000 multiplied by two and (ii) as of
the end of the second Fiscal Quarter of 1999, Consolidated Interest Expense for
the period from the beginning of the last Fiscal Quarter of 1999 through the
second Fiscal Quarter of 2000 multiplied by 4/3.
"CONSOLIDATED LEVERAGE RATIO" means, as at any date of determination
the ratio of (a) Consolidated Total Debt as of the last day of the Fiscal
Quarter for which such determination is being made to (b) Consolidated Adjusted
EBITDA for the consecutive four Fiscal Quarters for which such determination is
made.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains or net non-cash extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as
7
of the beginning of such period exceeds (or is less than) Consolidated Working
Capital as of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any Security issued by that Person or of any material indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization or an investment account, in either case, containing Cash or Cash
Equivalents.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"DOMESTIC SUBSIDIARY" means a Subsidiary of Company which is
incorporated in a state of the United States or in the District of Columbia.
8
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under the
laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities Act) which extends credit or buys loans as
one of its businesses, including insurance companies, mutual funds and lease
financing companies; and (B) any Lender and any Affiliate of any Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was maintained or contributed to by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates. Any such
plan of a former ERISA Affiliate of the Company shall continue to be considered
an Employee Benefit Plan within the meaning of this definition solely with
respect to the period during which such former ERISA Affiliate was an ERISA
Affiliate of the Company and with respect to liabilities existing after such
period for which the Company could be liable under the Internal Revenue Code or
ERISA.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C.Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C.Section 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C.Section 1251 et seq.), the Clean
Air Act (42 U.S.C.Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C.Section 2601 et seq.), the Federal Insecticide, Fungicide and Rodenticide
Act (7 U.S.C.Section 136 et seq.), the Occupational Safety and Health Act (29
U.S.C.Section 651 et seq.), the Oil Pollution Act (33 U.S.C.Section 2701 et
seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C.Section 11001 et seq.), each as amended or supplemented, any analogous
present or future state or local statutes or laws, and any regulations
promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
9
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan, in either case resulting in liability
pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which constitutes grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any liability therefor, or the receipt by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan intended
to be qualified under Section 401(a) of the Internal
10
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xi) the imposition of a Lien pursuant to Section 401(a)(29); provided that any
event described in the foregoing clauses shall not be an ERISA Event if Company
and/or its Subsidiaries are (or would be) liable for any potential liability
resulting from such event solely because of their affiliation with an ERISA
Affiliate (excluding Company and all Subsidiaries) and (A) such events could not
reasonably be expected to result (individually or in the aggregate) in liability
(including joint and several liability) of Company and its Subsidiaries of more
than $1,000,000 or (B) neither Company nor any of its Subsidiaries could
reasonably be expected to be required to pay (either individually or on a joint
and several basis) for any potential liability resulting from such event;
provided further that any event described in the foregoing proviso shall be an
ERISA Event if the PBGC or any other governmental authority notifies Company or
one of its Subsidiaries that Company or one of its Subsidiaries is liable for
any potential liability resulting from such event or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXISTING CREDIT AGREEMENT" means that certain Loan Agreement dated as
of May 13, 1997 between Company and SouthTrust Bank of Alabama, N.A., as
amended.
"FACILITIES" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances which as a matter of statutory law have priority over any other
Lien irrespective of the prior perfection or filing of such other Lien) and (ii)
such Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2) to which such Collateral is subject.
11
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"FOREIGN SUBSIDIARY" means a direct or indirect Subsidiary of Company
which is incorporated in a jurisdiction other than the states of the United
States and the District of Columbia.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ or (ii) such other office of Administrative Agent and Swing Line Lender as
may from time to time hereafter be designated as such in a written notice
delivered by Administrative Agent and Swing Line Lender to Company and each
Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, in each case as the same are
applicable to the circumstances as of the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of government.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"GUARANTIES" means the Subsidiary Guaranty and any guaranty which may
hereafter be provided by any Loan Party.
"H&F" means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital Partners III, L.P., H&F Orchard
Partners III, L.P. or H&F International Partners III, L.P.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or
12
words of similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (X) in the case of Hedge Agreements, Contingent
Obligations, and (Y) in all other cases, Investments, and in neither case
constitute Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INFORMATION SYSTEMS AND EQUIPMENT" means all computer hardware,
firmware and software, as well as other information processing systems, or any
equipment containing embedded microchips, whether directly owned, licensed,
leased, operated or otherwise controlled by the Company or any of its
Subsidiaries, including through third-party service providers, and which, in
whole or in part, are used, operated, relied upon or integral to, the Company's
or any of its Subsidiaries' conduct of their business.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial
13
or otherwise), business or operations of Company and its Subsidiaries, taken as
a whole; provided that patents, trademarks, tradenames, copyrights, technology,
know-how and processes considered to be work product performed for or acquired
on behalf of customers of Company or its Subsidiaries or which have been
assigned or are required to be assigned to such customer shall not be deemed
Intellectual Property.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
each March 15, June 15, September 15 and December 15 of each year, commencing on
the first such date to occur after the Closing Date, and (ii) with respect to
any Eurodollar Rate Loan, the last day of each Interest Period applicable to
such Loan; provided that in the case of each Interest Period of longer than
three months "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in subsection
2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its wholly-owned domestic Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance (other
than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Company or any of its Subsidiaries to any other Person
(other than a wholly-owned domestic Subsidiary of Company), including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business, or (iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto, without
any adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment.
"IP COLLATERAL" means, collectively, the Intellectual Property
Collateral under the Company Security Agreement and the Subsidiary Security
Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender (including Deutsche Bank AG, New York Branch, an affiliate of
Administrative Agent) which agrees or is otherwise obligated to issue such
Letter of Credit, determined as provided in subsection 3.1B(ii).
14
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that without any further consent of such lessor or any further action
on the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Administrative Agent notice of such default and
at least 60 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, and (iii) to such other matters relating to such
Leasehold Property as Administrative Agent may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires; provided that
the term "Lenders", when used in the context of a particular Commitment, shall
mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby Letters of
Credit issued or to be issued by Issuing Lenders for the account of Company
pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Term Loans, Revolving Loans
or Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by
15
Company in favor of an Issuing Lender relating to, the Letters of Credit), the
Guaranties and the Collateral Documents.
"LOAN PARTY" means each of Company, any of Company's Subsidiaries
(other than the Related Entities) and any other Person from time to time
executing a Loan Document, and "LOAN PARTIES" means all such Persons,
collectively.
"MANAGEMENT CONTRACTS" means the Executive Employment Agreements
substantially in the form of Exhibit C to the Recapitalization Agreement entered
into by and between the Company and the individuals listed on Exhibit C to the
Recapitalization Agreement and the Non-Competition Agreements substantially in
the form of Exhibit G to the Recapitalization Agreement entered into by and
between the Company and the individuals listed on Exhibit G to the
Recapitalization Agreement.
"MARGIN DETERMINATION CERTIFICATE" means an Officers' Certificate of
Company delivered pursuant to subsection 6.1(iv) setting forth in reasonable
detail the Consolidated Leverage Ratio for the four-Fiscal Quarter period ending
as of the last day of the Fiscal Quarter immediately preceding the Fiscal
Quarter during which such Officers' Certificate is delivered.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and its Subsidiaries, taken as a whole or (ii) the
impairment in any material respect of the ability of any Loan Party to perform,
or of Administrative Agent or Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries.
"MATERIAL SUBSIDIARY" means each Subsidiary of Company now existing or
hereafter acquired or formed by Company which, on a consolidated basis for such
Subsidiary and its Subsidiaries, (i) for the most recent Fiscal Year accounted
for more than 5% of the Consolidated Net Income of Company and its Subsidiaries
or (ii) as at the end of such Fiscal Year, was the owner of more than 5% of the
consolidated assets of Company and its Subsidiaries.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, in such form as may be approved by Administrative Agent in its
sole discretion, in each case with such changes thereto as may be recommended by
Administrative Agent's local counsel based on local laws or customary local
mortgage or deed of trust practices, or (ii) at Administrative Agent's option,
in the case of an Additional Mortgaged Property (as defined in subsection 6.9),
an amendment to an
16
existing Mortgage, in form satisfactory to Administrative Agent, adding such
Additional Mortgaged Property to the Real Property Assets encumbered by such
existing Mortgage, in either case as such security instrument or amendment may
be amended, supplemented or otherwise modified from time to time. "MORTGAGES"
means all such instruments and any Additional Mortgages (as defined in
subsection 6.9), collectively.
"MORTGAGED PROPERTY" means an Additional Mortgaged Property (as defined
in subsection 6.9).
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of any reasonable fees and expenses
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale (or receipt of Cash by way of such a deferred prepayment) as a result
of any gain recognized in connection with such Asset Sale and (ii) payment of
the outstanding principal amount of, premium or penalty, if any, and interest on
any Indebtedness (other than the Loans) that is secured by a Lien on the stock
or assets in question and that is required to be repaid under the terms thereof
as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"NEW INVESTOR GROUP" means ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Capital Partners III,
L.P., H&F Orchard Partners III, L.P., H&F International Partners III, L.P.,
Pobeda Partners Ltd. and any other investors designated by H&F and reasonably
satisfactory to Administrative Agent.
"NOTES" means one or more of the Term Notes, Revolving Notes or Swing
Line Note or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
Exhibit I annexed hereto delivered by Company to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of Exhibit II annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
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"OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to Administrative Agent, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer), chief executive officer or its president or one of its vice
presidents and by its chief financial officer or its treasurer; provided that
every Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (i) a statement
that the officer or officers making or giving such Officers' Certificate have
read such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed opinion as
to whether or not such condition has been complied with, and (iii) a statement
as to whether, in the opinion of the signers, such condition has been complied
with.
"OPERATING LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease other than any
such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition of a Person's capital
stock or other equity interests or of all or a substantial portion of a Person's
business, property or fixed assets permitted pursuant to subsection 7.3(vi).
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges
or claims the payment of which is not, at the time, required by
subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
5 days) are being contested in good faith by appropriate proceedings,
so long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
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(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an
Event of Default under subsection 8.8;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Company or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions,
encroachments, and other minor defects or irregularities in title, in
each case which do not and will not interfere in any material respect
with the ordinary conduct of the business of Company or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor
under any lease permitted under this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor may
be subject to, or (c) subordination of the interest of the lessee or
sublessee under such lease to any restriction or encumbrance referred
to in the preceding clause (b), so long as the holder of such
restriction or encumbrance agrees to recognize the rights of such
lessee or sublessee under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or regulate the
use of any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or similar agreements entered into in the ordinary
course of business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other
intellectual property rights granted by Company or any of its
Subsidiaries in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of
Company or such Subsidiary.
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"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Company Pledge Agreement, the Subsidiary Pledge Agreements, the
Auxiliary Pledge Agreements and any other pledge agreement executed by a Loan
Party.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that BTCo announces from time to time as
its prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRO FORMA BASIS" means, as of any date of determination, the
compliance of Company with the financial covenants set forth in subsections 7.6A
and 7.6B as of the last day of the four Fiscal Quarter period most recently
ended prior to such date of determination for which the relevant financial
information is available (the "COMPLIANCE PERIOD"), after giving effect on a pro
forma basis to any Permitted Acquisitions made during such Compliance Period and
any dispositions made during such Compliance Period, other than sales of
inventory in the ordinary course of business, dispositions of assets under
$100,000 and dispositions of obsolete equipment, on the following basis:
(i) any Indebtedness incurred or assumed by Company or
any of its Subsidiaries in connection with such Permitted Acquisitions
and any Indebtedness repaid in connection with such Permitted
Acquisitions or dispositions shall be deemed to have been incurred or
repaid, respectively, as of the first day of the Compliance Period;
(ii) if such Indebtedness incurred or assumed by Company
or any of its Subsidiaries in connection with such Permitted
Acquisitions has a floating or formula rate, then the rate of interest
for such Indebtedness for the applicable period shall be computed as if
the rate in effect for such Indebtedness on the relevant measurement
date had been the applicable rate for the entire applicable period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired or disposed of in
such Permitted Acquisitions or dispositions shall be included as if
such acquisitions or dispositions took place on the first day of such
Compliance Period on a pro forma basis; and
(iv) any historical extraordinary non-recurring costs or
expenses or other verifiable costs or expenses that will not continue
after the acquisition or disposition date may be eliminated and other
expenses and cost reductions may be reflected on a basis
20
consistent with Regulation S-X promulgated by the Securities and
Exchange Commission or as approved by the Administrative Agent.
With respect to any such Permitted Acquisitions, such pro
forma calculations (other than clause (iv)) shall be based on the
audited or reviewed financial results delivered in compliance with
subsection 7.7.
"PRO RATA SHARE" means, with respect to a Lender (i) with respect to
all payments, computations and other matters relating to the Term Loan
Commitment or the Term Loan of any Lender, the percentage obtained by dividing
(x) the Term Loan Exposure of that Lender by (y) the Term Loan Exposure of all
Lenders, (ii) with respect to all payments, computations and other matters
relating to the Revolving Loan Commitment or the Revolving Loans of any Lender
or any Letter of Credit issued or participations in any Swing Line Loans
purchased or deemed purchased by any Lender, the percentage obtained by dividing
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving
Loan Exposure of all Lenders, and (iii) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the sum of the Term Loan
Exposure of that Lender plus the Revolving Loan Exposure of that Lender by (y)
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders, as such percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i) and (ii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"RECAPITALIZATION" means the transactions contemplated by the
Recapitalization Agreement.
"RECAPITALIZATION AGREEMENT" means that certain Recapitalization
Agreement among Company, the Related Entities, the Selling Shareholders
signatory thereto and certain members of the New Investor Group dated as of
September 13, 1999 in the form delivered to the Administrative Agent and Lenders
prior to their execution of this Agreement and as such may be amended from time
to time thereafter to the extent permitted under subsection 7.14A.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in Administrative Agent's reasonable judgment, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the
21
applicable assignment or sublease document, executed and acknowledged by such
holder, in each case in form sufficient to give such constructive notice upon
recordation and otherwise in form reasonably satisfactory to Administrative
Agent.
"REFERENCE LENDERS" means BTCo.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Recapitalization
Agreement and the Management Contracts.
"RELATED ENTITIES" means Blackbaud Pacific, Pty Ltd., a South Carolina
corporation, and Blackbaud Europe, Ltd., a South Carolina corporation.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" means a notice substantially
in the form of Exhibit III annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any distribution, direct or
indirect, on account of any shares of any class of stock of Company now or
hereafter outstanding, except a dividend payable solely in shares of that class
of stock payable solely to holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
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"REVOLVING LENDER" means any Lender who is committed to make Revolving
Loans to Company.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means September 30, 2005.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all Letters of Credit issued by that Lender (in each case net of
any participations purchased or deemed purchased by other Lenders in such
Letters of Credit or any unreimbursed drawings thereunder) plus (c) the
aggregate amount of all participations purchased or deemed purchased by that
Lender in any outstanding Letters of Credit or any unreimbursed drawings under
any Letters of Credit plus (d) in the case of Swing Line Lender, the aggregate
outstanding principal amount of all Swing Line Loans (net of any participations
therein purchased or deemed purchased by other Lenders) plus (e) the aggregate
amount of all participations purchased or deemed purchased by that Lender in any
outstanding Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(ii).
"REVOLVING NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i)(b) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of Exhibit V
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"ROLLOVER SHAREHOLDERS" has the meaning assigned to that term in the
Recitals to this Agreement.
"ROLLOVER SHARES" has the meaning assigned to that term in the Recitals
to this Agreement.
"SECURITIES" means any stock, shares, membership interests, partnership
interests, voting trust certificates, certificates of interest or participation
in any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
23
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SELLING SHAREHOLDERS" means the shareholders listed on Disclosure
Schedule 2.1 to the Recapitalization Agreement.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the laws of
any jurisdiction requiring third party insurers, (iv) obligations with respect
to Capital Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries, in any case if required by law or governmental rule or regulation
or in accordance with custom and practice in the industry; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Company
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Administrative Agent and Requisite Leaders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or
24
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means any Subsidiary of Company that executes
and delivers a counterpart of the Subsidiary Guaranty on the Closing Date or
from time to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty executed and
delivered by existing Subsidiaries of Company on the Closing Date and to be
executed and delivered by additional Subsidiaries of Company from time to time
thereafter in accordance with subsection 6.8, substantially in the form of
Exhibit XVI annexed hereto, as such Subsidiary Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means each such Subsidiary Pledge
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary Guarantor
from time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form of Exhibit XVII annexed hereto, as such Subsidiary
Pledge Agreement may be amended, supplemented or otherwise modified from time to
time, and "SUBSIDIARY PLEDGE AGREEMENTS" means all such Subsidiary Pledge
Agreements, collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by an existing Subsidiary Guarantor from
time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form of Exhibit XVIII annexed hereto, as such Subsidiary
Security Agreement may be amended, supplemented or otherwise modified from time
to time, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary Security
Agreements, collectively.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that term
in subsection 9.1C.
"SWING LINE LENDER" means BTCo, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iii).
"SWING LINE LOANS" means the Loans made by Swing Line Lender to Company
pursuant to subsection 2.1A(iii).
"SWING LINE NOTE" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any promissory note
issued by Company to any successor Administrative Agent and Swing Line Lender
pursuant to the last sentence of subsection 9.5B, in each case substantially in
the form of Exhibit VI annexed hereto, as it may be amended, supplemented or
otherwise modified from time to time.
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"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by any
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or in which that Person's principal office (and/or, in
the case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business (each such jurisdiction, a "Home Jurisdiction") on all or part of the
net income, profits or gains (whether worldwide, or only insofar as such income,
profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its
lending office) or a franchise tax imposed by a Home Jurisdiction of such
Person.
"TERM LOAN COMMITMENT" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(i), and "TERM LOAN COMMITMENTS"
means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the Term Loans, that Lender's Term
Loan Commitment and (ii) after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.
"TERM LOAN LENDER" means any Lender who is committed to make Term Loans
to Company.
"TERM LOANS" means the Loans made by Lenders to Company pursuant to
subsection 2.1A(i).
"TERM NOTES" means (i) the promissory notes of Company issued pursuant
to subsection 2.1E(i) on the Closing Date and (ii) any promissory notes issued
by Company pursuant to the last sentence of subsection 10.1B(i) in connection
with assignments of the Term Loan Commitments or Term Loans of any Lenders, in
each case substantially in the form of Exhibit IV annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TITLE COMPANY" means any title insurance company reasonably
satisfactory to Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any date
of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Company on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents and the Related Agreements.
26
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"YEAR 2000 COMPLIANT" means that all Information Systems and Equipment
accurately process date data (including, but not limited to, calculating,
comparing and sequencing), before, during and after the year 2000, as well as
same and multi-century dates, or between the years 1999 and 2000, taking into
account all leap years, including the fact that the year 2000 is a leap year,
and further, that when used in combination with, or interfacing with, other
Information Systems and Equipment, shall accurately accept, release and exchange
date data, and shall in all material respects continue to function in the same
manner as it performs today and shall not otherwise impair the accuracy or
functionality of Information Systems and Equipment.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
B. References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
herein set forth, each Lender
27
hereby severally agrees to make the Loans described in subsections 2.1A(i) and
2.1A(ii) and Swing Line Lender hereby agrees to make the Loans described in
subsection 2.1A(iii).
(i) Term Loans. Each Term Loan Lender severally agrees to
lend to Company on the Closing Date an amount not exceeding its Pro
Rata Share of the aggregate amount of the Term Loan Commitments to be
used for the purposes identified in subsection 2.5A. The amount of each
Term Loan Lender's Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the Term
Loan Commitments is $115,000,000; provided that the Term Loan
Commitments of Term Loan Lenders shall be adjusted to give effect to
any assignments of the Term Loan Commitments pursuant to subsection
10.1B. Each Term Loan Lender's Term Loan Commitment shall expire
immediately and without further action on November 30, 1999 if the Term
Loans are not made on or before that date. Company may make only one
borrowing under the Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) Revolving Loans. Each Revolving Lender severally
agrees, subject to the limitations set forth below with respect to the
maximum amount of Revolving Loans permitted to be outstanding from time
to time, to lend to Company from time to time during the period from
the Closing Date to but excluding the Revolving Loan Commitment
Termination Date an aggregate amount not exceeding its Pro Rata Share
of the aggregate amount of the Revolving Loan Commitments to be used
for the purposes identified in subsection 2.5B. The original amount of
each Revolving Lender's Revolving Loan Commitment is set forth opposite
its name on Schedule 2.1 annexed hereto and the aggregate original
amount of the Revolving Loan Commitments is $15,000,000; provided that
the Revolving Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B; and provided, further that the amount of the
Revolving Loan Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections 2.4B(ii)
and 2.4B(iii). Each Revolving Lender's Revolving Loan Commitment shall
expire on the Revolving Loan Commitment Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to
the Revolving Loans and the Revolving Loan Commitments shall be paid in
full no later than that date; provided that each Revolving Lender's
Revolving Loan Commitment shall expire immediately and without further
action on November 30, 1999 if the Term Loans and any initial Revolving
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(ii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan
Commitments shall be subject to the following limitations in
the amounts and during the periods indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
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(b) for 30 consecutive days during each
consecutive twelve-month period, the sum of the aggregate
outstanding principal amount of all Revolving Loans plus the
aggregate outstanding principal amount of all Swing Line Loans
shall not exceed $0.
(iii) Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
amount of Swing Line Loans permitted to be outstanding from time to
time, to make a portion of the Revolving Loan Commitments available to
Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date by making
Swing Line Loans to Company in an aggregate amount not exceeding the
amount of the Swing Line Loan Commitment to be used for the purposes
identified in subsection 2.5B, notwithstanding the fact that such Swing
Line Loans, when aggregated with Swing Line Lender's outstanding
Revolving Loans and Swing Line Lender's Pro Rata Share of the Letter of
Credit Usage then in effect, may exceed Swing Line Lender's Revolving
Loan Commitment. The original amount of the Swing Line Loan Commitment
is $3,500,000; provided that any reduction of the Revolving Loan
Commitments made pursuant to subsection 2.4B(ii) or 2.4B(iii) which
reduces the aggregate Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall result
in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Revolving Loan Commitments, as so
reduced, without any further action on the part of Company,
Administrative Agent or Swing Line Lender. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than
that date; provided that the Swing Line Loan Commitment shall expire
immediately and without further action on November 30, 1999 if the Term
Loans and any initial Revolving Loans are not made on or before that
date. Amounts borrowed under this subsection 2.1A(iii) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, the Swing
Line Loans and the Swing Line Loan Commitment shall be subject to the following
limitations in the amounts and during the periods indicated:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect; and
(b) for 30 consecutive days during each
consecutive twelve-month period, the sum of the aggregate
outstanding principal amount of all Revolving Loans plus the
aggregate outstanding principal amount of all Swing Line Loans
shall not exceed $0.
With respect to any Swing Line Loans which have not been voluntarily prepaid by
Company pursuant to subsection 2.4B(i), Swing Line Lender may, at any time in
its sole and absolute discretion, deliver to Administrative Agent (with a copy
to Company), no later than 10:00 A.M.
29
(New York City time) on the first Business Day in advance of the proposed
Funding Date, a notice (which shall be deemed to be a Notice of Borrowing given
by Company) requesting Revolving Lenders to make Revolving Loans that are Base
Rate Loans on such Funding Date in an amount equal to the amount of such Swing
Line Loans (the "REFUNDED SWING LINE LOANS") outstanding on the date such notice
is given which Swing Line Lender requests Revolving Lenders to prepay. Anything
contained in this Agreement to the contrary notwithstanding, (i) the proceeds of
such Revolving Loans made by Revolving Lenders other than Swing Line Lender
shall be immediately delivered by Administrative Agent to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing Line
Lender's Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be
paid with the proceeds of a Revolving Loan made by Swing Line Lender, and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the Swing Line
Note of Swing Line Lender but shall instead constitute part of Swing Line
Lender's outstanding Revolving Loans and shall be due under the Revolving Note
of Swing Line Lender. Company hereby authorizes Administrative Agent and Swing
Line Lender to charge Company's accounts with Administrative Agent and Swing
Line Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to
the extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient to
repay in full the Refunded Swing Line Loans. If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be recovered by or on
behalf of Company from Swing Line Lender in bankruptcy, by assignment for the
benefit of creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all Revolving Lenders in the manner contemplated by
subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect of
any outstanding Swing Line Loans or (b) the Revolving Loan Commitments are
terminated at a time when any Swing Line Loans are outstanding, each Revolving
Lender shall be deemed to, and hereby agrees to, have purchased a participation
in such outstanding Swing Line Loans in an amount equal to its Pro Rata Share
(calculated, in the case of the foregoing clause (b), immediately prior to such
termination of the Revolving Loan Commitments) of the unpaid amount of such
Swing Line Loans together with accrued interest thereon. Upon one Business Day's
notice from Swing Line Lender, each Revolving Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in same day funds at the
Funding and Payment Office. In order to further evidence such participation (and
without prejudice to the effectiveness of the participation provisions set forth
above), each Revolving Lender agrees to enter into a separate participation
agreement at the request of Swing Line Lender in form and substance reasonably
satisfactory to Swing Line Lender. In the event any Revolving Lender fails to
make available to Swing Line Lender the amount of such Revolving Lender's
participation as provided in this paragraph, Swing Line Lender shall be entitled
to recover such amount on demand from such Revolving Lender together with
interest thereon at the rate customarily used by Swing Line Lender for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. In the event Swing Line Lender receives a payment of any amount in
which other Revolving Lenders have
30
purchased participations as provided in this paragraph, Swing Line Lender shall
promptly distribute to each such other Lender its Pro Rata Share of such
payment.
Anything contained herein to the contrary notwithstanding, each
Revolving Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Revolving Lender's obligation to purchase a participation in
any unpaid Swing Line Loans pursuant to the immediately preceding paragraph
shall be absolute and unconditional and shall not be affected by any
circumstance, including (a) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against Swing Line Lender, Company or any
other Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries; (d) any breach of this
Agreement or any other Loan Document by any party thereto; or (e) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing; provided that such obligations of each Revolving Lender are
subject to the condition that (X) Swing Line Lender believed in good faith that
all conditions under Section 4 to the making of the applicable Refunded Swing
Line Loans or other unpaid Swing Line Loans, as the case may be, were satisfied
at the time such Refunded Swing Line Loans or unpaid Swing Line Loans were made
or (Y) the satisfaction of any such condition not satisfied had been waived in
accordance with subsection 10.6 prior to or at the time such Refunded Swing Line
Loans or other unpaid Swing Line Loans were made.
B. BORROWING MECHANICS. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iii) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to subsection 3.3B
for the purpose of reimbursing any Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it) shall be in an aggregate minimum amount
of $500,000 and integral multiples of $250,000 in excess of that amount;
provided that Term Loans or Revolving Loans made on any Funding Date as
Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $500,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $250,000 and integral multiples of $100,000 in excess of that
amount. Whenever Company desires that Lenders make Term Loans or Revolving Loans
it shall deliver to Administrative Agent a Notice of Borrowing no later than
10:00 A.M. (New York City time) at least three Business Days in advance of the
proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one
Business Day in advance of the proposed Funding Date (in the case of a Base Rate
Loan). Whenever Company desires that Swing Line Lender make a Swing Line Loan,
it shall deliver to Administrative Agent a Notice of Borrowing no later than
12:00 Noon (New York City time) on the proposed Funding Date. The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) in the case of Swing
Line Loans and any Loans made on the Closing Date or within a period of 90 days
after the Closing Date, that such Loans shall be Base Rate Loans or Eurodollar
Rate Loans with an Interest Period of one-month unless approved by
Administrative Agent, (iv) in the case of Revolving Loans not made on the
Closing Date or within a period of 30 days after the Closing Date, whether such
Loans shall be Base Rate Loans or Eurodollar Rate Loans, and (v) in the case of
any Loans requested to be made as Eurodollar Rate Loans, the initial Interest
Period requested therefor. Term Loans and Revolving Loans may
31
be continued as or converted into Base Rate Loans and Eurodollar Rate Loans in
the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Borrowing to Administrative Agent on or
before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans
under this Agreement shall be made by Lenders simultaneously and proportionately
to their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt (and in any event on
the day following Administrative Agent's receipt) by Administrative Agent of a
Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu
thereof), Administrative Agent shall notify each Lender or Swing Line Lender, as
the case may be, of the proposed borrowing. Each Lender shall make the amount of
its Loan available to Administrative Agent not later than 12:00 Noon (New York
City time) on the applicable Funding Date, and Swing Line Lender shall make the
amount of its Swing Line Loan available to Administrative Agent not later than
2:00 P.M.(New York City time) on the applicable Funding Date, in each case in
same day funds in Dollars, at the Funding and Payment Office. Except as provided
in subsection 2.1A(iii) or subsection 3.3B with respect to Revolving Loans used
to repay Refunded Swing Line Loans or to reimburse any Issuing Lender for the
amount of a drawing under a Letter of Credit issued by it, upon satisfaction or
waiver of the conditions precedent specified in subsections 4.1 (in the case of
Loans made on the Closing Date) and 4.2 (in the case of all Loans),
Administrative Agent shall make the proceeds of such Loans available to Company
on the applicable Funding Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Loans received
32
by Administrative Agent from Lenders or Swing Line Lender, as the case may be,
to be credited to the account of Company as directed by its Notice of Borrowing.
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Term Loan Commitment and Revolving Loan Commitment and the Term Loan
and Revolving Loans from time to time of each Lender, the Swing Line
Loan Commitment and the Swing Line Loans from time to time of Swing
Line Lender, and each repayment or prepayment in respect of the
principal amount of the Term Loan or Revolving Loans of each Lender or
the Swing Line Loans of Swing Line Lender. Any such recordation shall
be conclusive and binding on Company and each Lender, absent manifest
error; provided that failure to make any such recordation, or any error
in such recordation, shall not affect any Lender's Commitments or
Company's Obligations in respect of any applicable Loans.
(iii) Each Lender shall record on its internal records
(including the Notes held by such Lender) the amount of the Term Loan
and each Revolving Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on Company, absent
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect any Lender's
Commitments or Company's Obligations in respect of any applicable
Loans; and provided, further that in
33
the event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem
and treat the Persons listed as Lenders in the Register as the holders
and owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any such
Commitment or Loan shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been accepted by Administrative Agent and recorded in the Register
as provided in subsection 10.1B(ii). Prior to such recordation, all
amounts owed with respect to the applicable Commitment or Loan shall be
owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making
such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments or
Loans.
(v) Company hereby designates BTCo to serve as Company's
agent solely for purposes of maintaining the Register as provided in
this subsection 2.1D, and Company hereby agrees that, to the extent
BTCo serves in such capacity, BTCo and its officers, directors,
employees, agents and affiliates shall constitute Indemnitees for all
purposes under subsection 10.3.
E. NOTES. Company shall execute and deliver on the Closing Date
(i) to each Term Loan Lender (or to Administrative Agent for that Lender) a Term
Note substantially in the form of Exhibit IV annexed hereto to evidence that
Term Loan Lender's Term Loan, in the principal amount of that Term Loan Lender's
Term Loan and with other appropriate insertions, and (ii) to each Revolving
Lender (or to Administrative Agent for that Lender) a Revolving Note
substantially in the form of Exhibit V annexed hereto to evidence that Revolving
Lender's Revolving Loans, in the principal amount of that Revolving Lender's
Revolving Loan Commitment and with other appropriate insertions, and (iii) to
Swing Line Lender (or to Administrative Agent for Swing Line Lender) a Swing
Line Note substantially in the form of Exhibit VI annexed hereto to evidence
Swing Line Lender's Swing Line Loans, in the principal amount of the Swing Line
Loan Commitment and with other appropriate insertions.
Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent as provided in subsection 10.1B(ii). Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by
34
reference to the Base Rate or the Adjusted Eurodollar Rate. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate as
described in subsection 2.2A(ii). The applicable basis for determining the rate
of interest with respect to any Term Loan or any Revolving Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B, and the basis for determining
the interest rate with respect to any Term Loan or any Revolving Loan may be
changed from time to time pursuant to subsection 2.2D; provided that for the
first 90 days following the Closing Date any Term Loan or Revolving Loan shall
bear interest at a rate determined by reference to the Base Rate or Eurodollar
Rate with an Interest Period of one-month unless otherwise approved by
Administrative Agent. If on any day a Term Loan or Revolving Loan is outstanding
with respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and
2.7, the Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(a) If a Base Rate Loan, then at the sum of the
Base Rate plus the Base Rate margin (the "APPLICABLE BASE RATE
MARGIN") set forth in the table below opposite the
Consolidated Leverage Ratio for the four-Fiscal Quarter period
for which the applicable Margin Determination Certificate is
being delivered pursuant to subsection 6.1(iv); or
(b) if a Eurodollar Rate Loan, then at the sum
of the Adjusted Eurodollar Rate plus the Eurodollar Rate
margin (the "APPLICABLE EURODOLLAR RATE MARGIN") set forth in
the table below opposite the Consolidated Leverage Ratio for
the four-Fiscal Quarter period for which the applicable Margin
Determination Certificate is being delivered pursuant to
subsection 6.1(iv):
Applicable
Eurodollar Rate Applicable Base
Consolidated Leverage Ratio Margin Rate Margin
--------------------------- --------------- ---------------
Greater than or equal to 3.25% 2.25%
3.75:1:00
Greater than or equal to 3.00% 2.00%
3.00:1.00 but less than
3.75:1.00
Greater than or equal to 2.75% 1.75%
2.50:1.00 but less than
3.00:1.00
35
Greater than or equal to 2.50% 1.50%
2.00:1.00 but less than
2.50:1.00
Less than 2.00:1.00 2.25% 1.25%
Upon delivery of a Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(iv), the Applicable Base Rate
Margin and the Applicable Eurodollar Rate Margin shall automatically be adjusted
in accordance with such Margin Determination Certificate, such adjustment to
become effective on the next succeeding Business Day following the receipt by
Administrative Agent of such Margin Determination Certificate; provided that
until the delivery of the first Margin Determination Certificate after the six
month anniversary of the Closing Date, the Applicable Eurodollar Rate Margin
shall be 3.00% per annum and the Applicable Base Rate Margin shall be 2.00% per
annum; provided further that at any time a Margin Determination Certificate is
not delivered at the time required pursuant to subsection 6.1(iv), from the time
such Margin Determination Certificate was required to be delivered until
delivery of such Margin Determination Certificate, the Applicable Eurodollar
Rate Margin shall be 3.25% per annum and the Applicable Base Rate Margin shall
be 2.25% per annum; provided further that if a Margin Determination Certificate
erroneously indicates an applicable margin more favorable to Company than would
be afforded by the actual calculation of the Consolidated Leverage Ratio,
Company shall promptly pay such additional interest and letter of credit fees as
shall correct for such error.
(ii) Subject to the provisions of subsections 2.2E and
2.7, the Swing Line Loans shall bear interest through maturity at the
sum of the Base Rate plus the Applicable Base Rate Margin less the
commitment fee percentage provided for in subsection 2.3A.
B. INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided
36
that, if any Interest Period would otherwise expire on a day that is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iv) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
Term Loans shall extend beyond September 30, 2005 and no Interest
Period with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Term Loans unless the sum
of (a) the aggregate principal amount of Term Loans that are Base Rate
Loans plus (b) the aggregate principal amount of Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
(vii) there shall be no more than seven Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all or
any part of its outstanding Term Loans or Revolving Loans equal to $1,000,000
and integral multiples of $500,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis or (ii) upon
the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $1,000,000 and integral
multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
37
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, provided that no Loans
shall be converted to Eurodollar Rate Loans with an Interest Period of greater
than one-month prior to the 90th day after the Closing Date unless otherwise
approved by Administrative Agent, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all Loans and, to
the extent permitted by applicable law, any interest payments thereon not paid
when due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the
38
interest rate otherwise payable under this Agreement for Base Rate Loans.
Payment or acceptance of the increased rates of interest provided for in this
subsection 2.2E is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Administrative Agent or any Lender.
F. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on any
Loan, the date of the making of such Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan
to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate
Loan, as the case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be paid on that
Loan.
2.3 FEES.
A. COMMITMENT FEES. Company agrees to pay to Administrative
Agent, for distribution to each Revolving Lender in proportion to that Revolving
Lender's Pro Rata Share, commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the sum of the aggregate principal amount of outstanding Revolving Loans (but
not including any outstanding Swing Line Loans) plus the Letter of Credit Usage
multiplied by the per annum commitment fee percentage set forth below opposite
the Consolidated Leverage Ratio for the four Fiscal Quarter period for which the
applicable Margin Determination Certificate has been delivered pursuant to
subsection 6.1(iv):
Commitment Fee
Consolidated Leverage Ratio Percentage
---------------------------------- --------------
Greater than or equal to 2.00:1.00 0.50%
Less than 2.00:1.00 0.40%
such commitment fees to be calculated on the basis of a 360-day year and the
actual number of days elapsed and to be payable quarterly in arrears on March
15, June 15, September 15 and December 15 of each year, commencing on the first
such date to occur after the Closing Date, and on the Revolving Loan Commitment
Termination Date; provided that until the delivery of the first Margin
Determination Certificate after the sixth month anniversary of the Closing Date
the applicable commitment fee percentage shall be 0.50% per annum. Upon delivery
of the Margin Determination Certificate by Company to Administrative Agent
pursuant to subsection 6.1(iv), the applicable commitment fee percentage shall
automatically be adjusted in accordance with such Margin Determination
Certificate, such adjustment to become effective on the next succeeding Business
Day following the receipt by Administrative Agent of such Margin Determination
Certificate; provided that in the event that Company fails to deliver a Margin
39
Determination Certificate timely in accordance with the provisions of subsection
6.1(iv), from the time such a Margin Determination Certificate is actually
delivered, the applicable commitment fee percentage shall be the maximum
percentage amount set forth above per annum.
B. OTHER FEES. Company agrees to pay to Arranger and
Administrative Agent such other fees in the amounts and at the times separately
agreed upon between Company and Administrative Agent and Arranger.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS. Company shall make principal
payments on the Term Loans in installments on the dates and in the amounts set
forth below:
Date Scheduled Repayment
------------------ -------------------
March 31, 2000 $3,125,000
June 30, 2000 $3,125,000
September 30, 2000 $3,125,000
December 31, 2000 $3,125,000
March 31, 2001 $4,375,000
June 30, 2001 $4,375,000
September 30, 2001 $4,375,000
December 31, 2001 $4,375,000
March 31, 2002 $5,000,000
June 30, 2002 $5,000,000
September 30, 2002 $5,000,000
December 31, 2002 $5,000,000
March 31, 2003 $5,000,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
March 31, 2004 $5,000,000
June 30, 2004 $5,000,000
September 30, 2004 $5,000,000
December 31, 2004 $5,000,000
March 31, 2005 $8,333,333
June 30, 2005 $8,333,333
September 30, 2005 $8,333,334
; provided that the scheduled installments of principal of the Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term
40
Loans in accordance with subsection 2.4B(iv); and provided, further
that the Term Loans and all other amounts owed hereunder with respect
to the Term Loans shall be paid in full no later than September 30,
2005, and the final installment payable by Company in respect of the
Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Term Loans.
B. PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) Voluntary Prepayments.
(a) Company may, upon written or telephonic
notice to Administrative Agent on or prior to 12:00 Noon (New
York City time) on the date of prepayment, which notice, if
telephonic, shall be promptly confirmed in writing, at any
time and from time to time prepay any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum
amount of $250,000 and integral multiples of $100,000 in
excess of that amount. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case
of Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans, in
each case given to Administrative Agent by 12:00 Noon (New
York City time) on the date required and, if given by
telephone, promptly confirmed in writing to Administrative
Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to
time prepay any Term Loans or Revolving Loans on any Business
Day in whole or in part in an aggregate minimum amount for
Base Rate Loans of $500,000 and integral multiples of $250,000
in excess of that amount and for Eurodollar Rate Loans of
$1,000,000 and integral multiples of $500,000 in excess of
that amount; provided, however, that a Eurodollar Rate Loan
may only be prepaid on the expiration of the Interest Period
applicable thereto unless Company shall pay to Lenders all
amounts payable under subsection 2.6D with respect to such
prepayment. Notice of prepayment having been given as
aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date
specified therein. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(b) In the event Company is entitled to replace
a non-consenting Lender pursuant to subsection 10.6B, Company
shall have the right, upon five Business Days' written notice
to Administrative Agent (which notice Administrative Agent
shall promptly transmit to each of the Lenders), to prepay all
Loans, together with accrued and unpaid interest, fees and
other amounts owing to such Lender (including without
limitation amounts owing to such Lender pursuant to subsection
2.6D) in accordance with subsection 10.6B so long as (1) in
the case of the prepayment of the Revolving Loans of any
Lender pursuant to this subsection 2.4B(i)(b), the Revolving
Loan Commitment of such Lender is terminated concurrently with
such prepayment pursuant to subsection 2.4B(ii)(b) (at which
time Schedule 2.1 shall be deemed modified to reflect the
41
changed Revolving Loan Commitments), and (2) in the case of
the prepayment of the Loans of any Lender, the consents
required by subsection 10.6B in connection with the prepayment
pursuant to this subsection 2.4B(i)(b) shall have been
obtained, and at such time, such Lender shall no longer
constitute a "Lender" for purposes of this Agreement, except
with respect to indemnifications under this Agreement
(including, without limitation, subsections 2.6D, 2.7, 3.6,
10.2 and 10.3), which shall survive as to such Lender.
(ii) Voluntary Reductions of Revolving Loan Commitments.
(a) Company may, upon not less than three
Business Days' prior written or telephonic notice confirmed in
writing to Administrative Agent (which original written or
telephonic notice Administrative Agent will promptly transmit
by telefacsimile or telephone to each Lender), at any time and
from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed
termination or reduction; provided that any such partial
reduction of the Revolving Loan Commitments shall be in an
aggregate minimum amount of $1,000,000 and integral multiples
of $500,000 in excess of that amount. Company's notice to
Administrative Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective
on the date specified in Company's notice and shall reduce the
Revolving Loan Commitment of each Lender proportionately to
its Pro Rata Share.
(b) In the event Company is entitled to replace
a non-consenting Lender pursuant to subsection 10.6B, Company
shall have the right, upon five Business Days' written notice
to Administrative Agent (which notice Administrative Agent
shall promptly transmit to each of the Lenders), to terminate
the entire Revolving Loan Commitment of such Lender so long as
(1) all Loans, together with accrued and unpaid interest, fees
and other amounts owing to such Lender are repaid, including
without limitation amounts owing to such Lender pursuant to
subsection 2.6D, pursuant to subsection 2.4B(i)(b)
concurrently with the effectiveness of such termination (at
which time Schedule 2.1 shall be deemed modified to reflect
such changed Revolving Loan Commitments), and (2) the consents
required by subsection 10.6B in connection with the prepayment
pursuant to subsection 2.4B(i)(b) shall have been obtained,
and at such time, such Lender shall no longer constitute a
"Lender" for purposes of this Agreement, except with respect
to indemnifications under this Agreement (including, without
limitation, subsections 2.6D, 2.7, 3.6, 10.2 and 10.3), which
shall survive as to such Lender.
(iii) Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments. The Loans shall be prepaid and/or the
Revolving Loan Commitments shall be permanently reduced in the amounts
and under the circumstances set forth below,
42
all such prepayments and/or reductions to be applied as set forth below
or as more specifically provided in subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset
Sale Proceeds. No later than the first Business Day following
the date of receipt by Company or any of its Subsidiaries of
any Net Asset Sale Proceeds in respect of any Asset Sale,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to such Net Asset Sale Proceeds; provided that
Company may in its sole discretion elect, pursuant to a
written notice given by Company to Administrative Agent
describing such election, to postpone any mandatory
prepayments otherwise required to be made by Company pursuant
to this subsection 2.4B(iii)(a) (any such prepayment, until
the time actually made, being "POSTPONED PREPAYMENTS") until
such time as the aggregate amount of Postponed Prepayments
equal $1,000,000.
(b) Prepayments and Reductions from Net
Insurance/ Condemnation Proceeds. No later than the first
Business Day following the date of receipt by Administrative
Agent or by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds that are required to be
applied to prepay the Loans and/or reduce the Revolving Loan
Commitments pursuant to the provisions of subsection 6.4B,
Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate
amount equal to the amount of such Net Insurance/Condemnation
Proceeds; provided, however, that no such prepayment shall be
required to the extent (i) under the terms of any lease or
other agreement existing on the date hereof such Net
Insurance/Condemnation Proceeds are required to be used to
replace, rebuild or repair the asset so damaged, destroyed or
taken or (ii) Company or the applicable Subsidiary determines
to utilize such Net Insurance/Condemnation Proceeds to
replace, rebuild or repair the asset damaged, destroyed or
taken, and in each case referred to in clauses (i) and (ii)
above, Company or such Subsidiary so utilizes Net
Insurance/Condemnation Proceeds within 180 days of the receipt
thereof.
(c) Prepayments and Reductions Due to Issuance
of Equity Securities. No later than the first Business Day
following the date of receipt by Company of the Cash proceeds
(any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being
"NET EQUITY SECURITIES PROCEEDS") from the issuance of any
equity Securities of Company (or any holding company parent of
Company) after the Closing Date (other than proceeds from
equity interests in Company (or holding company parent of
Company) issued to officers and employees of Company and its
Subsidiaries pursuant to option plans or similar plans or
agreements adopted by Company's (or any holding company parent
of Company) Board of Directors, as the case may be), Company
shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to
100% of the first $15,000,000 of such Net Equity Securities
Proceeds and 50% of such Net Equity Securities Proceeds
thereafter; provided that, (i) if the most current Margin
43
Determination Certificate indicates that the Consolidated
Leverage Ratio is less than 2.00:1.00 then such percentage
shall be reduced to 0% and (ii) Net Equity Securities Proceeds
used to make Permitted Acquisitions shall be excluded from the
provisions of this subsection 2.4B(iii)(c).
(d) Prepayments and Reductions Due to Issuance
of Debt Securities. No later than the first Business Day
following the date of receipt by Company of the Cash proceeds
(any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being
"NET DEBT SECURITIES PROCEEDS") from the issuance of debt
Securities of Company after the Closing Date, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to 100% of
such Net Debt Securities Proceeds; provided that Net Debt
Securities Proceeds received from the issuance of Indebtedness
permitted by subsection 7.1 shall be excluded from the
provisions of this subsection 2.4B(iii)(d).
(e) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with Fiscal Year 2000), Company shall, no later than 90 days
after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 75% of such Consolidated Excess Cash
Flow; provided that, if the Margin Determination Certificate
for the last day of the Fiscal Year immediately preceding the
Fiscal Year in which such determination is being made
establishes that the Consolidated Leverage Ratio is less than
2.00:1.00 then such percentage shall be reduced to 0%.
(f) Calculations of Net Proceeds Amounts;
Additional Prepayments and Reductions Based on Subsequent
Calculations. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(e), Company shall deliver to
Administrative Agent an Officers' Certificate demonstrating
the calculation of the amount (the "NET PROCEEDS AMOUNT") of
the applicable Net Asset Sale Proceeds or Net
Insurance/Condemnation Proceeds, Net Debt Securities Proceeds
or Net Equity Securities Proceeds (as such terms are defined
in subsections 2.4B(iii)(c) and (d)), or the applicable
Consolidated Excess Cash Flow, as the case may be, that gave
rise to such prepayment and/or reduction. In the event that
Company shall subsequently determine that the actual Net
Proceeds Amount was greater than the amount set forth in such
Officers' Certificate, Company shall promptly make an
additional prepayment of the Loans (and/or, if applicable, the
Revolving Loan Commitments shall be permanently reduced) in an
amount equal to the amount of such excess, and Company shall
concurrently therewith deliver to Administrative Agent an
Officers' Certificate demonstrating the derivation of the
additional Net Proceeds Amount resulting in such excess.
44
(g) Prepayments Due to Reductions or
Restrictions of Revolving Loan Commitments. Company shall from
time to time prepay first the Swing Line Loans and second the
Revolving Loans to the extent necessary (1) so that the Total
Utilization of Revolving Loan Commitments shall not at any
time exceed the Revolving Loan Commitments then in effect and
(2) to give effect to the limitations set forth in clause (b)
of the second paragraph of subsection 2.1A(ii) and clause (b)
of the second paragraph of subsection 2.1A(iii).
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type
of Loans and Order of Maturity. Any voluntary prepayments
pursuant to subsection 2.4B(i) shall be applied as specified
by Company in the applicable notice of prepayment; provided
that in the event Company fails to specify the Loans to which
any such prepayment shall be applied, such prepayment shall be
applied first to repay outstanding Swing Line Loans to the
full extent thereof, second to repay outstanding Revolving
Loans to the full extent thereof, and third to repay
outstanding Term Loans to the full extent thereof. Any
voluntary prepayments of the Term Loans pursuant to subsection
2.4B(i) shall be applied first to reduce the scheduled
installments of principal of the Term Loans set forth in
subsection 2.4A commencing on March 31, 2000 through and
including December 31, 2000 in forward order of maturity and
thereafter to reduce the remaining scheduled installments on a
pro rata basis (in accordance with the respective outstanding
principal amounts thereof).
(b) Application of Mandatory Prepayments by Type
of Loans. Any amount (the "APPLIED AMOUNT") required to be
applied as a mandatory prepayment of the Loans and/or a
reduction of the Revolving Loan Commitments pursuant to
subsections 2.4B(iii)(a)-(f) shall be applied first to prepay
the Term Loans to the full extent thereof, second, to the
extent of any remaining portion of the Applied Amount, to
prepay the Swing Line Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, third, to the extent of any
remaining portion of the Applied Amount, to prepay the
Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Loan Commitments by the
amount of such prepayment, and fourth, to the extent of any
remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof.
(c) Application of Mandatory Prepayments of Term
Loans by Order of Maturity. Any mandatory prepayments of the
Term Loans pursuant to subsection 2.4B(iii) shall be applied
on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) to each scheduled
installment of principal of the Term Loans set forth in
subsection 2.4A that is unpaid at the time of such prepayment.
45
(d) Application of Prepayments to Base Rate
Loans and Eurodollar Rate Loans. Considering Term Loans and
Revolving Loans being prepaid separately, any prepayment
thereof shall be applied first to Base Rate Loans to the full
extent thereof before application to Eurodollar Rate Loans, in
each case in a manner which minimizes the amount of any
payments required to be made by Company pursuant to subsection
2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company
of principal, interest, fees and other Obligations hereunder and under
the Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest.
Except as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied
to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute (and in any event shall
distribute one day following Administrative Agent's receipt) to each
Lender, at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when
received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share
of any Eurodollar Rate Loans, Administrative Agent shall give effect
thereto in apportioning payments received thereafter.
(iv) Payments on Non-Business Days. Whenever any payment
to be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be
46
included in the computation of the payment of interest hereunder or of
the commitment fees or the letter of credit fees hereunder, as the case
may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
GUARANTIES.
(i) Application of Proceeds of Collateral. Except as
provided in subsection 2.4B(iii)(a) with respect to prepayments from
Net Asset Sale Proceeds, all proceeds received by Administrative Agent
in respect of any sale of, collection from, or other realization upon
all or any part of the Collateral under any Collateral Document may, in
the discretion of Administrative Agent, be held by Administrative Agent
as Collateral for, and/or (then or at any time thereafter) applied in
full or in part by Administrative Agent against, the applicable Secured
Obligations (as defined in such Collateral Document) in the following
order of priority:
(a) To the payment of all costs and expenses of
such sale, collection or other realization, including
reasonable compensation to Administrative Agent and its agents
and counsel, and all other expenses, liabilities and advances
made or incurred by Administrative Agent in connection
therewith, and all amounts for which Administrative Agent is
entitled to indemnification under such Collateral Document and
all advances made by Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of
all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All
payments received by Administrative Agent under any of the Guaranties
shall be applied promptly from time to time by Administrative Agent in
the following order of priority:
(a) To the payment of the costs and expenses of
any collection or other realization under such Guaranty,
including reasonable compensation to
47
Administrative Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, all in
accordance with the terms of this Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in such Guaranty) for the ratable benefit of the
holders thereof; and
(c) thereafter, to the extent of any excess such
payments, to the payment to the applicable Subsidiary
Guarantor or to whosoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
2.5 USE OF PROCEEDS.
A. TERM LOANS. The proceeds of the Term Loans, together with the
proceeds of an aggregate of not less than $155,000,000 of Cash of the New
Investor Group and the Cash proceeds of $36,126,000 of cash on hand at the
Company and of the repayment of certain notes receivable to the Company in an
aggregate amount of up to $18,038,000, shall be applied (i) to the purchase of
the Company's and the Related Entities' outstanding shares of capital stock and
options for a maximum aggregate consideration of approximately $301,302,885
(including the funding of a cash escrow in accordance with the terms of the
Recapitalization Agreement), (ii) to refinance the existing Indebtedness of
Company in an aggregate amount of approximately $4,723,000, (iii) to pay
Transaction Costs in an aggregate amount of approximately $4,800,000, (iv) to
make certain tax distributions to Company's shareholders in an aggregate amount
of approximately $11,782,000 and (v) to make a payment with respect to closing
bonuses to members of Company's management of approximately $2,542,000.
B. REVOLVING LOANS; SWING LINE LOANS. In addition to the purpose
specified in subsection 2.5A, the proceeds of the Revolving Loans and any Swing
Line Loans shall be applied by Company for working capital requirements and
general corporate purposes of the Company and its Subsidiaries.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which
48
an interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Company and each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which determination shall be
final and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the Eurodollar market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Loans on the basis
provided for in the definition of Adjusted Eurodollar Rate, Administrative Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the Eurodollar market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "Affected Lender" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate
Loans shall be suspended until such notice shall be withdrawn by the Affected
Lender, (b) to the extent such determination by the Affected Lender relates to a
Eurodollar Rate Loan then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Company pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D, to rescind such
Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by
giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender
gives notice of its determination as described above (which notice of rescission
49
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written request by that
Lender (which request shall set forth in reasonable detail the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment pursuant to subsection 2.4B(i))
or other principal payment or any conversion of any of its Eurodollar Rate Loans
occurs on a date prior to the last day of an Interest Period applicable to that
Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a notice of prepayment given by Company, or (iv) as a
consequence of any other default by Company in the repayment of its Eurodollar
Rate Loans when required by the terms of this Agreement.
E. BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of that Lender to a domestic office of that Lender in the United States
of America; provided, however, that each Lender may fund each of its Eurodollar
Rate Loans in any manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable under this
subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or maintained as, or
converted to, a Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by
Company with respect to a requested borrowing or conversion/continuation that
has not yet occurred shall be deemed to be rescinded by Company.
50
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount
payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with respect
to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto in an amount deemed by such Lender (in its sole discretion) to
be material; then, in any such case, Company shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this subsection 2.7A, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
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B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by
Company under this Agreement and the other Loan Documents shall (except
to the extent required by law) be paid free and clear of, and without
any deduction or withholding on account of, any Tax (other than a Tax
on the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company.
(ii) Grossing-up of Payments. If Company or any other
Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Company to
Administrative Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of
any such requirement or any change in any such requirement as
soon as Company becomes aware of it;
(b) Company shall pay any such Tax before the
date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on Company) for its
own account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of
which the relevant deduction, withholding or payment is
required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or
payment, Administrative Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment
been required or made; and
(d) within 30 days after paying any sum from
which it is required by law to make any deduction or
withholding, and within 30 days after the due date of payment
of any Tax which it is required by clause (b) above to pay,
Company shall deliver to Administrative Agent evidence
satisfactory to the Administrative Agent of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof imposing any such requirement for
a deduction, withholding or payment as is mentioned therein shall
result in an increase in the applicable rate (including an increase
from a zero rate to a positive
52
rate) of such deduction, withholding or payment from that in effect at
the date of this Agreement or at the date of such Assignment Agreement,
as the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws
of any jurisdiction other than the United States or any state
or other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form 1001 or
4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of principal, interest, fees or other amounts
payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
for transmission to Company two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Administrative
53
Agent and Company of its inability to deliver any such forms,
certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Lender listed on the
signature pages hereof) or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change in any applicable law,
treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
(iv) If Administrative Agent or any Lender shall become
aware that it is entitled to receive a refund in respect of Taxes as to
which Company has paid additional or increased amounts pursuant to this
Section 2.7, it shall promptly notify Company of the availability of
such refund and shall apply for such refund. If Administrative Agent or
any Lender receives a refund in respect of Taxes as to which Company
has paid additional or increased amounts pursuant to this Section 2.7,
it shall promptly notify Company of such refund and repay such refund
to Company.
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after the
date hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy) and
in an amount deemed by such Lender (in its sole discretion) to be material, then
from time to time, within five Business Days after receipt by Company from such
Lender of the statement referred to in the next sentence, Company shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional
54
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE; REPLACEMENT OF
LENDER.
A. MITIGATION. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing Lender
responsible for administering the Loans or Letters of Credit of such Lender or
Issuing Lender, as the case may be, becomes aware of the occurrence of an event
or the existence of a condition that would cause such Lender to become an
Affected Lender or that would entitle such Lender or Issuing Lender to receive
payments under subsection 2.7 or subsection 3.6, it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and any
applicable legal or regulatory restrictions, use reasonable efforts (i) to make,
issue, fund or maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take such
other measures as such Lender or Issuing Lender may deem reasonable, if as a
result thereof the circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7
or subsection 3.6 would be materially reduced and if, as determined by such
Lender or Issuing Lender in its sole discretion, the making, issuing, funding or
maintaining of such Commitments or Loans or Letters of Credit through such other
lending or letter of credit office or in accordance with such other measures, as
the case may be, would not otherwise materially adversely affect such
Commitments or Loans or Letters of Credit or the interests of such Lender or
Issuing Lender; provided that such Lender or Issuing Lender will not be
obligated to utilize such other lending or letter of credit office pursuant to
this subsection 2.8 unless Company agrees to pay all incremental expenses
incurred by such Lender or Issuing Lender as a result of utilizing such other
lending or letter of credit office as described in clause (i) above. A
certificate as to the amount of any such expenses payable by Company pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a copy
to Administrative Agent) shall be conclusive absent manifest error.
B. REPLACEMENT OF LENDER. If Company receives a notice pursuant
to subsection 2.7A, 2.7C or 3.6, is required to pay any additional amounts
pursuant to subsection 2.7B or in the event a Lender has not consented to a
proposed change, waiver, discharge or termination with respect to this Agreement
which has been approved by the Requisite Lenders as provided in subsection 10.6,
Company shall have the right, if no Potential Event of Default or Event of
Default then exists, to replace such Lender (a "REPLACED LENDER") with one or
more Eligible Assignees (collectively, the "REPLACEMENT LENDER") acceptable to
Administrative Agent; provided that (i) at the time of any replacement pursuant
to this subsection 2.8, the Replacement Lender shall enter into one or more
Assignment Agreements pursuant to subsection 10.1B (and with all fees payable
pursuant to such subsection 10.1B to be paid by the Replacement Lender) pursuant
to which the Replacement Lender shall acquire all of the outstanding Loans and
Commitments of, and in each case participations in Letters of Credit and Swing
Line Loans by, the Replaced Lender and, in connection therewith, shall pay to
(x) the Replaced Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (B) an amount equal to all
55
unpaid drawings with respect to Letters of Credit that have been funded by (and
not reimbursed to) such Replaced Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, fees owing to the Replaced Lender with respect thereto, (y)
the appropriate Issuing Lender an amount equal to such Replaced Lender's Pro
Rata Share of any unpaid drawings with respect to Letters of Credit (which at
such time remains an unpaid drawing) issued by it to the extent such amount was
not theretofore funded by such Replaced Lender, and (z) Swing Line Lender an
amount equal to such Replaced Lender's Pro Rata Share of any Refunded Swing Line
Loans to the extent such amount was not theretofore funded by such Replaced
Lender, and (ii) all obligations (including without limitation all such amounts,
if any, owing under subsection 2.6D) of Company owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid), shall
be paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment Agreements, recordation of such
assignment in the Register by Administrative Agent pursuant to subsection 2.1D,
the payment of amounts referred to in clauses (i) and (ii) above and delivery to
the Replacement Lender of the appropriate Note or Notes executed by Company, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder except with respect to indemnification
provisions under this Agreement which by the terms of this Agreement survive the
termination of this Agreement, which indemnification provisions shall survive as
to such Replaced Lender. Notwithstanding anything to the contrary contained
above, no Issuing Lender may be replaced hereunder at any time while it has
Letters of Credit outstanding hereunder unless arrangements satisfactory to such
Issuing Lender (including the furnishing of a Standby Letter of Credit in form
and substance, and issued by an issuer, satisfactory to such Issuing Lender or
the furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Lender) have been made with respect to such
outstanding Letters of Credit.
SECTION 3. LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF PARTICIPATIONS
THEREIN.
A. LETTERS OF CREDIT. In addition to Company requesting that
Revolving Lenders make Revolving Loans pursuant to subsection 2.1A(ii) and that
Swing Line Lender make Swing Line Loans pursuant to subsection 2.1A(iii),
Company may request, in accordance with the provisions of this subsection 3.1,
from time to time during the period from the Closing Date to the 30th day prior
to the Revolving Loan Commitment Termination Date, that one or more Lenders
issue Letters of Credit for the account of Company for the purposes specified in
the definitions of Standby Letters of Credit. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of Company herein set forth, any one or more Lenders may, but (except
as provided in subsection 3.1B(ii)) shall not be obligated to, issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
56
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $3,000,000;
(iii) any Standby Letter of Credit having an expiration
date later than the earlier of (a) ten days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
immediately preceding clause (b) shall not prevent any Issuing Lender
from agreeing that a Standby Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each
unless such Issuing Lender elects not to extend for any such additional
period; and provided, further that such Issuing Lender shall elect not
to extend such Standby Letter of Credit if it has knowledge that an
Event of Default has occurred and is continuing (and has not been
waived in accordance with subsection 10.6) at the time such Issuing
Lender must elect whether or not to allow such extension;
(iv) any Letter of Credit denominated in a currency other
than Dollars; or
(v) any Letter of Credit without presentation of sight
drafts.
B. MECHANICS OF ISSUANCE.
(i) Notice of Issuance. Whenever Company desires the
issuance of a Letter of Credit, it shall deliver to Administrative
Agent either an original or a facsimile (provided that an original be
delivered to Administrative Agent the day following Administrative
Agent's receipt of the facsimile) Request for Issuance of Letter of
Credit in the form of Exhibit III annexed hereto no later than 12:00
Noon (New York City time) at least three Business Days, or in such
shorter period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of issuance. The
Request for Issuance of Letter of Credit shall specify (a) the proposed
date of issuance (which shall be a Business Day), (b) the face amount
of the Letter of Credit, (c) the expiration date of the Letter of
Credit, (d) the name and address of the beneficiary, and (e) either the
verbatim text of the proposed Letter of Credit or the proposed terms
and conditions thereof, including a precise description of any
documents to be presented by the beneficiary which, if presented by the
beneficiary prior to the expiration date of the Letter of Credit, would
require the Issuing Lender to make payment under the Letter of Credit;
provided that the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any
such documents.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender) prior
to the issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Request for Issuance of
Letter of Credit is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter of Credit
Company shall be deemed to have re-certified, as of the date of such issuance,
as to the matters to which Company is required to certify in the applicable
Request for Issuance of Letter of Credit.
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(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Request for Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Company, and
Administrative Agent shall be the Issuing Lender with respect thereto.
In the event that Administrative Agent, in its sole discretion, elects
not to issue such Letter of Credit, Administrative Agent shall promptly
so notify Company, whereupon Company may request any other Lender to
issue such Letter of Credit by delivering to such Lender a copy of the
applicable Request for Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify Company
and Administrative Agent whether or not, in its sole discretion, it has
elected to issue such Letter of Credit, and any such Lender which so
elects to issue such Letter of Credit shall be the Issuing Lender with
respect thereto. In the event that all other Lenders shall have
declined to issue such Letter of Credit, notwithstanding the prior
election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit
and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the Letter of Credit Usage with respect to such Letter of
Credit and with respect to all other Letters of Credit issued by
Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans and Swing Line Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures.
(iv) Notification to Lenders. Upon the issuance of or
amendment to any Letter of Credit the applicable Issuing Lender shall
promptly notify Administrative Agent and each other Lender of such
issuance or amendment. The notice to the Administrative Agent shall be
accompanied by a copy of such Letter of Credit or amendment and in the
event a Lender requests a copy of such issuance or amendment such
copies will be provided by the Administrative Agent. The Administrative
Agent shall notify each Lender of the amount of such Lender's
respective participation in such Letter of Credit, determined in
accordance with subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the end of
each calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such calendar
quarter, each Issuing Lender shall deliver to each other Lender a
report setting forth for such calendar quarter the daily aggregate
amount available to be drawn under the Letters of Credit issued by such
Issuing Lender that were outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro
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Rata Share of the maximum amount which is or at any time may become available to
be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its
own account, equal to 0.25% per annum of the daily amount available to
be drawn under such Standby Letter of Credit; provided that in any
event, the minimum fronting fee for any Standby Letter of Credit shall
be $500 per year per Standby Letter of Credit and (b) a letter of
credit fee, payable to Administrative Agent for the account of Lenders,
equal to the Applicable Eurodollar Rate Margin set forth in subsection
2.2A hereof for Eurodollar Rate Loans multiplied by the daily amount
available from time to time to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each March 15, June 15, September 15
and December 15 of each year and computed on the basis of a 360-day
year for the actual number of days elapsed; and
(ii) with respect to the issuance, amendment or transfer
of each Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such Issuing
Lender's standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, the daily amount available to be drawn under any Letter of Credit shall be
determined as of the close of business on any date of determination. Promptly
upon receipt by Administrative Agent of any amount described in clause (i)(b) of
this subsection 3.2, Administrative Agent shall distribute to each Revolving
Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
A. RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing under a
Letter of Credit issued by it, such Issuing Lender shall immediately notify
Company and Administrative Agent, and Company shall reimburse such Issuing
Lender on or before the Business Day immediately following the date on which
such drawing is honored (the "REIMBURSEMENT DATE") in an amount in Dollars and
in same day funds equal to the amount of such drawing; provided that, anything
contained in this Agreement to the contrary notwithstanding, (i) unless Company
shall
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have notified Administrative Agent and such Issuing Lender prior to 10:00 A.M.
(New York City time) on the date such drawing is that Company intends to
reimburse such Issuing Lender for the amount of such drawing with funds other
than the proceeds of Revolving Loans, Company shall be deemed to have given a
timely Notice of Borrowing to Administrative Agent requesting Revolving Lenders
to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an
amount in Dollars equal to the amount of such drawing and (ii) subject to
satisfaction or waiver of the conditions specified in subsection 4.2B, Lenders
shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such drawing, the proceeds of which shall be applied directly
by Administrative Agent to reimburse such Issuing Lender for the amount of such
drawing; and provided, further that if for any reason proceeds of Revolving
Loans are not received by such Issuing Lender on the Reimbursement Date in an
amount equal to the amount of such drawing, Company shall reimburse such Issuing
Lender, on demand, in an amount in same day funds equal to the excess of the
amount of such drawing over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Revolving Lender from its obligation to make Revolving Loans on the
terms and conditions set forth in this Agreement, and Company shall retain any
and all rights it may have against any Revolving Lender resulting from the
failure of such Revolving Lender to make such Revolving Loans under this
subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.
(i) Payment by Lenders. In the event that Company shall
fail for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any drawing honored
by such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall promptly notify each other Revolving Lender of the
unreimbursed amount of such drawing and of such other Lender's
respective participation therein based on such Revolving Lender's Pro
Rata Share. Each Revolving Lender shall make available to such Issuing
Lender an amount equal to its respective participation, in Dollars and
in same day funds, at the office of such Issuing Lender specified in
such notice, not later than 12:00 Noon (New York City time) on the
first business day (under the laws of the jurisdiction in which such
office of such Issuing Lender is located) after the date notified by
such Issuing Lender. In the event that any Revolving Lender fails to
make available to such Issuing Lender on such business day the amount
of such Revolving Lender's participation in such Letter of Credit as
provided in this subsection 3.3C, such Issuing Lender shall be entitled
to recover such amount on demand from such Revolving Lender together
with interest thereon at the rate customarily used by such Issuing
Lender for the correction of errors among banks for three Business Days
and thereafter at the Base Rate. Nothing in this subsection 3.3C shall
be deemed to prejudice the right of any Revolving Lender to recover
from any Issuing Lender any amounts made available by such Revolving
Lender to such Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a Letter of
Credit by such Issuing Lender in respect of which payment was made by
such Revolving Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
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(ii) Distribution to Lenders of Reimbursements Received
From Company. In the event any Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i)
for all or any portion of any drawing honored by such Issuing Lender
under a Letter of Credit issued by it, such Issuing Lender shall
distribute to each other Revolving Lender which has paid all amounts
payable by it under subsection 3.3C(i) with respect to such honored
drawing such other Revolving Lender's Pro Rata Share of all payments
subsequently received by such Issuing Lender from Company in
reimbursement of such honored drawing when such payments are received.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Revolving Lender may request.
D. INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i) Payment of Interest by Company. Company agrees to pay
to each Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for
the period from the date of such drawing to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with
respect to Revolving Loans that are Base Rate Loans and (b) thereafter,
a rate which is 2% per annum in excess of the rate of interest
otherwise payable under this Agreement with respect to Revolving Loans
that are Base Rate Loans. Interest payable pursuant to this subsection
3.3D(i) shall be computed on the basis of a 360-day year for the actual
number of days elapsed in the period during which it accrues and shall
be payable on demand or, if no demand is made, on the date on which the
related drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing under a Letter
of Credit issued by it, (a) such Issuing Lender shall distribute to
each other Revolving Lender, out of the interest received by such
Issuing Lender in respect of the period from the date of such drawing
to but excluding the date on which such Issuing Lender is reimbursed
for the amount of such drawing (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B), the
amount that such other Revolving Lender would have been entitled to
receive in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period pursuant to
subsection 3.2 if no drawing had been honored under such Letter of
Credit, and (b) in the event such Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i)
for all or any portion of such drawing, such Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such drawing such other
Revolving Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such drawing so reimbursed
by other Revolving Lenders for the period from the date on which such
Issuing Lender was so reimbursed by other Revolving Lenders to but
excluding the date on which such portion of such drawing
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is reimbursed by Company. Any such distribution shall be made to a
Revolving Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as such
Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for drawings
made under the Letters of Credit issued by it and to repay any Revolving Loans
made by Revolving Lenders pursuant to subsection 3.3B and the obligations of
Revolving Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter
of Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Revolving Lender may have at any time
against a beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing Lender
or other Revolving Lender or any other Person or, in the case of a
Revolving Lender, against Company, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or
one of its Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any
Letter of Credit against presentation of a draft or other document
which does not substantially comply with the terms of such Letter of
Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan
Document by any party thereto;
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
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3.5 INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
A. INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"GOVERNMENTAL ACTS").
B. NATURE OF ISSUING LENDERS' DUTIES. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible (absent a
determination of a court of competent jurisdiction of gross negligence or
willful misconduct by Issuing Lender) for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any such Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Letter of Credit to
comply fully with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) errors in interpretation of technical terms; (vi)
any loss or delay in the transmission or otherwise of any document required in
order to make a drawing under any such Letter of Credit or of the proceeds
thereof; (vii) the misapplication by the beneficiary of any such Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of such Issuing Lender,
including any Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or powers
hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall retain any and all rights it may have against any Issuing
Lender for any liability arising solely out
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of the gross negligence or willful misconduct of such Issuing Lender, as
determined by a final judgment of a court of competent jurisdiction or out of a
wrongful dishonor by Issuing Lender of a proper demand for payment made under
any Letter of Credit.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or any change
therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of such Issuing Lender or
Lender) with respect to the issuing or maintaining of any Letters of
Credit or the purchasing or maintaining of any participations therein
or any other obligations under this Section 3, whether directly or by
such being imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect
to a Tax matter) on or affecting such Issuing Lender or Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto (in an amount deemed by such Issuing Lender (in its sole discretion) to
be material); then, in any case, Company shall promptly pay to such Issuing
Lender or Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts as may be necessary to compensate
such Issuing Lender or Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Issuing Lender or Lender shall
deliver to Company a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Issuing Lender or
Lender under this subsection 3.6, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
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SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS AND SWING LINE
LOANS.
The obligations of Lenders to make the Term Loans and any Revolving
Loans and Swing Line Loans to be made on the Closing Date are, in addition to
the conditions precedent specified in subsection 4.2, subject to prior or
concurrent satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Closing Date, Company
shall, and shall cause each other Loan Party to, deliver to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such Loan Party, as the case may be, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation or other organizational documents of such Person,
together with a good standing certificate from the Secretary of State
of its jurisdiction of incorporation and each other state in which such
Person is qualified as a foreign corporation to do business and, to the
extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of each of such jurisdictions,
each dated a recent date prior to the Closing Date;
(ii) Copies of the Bylaws or other organizational
documents of such Person, certified as of the Closing Date by such
Person's corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the Loan Documents and Related Agreements to which it is a party,
certified as of the Closing Date by the corporate secretary or an
assistant secretary of such Person as being in full force and effect
without modification or amendment;
(iv) Signature and incumbency certificates of the officers
of such Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which
such Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1998, no
material adverse effect upon the business, operations, properties, assets or
condition (financial or otherwise) of Company and its Subsidiaries, taken as a
whole, and (ii) no impairment in any material respect on the ability of any Loan
Party to perform, or of Administrative Agent or Lenders to enforce, the
Obligations, shall have occurred in the sole opinion of Administrative Agent.
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C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The corporate organizational
structure of the Company and the Related Entities, both before and
after giving effect to the Recapitalization, shall be as set forth on
Schedule 4.1C annexed hereto.
(ii) Capital Structure and Ownership. The capital
structure and ownership of the Company and the Related Entities, both
before and after giving effect to the Recapitalization, shall be as set
forth on Schedule 4.1C annexed hereto.
(iii) Management; Employment Contracts. The management
structure of the Company and the Related Entities and the percentage
ownership interests in the Company of senior management, after giving
effect to the Recapitalization, shall be as set forth on Schedule 4.1C
annexed hereto, and Administrative Agent shall have received executed
copies of each of the Management Contracts substantially in the form
attached to the Recapitalization Agreement or as otherwise satisfactory
to Administrative Agent.
D. OTHER SOURCES OF FUNDS.
(i) Equity Capitalization of Company. On or before the
Closing Date, the New Investor Group shall have purchased shares of
capital stock of the Company and the Related Entities in an aggregate
amount of not less than $155,000,000, in accordance with the terms and
conditions of the Recapitalization Agreement and not less than
$38,508,115 of shares of the Company's and Related Entities' capital
stock shall constitute Rollover Shares retained by the existing
shareholders of Company and the Related Entities.
(ii) Company Cash. On or before the Closing Date, the
Company shall have (i) terminated the loan agreement entered into on or
about February 15, 1999 with Duckling, LLC, (ii) been released from the
Unconditional Guaranty of Company dated May 27, 1999 guaranteeing a
promissory note of Duck Pond Creek, LLC payable to SouthTrust Bank,
N.A. and (iii) been repaid by members of Duck Pond Creek, LLC for the
loan to Duck Pond Creek, LLC.
E. SATISFACTION WITH RECAPITALIZATION; FINANCING. Administrative
Agent shall have received evidence satisfactory to it that (i) the final
structure of the Recapitalization and (ii) the sources and uses of proceeds to
consummate the transactions contemplated by the Loan Documents and the Related
Agreements are in accordance with the Recapitalization Agreement.
F. RELATED AGREEMENTS. Administrative Agent shall have received a
fully executed copy or photocopy of each Related Agreement in the form attached
to the Recapitalization Agreement, including any revised Disclosure Memorandum
to the Recapitalization Agreement delivered in connection with the
Recapitalization Agreement, and any documents executed in connection therewith,
and each Related Agreement shall be in full force and effect and no provision
thereof shall have been modified or waived in any respect determined by the
Administrative Agent to be material, in each case without the consent of the
Administrative Agent.
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G. MATTERS RELATING TO EXISTING INDEBTEDNESS OF COMPANY AND ITS
SUBSIDIARIES. On the Closing Date, Company shall have (a) repaid in full all
Indebtedness outstanding under the Existing Credit Agreement (the aggregate
principal amount of which Indebtedness shall not exceed approximately
$4,723,000), (b) terminated any commitments to lend or make other extensions of
credit thereunder, (c) delivered to Administrative Agent all documents or
instruments necessary to release all Liens securing Indebtedness or other
obligations of Company thereunder, and (d) made arrangements satisfactory to
Administrative Agent with respect to the cancellation of any letters of credit
outstanding thereunder or the issuance of Letters of Credit to support the
obligations of Company with respect thereto. No existing Indebtedness of the
Company shall remain outstanding except as permitted by subsection 7.1.
H. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION
OF WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Recapitalization and the other
transactions contemplated by the Loan Documents and the Related Agreements, and
the continued operation of the business conducted by Company in substantially
the same manner as conducted prior to the consummation of the Recapitalization,
and each of the foregoing shall be in full force and effect, in each case other
than those the failure to obtain or maintain which, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect. All applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the Recapitalization or the
financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
I. CONSUMMATION OF THE RECAPITALIZATION.
(i) All conditions to the Recapitalization set forth in
the Recapitalization Agreement shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the
consent of Administrative Agent and Requisite Lenders;
(ii) the Recapitalization shall have become effective in
accordance with the terms of the Recapitalization Agreement;
(iii) Transaction Costs shall not exceed $5,750,000, and
Administrative Agent shall have received evidence to its satisfaction
to such effect; and
(iv) Administrative Agent shall have received an Officers'
Certificate of Company to the effect set forth in clauses (i)-(iii)
above and stating that Company will proceed to consummate the
Recapitalization immediately upon the making of the initial Loans.
J. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the
extent not otherwise satisfied pursuant to subsection 4.1K, Administrative Agent
shall have received evidence satisfactory to it that Company, Subsidiary
Guarantors and the shareholders of the Company shall have taken or caused to be
taken all such actions, executed and delivered or
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caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to
Administrative Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Administrative
Agent) representing all capital stock or other equity interests pledged
pursuant to the Company Pledge Agreement and the Subsidiary Pledge
Agreements and the Auxiliary Pledge Agreements and (b) all promissory
notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Administrative Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements.
Delivery to Administrative Agent of (a) the results of a recent search,
by a Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of any Loan Party, together with copies of all such filings
disclosed by such search, and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement).
(iv) UCC Financing Statements and Fixture Filings.
Delivery to Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable Loan
Party with respect to all personal and mixed property Collateral of
such Loan Party, for filing in all jurisdictions as may be necessary
or, in the opinion of Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the
Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative
Agent of all cover sheets or other documents or instruments required to
be filed with the PTO in order to create or perfect Liens in respect of
any IP Collateral.
(vi) Opinions of Local Counsel. Delivery to Administrative
Agent of an opinion of counsel (which counsel shall be reasonably
satisfactory to the Administrative Agent) under the laws of each
jurisdiction in which any Loan Party or any personal or mixed property
Collateral is located with respect to the creation and perfection of
the security interests in favor of Administrative Agent in such
Collateral and such other
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matters governed by the laws of such jurisdiction regarding such
security interests as Administrative Agent may reasonably request, in
each case in form and substance reasonably satisfactory to
Administrative Agent.
K. CLOSING DATE MORTGAGES; CLOSING DATE MORTGAGE POLICIES; ETC.
Administrative Agent shall have received from Company and each applicable
Subsidiary Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized
Mortgages (each a "CLOSING DATE MORTGAGE" and, collectively, the
"CLOSING DATE MORTGAGES"), in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering each
Real Property Asset listed in Schedule 4.1K annexed hereto and
identified as being subject to a Closing Date Mortgage (each a "CLOSING
DATE MORTGAGED PROPERTY" and, collectively, the "CLOSING DATE MORTGAGED
PROPERTIES");
(ii) Opinions of Local Counsel. An opinion of counsel
(which counsel shall be reasonably satisfactory to Administrative
Agent) in each state in which a Closing Date Mortgaged Property is
located with respect to the enforceability of the form(s) of Closing
Date Mortgages to be recorded in such state and such other matters as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consents and Estoppels; Recorded Leasehold
Interests. In the case of each Closing Date Mortgaged Property
consisting of a Leasehold Property, (a) a Landlord Consent and Estoppel
with respect thereto and (b) evidence that such Leasehold Property is a
Recorded Leasehold Interest;
(iv) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if there are any such Flood Hazard
Properties, such Loan Party's written acknowledgment of receipt of
written notification from Administrative Agent (1) as to the existence
of each such Flood Hazard Property and (2) as to whether the community
in which each such Flood Hazard Property is located is participating in
the National Flood Insurance Program, and (c) in the event any such
Flood Hazard Property is located in a community that participates in
the National Flood Insurance Program, evidence that flood insurance in
respect of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System has been obtained; and
(v) Environmental Indemnity . If requested by
Administrative Agent, an environmental indemnity agreement,
satisfactory in form and substance to Administrative Agent and its
counsel, with respect to the indemnification of Administrative Agent
and Lenders for any liabilities that may be imposed on or incurred by
any of them as a result of any Hazardous Materials Activity.
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L. ENVIRONMENTAL REPORTS. Administrative Agent shall have
received reports and other information in form, scope and substance satisfactory
to Administrative Agent, regarding environmental matters relating to each
Closing Date Mortgaged Property.
M. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before
the Closing Date, Lenders shall have received from Company (i) unaudited
financial statements of Company and its Subsidiaries for the six-month fiscal
period ending June 30, 1999 and monthly financial statements for each month
thereafter, consisting of a balance sheet and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows, all in
reasonable detail and certified by the chief financial officer of Company that
they fairly present the financial condition of Company and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments, (ii) pro forma balance sheet of Company and its
Subsidiaries as of the Closing Date, prepared in accordance with GAAP and
reflecting the consummation of the Recapitalization, the related financings and
the other transactions contemplated by the Loan Documents and the Related
Agreements, which pro forma financial statements shall be in form and substance
satisfactory to Lenders, and (iii) any projected financial statements (including
balance sheets and statements of operations, stockholders' equity and cash
flows) of the Company and its Subsidiaries, delivered subsequent to September
23, 1999 for the six-year period after the Closing Date to be in form and
substance satisfactory to Administrative Agent and Lenders.
N. SOLVENCY ASSURANCES. On the Closing Date, Administrative Agent
and Lenders shall have received a Financial Condition Certificate executed by
the Chief Financial Officer of Company dated the Closing Date, substantially in
the form of Exhibit XIII annexed hereto and with appropriate attachments, in
each case demonstrating that, after giving effect to the consummation of the
Recapitalization, the related financings and the other transactions contemplated
by the Loan Documents and the Related Agreements, Company will be Solvent.
O. EVIDENCE OF INSURANCE. Administrative Agent shall have
received a certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to
subsection 6.4 is in full force and effect and that Administrative Agent on
behalf of Lenders has been named as additional insured and/or loss payee
thereunder to the extent required under subsection 6.4.
P. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their
respective counsel shall have received (i) originally executed copies of one or
more favorable written opinions of Wachtell, Lipton, ▇▇▇▇▇ & Katz, Wyche,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇▇ & Cave LLP and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel for Loan Parties, in form and substance reasonably
satisfactory to Administrative Agent and its counsel, dated as of the Closing
Date and setting forth substantially the matters in the opinions designated in
Exhibit VIII annexed hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request and (ii) evidence
satisfactory to Administrative Agent that Company has requested such counsel to
deliver such opinions to Lenders.
Q. OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall have
received originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇
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LLP, counsel to Administrative Agent, dated as of the Closing Date,
substantially in the form of Exhibit IX annexed hereto and as to such other
matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
R. FEES. Company shall have paid to Administrative Agent, for
distribution (as appropriate) to Administrative Agent and Lenders, the fees
payable on the Closing Date referred to in subsection 2.3.
S. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officers' Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
the representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that for purposes of the foregoing,
the Related Entities shall be deemed to be Subsidiaries of the Company, and that
Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Administrative Agent and Requisite Lenders.
T. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an originally
executed Notice of Borrowing, in each case signed by the chief executive
officer, the chief financial officer or the treasurer of Company or by any
executive officer of Company designated by any of the above-described officers
on behalf of Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein
and in the other Loan Documents shall be true, correct and complete in
all material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
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(ii) No event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System;
and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that
has not been disclosed by Company in writing pursuant to subsection 5.5
or 6.1(x) prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this Agreement),
and there shall have occurred no development not so disclosed in any
such action, suit, proceeding, governmental investigation or
arbitration so disclosed, that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be expected to have
a Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.
4.3 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Request for Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or information as the
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.
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C. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.2B shall be satisfied to the same
extent as if the issuance of such Letter of Credit were the making of a Loan and
the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make
the Loans, to induce Issuing Lenders to issue Letters of Credit and to induce
other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
are true, correct and complete:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto. Each
Loan Party has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and Related Agreements to which it
is a party and to carry out the transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, except
where the failure to be so qualified or in good standing has not had and will
not have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsections 7.13.
D. SUBSIDIARIES. All of the Subsidiaries of Company are
identified in Schedule 5.1 annexed hereto, as said Schedule 5.1 may be
supplemented from time to time pursuant to the provisions of subsection
6.1(xvi). The capital stock of each of the Subsidiaries of Company identified in
Schedule 5.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 5.1
annexed hereto (as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and will not reasonably be expected to have a Material
Adverse Effect. Schedule 5.1 annexed hereto (as so supplemented) correctly sets
forth, the ownership interest of Company and each of its Subsidiaries in each of
the Subsidiaries of Company identified therein.
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5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Agreements have been duly
authorized by all necessary corporate action on the part of each Loan Party that
is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements to which they are
parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Company or any of
its Subsidiaries (other than any Liens created under any of the Loan Documents
in favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Closing Date and
disclosed in writing to Lenders and except for such violations, conflicts,
breaches, defaults, Liens or failures to obtain approvals or consents which
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance
by Loan Parties of the Loan Documents and the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the Loan
Documents and such Related Agreements do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body except for (i) registrations, consents, approvals, notices or other actions
the failure to obtain or take could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (ii) any required
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ filings and (iii) filings and recordings required in
connection with the perfection of the security interests under the Loan
Documents.
D. BINDING OBLIGATION. Each of the Loan Documents and Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
5.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheet of Company and its Subsidiaries as at December 31, 1998 and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then
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ended, (ii) the unaudited consolidated balance sheet of Company and its
Subsidiaries as at June 30, 1999 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows of Company and its
Subsidiaries for the six months then ended and monthly financial statements for
each month thereafter, (iii) a pro forma balance sheet of Company and its
Subsidiaries as of the Closing Date and reflecting the consummation of the
Recapitalization, the related financings and the other transactions contemplated
by the Loan Documents and the Related Agreements, which pro forma financial
statements shall be in form and substance satisfactory to Lenders, and (iv)
projected financial statements (including balance sheets and statements of
operations, stockholders' equity and cash flows) of the Company and its
Subsidiaries, for the six-year period after the Closing Date. The statements
referred to in clauses (i) through (iii) were prepared in conformity with GAAP
(except as disclosed in the notes thereto) and fairly present, in all material
respects, the financial position (on a consolidated basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated basis) of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. Company does not (and will not following the
funding of the initial Loans) have any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto (or, with respect to any Contingent Obligation arising
after the date of the delivery of such financial statements, that is not
reflected in the financial statements next delivered pursuant to subsection 6.1
after the incurrence of such Contingent Obligation) and which in any such case
is material in relation to the business, operations, properties, assets or
condition (financial or otherwise), or after the Closing Date, prospects of
Company or any of its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1998, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Except as set forth in Schedule 5.4, neither Company nor any of its
Subsidiaries since September 13, 1999, has directly or indirectly declared,
ordered, paid or made, or set apart any sum or property for, any Restricted
Junior Payment or agreed to do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. As of the date hereof, neither the
Company nor any of its Subsidiaries owns any real property. To the extent
Company or any of its Subsidiaries acquires an ownership interest in any real
property after the Closing Date, Company and each of its Subsidiaries will have
good, sufficient and legal title to all such owned real property. Company and
its Subsidiaries has (i) valid leasehold interests in (in the case of leasehold
interests in real or personal property), or (ii) good title to (in the case of
all other personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or in the
most recent financial statements delivered pursuant to subsection 6.1, in each
case except for assets disposed of since the date of such financial statements
in the ordinary course of business or as otherwise permitted under subsection
7.7. Except as permitted by this Agreement, all such properties and assets are
free and clear of Liens.
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B. REAL PROPERTY. As of the Closing Date, Schedule 5.5 annexed
hereto contains a true, accurate and complete list of all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. Except as specified in Schedule 5.5 annexed hereto, each
agreement listed in the immediately preceding sentence is in full force and
effect and Company does not have knowledge of any default that has occurred and
is continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against such
Loan Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all material taxes shown on such tax returns
to be due and payable and all material assessments, fees and other governmental
charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been
paid when due and payable. Company knows of no tax assessment proposed in
writing against Company or any of its Subsidiaries which is not being actively
contested by Company or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
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5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or
is otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
C. Schedule 5.8 contains a true, correct and complete list of all
the Material Contracts in effect on the Closing Date. Except as described on
Schedule 5.8, all such Material Contracts are in full force and effect and, to
Company's knowledge, no material defaults currently exist thereunder.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A. Company, and each of its Subsidiaries are in compliance with
all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Company Employee
Benefit Plan, and have performed all their obligations under each Company
Employee Benefit Plan. Each Company Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.
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B. No ERISA Event has occurred or is expected to occur that could
reasonably be expected to result in a liability to the Company or any of its
Subsidiaries in excess of $1,000,000.
C. As of the most recent valuation date for any Pension Plan, and
excluding for purposes of such computation all Pension Plans with respect to
which assets exceed benefit liabilities (as defined in Section 4001(a)(16) of
ERISA), the sum of:
(i) the unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA) individually or in the aggregate for all
Company Pension Plans; and
(ii) the liability that the Company or its Subsidiaries
could reasonably be expected to incur as the result of such unfunded
benefit liabilities, individually or in the aggregate, for all Pension
Plans other than Company Pension Plans (assuming amortization of such
unfunded benefit liabilities over ten years);
does not exceed $1,000,000.
D. As of the most recent valuation date for which an
actuarial report has been received and based on information available pursuant
to Section 4221(e) of ERISA, the sum of:
(i) the potential liability of Company and its
Subsidiaries for a complete withdrawal from all Multiemployer Plans
(within the meaning of Section 4203 of ERISA) to which the Company or
any of its Subsidiaries contribute, and
(ii) the liability that the Company or its Subsidiaries
could be reasonably be expected to incur as a result of the complete
withdrawal from all Multiemployer Plans to which neither the Company
nor any of its Subsidiaries contribute, after considering the financial
condition of the all of the ERISA Affiliates most closely related to
the contributing employer(s);
does not exceed $1,000,000.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable by Company
with respect to this Agreement or any of the transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and disbursements of
counsel) arising in connection with any such claim, demand or liability except
as previously disclosed in writing to Administrative Agent.
5.13 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or, to Company's
knowledge, threatened involving Company or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
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5.14 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
5.15 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 4.1J, 4.1K,
6.8 and 6.9 and (ii) the delivery to Administrative Agent of any Pledged
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Administrative Agent
for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral),
a valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.15A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Administrative Agent as contemplated by subsection 5.15A, (i)
no effective UCC financing statement, fixture filing or other instrument similar
in effect covering all or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation T, U or X of
the Board of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
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5.16 RELATED AGREEMENTS.
A. DELIVERY OF RELATED AGREEMENTS. Company has delivered to
Lenders complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto.
B. WARRANTIES OF COMPANY. Subject to the qualifications set forth
therein, each of the representations and warranties given by Company to H&F in
the Recapitalization Agreement is true and correct in all material respects as
of the date hereof and will be true and correct in all material respects as of
the Closing Date.
5.17 DISCLOSURE.
No representation or warranty of Company or any of its Subsidiaries
contained in any Loan Document or Related Agreement or in any other document,
certificate or written statement furnished to Lenders by or on behalf of Company
or any of its Subsidiaries for use in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made, except to the extent that a prior statement was subsequently updated,
amended or revised in written material provided to the Administrative Agent
prior to the Closing Date. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results, except to the extent that a
prior statement was subsequently updated, amended or revised in written material
provided to the Administrative Agent prior to the Closing Date. There are no
facts known (or which should upon the reasonable exercise of diligence be known)
to Company (other than matters of a general economic nature) that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect and that have not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.18 INTELLECTUAL PROPERTY.
Company and each of its Subsidiaries owns, or is licensed to use, all
Intellectual Property except for those the failure to own or license which could
not reasonably be expected to have a Material Adverse Effect. Company has
registered with the United States Copyright Office all of its material software
assets. No claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does Company know of any
valid basis for any such claim, except for any such claims which, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
The use of such Intellectual Property by Company and its Subsidiaries does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
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5.19 ENVIRONMENTAL PROTECTION.
Except for such exceptions as in the aggregate could not reasonably be
expected to have a Material Adverse Effect:
(i) the operations of Company and each of its
Subsidiaries (including, without limitation, all operations and
condition at or in the Facilities) comply with all Environmental Laws;
(ii) Company and each of its Subsidiaries have obtained
all Governmental Authorizations under Environmental Laws necessary to
their respective operations, and all such Governmental Authorizations
are in good standing, and Company and each of its Subsidiaries are in
compliance with the terms and conditions of such Governmental
Authorizations;
(iii) neither Company nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release
of any Hazardous Materials or (b) any letter or request for information
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9604) or comparable
state laws, and, to the best of Company's knowledge, none of the
operations of Company or any of its Subsidiaries is the subject of any
federal or state investigation evaluating whether any remedial action
is needed to respond to any Release or threatened Release of any
Hazardous Materials at any Facility or at any other location;
(iv) none of the operations of Company or any of its
Subsidiaries is the subject of any pending judicial or administrative
proceeding alleging the violation of or liability under any
Environmental Laws;
(v) neither Company nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to any
outstanding written order or agreement with any governmental authority
or private party relating to (x) any Environmental Laws or (y) any
Environmental Claims;
(vi) neither Company nor any of its Subsidiaries has, to
its knowledge, any contingent liability in connection with any Release
of any Hazardous Materials by Company or any of its Subsidiaries;
(vii) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment or Release of Hazardous Materials
at any Facility (other than hazardous waste manifested in the ordinary
course of business), and none of Company's or any of its Subsidiaries'
operations involves the generation, transportation, treatment, storage
or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;
(viii) (a) no Hazardous Materials exist on, under or about
any Facility in a manner that has a reasonable possibility of giving
rise to an Environmental Claim, and
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(b)neither Company nor any of its Subsidiaries has filed any notice or
report of a Release of any Hazardous Materials that has a reasonable
possibility of giving rise to an Environmental Claim;
(ix) neither Company nor any of its Subsidiaries nor, to
the best knowledge of Company, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim;
(x) no underground storage tanks or surface impoundments
are on or at any Facility;
(xi) no Lien in favor of any Person relating to any
Environmental Claim has been filed or has been attached to any
Facility; and
(xii) no Lien in favor of any Person relating to any
Environmental Claim has been filed or has been attached to any Facility
which is owned by Company or any of its Subsidiaries.
5.20 YEAR 2000.
All Information Systems and Equipment are either Year 2000 Compliant,
or any reprogramming, remediation, or any other corrective action, including the
internal testing of all such Information Systems and Equipment will be completed
by November 30, 1999. Further, to the extent that such reprogramming/remediation
and testing action is required, the cost thereof, as well as the cost of the
reasonably foreseeable consequences of failure to become Year 2000 Compliant, to
the Company and its Subsidiaries (including, without limitation, reprogramming
errors and the failure of other systems or equipment) will not result in a
Material Adverse Effect.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any
event within 30 days after the end of each month ending after the
Closing Date except for months which constitute the end of a Fiscal
Quarter or Fiscal Year, (a) the consolidated balance sheet of Company
and its Subsidiaries as at the end of such month and the related
consolidated
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statements of income and cash flows of Company and its Subsidiaries for
such month and for the period from the beginning of the then current
Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year and the corresponding figures from
the Financial Plan for the current Fiscal Year, to the extent prepared
on a monthly basis, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments, and (b) a narrative report
describing the material changes, if any, in operations of Company and
its Subsidiaries from the Financial Plan for the current Fiscal Year in
the form prepared for presentation to senior management for such month
and for the period from the beginning of the then current Fiscal Year
to the end of such month;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of the first three Fiscal
Quarters in each Fiscal Year, (a) the consolidated balance sheet of
Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated statements of income and cash flows of Company
and its Subsidiaries for such Fiscal Quarter and for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous
Fiscal Year and the corresponding figures from the Financial Plan for
the current Fiscal Year, all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b) a
narrative report describing the material changes, if any, in the
operations of Company and its Subsidiaries from the Financial Plan for
the current Fiscal Year in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the changes in the operations of Company
and its Subsidiaries from the operations of Company and its
Subsidiaries reflected in the financial statements delivered pursuant
to subdivisions (i) and (ii) above for the current Fiscal Year in the
form prepared for presentation to senior management for such Fiscal
Year, and (c) in the case of such consolidated financial statements, a
report thereon of Ernst & Young LLP or other
83
independent certified public accountants of recognized national
standing selected by Company and reasonably satisfactory to
Administrative Agent, which report shall be unqualified, shall express
no doubts about the ability of Company and its Subsidiaries to continue
as a going concern, and shall state that such consolidated financial
statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated in conformity with GAAP applied on a basis
consistent with prior years (except as otherwise disclosed in such
financial statements) and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with
each delivery of financial statements of Company and its Subsidiaries
pursuant to subdivision (i), an Officers' Certificate of Company as
provided in clause (a) below, and together with each delivery of
financial statements of Company and its Subsidiaries pursuant to
subdivisions (ii) and (iii) above, (a) an Officers' Certificate of
Company stating (x) that the signers have reviewed the terms of this
Agreement and have made, or caused to be made under their supervision,
a review in reasonable detail of the transactions and condition of
Company and its Subsidiaries during the accounting period covered by
such financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and that the
signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto and (y) that the Company does not
as at the date of such Officer's Certificate, have any Contingent
Obligation, contingent liability or unusual forward or long-term
commitment arising from any amendments to the Management Contracts that
is not reflected in the financial statements being delivered or the
notes thereto and which in any such case is material in relation to the
business operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (b) a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent
compliance with such restrictions is required to be tested at the end
of the applicable accounting period; and (c) a Margin Determination
Certificate demonstrating in reasonable detail the Consolidated
Leverage Ratio for the four consecutive fiscal quarters ending on the
last day of the accounting period covered by such financial statements.
(v) Reconciliation Statements: if, as a result of any
change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3 the consolidated financial statements of Company and its
Subsidiaries delivered pursuant to subdivisions (ii), (iii) or (xiii)
of this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (ii), (iii) or
(xiii) of this subsection 6.1 following such change, unaudited
consolidated financial statements of Company and its
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Subsidiaries for (y) the current Fiscal Year to the effective date of
such change and (z) the two full Fiscal Years immediately preceding the
Fiscal Year in which such change is made, in each case prepared on a
pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (ii), (iii) or (xiii) of this subsection 6.1
following such change, a written statement of the chief accounting
officer or chief financial officer of Company setting forth the
differences (including any differences that would affect any
calculations relating to the financial covenants set forth in
subsection 7.6) which would have resulted if such financial statements
had been prepared without giving effect to such change;
(vi) Accountants' Certification: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, (x) the comment
letter submitted by such accountants to management and (y) a written
statement by the independent certified public accountants giving the
report thereon (a) stating that their audit examination has included a
review of the terms of this Agreement and the other Loan Documents as
they relate to accounting matters, (b) stating whether, in connection
with their audit examination, any condition or event that constitutes
an Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance Certificate
delivered therewith pursuant to clause (b) of subdivision (iv) above
for the applicable Fiscal Year are not stated in accordance with the
terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
85
(ix) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon
any officer of Company obtaining knowledge of (X) the institution of,
or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(a) could reasonably be expected to have a
Material Adverse Effect; or
(b) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon the Company becoming
aware of the occurrence of or forthcoming occurrence of any ERISA Event
that could reasonably be expected to result in a liability to the
Company or any of its Subsidiaries in excess of $1,000,000, a written
notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
86
(xii) ERISA Notices: with reasonable promptness, copies of
(a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by Company or any of its Subsidiaries with respect
to each Company Pension Plan; (b) all notices received by Company or
(if obtained by the Company) any of its Subsidiaries or any of their
respective ERISA Affiliates from a Multiemployer Plan sponsor, the
Internal Revenue Service or the PBGC concerning an ERISA Event; and (c)
copies of such other documents or governmental reports or filings
relating to any Pension Plan, Multiemployer Plan or Company Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days after the beginning of each Fiscal Year, a
consolidated plan and financial forecast for such Fiscal Year and the
next succeeding Fiscal Year (the "FINANCIAL PLAN" for such Fiscal
Year), including (a) forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of Company
and its Subsidiaries for such Fiscal Year, together with a pro forma
Compliance Certificate for such Fiscal Year and an explanation of the
assumptions on which such forecasts are based, (b) forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each month of such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based, and
(c) such other information and projections as any Lender may reasonably
request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness,
written notice of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Company and (b) all of the data required to be set forth in Schedule
5.1 annexed hereto with respect to all Subsidiaries of Company (it
being understood that such written notice shall be deemed to supplement
Schedule 5.1 annexed hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto;
(xviii) UCC Search Report: As promptly as practicable after
the date of delivery to Administrative Agent of any UCC financing
statement executed by any Loan Party
87
pursuant to subsection 4.1J(iv) or 6.8A, copies of completed UCC
searches evidencing the proper filing, recording and indexing of all
such UCC financing statement and listing all other effective financing
statements that name such Loan Party as debtor, together with copies of
all such other financing statements not previously delivered to
Administrative Agent by or on behalf of Company or such Loan Party;
(xix) Cleanup Compliance: as promptly, and in any event,
within ten Business Days of compliance with subsections 2.1A(ii)(b) and
2.1A(iii)(b), notice of such compliance; and
(xx) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary, as applicable, shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay
all taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a material Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each
of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition,
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ordinary wear and tear excepted, all material properties used or useful in the
business of Company and its Subsidiaries (including all Intellectual Property)
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
B. INSURANCE. Company will maintain or cause to be maintained,
with financially sound and reputable insurers, such public liability insurance,
third party property damage insurance, business interruption insurance and
casualty insurance with respect to liabilities, losses or damage in respect of
the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder for any covered loss in excess
of $500,000 and provides for at least 30 days prior written notice to
Administrative Agent of any modification or cancellation of such policy.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. LENDER MEETING. Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
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6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any Governmental Authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION; REMEDIAL ACTION REGARDING
HAZARDOUS MATERIALS.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence reasonable under the circumstances in order to comply
with all Environmental Laws and cause (i) their respective employees, agents,
contractors and subcontractors and (ii) all other Persons on or occupying any
real property owned by Company or any of its Subsidiaries or with respect to
which Company or any of its Subsidiaries is lessor to comply with all
Environmental Laws.
B. Company shall promptly advise Administrative Agent and Lenders
in writing and in reasonable detail of any of the following which, individually
or in the aggregate, is reasonably likely to give rise to a Material Adverse
Effect (i) any Release of any Hazardous Materials made by Company or any of its
Subsidiaries required to be reported to any federal, state or local governmental
or regulatory agency under any applicable Environmental Laws, (ii) any Release
of any Hazardous Materials made by a Person other than Company or any of
Company's Subsidiaries required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws to the
extent Company or any of its Subsidiaries has received written notice of such
Release, (iii) any and all written communications of the Company or any of its
Subsidiaries with respect to any Environmental Claims or with respect to any
Release of Hazardous Materials required to be reported to any federal, state or
local governmental or regulatory agency, (iv) any and all written communications
of any Person other than the Company or any of its Subsidiaries with respect to
any Environmental Claims or with respect to any Release of Hazardous Materials
required to be reported to any federal, state or local governmental or
regulatory agency to the extent Company or any of its Subsidiaries has received
written notice of such communications, (v) any remedial action taken by Company
or, to the extent Company or any of its Subsidiaries has received written
notice, any other Person in response to (x) any Hazardous Materials on, under or
about any Facility, the existence of which has a reasonable possibility of
resulting in an Environmental Claim, or (y) any Environmental Claim, (vi) the
discovery by Company or any of its Subsidiaries of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility which is owned
by Company or any of its Subsidiaries that could cause such Facility or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws, (vii) to the extent
Company or any of its Subsidiaries has received written notice of any occurrence
or condition on any real property adjoining or in the vicinity of any Facility
which is leased by Company or any of it Subsidiaries that could cause such
Facility or any part thereof to be subject to any restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws, and
(viii) any request for information from any governmental agency
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that suggests such agency is investigating whether Company or any of its
Subsidiaries may be potentially responsible for a Release of Hazardous
Materials.
6.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES; AUXILIARY
PLEDGE AGREEMENTS; COLLATERAL.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY
COLLATERAL DOCUMENTS. In the event that any Person becomes a Domestic Subsidiary
of Company after the date hereof, Company will promptly notify Administrative
Agent of that fact and cause such Domestic Subsidiary to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty and Subsidiary
Security Agreement and to take all such further actions and execute all such
further documents and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1J) as may be necessary or, in the
opinion of Administrative Agent, desirable to create in favor of Administrative
Agent, for the benefit of Lenders, a valid and perfected First Priority Lien on
all of the personal and mixed property assets of such Domestic Subsidiary
described in the applicable forms of Collateral Documents. With respect to any
such Subsidiary which is a Domestic Subsidiary, Company shall also deliver to
Administrative Agent a Subsidiary Pledge Agreement, granting to Administrative
Agent on behalf of Lenders a First Priority Lien in 100% of the capital stock or
other equity interests of such Domestic Subsidiary.
B. EXECUTION OF FUTURE FOREIGN SUBSIDIARY GUARANTY AND COLLATERAL
DOCUMENTS. In the event that any Person becomes a direct Foreign Subsidiary of
Company or any Domestic Subsidiary of Company after the Closing Date, Company
will promptly notify Administrative Agent of that fact and Company or such
Domestic Subsidiary will execute a Pledge Amendment (as defined in the Pledge
Agreement) to the Pledge Agreement executed and delivered by Company or such
Domestic Subsidiary pledging not less than 66% of the stock of such Foreign
Subsidiary. In the event that U.S. tax laws and/or any other applicable laws in
foreign jurisdictions, as the case may be, are amended to permit a Foreign
Subsidiary to guarantee the Loans without the incurrence of an investment in
U.S. property or other deemed dividends for U.S. tax purposes or without
otherwise resulting in U.S. taxable income or without otherwise violating any
other applicable laws in foreign jurisdictions, Company will promptly notify
Administrative Agent of that fact and Company or such Domestic Subsidiary will
execute Pledge Amendments to the Pledge Agreement executed and delivered by
Company or such Domestic Subsidiary pledging not less than 100% of the stock of
its Foreign Subsidiaries and Company will cause its Foreign Subsidiaries to
execute and deliver to Administrative Agent a counterpart of a Subsidiary
Guaranty, a Pledge Agreement, a Security Agreement and Additional Mortgages, as
applicable, and to take all such further action and execute all such further
documents and instruments as may be reasonably required to grant and perfect in
favor of Administrative Agent, for the benefit of Lenders, a First Priority
security interest in all of the personal and mixed property assets of such
Subsidiary described in the applicable Collateral Documents.
C. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company
shall deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation
or other organizational documents, together
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with a good standing certificate from the Secretary of State of the jurisdiction
of its incorporation and each other state in which such Person is qualified as a
foreign corporation to do business if such Subsidiary is a Domestic Subsidiary
and, to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each such jurisdictions if such Subsidiary is a
Domestic Subsidiary, each to be dated a recent date prior to their delivery to
Administrative Agent, (ii) a copy of such Subsidiary's Bylaws or other
organizational documents, certified by its corporate secretary or an assistant
secretary as of a recent date prior to their delivery to Administrative Agent,
(iii) a certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the fact that the attached resolutions of the Board of
Directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (b) the incumbency and signatures of the officers
of such Subsidiary Guarantor executing such Loan Documents, and (iv) a favorable
opinion of counsel to such Subsidiary Guarantor, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, as to (a) the
due organization and good standing of such Subsidiary, (b) the due
authorization, execution and delivery by such Subsidiary of such Loan Documents,
(c) the enforceability of such Loan Documents against such Subsidiary, (d) such
other matters (including matters relating to the creation and perfection of
Liens in any Collateral pursuant to such Loan Documents) as Administrative Agent
may reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. CONFORMING LEASEHOLD INTERESTS. If Company or any of its
Subsidiaries acquires any Material Leasehold Property after the Closing Date,
Company shall, or shall cause such Subsidiary to, use its reasonable good faith
best efforts (without requiring Company or such Subsidiary to relinquish any
material rights or incur any material obligations or to expend more than a
nominal amount of money excluding reasonable attorneys' fees incurred by (i) the
landlord under the applicable lease, (ii) Administrative Agent and (iii) Company
or such Subsidiary) to cause such Material Leasehold Property to be a Conforming
Leasehold Interest.
B. ADDITIONAL MORTGAGES, ETC. From and after the Closing Date, in
the event that (i) Company or any Subsidiary Guarantor acquires any fee interest
in real property or any Material Leasehold Property or (ii) at the time any
Person becomes a Subsidiary Guarantor, such Person owns or holds any fee
interest in real property or any Material Leasehold Property, in either case
excluding any such Real Property Asset the encumbrancing of which requires the
consent of any applicable lessor or (in the case of clause (ii) above)
then-existing senior lienholder, where Company and its Subsidiaries are unable
to obtain such lessor's or senior lienholder's consent (any such non-excluded
Real Property Asset described in the foregoing clause (i) or (ii) being an
"ADDITIONAL MORTGAGED PROPERTY"), Company or such Subsidiary Guarantor shall
deliver to Administrative Agent, as soon as practicable after such Person
acquires such Additional Mortgaged Property or becomes a Subsidiary Guarantor,
as the case may be, the following:
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(i) Additional Mortgage. A fully executed and notarized
Mortgage (an "ADDITIONAL MORTGAGE"), duly recorded in all appropriate
places in all applicable jurisdictions, encumbering the interest of
such Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of
counsel to such Loan Party, in form and substance satisfactory to
Administrative Agent and its counsel, as to the due authorization,
execution and delivery by such Loan Party of such Additional Mortgage
and such other matters as Administrative Agent may reasonably request,
and (b) if required by Administrative Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Administrative
Agent) in the state in which such Additional Mortgaged Property is
located with respect to the enforceability of such Additional Mortgage
and such other matters (including any matters governed by the laws of
such state regarding personal property security interests in respect of
any Collateral) as Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to Administrative
Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of an Additional Mortgaged Property consisting of
a Material Leasehold Property, (a) a Landlord Consent and Estoppel and
(b) evidence that such Leasehold Property is a Recorded Leasehold
Interest;
(iv) Title Insurance. (a) If required by Administrative
Agent, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the
Title Company with respect to such Additional Mortgaged Property, in an
amount satisfactory to Administrative Agent, insuring fee simple title
to, or a valid leasehold interest in, such Additional Mortgaged
Property vested in such Loan Party and assuring Administrative Agent
that such Additional Mortgage creates a valid and enforceable First
Priority mortgage Lien on such Additional Mortgaged Property, subject
only to a standard survey exception, which Additional Mortgage Policy
(1) shall include an endorsement for mechanics' liens, for future
advances under this Agreement and for any other matters reasonably
requested by Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent; and (b) evidence satisfactory to
Administrative Agent that such Loan Party has (i) delivered to the
Title Company all certificates and affidavits required by the Title
Company in connection with the issuance of the Additional Mortgage
Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company
in connection with the issuance of the Additional Mortgage Policy and
all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Additional
Mortgage in the appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is
required with respect to such Additional Mortgaged Property, a title
report issued by the Title Company with respect thereto, dated not more
than 30 days prior to the date such Additional Mortgage is to be
recorded and satisfactory in form and substance to Administrative
Agent;
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(vi) Copies of Documents Relating to Title Exceptions.
Copies of all recorded documents listed as exceptions to title or
otherwise referred to in the Additional Mortgage Policy or title report
delivered pursuant to clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property, and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Additional Mortgaged Property is a Flood Hazard Property, such Loan
Party's written acknowledgment of receipt of written notification from
Administrative Agent (1) that such Additional Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (c) in the event such Additional Mortgaged Property
is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System, and (d) with respect
to any Closing Date Mortgaged Property in which Company did not have an
insurable interest on the Closing Date which is a Flood Hazard Property
that is located in a community that participates in the National Flood
Insurance Program, evidence that at the time the Company acquires an
insurable interest that it has obtained flood insurance in respect of
such Flood Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve System;
and
(viii) Environmental Audit. If required by Administrative
Agent, reports and other information, in form, scope and substance
satisfactory to Administrative Agent and prepared by environmental
consultants satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. REAL ESTATE APPRAISALS. Company shall, and shall cause each of
its Subsidiaries to, permit an independent real estate appraiser satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 INTEREST RATE PROTECTION.
By the date which is 90 days after the Closing Date until the two year
anniversary after the Closing Date, Company shall maintain in effect one or more
Interest Rate Agreements with respect to the Loans, in an aggregate notional
principal amount of not less than 50% of the aggregate principal amount of the
Term Loan outstanding on the Closing Date, which Interest Rate Agreements shall
have the effect of establishing a maximum interest rate of not more than 10% per
annum with respect to such notional principal amount, each such Interest Rate
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Agreement to be in form and substance satisfactory to Administrative Agent and
with a term of not less than two years after the Closing Date.
6.11 DEPOSIT ACCOUNTS AND CASH MANAGEMENT SYSTEMS.
On and after November 30, 1999, Company shall, and shall cause each of
its Subsidiaries to, use and maintain its Deposit Accounts and cash management
systems in a manner reasonably satisfactory to Administrative Agent. Company
shall not permit any of such Deposit Accounts with any Person other than
Administrative Agent or any other Lenders at any time to have a principal
balance in excess of $500,000 unless Company or such Subsidiary, as the case may
be, has (i) delivered to Administrative Agent an agreement, satisfactory in form
and substance to Administrative Agent and executed by the financial institution,
at which such Deposit Account is maintained, pursuant to which such financial
institution confirms and acknowledges Administrative Agent's security interest
in, and sole dominion and control over, such Deposit Account and waives its
rights to set-off with respect to amounts in such Deposit Account and (ii) taken
all other steps necessary or, in the reasonable opinion of Administrative Agent,
desirable to ensure that Administrative Agent has sole dominion and control over
such Deposit Account; provided that if Company or such Subsidiary is unable to
obtain such agreement from such financial institution, Company shall, or shall
cause such Subsidiary to, within 30 days after receiving a written request by
Administrative Agent to do so, transfer all amounts in the applicable Deposit
Account to a Deposit Account maintained with a financial institution from which
Company or such Subsidiary has obtained such an agreement. Company shall not
permit the aggregate amount on deposit in all Deposit Accounts of Company and of
its Subsidiaries (other than Deposit Accounts maintained with Administrative
Agent or any other Lenders) at any time to exceed $500,000.
6.12 YEAR 2000.
The Company will ensure that its Information Systems and Equipment are
at all times after November 30, 1999 Year 2000 Compliant, except insofar as the
failure to do so will not result in a Material Adverse Effect, and shall notify
the Administrative Agent promptly upon detecting any failure of the Information
Systems and Equipment to be Year 2000 Compliant. In addition, Company shall
provide the Administrative Agent and any Lender with such information about its
Year 2000 computer readiness (including, without limitation, information as to
contingency plans, budgets and testing results) as the Administrative Agent or
such Lender shall reasonably request.
SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
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7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to
the Obligations;
(ii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Indebtedness in respect of Capital Leases;
provided that such Capital Leases are permitted under the terms of
subsection 7.8;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any
wholly-owned Subsidiary of Company may become and remain liable with
respect to Indebtedness to Company or any other wholly-owned Subsidiary
of Company; provided that (a) all such intercompany Indebtedness shall
be evidenced by promissory notes, (b) all such intercompany
Indebtedness owed by Company to any of its Subsidiaries shall be
subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory notes or
an intercompany subordination agreement, and (c) any payment by any
Subsidiary of Company under any guaranty of the Obligations shall
result in a pro tanto reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may
become and remain liable with respect to Indebtedness described in
Schedule 7.1 annexed hereto;
(vi) Acquired Indebtedness of the Company or any
Subsidiary of Company not exceeding $1,000,000 at any one time
outstanding; provided that (a) the transaction pursuant to which such
Acquired Indebtedness becomes Acquired Indebtedness is a transaction
permitted under subsection 7.3, (b) the principal amount of such
Acquired Indebtedness is not increased, (c) the maturity of such
Acquired Indebtedness is not shortened, and (d) such Acquired
Indebtedness is not secured by any Lien on any property other than that
which secured it before such event;
(vii) Company may become and remain liable with respect to
(i) deferred compensation arrangements owed to members of Company's
senior management and (ii) promissory notes evidencing Company's
obligations to repurchase Company's common stock from members of
management and Company may make payments on such promissory notes, in
each case to the extent permitted under subsection 7.5;
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(viii) Company may become and remain liable with respect to
earn outs, deferred compensation and other similar arrangements in
connection with Permitted Acquisitions to the extent permitted under
subsection 7.3(vi);
(ix) Company and its Subsidiaries may become and remain
liable with respect to obligations to suppliers and trade vendors which
either constitute the deferred purchase price of property or services
or which are evidenced by promissory notes in an aggregate amount not
exceeding $5,000,000 outstanding at any time; and
(x) Company and its Subsidiaries may become and remain
liable with respect to other Indebtedness in an aggregate principal
amount not to exceed $2,500,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Liens securing Indebtedness permitted under
subsection 7.1(vi) so long as such Liens cover only property which was
subject to Liens securing such Indebtedness before such Indebtedness
became Acquired Indebtedness;
(v) Liens securing Indebtedness permitted under
subsection 7.1(iii); and
(vi) Other Liens securing Indebtedness in an aggregate
amount not to exceed $2,500,000 at any time outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not permitted by the
provisions of subsection 7.2A.
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C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
D. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Except as provided herein, Company will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock or membership interests
owned by Company or any other Subsidiary of Company, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company.
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(ii) Company and its Subsidiaries may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.8;
(iv) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3 annexed hereto;
(v) Company and its Subsidiaries may make and own other
Investments (including by means of a merger) in an aggregate amount not
to exceed at any time $1,000,000;
(vi) Company and its Subsidiaries may make acquisitions
(including by means of a merger) of a Person's capital stock or other
equity interests or of all or a substantial portion of a Person's
business, property or fixed assets provided that each of the following
conditions is satisfied (a "Permitted Acquisition"):
(a) the acquired Person is in, or the business,
property or fixed assets so acquired are used in, the same or
a related line of business as the Company and its
Subsidiaries;
(b) the consideration paid by Company and its
Subsidiaries for any acquisition or series of related
acquisitions consists of (w) common stock of
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Company, (x) the Cash proceeds of common stock issued by
Company in connection with such acquisition, (y) Acquired
Indebtedness permitted under subsection 7.1(vi) and/or (z)
such other consideration as may be paid by Company and its
Subsidiaries, including without limitation Cash not
constituting the proceeds of common stock issuances by the
Company and provisions for earnouts, deferred compensation or
other similar arrangements, provided that the amount of such
other consideration so paid in any Fiscal Year (the "ANNUAL
AMOUNT") shall not exceed $2,500,000 in the aggregate or, in
the event that Company's Consolidated Leverage Ratio is less
than or equal to 2.00:1.00, the amount of such other
consideration so paid in any Fiscal Year shall not exceed
$5,000,000 in the aggregate; provided however that the Annual
Amount in any Fiscal Year may be increased with respect to
earnout payments made in such Fiscal Year (the "Additional
Earnout Payments") up to an amount which does not exceed the
Annual Amount available for the next succeeding Fiscal Year
and provided that the Annual Amount available in such next
succeeding Fiscal Year shall be reduced by the amount of such
Additional Earnout Payments;
(c) concurrently with the consummation of such
Permitted Acquisition, Company shall, and shall cause its
Subsidiaries to, comply with the requirements of subsections
6.8 and 6.9 with respect to such Permitted Acquisition; and
(d) prior to the consummation of any such
Permitted Acquisition, Company shall deliver to Administrative
Agent an Officers' Certificate (1) certifying that no
Potential Event of Default or Event of Default under this
Agreement shall then exist or shall occur as a result of such
Permitted Acquisition, (2) demonstrating that after giving
effect to such Permitted Acquisition and to all Indebtedness
to be incurred or assumed or repaid in connection with or as
consideration for such Permitted Acquisition, Company will be
in compliance with the financial covenants, calculated on a
Pro Forma Basis, as of the last day of the four Fiscal Quarter
period most recently ended prior to the date of the proposed
Permitted Acquisition for which the relevant financial
information is available, (3) delivering a copy, prepared in
conformity with GAAP (subject to year-end adjustments and the
absence of footnotes), of (i) financial statements of the
Person or business so acquired for the immediately preceding
four consecutive Fiscal Quarter period corresponding to the
calculation period for the financial covenants in the
immediately preceding clause and (ii) audited or reviewed
financial statements of the Person or business so acquired for
the fiscal year ended within such period of such Person, and
(4) revised financial projections (in a form substantially
consistent with previously provided projections) for Company
Pro Forma for any proposed Permitted Acquisition for the
succeeding four Fiscal Quarters.
(vii) Company and its Subsidiaries (x) may continue to own
their existing Investments in their respective Subsidiaries as of the
Closing Date, (y) may make additional Investments in their respective
wholly-owned Subsidiary Guarantors and (z)
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may make additional Investments in their Foreign Subsidiaries in an
aggregate amount not to exceed $2,000,000 outstanding at any time; and
(viii) Company and its Subsidiaries may make Investments in
Joint Ventures (including a Joint Venture where the Company contributes
assets to the Joint Venture rather than Cash); provided that the
aggregate amount or value of all such Investments does not to exceed
$1,000,000 outstanding at any time.
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit; provided that
no Loan Party shall have granted any Lien securing obligations other
than pursuant to the Loan Documents;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Hedge Agreements entered into with a
Lender; and
(iv) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall at
no time exceed $1,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that so long as no Potential Event of
Default or Event of Default has occurred or is continuing, (i) in addition to
the deferred compensation payments made to members of Company's senior
management on the Closing Date in accordance with the terms of the
Recapitalization Agreement, Company may pay deferred compensation to members of
Company's senior management in an amount not to exceed $2,500,000 (plus related
payroll taxes) in each Fiscal Year and not to exceed $7,500,000 (plus related
payroll taxes) in the aggregate for all such payments made after the Closing
Date, (ii) Company may repurchase for Cash, or may make payments on promissory
notes evidencing Company's obligations to repurchase, Company's common stock
from members of Company's management in an aggregate amount for all such
repurchases or payments not to exceed $10,000,000 provided that such Cash
Restricted Junior Payments shall not exceed (A) $1,000,000 in the aggregate for
any one Fiscal Year so long as the Consolidated Leverage Ratio for the four
Fiscal Quarter period for which the most recent Margin Determination Certificate
has been delivered pursuant to subsection 6.1(iv) exceeds 2.50:1.00 or (B)
$2,000,000 in the aggregate for any one Fiscal Year so long as Consolidated
Leverage Ratio is less than or equal to 2.50:100; provided, further that any
portion of the amount permitted pursuant to the foregoing clause (B) together
with any amount carried forward from a prior year
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which is not utilized for such purpose in a given Fiscal Year may be carried
over to the subsequent Fiscal Year up to a maximum amount so carried forward to
such subsequent Fiscal Year of $2,000,000; and (iii) Company may pay
post-closing adjustments and make indemnity and similar payments in accordance
with the Recapitalization Agreement.
7.6 FINANCIAL COVENANTS.
A. MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest Expense,
calculated on a Pro Forma Basis, for any four-Fiscal Quarter period ending
during any of the periods set forth below to be less than the correlative ratio
indicated:
MINIMUM
PERIOD INTEREST COVERAGE RATIO
-------------------------- -----------------------
Fourth Fiscal Quarter 1999 2.75:1.00
First Fiscal Quarter 2000 2.75:1.00
Second Fiscal Quarter 2000 2.75:1.00
Third Fiscal Quarter 2000 3.00:1.00
Fourth Fiscal Quarter 2000 3.00:1.00
First Fiscal Quarter 2001 3.00:1.00
Second Fiscal Quarter 2001 3.25:1.00
Third Fiscal Quarter 2001 3.50:1.00
Fourth Fiscal Quarter 2001 3.50:1.00
First Fiscal Quarter 2002 3.75:1.00
Second Fiscal Quarter 2002 3.75:1.00
Third Fiscal Quarter 2002 3.75:1.00
Fourth Fiscal Quarter 2002 3.75:1.00
First Fiscal Quarter 2003 4.00:1.00
Second Fiscal Quarter 2003 4.25:1.00
Third Fiscal Quarter 2003 4.50:1.00
Fourth Fiscal Quarter 2003 4.75:1.00
First Fiscal Quarter 2004 5.00:1.00
Second Fiscal Quarter 2004 5.00:1.00
Third Fiscal Quarter 2004 5.00:1.00
Fourth Fiscal Quarter 2004 5.00:1.00
First Fiscal Quarter 2005 5.00:1.00
Second Fiscal Quarter 2005 5.00:1.00
Third Fiscal Quarter 2005 5.00:1.00
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B. MAXIMUM LEVERAGE RATIO. Company shall not permit the
Consolidated Leverage Ratio, calculated on a Pro Forma Basis, as of the last day
of any Fiscal Quarter ending during any of the periods set forth below to exceed
the correlative ratio indicated:
PERIOD MAXIMUM LEVERAGE RATIO
-------------------------- ----------------------
Fourth Fiscal Quarter 1999 3.75:1.00
First Fiscal Quarter 2000 3.75:1.00
Second Fiscal Quarter 2000 3.50:1.00
Third Fiscal Quarter 2000 3.25:1.00
Fourth Fiscal Quarter 2000 3.00:1.00
First Fiscal Quarter 2001 3.00:1.00
Second Fiscal Quarter 2001 2.75:1.00
Third Fiscal Quarter 2001 2.75:1.00
Fourth Fiscal Quarter 2001 2.50:1.00
First Fiscal Quarter 2002 2.25:1.00
Second Fiscal Quarter 2002 2.25:1.00
Third Fiscal Quarter 2002 2.00:1.00
Fourth Fiscal Quarter 2002 2.00:1.00
First Fiscal Quarter 2003 2.00:1.00
Second Fiscal Quarter 2003 2.00:1.00
Third Fiscal Quarter 2003 2.00:1.00
Fourth Fiscal Quarter 2003 2.00:1.00
First Fiscal Quarter 2004 2.00:1.00
Second Fiscal Quarter 2004 2.00:1.00
Third Fiscal Quarter 2004 2.00:1.00
Fourth Fiscal Quarter 2004 2.00:1.00
First Fiscal Quarter 2005 2.00:1.00
Second Fiscal Quarter 2005 2.00:1.00
Third Fiscal Quarter 2005 2.00:1.00
C. MINIMUM CONSOLIDATED ADJUSTED EBITDA. Company shall not permit
Consolidated Adjusted EBITDA, calculated on a Pro Forma Basis, for any
four-Fiscal Quarter period ending during any of the periods set forth below to
be less than the correlative amount indicated:
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MINIMUM CONSOLIDATED
PERIOD ADJUSTED EBITDA
-------------------------- ---------------------
Fourth Fiscal Quarter 1999 $31,500,000
First Fiscal Quarter 2000 $31,500,000
Second Fiscal Quarter 2000 $32,000,000
Third Fiscal Quarter 2000 $32,500,000
Fourth Fiscal Quarter 2000 $33,000,000
First Fiscal Quarter 2001 $33,000,000
Second Fiscal Quarter 2001 $34,000,000
Third Fiscal Quarter 2001 $35,000,000
Fourth Fiscal Quarter 2001 $36,000,000
First Fiscal Quarter 2002 $36,000,000
Second Fiscal Quarter 2002 $37,000,000
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Subsidiary of Company and the Related Entities
may be merged with or into Company or any wholly-owned Subsidiary
Guarantor, or be liquidated, wound up or dissolved, or all or any part
of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any wholly-owned Subsidiary Guarantor;
provided that, in the case of such a merger, Company or such
wholly-owned Subsidiary Guarantor shall be the continuing or surviving
corporation;
(ii) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted under subsection 7.8;
(iii) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; and
(v) subject to subsection 7.12, Company and its
Subsidiaries may make Asset Sales of assets having a fair market value
not in excess of $2,500,000; provided that
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(x) the consideration received for such assets shall be in an amount at
least equal to the fair market value thereof; (y) the sole
consideration received shall be cash; and (z) the proceeds of such
Asset Sales shall be applied as required by subsection 2.4B(iii)(a);
and
(vi) Company and its Subsidiaries may make Investments in
accordance with subsection 7.3.
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any (but in
no event more than $2,000,000), of the Maximum Consolidated Capital Expenditures
Amount for the previous Fiscal Year over the actual amount of Consolidated
Capital Expenditures for such previous Fiscal Year.
MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
----------- --------------------
1999 $4,000,000
2000 $5,000,000
2001 $6,000,000
2002 $6,500,000
2003 $7,000,000
2004 $7,500,000
2005 $6,000,000
7.9 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; provided that Company and its Subsidiaries may become and remain
liable as lessee, guarantor or other surety with respect to any such lease if
and to the extent that Company or any of its Subsidiaries would be permitted to
enter into and remain liable under such lease under subsection 7.8.
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7.10 SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
7.11 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries (iii)
transactions contemplated by the Related Agreements and options granted to
employees under the Blackbaud, Inc. 1999 Stock Option Plan and the related
option agreement, (iv) arms-length transactions in the ordinary course of
business with other companies in which H&F is an investor and (v) payment of
Transaction Costs and other payments permitted by subsection 7.5.
7.12 DISPOSAL OF SUBSIDIARY STOCK.
Except pursuant to the Collateral Documents and except for any sale of
100% of the capital stock or other equity Securities of any of its Subsidiaries
in compliance with the provisions of subsection 7.7(i) or (v), Company shall
not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except to qualify
directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares
of capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except to Company, another Subsidiary of
Company, or to qualify directors if required by applicable law.
7.13 CONDUCT OF BUSINESS.
From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
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7.14 AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS; AMENDMENTS OF
DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
A. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Neither
Company nor any of its Subsidiaries will agree to any material amendment to, or
waive any of its material rights under, any Related Agreement after the Closing
Date without in each case obtaining the prior written consent of Requisite
Lenders to such amendment or waiver.
B. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of any Subordinated Indebtedness, or make any payment
consistent with an amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which payments of
principal or interest are due thereon, change any event of default or condition
to an event of default with respect thereto (other than to eliminate any such
event of default or increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Subordinated Indebtedness (or a
trustee or other representative on their behalf) which would be adverse to
Company or Lenders.
7.15 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31.
7.16 RELATED ENTITIES.
The Company shall not fail to cause the Related Entities to be merged
with and into the Company as soon as practicable after the Closing Date provided
that Company shall cause the Related Entities to be merged with and into the
Company within five Business Days after the Closing Date and shall deliver an
Officers' Certificate to Administrative Agent to such effect.
SECTION 8. EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
8.1 8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
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8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay
when due any principal of or interest on or any other amount payable in
respect of one or more items of Indebtedness (other than Indebtedness
referred to in subsection 8.1) or Contingent Obligations in an
aggregate principal amount of $1,000,000 or more, in each case beyond
the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Contingent
Obligations in the aggregate principal amount referred to in clause (i)
above or (b) any loan agreement, mortgage, indenture or other agreement
relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the
holder or holders of that Indebtedness or Contingent Obligation(s) (or
a trustee on behalf of such holder or holders) to cause, that
Indebtedness or Contingent Obligation(s) to become or be declared due
and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 20 days after the
earlier of (i) an officer of Company or such Loan Party becoming aware of such
default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Material Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Material Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator,
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sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Material Subsidiaries, or over all or a substantial part
of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Material Subsidiaries for all or a substantial part of its
property; or a warrant of attachment, execution or similar process shall have
been issued against any substantial part of the property of Company or any of
its Material Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
Company or any of its Material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or, Company or any of its Material
Subsidiaries shall make any assignment for the benefit of creditors; or (ii)
Company or any of its Material Subsidiaries shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Company or any of its Material
Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise
authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $1,000,000 or (ii)
in the aggregate at any time an amount in excess of $1,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Company or any of its Material Subsidiaries or any of their respective assets
and shall remain undischarged, unvacated, unbonded or unstayed for a period of
60 days (or in any event later than five days prior to the date of any proposed
sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or any
of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in the
aggregate results in or could reasonably be expected to result in liability of
Company or any of its Subsidiaries in excess of $1,000,000 during the term of
this Agreement; or there shall exist an amount of liability calculated in
accordance with the provisions of subsection 5.11C which exceeds $1,000,000; or
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8.11 CHANGE IN CONTROL.
H&F shall cease to beneficially own and control, directly or
indirectly, at least a majority of the issued and outstanding shares of capital
stock of the Company (without regard to the occurrence of any contingency)
entitled to vote for the election of members of the Board of Directors of the
Company. Any Person or any two or more Persons acting in concert who is not a
holder of stock or stock options as of the Closing Date shall have acquired
beneficial ownership, directly or indirectly, of Securities of Company (or other
Securities convertible into such Securities) representing 30% or more of the
combined voting power of all Securities of Company entitled to vote in the
election of directors, other than Securities having such power only by reason of
the happening of a contingency; or
8.12 INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void, (ii) any Collateral Document shall
cease to be in full force and effect (other than by reason of a release of
Collateral thereunder in accordance with the terms hereof or thereof, the
satisfaction in full of the Obligations or any other termination of such
Collateral Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby, in each case for any reason other than the failure of
Administrative Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document to
which it is a party.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request or with the
written consent of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c) above to be,
and the same shall forthwith become, immediately due and payable, and the
obligation of each Lender to make any Loan, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
foregoing shall not affect in any way the obligations of Lenders under
subsection 3.3C(i) or the obligations of Lenders to purchase participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iii).
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Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
clause (ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the Loans, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the Loan Documents, even if the conditions set forth in this paragraph
are met.
SECTION 9. AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. BTCo is hereby appointed Administrative
Agent, Fleet National Bank is hereby appointed Documentation Agent and First
Union Securities, Inc. is hereby appointed Syndication Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes such Agent to act as
its agent in accordance with the terms of this Agreement and the other Loan
Documents. Each Agent agrees to act upon the express conditions contained in
this Agreement and the other Loan Documents, as applicable. The provisions of
this Section 9 are solely for the benefit of Agents and Lenders and Company
shall have no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be
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desirable or necessary in connection therewith, it may be necessary that
Administrative Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes
each Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies hereunder and under the other Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. Each Agent shall not have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon such Agent any obligations in respect of this Agreement or any of
the other Loan Documents except as expressly set forth herein or therein.
Neither Documentation Agent nor Syndication Agent shall have any duties or
obligations under this Agreement in their capacities as such.
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B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by such Agent to Lenders or by or on
behalf of Company to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither of the Agents nor any of their
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any such Agent under or in connection with
any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against such Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Letters of
Credit, each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include such
Agent in its individual capacity. Any Agent and its Affiliates may accept
deposits from, lend money to and generally
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engage in any kind of banking, trust, financial advisory or other business with
Company or any of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration from Company for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.
Administrative Agent shall not have any duty or responsibility, either initially
or on a continuing basis, to make any such investigation or any such appraisal
on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter, and no Agent shall have
any responsibility with respect to the accuracy of or the completeness of any
information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as such
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to such Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
9.5 SUCCESSOR ADMINISTRATIVE AGENT AND SWING LINE LENDER.
A. SUCCESSOR ADMINISTRATIVE AGENTS. Administrative Agent may
resign at any time by giving 30 days' prior written notice thereof to Lenders
and Company, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to Company
and Administrative Agent and signed by Requisite Lenders. Upon any such notice
of resignation or any such removal, Requisite Lenders shall have the right, upon
five Business Days' notice to Company, to appoint a successor Administrative
Agent. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from
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its duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
B. SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of Bankers Trust Company or its successor as Swing Line
Lender, and any successor Administrative Agent appointed pursuant to subsection
9.5A shall, upon its acceptance of such appointment, become the successor Swing
Line Lender for all purposes hereunder. In such event (i) Company shall prepay
any outstanding Swing Line Loans made by the retiring or removed Administrative
Agent in its capacity as Swing Line Lender, (ii) upon such prepayment, the
retiring or removed Administrative Agent and Swing Line Lender shall surrender
the Swing Line Note held by it to Company for cancellation, and (iii) Company
shall issue a new Swing Line Note to the successor Administrative Agent and
Swing Line Lender substantially in the form of Exhibit VI annexed hereto, in the
principal amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and such Guaranty; provided that Administrative Agent shall not (i)
enter into or consent to any material amendment, modification, termination or
waiver of any provision contained in any Collateral Document or such Guaranty or
(ii) release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); provided further, however, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders have
otherwise consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, Administrative Agent and each Lender hereby
agree that (X) no Lender shall have any right individually to realize upon any
of the Collateral under any Collateral Document or to enforce any Guaranty, it
being understood and agreed that all powers, rights and remedies under the
Collateral Documents and the Guaranties may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
thereof, and (Y) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, Administrative Agent or any
Lender may be the purchaser of any or all of such Collateral at any such sale
and Administrative Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or
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payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by Administrative Agent
at such sale.
SECTION 10. MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
A. GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign or transfer to any Eligible Assignee,
or (ii) sell participations to any Person in, all or any part of its Commitments
or any Loan or Loans made by it or its Letters of Credit or participations
therein or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall, without
the consent of Company, require Company to file a registration statement with
the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided, further that no such sale, assignment or transfer described in clause
(i) above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii);
provided, further that no such sale, assignment, transfer or participation of
any Letter of Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Revolving Lender
effecting such sale, assignment, transfer or participation; and provided,
further that, anything contained herein to the contrary notwithstanding, the
Swing Line Loan Commitment and the Swing Line Loans of Swing Line Lender may not
be sold, assigned or transferred as described in clause (i) above to any Person
other than a successor Administrative Agent and Swing Line Lender to the extent
contemplated by subsection 9.5. Except as otherwise provided in this subsection
10.1, no Lender shall, as between Company and such Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment or transfer of, or
any granting of participations in, all or any part of its Commitments or the
Loans, the Letters of Credit or participations therein, or the other Obligations
owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Commitment,
Loan, Letter of Credit or participation therein, or other Obligation
may (a) be assigned in any amount to another Lender, or to an Affiliate
of the assigning Lender or another Lender, with the giving of notice to
Company and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the
assigning Lender) to any other Eligible Assignee with the consent of
Company and Administrative Agent (which consent of Company and
Administrative Agent shall not be unreasonably withheld or delayed). To
the extent of any such assignment in accordance with either clause (a)
or (b) above, the assigning Lender shall be relieved of its obligations
with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
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assigned. The parties to each such assignment shall execute and deliver
to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing fee of
$3,500 and such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver to
Administrative Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment Agreement, shall have the rights and obligations of a Lender
hereunder and (z) the assigning Lender thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant
to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination of this Agreement under subsection
10.9B) and be released from its obligations under this Agreement (and,
in the case of an Assignment Agreement covering all or the remaining
portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto; provided that,
anything contained n any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with respect to
any outstanding Letters of Credit such Lender shall continue to have
all rights and obligations of an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters
of Credit and the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the Commitment of
such assignee and any remaining Commitment of such assigning Lender
and, if any such assignment occurs after the issuance of the Notes
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Notes to Administrative Agent for cancellation, and
thereupon new Notes shall be issued to the assignee and to the
assigning Lender, substantially in the form of Exhibit IV or Exhibit V
annexed hereto, as the case may be, with appropriate insertions, to
reflect the new Commitments and/or outstanding Term Loans, as the case
may be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent and Company have consented to the assignment
evidenced thereby (in each case to the extent such consent is required
pursuant to subsection 10.1B(i)), (a) accept such Assignment Agreement
by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
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C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
and all amounts payable by Company hereunder (including amounts payable to such
Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender had not sold such participation. Company and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4 and 10.5,
(a) any participation will give rise to a direct obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 10.1, any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that (i) no Lender shall, as between Company
and such Lender, be relieved of any of its obligations hereunder as a result of
any such assignment and pledge and (ii) in no event shall such Federal Reserve
Bank be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
E. INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an Eligible
Assignee described in clause (A) of the definition thereof; (ii) that it has
experience and expertise in the making of loans such as the Loans; and (iii)
that it will make its Loans for its own account in the ordinary course of its
business and without a view to distribution of such Loans within the meaning of
the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other Loan Documents
including with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees,
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expenses and disbursements of counsel to Administrative Agent (including
allocated costs of internal counsel) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (iv) all the actual costs and
reasonable expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Administrative Agent and of counsel providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral Documents or the Liens created pursuant thereto; (v) all the actual
costs and reasonable expenses (including the reasonable fees, expenses and
disbursements of any auditors, accountants or appraisers and any environmental
or other consultants, advisors and agents employed or retained by Administrative
Agent or its counsel) of obtaining and reviewing any appraisals provided for
under subsection 4.1K or 6.9C, any environmental audits or reports provided for
under subsection 4.1K or 6.9B(viii) and any audits or reports provided for under
subsection 6.5B with respect to Inventory and accounts receivable of Company and
its Subsidiaries; (vi) the custody or preservation of any of the Collateral;
(vii) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Guaranties) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "INDEMNITEES"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and
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disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto, and any fees or expenses incurred by Indemnitees in enforcing
this indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Loan Documents or
the Related Agreements or the transactions contemplated hereby or thereby
(including Lenders' agreement to make the Loans hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit hereunder or
the use or intended use of any thereof, or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranties), (ii) the statements
contained in the commitment letter delivered by any Lender to Company with
respect thereto, or (iii) any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or indirectly, any past or
present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured and whether or not
otherwise fully secured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement, the Letters of Credit and
participations therein and the other Loan Documents, including all claims of any
nature or description arising out of or connected with this Agreement, the
Letters of Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any amounts
in respect of the Letters of Credit or any other amounts due hereunder shall
have become due and payable pursuant to Section 8 and although said obligations
and liabilities, or any of them, may be contingent or unmatured. Company hereby
further grants to Administrative Agent and each Lender a security interest in
all deposits and accounts maintained with Administrative Agent or such Lender as
security for the Obligations.
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10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any amendment, modification,
termination, waiver or consent which:
(a) extends the final scheduled maturity of any
Loan or Note or extends the stated maturity of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date,
or reduces the rate or extends the time of payment of interest
or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates),
or reduces the principal amount thereof (except to the extent
repaid in cash); or
(b) releases all or substantially all of (x) the
Collateral (except as expressly provided in the Loan
Documents) under all the Collateral Documents, or (y) the
Guarantors (except as expressly provided in the Loan
Documents) from their obligations under any of the Guaranties;
or
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(c) amends, modifies or waives any provision of
this subsection 10.6; or
(d) reduces the percentage specified in the
definition "Requisite Lenders"(it being understood that, with
the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the
determination of Requisite Lenders on substantially the same
basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Closing Date); or
(e) consents to the assignment or transfer by
Company of any of its rights and obligations under this
Agreement or any other Loan Document; or
shall be effective only if evidenced in a writing signed by or on behalf of all
Lenders (with Obligations being directly affected in the case of clause (a)
above).
In addition, (i) no amendment, modification, termination or
waiver of any provision of any Note held by a Lender or which increases the
Commitments of any Lender over the amount thereof then in effect shall be
effective without the written concurrence of such Lender, (ii) no amendment,
modification, termination or waiver of any provision of subsection 2.1A(iii) or
any other provision of this Agreement relating to the Swing Line Lender shall be
effective without the written concurrence of Swing Line Lender and (iii) no
amendment, modification, termination or waiver of any provision of Section 9 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or concurrence of Administrative Agent shall be effective without
the written concurrence of Administrative Agent.
B. If, in connection with any proposed amendment,modification,
termination or waiver of any of the provisions of this Agreement or the Notes
which requires the consent of all Lenders, the consent of Requisite Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then Company shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in either clause (i) or (ii) below, to either (i) replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to subsection 2.8 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed amendment, modification, termination
or waiver, or (ii) terminate such non-consenting Lender's Commitments and repay
in full its outstanding Loans in accordance with subsections 2.4B(i)(b) and
2.4B(ii)(b); provided that unless the Commitments that are terminated and the
Loans that are repaid pursuant to the preceding clause (ii) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Commitments and/or outstanding Loans of existing Lenders (who in
each case must specifically consent thereto), then in the case of any action
pursuant to the preceding clause (ii), the Requisite Lenders (determined before
giving effect to the proposed action) shall specifically consent thereto;
provided further that Company shall not have the right to terminate such
non-consenting Lender's Commitment and repay in full its outstanding Loans
pursuant to clause (ii) of this subsection 10.6B if, immediately after the
termination of such Lender's Revolving Loan Commitment in accordance with
subsection 2.4B(ii)(b), the Revolving Loan Exposure of all Lenders would exceed
the Revolving Loan Commitments of all Lenders;
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provided still further that Company shall not have the right to replace a Lender
solely as a result of the exercise of such Lender's rights (and the withholding
of any required consent by such Lender) pursuant to the second paragraph of
subsection 10.6A.
C. Administrative Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
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10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
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10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN
ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
124
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
10.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates of such Lender or disclosures
reasonably required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such Lender of any
Loans or any participations therein or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court order,
each Lender shall notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further that in no event
125
shall any Lender be obligated or required to return any materials furnished by
Company or any of its Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
126
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: BLACKBAUD, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Title: Executive Vice President
Notice Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Credit Agreement
S-1
LENDERS: BANKERS TRUST COMPANY,
individually and as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇
--------------------------
Title: Assistant Vice President
Notice Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Agreement
S-2
ISSUING LENDER: DEUTSCHE BANK AG,
NEW YORK BRANCH,
as Issuing Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Title: Vice President
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
Director
Notice Address: ▇▇▇ ▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Agreement
S-3
FIRST UNION NATIONAL BANK
By: /s/ signature illegible
-----------------------
Title: Vice President
Notice Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
1 First Union Center DC-5
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Agreement
S-4
SYNDICATION AGENT: FIRST UNION SECURITIES, INC.,
as Syndication Agent
By: /s/ signature illegible
-----------------------
Title: Vice President
Notice Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
1 First Union Center DC-5
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Agreement
S-5
FLEET NATIONAL BANK,
Individually and as Documentation Agent
By: /s/ signature illegible
-------------------------
Title: Executive Vice President
Notice Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Agreement
S-6
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of October 13, 1999,
as amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Blackbaud, Inc., a South Carolina
corporation ("BLACKBAUD"), the financial institutions listed therein as Lenders
("LENDERS"), Bankers Trust Company, as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), Fleet National Bank, as Documentation Agent
and First Union Securities, Inc., as Syndication Agent, this represents
Blackbaud's request to borrow as follows:
1. Date of borrowing: ___________________, _________
2. Amount of borrowing: $___________________
3. Lender(s): [_] a. Lenders, in accordance with
their applicable Pro Rata
Shares
[_] b. Swing Line Lender
4. Type of Loans: [_] a. Term Loans
[_] b. Revolving Loans
[_] c. Swing Line Loan
5. Interest rate option: [_] a. Base Rate Loan(s)
[_] b. Eurodollar Rate Loans with
an initial Interest Period
of ____________ month(s)
The proceeds of such Loans are to be deposited in Blackbaud's account at
[______________].
The undersigned officer, to the best of his or her knowledge,
and Blackbaud certify that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true,
correct and complete in all material respects on and as of the
date hereof to the same extent as though made on and as of the
date hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and warranties were true, correct
and complete in all material respects on and as of such
earlier date;
I-1
(ii) No event has occurred and is continuing or would
result from the consummation of the borrowing contemplated
hereby that would constitute an Event of Default or a
Potential Event of Default; and
(iii) Blackbaud has performed in all material respects all
agreements and satisfied all conditions which the Credit
Agreement provides shall be performed or satisfied by it on or
before the date hereof.
DATED: BLACKBAUD, INC.
---------------------
By:
--------------------------
Title:
-----------------------
I-2
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of October 13, 1999,
as amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Blackbaud, Inc., a South Carolina
corporation ("BLACKBAUD"), the financial institutions listed therein as Lenders
("LENDERS"), Bankers Trust Company, as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), Fleet National Bank, as Documentation Agent
and First Union Securities, Inc., as Syndication Agent, this represents
Blackbaud's request to convert or continue Loans as follows:
1. Date of conversion/continuation: __________________, _______
2. Amount of Loans being converted/continued: $_________________
3. Type of Loans being [_] a. Term Loans
converted/continued: [_] b. Revolving Loans
4. Nature of conversion/continuation:
[_] a. Conversion of Base Rate Loans to Eurodollar Rate
Loans
[_] b. Conversion of Eurodollar Rate Loans to Base Rate
Loans
[_] c. Continuation of Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar
Rate Loans, the duration of the new Interest Period that commences on
the conversion/continuation date: _______________ month(s)
In the case of a conversion to or continuation of Eurodollar Rate
Loans, the undersigned officer, to the best of his or her knowledge, and
Blackbaud certify that no Event of Default or Potential Event of Default has
occurred and is continuing under the Credit Agreement.
DATED: BLACKBAUD, INC.
---------------------
By:
--------------------------
Title:
-----------------------
II-1
EXHIBIT III
[FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT]
REQUEST FOR ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of October 13, 1999,
as amended, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, supplemented or otherwise modified, being the "CREDIT
AGREEMENT", the terms defined therein and not otherwise defined herein being
used herein as therein defined), by and among Blackbaud, Inc., a South Carolina
corporation ("BLACKBAUD"), the financial institutions listed therein as Lenders
("LENDERS"), Bankers Trust Company, as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT"), Fleet National Bank, as Documentation Agent
and First Union Securities, Inc., as Syndication Agent, this represents
Blackbaud's request for the issuance of a Letter of Credit as follows:
1. Issuing Lender: [_] a. Administrative Agent
[_] b. ___________________________
2. Date of issuance of Letter of Credit: _____________, ________
3. Face amount of Letter of Credit: $________________________
4. Expiration date of Letter of Credit: ______________, ________
5. Name and address of beneficiary:
___________________________________________
___________________________________________
___________________________________________
___________________________________________
6. Attached hereto is:
[_] a. the verbatim text of such proposed Letter of Credit
[_] b. a description of the proposed terms and conditions of
such Letter of Credit, including a precise description of any
documents to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of
such Letter of Credit, would require the Issuing Lender to
make payment under such Letter of Credit.
The undersigned officer, to the best of his or her knowledge,
and Blackbaud certify that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true,
correct and complete in all material respects on and as of the
date hereof to the same extent as though made on and as of the
date hereof, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and
III-1
warranties were true, correct and complete in all material
respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would
result from the issuance of the Letter of Credit
contemplated hereby that would constitute an Event of
Default or a Potential Event of Default; and
(iii) Blackbaud has performed in all material respects all
agreements and satisfied all conditions which the
Credit Agreement provides shall be performed or
satisfied by it on or before the date hereof.
DATED: BLACKBAUD, INC.
---------------------
By:
--------------------------
Title:
-----------------------
III-2
EXHIBIT IX
[FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP]
October 13, 1999
Bankers Trust Company,
as Administrative Agent
First Union Securities, Inc.,
as Syndication Agent
Fleet National Bank,
as Documentation Agent
and
The Lenders Listed on Schedule
A Hereto
Re: Credit Agreement dated as of October 13, 1999
among Blackbaud, Inc., the financial institutions
listed therein as Lenders, Bankers Trust Company, as
administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc.,
as Syndication Agent
Ladies and Gentlemen:
We have acted as counsel to Bankers Trust Company, as Administrative
Agent (in such capacity, "Administrative Agent"), in connection with the
preparation and delivery of a Credit Agreement dated as of October 13, 1999 (the
"Credit Agreement") among Blackbaud, Inc., a South Carolina corporation
("Blackbaud"), the financial institutions listed therein as lenders,
Administrative Agent, Fleet National Bank, as Documentation Agent and First
Union Securities, Inc., as Syndication Agent in connection with the preparation
and delivery of certain related documents.
We have participated in various conferences with representatives of
Blackbaud and Administrative Agent and conferences and telephone calls with
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, counsel to Blackbaud, during which the Credit
Agreement and related matters have been discussed, and we have also participated
in the meeting held on the date hereof (the "Closing") incident to the funding
of the initial loans made under the Credit Agreement. We have reviewed the forms
of the Credit Agreement and the exhibits thereto, including the forms of the
promissory notes annexed thereto (the "Notes"), and the opinions of Wachtell,
Lipton, ▇▇▇▇▇ & ▇▇▇▇ and [insert name of South Carolina counsel] (collectively,
the "Opinions") and the officers' certificates and other documents delivered at
the Closing. We have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals or copies and the due authority of
all persons executing the same, and we have relied as to factual matters on the
documents that we have reviewed.
Although we have not independently considered all of the matters
covered by the Opinions to the extent necessary to enable us to express the
conclusions therein stated, we believe that the Credit Agreement and the
exhibits thereto are in substantially acceptable legal form and that the
Opinions and the officers' certificates and other documents delivered in
connection with the execution and delivery of, and as conditions to the making
of the initial loans under, the Credit Agreement and the Notes are substantially
responsive to the requirements of the Credit Agreement.
Respectfully submitted,
X-1
EXHIBIT X
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "AGREEMENT") is entered into by and
between the parties designated as Assignor ("ASSIGNOR") and Assignee
("ASSIGNEE") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "SCHEDULE OF
TERMS") and relates to that certain Credit Agreement described in the Schedule
of Terms (said Credit Agreement, as amended, supplemented or otherwise modified
to the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "CREDIT AGREEMENT", the terms defined
therein and not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
(a) Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "SETTLEMENT DATE"), Assignor hereby sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan
X-2
Documents with respect to Assignor's Commitments and outstanding Loans, if any,
which represents, as of the Settlement Date, the percentage interest specified
in Item 3 of the Schedule of Terms of all rights and obligations of Lenders
arising under the Credit Agreement and the other Loan Documents with respect to
the Commitments and any outstanding Loans (the "ASSIGNED SHARE"). Without
limiting the generality of the foregoing, the parties hereto hereby expressly
acknowledge and agree that any assignment of all or any portion of Assignor's
rights and obligations relating to Assignor's Revolving Loan Commitment shall
include (i) in the event Assignor is an Issuing Lender with respect to any
outstanding Letters of Credit (any such Letters of Credit being "ASSIGNOR
LETTERS OF CREDIT"), the sale to Assignee of a participation in the Assignor
Letters of Credit and any drawings thereunder as contemplated by subsection 3.1C
of the Credit Agreement and (ii) the sale to Assignee of a ratable portion of
any participations previously purchased by Assignor pursuant to said subsection
3.1C with respect to any Letters of Credit other than the Assignor Letters of
Credit.
(b) In consideration of the assignment described above, Assignee hereby
agrees to pay to Assignor, on the Settlement Date, the principal amount of any
outstanding Loans included within the Assigned Share, such payment to be made by
wire transfer of immediately available funds in accordance with the applicable
payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of the Schedule
of Terms correctly sets forth the amount of the Commitments, the outstanding
Term Loan and the Pro Rata Share corresponding to the Assigned Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Administrative Agent, Assignor and the other Lenders and their respective
successors and permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitments, the outstanding Term
Loan and the Pro Rata Share corresponding to the Assigned Share as set forth in
Item 3 of the Schedule of Terms or on the interest of Assignee in any
outstanding Revolving Loans corresponding thereto, and (iii) from and after the
Settlement Date, Administrative Agent shall make all payments under the Credit
Agreement in respect of the Assigned Share (including all payments of principal
and accrued but unpaid
X-3
interest, commitment fees and letter of credit fees with respect thereto) (A) in
the case of any such interest and fees that shall have accrued prior to the
Settlement Date, to Assignor, and (B) in all other cases, to Assignee; provided
that Assignor and Assignee shall make payments directly to each other to the
extent necessary to effect any appropriate adjustments in any amounts
distributed to Assignor and/or Assignee by Administrative Agent under the Loan
Documents in respect of the Assigned Share in the event that, for any reason
whatsoever, the payment of consideration contemplated by Section 1(b) occurs on
a date other than the Settlement Date.
SECTION 2. CERTAIN REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Assignor to Assignee or by or on behalf
of Company or any of its Subsidiaries to Assignor or Assignee in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Assignor be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee;
that it has experience and expertise in the making of loans such as the Loans;
that it has acquired the Assigned Share for its own account in the ordinary
course of its business and without a view to distribution of the Loans within
the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 10.1 of the Credit Agreement, the disposition of the Assigned Share
or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from Assignor
such financial information regarding Company and its Subsidiaries as is
available to Assignor and as Assignee has requested, that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the assignment evidenced by this Agreement,
and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. Assignor shall have no duty or
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making
X-4
of the initial Loans or at any time or times thereafter, and Assignor shall not
have any responsibility with respect to the accuracy of or the completeness of
any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
(a) Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE
X-5
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
(h) This Agreement shall become effective upon the date (the "EFFECTIVE
DATE") upon which all of the following conditions are satisfied: (i) the
execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
execution of a counterpart hereof by Company as evidence of its consent hereto
to the extent required under subsection 10.1B(i) of the Credit Agreement, (iii)
the receipt by Administrative Agent of the processing and recordation fee
referred to in subsection 10.1B(i) of the Credit Agreement, (iv) in the event
Assignee is a Non-US Lender (as defined in subsection 2.7B(iii)(a) of the Credit
Agreement), the delivery by Assignee to Administrative Agent of such forms,
certificates or other evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to Administrative
Agent pursuant to said subsection 2.7B(iii)(a), (v) the execution of a
counterpart hereof by Administrative Agent as evidence of its acceptance hereof
in accordance with subsection 10.1B(ii) of the Credit Agreement, (vi) the
receipt by Administrative Agent of originals or telefacsimiles of the
counterparts described above and authorization of delivery thereof, and (vii)
the recordation by Administrative Agent in the Register of the pertinent
information regarding the assignment effected hereby in accordance with
subsection 10.1B(ii) of the Credit Agreement.
[Remainder of page intentionally left blank]
X-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
X-7
SCHEDULE OF TERMS
1. Borrower: Blackbaud, Inc.
2. Name and Date of Credit Agreement: Credit Agreement dated as of October
13, 1999 by and among Blackbaud, Inc., the financial institutions
listed therein as Lenders, Bankers Trust Company, as administrative
agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT"), Fleet
National Bank, as Documentation Agent and First Union Securities, Inc.,
as Syndication Agent.
3. Amounts:
Re: Term Re: Revolving
Loans Loans
--------- ---------
(a) Aggregate Commitments of all Lenders: $ $
(b) Assigned Share/Pro Rata Share: % %
(c) Amount of Assigned Share of Commitments: $ $
(d) Amount of Assigned Share of Term Loans: $
4. Settlement Date: ____________, ____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
____________________________ ____________________________
____________________________ ____________________________
____________________________ ____________________________
Attention: _________________ Attention: _________________
Reference: _________________ Reference: _________________
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
____________________________ ____________________________
____________________________ ____________________________
____________________________ ____________________________
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
------------------------------------- -------------------------------------
Title: Title:
---------------------------------- ----------------------------------
Consented to in accordance with subsection Accepted in accordance with subsection
10.1B(i) of the Credit Agreement 10.1B(ii) of the Credit Agreement
BLACKBAUD, INC. BANKERS TRUST COMPANY, as
Administrative Agent
By: By:
------------------------------------- -------------------------------------
Title: Title:
--------------------------------- ---------------------------------
X-8
EXHIBIT XI
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement dated as of
October 13, 1999 (said Credit Agreement, as amended, supplemented or otherwise
modified to the date hereof, being the "CREDIT AGREEMENT") by and among
Blackbaud, Inc, a South Carolina corporation, the financial institutions listed
therein as Lenders, Bankers Trust Company, as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc., as Syndication Agent.
Pursuant to subsection 2.7B(iii) of the Credit Agreement, the undersigned hereby
certifies that it is not a "bank" or other Person described in Section 881(c)(3)
of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
-------------------------------
Title:
----------------------------
XI-1
EXHIBIT XII
[FORM OF FINANCIAL CONDITION CERTIFICATE]
FINANCIAL CONDITION CERTIFICATE
This FINANCIAL CONDITION CERTIFICATE (this "CERTIFICATE") is delivered
in connection with that certain Credit Agreement dated as of October 13, 1999
(the "CREDIT AGREEMENT") by and among Blackbaud, Inc., a South Carolina
corporation ("BLACKBAUD"), the financial institutions referred to therein as
Lenders ("LENDERS"), Bankers Trust Company, as administrative agent for Lenders
(in such capacity, "ADMINISTRATIVE AGENT"), Fleet National Bank, as
Documentation Agent and First Union Securities, Inc., as Syndication Agent.
Capitalized terms used herein without definition have the same meanings as in
the Credit Agreement.
A. I am, and since _________, 19__ have been, the duly qualified
and acting Chief Financial Officer of Blackbaud. In such capacity, I am a senior
financial officer of Blackbaud and I have participated actively in the
management of its financial affairs and am familiar with its financial
statements and those of the Related Entities. I have, together with other
officers of Blackbaud, acted on behalf of Blackbaud in connection with the
negotiation of the Credit Agreement and I am familiar with the terms and
conditions thereof.
B. I have carefully reviewed the contents of this Certificate,
and I have conferred with counsel for the purpose of discussing the meaning of
its contents.
C. In connection with preparing for the consummation of the
transactions and financings contemplated by the Credit Agreement (the "PROPOSED
TRANSACTIONS"), I have participated with officers of Blackbaud in the
preparation of and have reviewed pro forma projections of net income and cash
flows for Company for the fiscal years of Company ending December 31, 1999
through December 31, 2005, inclusive (the "PROJECTED FINANCIAL STATEMENTS"). The
Projected Financial Statements, attached hereto as Exhibit A, give effect to the
consummation of the Proposed Transactions and assume that the debt obligations
of Company will be paid from the cash flow generated by the operations of
Company and its Subsidiaries and other cash resources. The Projected Financial
Statements were prepared on the basis of information available at August 31,
1999. I know of no facts that have occurred since such date that would lead me
to believe that the Projected Financial Statements are inaccurate in any
material respect. The Projected Financial Statements do not reflect (i) any
potential changes in interest rates from those assumed in the Projected
Financial Statements, (ii) any potential material, adverse changes in general
business conditions, or (iii) any potential changes in income tax laws.
D. I have also participated with officers of Blackbaud in the
preparation of and have reviewed a pro forma summary balance sheet of Company
and the Related Entities (the "FAIR VALUE SUMMARY BALANCE SHEET") as of October
13, 1999, the expected Closing Date, giving effect to the Proposed Transactions.
The Fair Value Summary Balance Sheet is attached hereto
XII-1
as Exhibit B and has been prepared as described in paragraphs F and G below and
not in accordance with GAAP.
E. In connection with the preparation of the Projected Financial
Statements, I have made such investigations and inquiries as I have deemed
necessary and prudent therefor and, specifically, have relied on historical
information with respect to revenues, expenses and other relevant items supplied
by the supervisory personnel of Blackbaud and its Subsidiaries directly
responsible for the various operations involved. The assumptions upon which the
Projected Financial Statements are based are stated therein. Although any
assumptions and any projections by necessity involve uncertainties and
approximations, I believe, based on my discussions with other members of
management, that the assumptions on which the Projected Financial Statements are
based are reasonable. Based thereon, I believe that the projections for
Blackbaud, taken as a whole, reflected in the Projected Financial Statements
provide reasonable estimations of future performance, subject, as stated above,
to the uncertainties and approximations inherent in any projections.
F. The Fair Value Summary Balance Sheet has been prepared in a
manner which I believe reflects a conservative estimate of the fair value of the
assets of Blackbaud and its Affiliates on a consolidated basis and the probable
liability on all of their debts, contingent or otherwise. For purposes of this
Certificate, I understand "fair value" of any assets to mean the amount that may
be realized within a reasonable time, either through collection of such assets
or through sale of such assets at the regular market value thereof, conceiving
of the latter as the amount that could be obtained for the property in question
within such period by a capable and diligent businessman from an interested
buyer who is willing to purchase under ordinary selling conditions.
G. For purposes of constructing the Fair Value Summary Balance
Sheet, I have, with respect to the asset values reflected in the Fair Value
Summary Balance Sheet, considered various methods of valuing the assets of
Blackbaud as I have considered appropriate, to arrive at the estimated fair
value of the long-term assets of Blackbaud and each of the Related Entities.
With respect to liabilities reflected in the Fair Value Summary Balance
Sheet, I have included long-term liabilities reported by Blackbaud and each of
the Related Entities in their August 31, 1999 financial statements and debts to
be incurred or assumed by Blackbaud under the Credit Agreement and the Proposed
Transactions. In addition, with respect to contingent liabilities (such as
litigation, guaranties and pension plan liabilities), I have consulted with
legal, financial and other personnel of Blackbaud and the Related Entities and
have reflected as liabilities our best judgment as to the maximum exposure that
can reasonably be expected to result therefrom in light of all the facts and
circumstances existing at this time, recognizing that any such estimation is
inherently subject to uncertainties.
Based on the foregoing, I have reached the following conclusions:
1. Blackbaud is not now, nor will the incurrence of the
Obligations under the Credit Agreement and the incurrence of the other
obligations contemplated by the Proposed Transactions render Blackbaud,
"insolvent" as defined in this paragraph
XII-2
1. The recipients of this Certificate and I have agreed that, in this
context, "insolvent" means that the present fair value of assets is
less than the amount that will be required to pay the probable
liability on existing debts as they become absolute and matured. We
have also agreed that the term "debts" includes any legal liability,
whether matured or unmatured, liquidated or unliquidated, absolute,
fixed or contingent. My conclusion expressed above is supported by the
Fair Value Summary Balance Sheet.
2. By the incurrence of the Obligations under the Credit
Agreement and the incurrence of the other obligations contemplated by
the Proposed Transactions, Blackbaud will not incur debts beyond its
ability to pay as such debts mature. I have based my conclusion in part
on the Projected Financial Statements, which demonstrate that Blackbaud
will have positive cash flow after paying all of its scheduled
anticipated indebtedness (including scheduled payments under the Credit
Agreement, the other obligations contemplated by the Proposed
Transactions and other permitted indebtedness). I have concluded that
the realization of current assets in the ordinary course of business
will be sufficient to pay recurring current debt and short-term and
long-term debt service as such debts mature, and that the cash flow
(including earnings plus non-cash charges to earnings) will be
sufficient to provide cash necessary to repay the Loans and other
Obligations under the Credit Agreement, the other obligations
contemplated by the Proposed Transactions and other long-term
indebtedness as such debt matures.
3. The incurrence of the Obligations under the Credit Agreement
and the incurrence of the other obligations contemplated by the
Proposed Transactions will not leave Blackbaud with property remaining
in its hands constituting "unreasonably small capital." In reaching
this conclusion, I understand that "unreasonably small capital" depends
upon the nature of the particular business or businesses conducted or
to be conducted, and I have reached my conclusion based on the needs
and anticipated needs for capital of the businesses conducted or
anticipated to be conducted by Blackbaud in light of the Projected
Financial Statements and available credit capacity.
4. To the best of my knowledge, Blackbaud has not executed the
Credit Agreement or any documents mentioned therein, or made any
transfer or incurred any obligations thereunder, with actual intent to
hinder, delay or defraud either present or future creditors.
I understand that Administrative Agent and Lenders are relying on the
truth and accuracy of the foregoing in connection with the extension of credit
to Blackbaud pursuant to the Credit Agreement.
I represent the foregoing information to be, to the best of my
knowledge and belief, true and correct and execute this Certificate, solely in
my capacity as an officer of the entity listed below, this _____ day of October,
1999.
BLACKBAUD, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title: Chief Financial Officer
XII-3
EXHIBIT XVI
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of ____________ __, ____ by
THE UNDERSIGNED (each a "GUARANTOR" and collectively, "GUARANTORS") in favor of
and for the benefit of BANKERS TRUST COMPANY, as administrative agent for and
representative of (in such capacity herein called "GUARANTIED PARTY") the
financial institutions ("LENDERS") party to the Credit Agreement referred to
below and any Interest Rate Exchangers (as hereinafter defined), and, subject to
subsection 3.14, for the benefit of the other Beneficiaries (as hereinafter
defined).
RECITALS
A. Blackbaud, Inc., a South Carolina corporation ("COMPANY") has
entered into that certain Credit Agreement dated as of October 13, 1999 with
Guarantied Party, Fleet National Bank, as Documentation Agent and First Union
Securities, Inc., as Syndication Agent, and Lenders (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "CREDIT AGREEMENT"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with or one or more Lenders (in such
capacity, collectively, "INTEREST RATE EXCHANGERS") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including the obligation of Company to make
payments thereunder in the event of early termination thereof (all such
obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which benefits
are hereby acknowledged).
D. It is a condition precedent to the making of the initial Loans
under the Credit Agreement that Company's obligations thereunder be guarantied
by Guarantors.
E. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and
XVI-1
other extensions of credit thereunder and to induce Interest Rate Exchangers to
enter into the Lender Interest Rate Agreements, Guarantors hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
"BENEFICIARIES" means Guarantied Party, Lenders and any
Interest Rate Exchangers.
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term
in subsection 2.1.
"GUARANTY" means this Guaranty dated as of _________ __, 1999,
as it may be amended, supplemented or otherwise modified from
time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means
payment in full of the Guarantied Obligations, including all
principal, interest, costs, fees and expenses (including
reasonable legal fees and expenses) of Beneficiaries as
required under the Loan Documents and the Lender Interest Rate
Agreements.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty
unless otherwise specifically provided.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the
terms, conditions and provisions of the Credit Agreement, the
terms, conditions and provisions of this Guaranty shall
prevail.
SECTION 2. THE GUARANTY
2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the
provisions of subsection 2.2(a), Guarantors jointly and severally hereby
irrevocably and unconditionally guaranty the due and punctual payment in full of
all Guarantied Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)). The
term "GUARANTIED OBLIGATIONS" is used herein in its most comprehensive sense and
includes:
(a) any and all Obligations of Company and any and all
Interest Rate Obligations, in each case now or hereafter made,
incurred or created, whether absolute or contingent,
liquidated or unliquidated, whether due or not due, and
however arising under or in connection with the Credit
Agreement and the other Loan Documents and the Lender Interest
Rate Agreements, including those arising under successive
borrowing transactions under the Credit Agreement which shall
XVI-2
either continue the Obligations of Company or from time to
time renew them after they have been satisfied and including
interest which, but for the filing of a petition in bankruptcy
with respect to Company, would have accrued on any Guarantied
Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS.
(a) Anything contained in this Guaranty to the contrary notwithstanding, if any
Fraudulent Transfer Law (as hereinafter defined) is determined by a court of
competent jurisdiction to be applicable to the obligations of any Guarantor
under this Guaranty, such obligations of such Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations hereunder subject to avoidance as a fraudulent transfer
or conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "FRAUDULENT
TRANSFER LAWS"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (x) in respect of intercompany indebtedness to Company or other
affiliates of Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Subordinated Indebtedness which guaranty contains a limitation
as to maximum amount similar to that set forth in this subsection 2.2(a),
pursuant to which the liability of such Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including any such
right of contribution under subsection 2.2(b).
(b) Guarantors under this Guaranty together desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by any Guarantor under
this Guaranty (a "FUNDING GUARANTOR") that exceeds its Fair Share (as defined
below) as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall (as defined below) as
of such date, with the result that all such contributions will cause each
Contributing Guarantor's Aggregate Payments (as defined below) to equal its Fair
Share as of such date. "FAIR SHARE" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of
(x) the Adjusted Maximum Amount (as defined below) with respect to such
Contributing Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with
respect to all Contributing Guarantors multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations guarantied. "FAIR SHARE SHORTFALL" means,
with respect to a Contributing Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "ADJUSTED MAXIMUM AMOUNT"
means, with respect to a Contributing
XVI-3
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty, determined as of
such date, in the case of any Guarantor, in accordance with subsection 2.2(a);
provided that, solely for purposes of calculating the "Adjusted Maximum Amount"
with respect to any Contributing Guarantor for purposes of this subsection
2.2(b), any assets or liabilities of such Contributing Guarantor arising by
virtue of any rights to subrogation, reimbursement or indemnification or any
rights to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Contributing Guarantor. "AGGREGATE PAYMENTS"
means, with respect to a Contributing Guarantor as of any date of determination,
an amount equal to (i) the aggregate amount of all payments and distributions
made on or before such date by such Contributing Guarantor in respect of this
Guaranty, as applicable (including in respect of this subsection 2.2(b) minus
(ii) the aggregate amount of all payments received on or before such date by
such Contributing Guarantor from the other Contributing Guarantors as
contributions under this subsection 2.2(b). The amounts payable as contributions
hereunder shall be determined as of the date on which the related payment or
distribution is made by the applicable Funding Guarantor. The allocation among
Contributing Guarantors of their obligations as set forth in this subsection
2.2(b) shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder
2.3 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to the
provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
any Beneficiary may have at law or in equity against any Guarantor by virtue
hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)),
Guarantors will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including interest
which, but for the filing of a petition in bankruptcy with respect to Company,
would have accrued on such Guarantied Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy proceeding)
and all other Guarantied Obligations then owed to Beneficiaries as aforesaid.
All such payments shall be applied promptly from time to time by Guarantied
Party as provided in subsection 2.4D of the Credit Agreement.
2.4 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that
its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which constitutes a
legal or equitable discharge of a guarantor or surety other than payment in full
of the Guarantied Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement
or the occurrence of an Early Termination Date (as defined in
a Master Agreement or an Interest Rate Swap Agreement or
XVI-4
Interest Rate and Currency Exchange Agreement in the form
prepared by the International Swap and Derivatives Association
Inc. or a similar event under any similar swap agreement)
under any Lender Interest Rate Agreement (either such
occurrence being an "Event of Default" for purposes of this
Guaranty) notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of
such Event of Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of Company under the Loan
Documents or the Lender Interest Rate Agreements and the
obligations of any other guarantor (including any other
Guarantor) of the obligations of Company under the Loan
Documents or the Lender Interest Rate Agreements, and a
separate action or actions may be brought and prosecuted
against such Guarantor whether or not any action is brought
against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify
or abridge any Guarantor's liability for any portion of the
Guarantied Obligations which has not been paid. Without
limiting the generality of the foregoing, if Guarantied Party
is awarded a judgment in any suit brought to enforce any
Guarantor's covenant to pay a portion of the Guarantied
Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the
Guarantied Obligations that is not the subject of such suit,
and such judgment shall not, except to the extent satisfied by
such Guarantor, limit, affect, modify or abridge any other
Guarantor's liability hereunder in respect of the Guarantied
Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any
reduction, limitation, impairment, discharge or termination of
any Guarantor's liability hereunder, from time to time may (i)
renew, extend, accelerate, increase the rate of interest on,
or otherwise change the time, place, manner or terms of
payment of the Guarantied Obligations, (ii) settle,
compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for,
the Guarantied Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of
any other obligations; (iii) request and accept other
guaranties of the Guarantied Obligations and take and hold
security for the payment of this Guaranty or the Guarantied
Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or
modify, with or without consideration, any security for
payment of the Guarantied Obligations, any other guaranties of
the Guarantied Obligations, or any other obligation of any
Person (including any other Guarantor) with respect to the
Guarantied Obligations; (v) enforce and apply any security now
or hereafter held by or for the benefit of such Beneficiary in
respect of this Guaranty or the Guarantied Obligations and
direct the order or manner of sale thereof, or exercise any
other right or remedy that such Beneficiary
XVI-5
may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent with
the Credit Agreement or the applicable Lender Interest Rate
Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more
judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any
Guarantor against Company or any security for the Guarantied
Obligations; and (vi) exercise any other rights available to
it under the Loan Documents or the Lender Interest Rate
Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination
for any reason (other than payment in full of the Guarantied
Obligations), including the occurrence of any of the
following, whether or not any Guarantor shall have had notice
or knowledge of any of them: (i) any failure or omission to
assert or enforce or agreement or election not to assert or
enforce, or the stay or enjoining, by order of court, by
operation of law or otherwise, of the exercise or enforcement
of, any claim or demand or any right, power or remedy (whether
arising under the Loan Documents or the Lender Interest Rate
Agreements, at law, in equity or otherwise) with respect to
the Guarantied Obligations or any agreement relating thereto,
or with respect to any other guaranty of or security for the
payment of the Guarantied Obligations; (ii) any rescission,
waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including
provisions relating to events of default) of the Credit
Agreement, any of the other Loan Documents, any of the Lender
Interest Rate Agreements or any agreement or instrument
executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, in each case whether
or not in accordance with the terms of the Credit Agreement or
such Loan Document, such Lender Interest Rate Agreement, or
any agreement relating to such other guaranty or security;
(iii) the Guarantied Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or
unenforceable in any respect; (iv) the application of payments
received from any source (other than payments received
pursuant to the other Loan Documents or any of the Lender
Interest Rate Agreements or from the proceeds of any security
for the Guarantied Obligations, except to the extent such
security also serves as collateral for indebtedness other than
the Guarantied Obligations) to the payment of indebtedness
other than the Guarantied Obligations, even though any
Beneficiary might have elected to apply such payment to any
part or all of the Guarantied Obligations; (v) any
Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Company
or any of its Subsidiaries and to any corresponding
restructuring of the Guarantied Obligations; (vi) any failure
to perfect or continue perfection of a security interest in
any collateral which secures any of the Guarantied
Obligations; (vii) any defenses, set-offs or counterclaims
which
XVI-6
Company may allege or assert against any Beneficiary in
respect of the Guarantied Obligations, including failure of
consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and
(viii) any other act or thing or omission, or delay to do any
other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect
of the Guarantied Obligations.
2.5 WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed
against Company, any other guarantor (including any other
Guarantor) of the Guarantied Obligations or any other Person,
(ii) proceed against or exhaust any security held from
Company, any such other guarantor or any other Person, (iii)
proceed against or have resort to any balance of any deposit
account or credit on the books of any Beneficiary in favor of
Company or any other Person, or (iv) pursue any other remedy
in the power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company
including any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations
or any agreement or instrument relating thereto or by reason
of the cessation of the liability of Company from any cause
other than payment in full of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than
that of the principal;
(d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guarantied Obligations,
except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of
this Guaranty and any legal or equitable discharge of such
Guarantor's obligations hereunder, (ii) the benefit of any
statute of limitations affecting such Guarantor's liability
hereunder or the enforcement hereof, (iii) any rights to
set-offs, recoupments and counterclaims, and (iv) promptness,
diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any
property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or
inaction, including acceptance of this Guaranty, notices of
default under the Credit Agreement, the Lender Interest Rate
XVI-7
Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the
Guarantied Obligations or any agreement related thereto,
notices of any extension of credit to Company and notices of
any of the matters referred to in subsection 2.4 and any right
to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms
of this Guaranty.
2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until
the Guarantied Obligations have been paid in full and the Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled, each
Guarantor shall withhold exercise of (a) any right of subrogation, reimbursement
or indemnification that such Guarantor now has or may hereafter have against
Company, (b) any right to enforce, or to participate in, any claim, right or
remedy that any Beneficiary now has or may hereafter have against Company, and
(c) any benefit of, and any right to participate in, any collateral or security
now or hereafter held by any Beneficiary. In addition, until the Guarantied
Obligations shall have been indefeasibly paid in full and the Commitments shall
have terminated and all Letters of Credit shall have expired or been cancelled,
each Guarantor shall withhold exercise of any right of contribution such
Guarantor may have against any other guarantor (including any other Guarantor)
of the Guarantied Obligations (including any such right of contribution under
subsection 2.2(b). Each Guarantor further agrees that, to the extent the waiver
or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Company or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Company,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guarantied Obligations shall not have been paid in full, such amount
shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of
Company or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
GUARANTOR") is hereby subordinated in right of payment to the Guarantied
Obligations, and any such indebtedness collected or received by the Obligee
Guarantor after an Event of Default has occurred and is continuing shall be held
in trust for Guarantied Party on behalf of Beneficiaries and shall forthwith be
paid over to Guarantied Party for the benefit of Beneficiaries to be credited
and applied against the Guarantied Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any other
provision of this Guaranty.
XVI-8
2.8 EXPENSES. Guarantors jointly and severally agree to pay, or
cause to be paid, on demand, and to save Beneficiaries harmless against
liability for, any and all costs and expenses (including fees and disbursements
of counsel and allocated costs of internal counsel) incurred or expended by any
Beneficiary in connection with the enforcement of or preservation of any rights
under this Guaranty.
2.9 CONTINUING GUARANTY. This Guaranty is a continuing guaranty
and shall remain in effect until all of the Guarantied Obligations shall have
been paid in full and the Commitments shall have terminated and all Letters of
Credit shall have expired or been cancelled. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Guarantied Obligations.
2.10 AUTHORITY OF GUARANTORS OR COMPANY. It is not necessary for
any Beneficiary to inquire into the capacity or powers of any Guarantor or
Company or the officers, directors or any agents acting or purporting to act on
behalf of any of them.
2.11 FINANCIAL CONDITION OF COMPANY. Any Loans may be granted to
Company or continued from time to time, and any Lender Interest Rate Agreements
may be entered into from time to time, in each case without notice to or
authorization from any Guarantor regardless of the financial or other condition
of Company at the time of any such grant or continuation or at the time such
Lender Interest Rate Agreement is entered into, as the case may be. No
Beneficiary shall have any obligation to disclose or discuss with any Guarantor
its assessment, or any Guarantor's assessment, of the financial condition of
Company. Each Guarantor has adequate means to obtain information from Company on
a continuing basis concerning the financial condition of Company and its ability
to perform its obligations under the Loan Documents and the Lender Interest Rate
Agreements, and each Guarantor assumes the responsibility for being and keeping
informed of the financial condition of Company and of all circumstances bearing
upon the risk of nonpayment of the Guarantied Obligations. Each Guarantor hereby
waives and relinquishes any duty on the part of any Beneficiary to disclose any
matter, fact or thing relating to the business, operations or conditions of
Company now known or hereafter known by any Beneficiary.
2.12 RIGHTS CUMULATIVE. The rights, powers and remedies given to
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement between any Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.
2.13 BANKRUPTCY; POST-PETITION INTEREST; REINSTATEMENT OF GUARANTY.
(a) So long as any Guarantied Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Guarantied Party acting pursuant to
the instructions of Requisite Obligees (as defined in subsection 3.14), commence
or join with any other Person in commencing any bankruptcy,
XVI-9
reorganization or insolvency proceedings of or against Company. The obligations
of Guarantors under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guarantied Obligations which accrues after the commencement
of any proceeding referred to in clause (a) above (or, if interest on any
portion of the Guarantied Obligations ceases to accrue by operation of law by
reason of the commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said proceedings had
not been commenced) shall be included in the Guarantied Obligations because it
is the intention of Guarantors and Beneficiaries that the Guarantied Obligations
which are guarantied by Guarantors pursuant to this Guaranty should be
determined without regard to any rule of law or order which may relieve Company
of any portion of such Guarantied Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Guarantied Party, or allow the claim of
Guarantied Party in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.
2.14 NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give Guarantied Party written notice of any
condition or event which has resulted in (a) a material adverse change in the
financial condition of any Guarantor or Company or (b) a breach of or
noncompliance with any term, condition or covenant contained herein or in the
Credit Agreement, any other Loan Document, any Lender Interest Rate Agreement or
any other document delivered pursuant hereto or thereto.
2.15 SET OFF. In addition to any other rights any Beneficiary may
have under law or in equity, if any amount shall at any time be due and owing by
any Guarantor to any Beneficiary under this Guaranty, such Beneficiary is
authorized at any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to such Guarantor and any other property
of such Guarantor held by any Beneficiary to or for the credit or the account of
such Guarantor against and on account of the Guarantied Obligations and
liabilities of such Guarantor to any Beneficiary under this Guaranty.
2.16 DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
stock of any Guarantor or any of its successors in interest under this Guaranty
shall be sold or otherwise
XVI-10
disposed of (including by merger or consolidation) in an Asset Sale not
prohibited by subsection 7.7 of the Credit Agreement or otherwise consented to
by Requisite Lenders, the Guaranty of such Guarantor or such successor in
interest, as the case may be, hereunder shall automatically be discharged and
released without any further action by any Beneficiary or any other Person
effective as of the time of such Asset Sale; provided that, as a condition
precedent to such discharge and release, Guarantied Party shall have received
evidence satisfactory to it that arrangements satisfactory to it have been made
for delivery to Guarantied Party of the applicable Net Asset Sale Proceeds of
such Asset Sale to the extent required under the Credit Agreement.
SECTION 3. MISCELLANEOUS
3.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the other Loan Documents and the Lender Interest Rate Agreements and any
increase in the Commitments under the Credit Agreement.
3.2 NOTICES. Any communications between Guarantied Party and any
Guarantor and any notices or requests provided herein to be given may be given
by mailing the same, postage prepaid, or by telex, facsimile transmission or
cable to each such party at its address set forth in the Credit Agreement, on
the signature pages hereof or to such other addresses as each such party may in
writing hereafter indicate. Any notice, request or demand to or upon Guarantied
Party or any Guarantor shall not be effective until received.
3.3 SEVERABILITY. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
3.4 AMENDMENTS AND WAIVERS. No amendment, modification,
termination or waiver of any provision of this Guaranty, and no consent to any
departure by any Guarantor therefrom, shall in any event be effective without
the written concurrence of Guarantied Party and, in the case of any such
amendment or modification, each Guarantor against whom enforcement of such
amendment or modification is sought. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
3.5 HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
3.6 APPLICABLE LAW; RULES OF CONSTRUCTION. THIS GUARANTY AND THE
RIGHTS AND OBLIGATIONS OF GUARANTORS AND BENEFICIARIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. The rules
XVI-11
of construction set forth in subsection 1.3 of the Credit Agreement shall be
applicable to this Guaranty mutatis mutandis.
3.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty
and shall be binding upon each Guarantor and its respective successors and
assigns. This Guaranty shall inure to the benefit of Beneficiaries and their
respective successors and assigns. No Guarantor shall assign this Guaranty or
any of the rights or obligations of such Guarantor hereunder without the prior
written consent of all Lenders. Any Beneficiary may, without notice or consent,
assign its interest in this Guaranty in whole or in part. The terms and
provisions of this Guaranty shall inure to the benefit of any transferee or
assignee of any Loan, and in the event of such transfer or assignment the rights
and privileges herein conferred upon such Beneficiary shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
3.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GUARANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GUARANTOR AT
ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 3.2;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE
IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GUARANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
PROCEEDINGS AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
XVI-12
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
3.9 WAIVER OF TRIAL BY JURY. EACH GUARANTOR AND, BY ITS ACCEPTANCE
OF THE BENEFITS HEREOF, EACH BENEFICIARY EACH HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY. The scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims. Each Guarantor and, by its acceptance of the benefits hereof, each
Beneficiary, each (i) acknowledges that this waiver is a material inducement for
such Guarantor and Beneficiaries to enter into a business relationship, that
such Guarantor and Beneficiaries have already relied on this waiver in entering
into this Guaranty or accepting the benefits thereof, as the case may be, and
that each will continue to rely on this waiver in their related future dealings
and (ii) further warrants and represents that each has reviewed this waiver with
its legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED
BY GUARANTIED PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
In the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
3.10 NO OTHER WRITING. This writing is intended by Guarantors and
Beneficiaries as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
3.11 FURTHER ASSURANCES. At any time or from time to time, upon the
request of Guarantied Party, Guarantors shall execute and deliver such further
documents and do such other acts and things as Guarantied Party may reasonably
request in order to effect fully the purposes of this Guaranty.
3.12 ADDITIONAL GUARANTORS. The initial Guarantor hereunder shall
be the Subsidiary of Company that is a signatory hereto on the date hereof. From
time to time subsequent to the date hereof, additional Subsidiaries of Company
may become parties hereto, as additional Guarantors (each an "ADDITIONAL
GUARANTOR"), by executing a counterpart of this Guaranty. Upon delivery of any
such counterpart to Administrative Agent, notice of which is hereby waived by
Guarantors, each such Additional Guarantor shall be a Guarantor and shall be as
fully a party hereto as if such Additional Guarantor were an original signatory
hereof. Each Guarantor
XVI-13
expressly agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Guarantor hereunder, nor by
any election of Administrative Agent not to cause any Subsidiary of Company to
become an Additional Guarantor hereunder. This Guaranty shall be fully effective
as to any Guarantor that is or becomes a party hereto regardless of whether any
other Person becomes or fails to become or ceases to be a Guarantor hereunder.
3.13 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in
any number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument. This Guaranty shall become effective
as to each Guarantor upon the execution of a counterpart hereof by such
Guarantor (whether or not a counterpart hereof shall have been executed by any
other Guarantor) and receipt by Guarantied Party of written or telephonic
notification of such execution and authorization of delivery thereof.
3.14 GUARANTIED PARTY AS AGENT.
(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i)Requisite Lenders or (ii)after payment in
full of all Obligations under the Credit Agreement and the other Loan Documents,
the holders of a majority of the aggregate notional amount (or, with respect to
any Lender Interest Rate Agreement that has been terminated in accordance with
its terms, the amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then due) under such
Lender Interest Rate Agreement) under all Lender Interest Rate Agreements
(Requisite Lenders or, if applicable, such holders being referred to herein as
"Requisite Obligees"). In furtherance of the foregoing provisions of this
subsection 3.14, each Interest Rate Exchanger, by its acceptance of the benefits
hereof, agrees that it shall have no right individually to enforce this
Guaranty, it being understood and agreed by such Interest Rate Exchanger that
all rights and remedies hereunder may be exercised solely by Guarantied Party
for the benefit of Beneficiaries in accordance with the terms of this subsection
3.14.
(b) Guarantied Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative
XVI-14
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Guarantied Party under this
Guaranty, and the retiring or removed Guarantied Party under this Guaranty shall
promptly (i) transfer to such successor Guarantied Party all sums held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Guarantied Party under this Guaranty, and (ii) take such other actions as may be
necessary or appropriate in connection with the assignment to such successor
Guarantied Party of the rights created hereunder, whereupon such retiring or
removed Guarantied Party shall be discharged from its duties and obligations
under this Guaranty. After any retiring or removed Guarantied Party's
resignation or removal hereunder as Guarantied Party, the provisions of this
Guaranty shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Guaranty while it was Guarantied Party hereunder.
[Remainder of page intentionally left blank]
XVI-15
IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
[NAME OF GUARANTOR]
By
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Title
----------------------------------
Address:
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[NAME OF GUARANTOR]
By
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Title
----------------------------------
Address:
-------------------------------
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ACKNOWLEDGED AND AGREED TO:
BANKERS TRUST COMPANY,
AS GUARANTIED PARTY
By
------------------------------------
Title
------------------------------------
XVI-16
IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, ____.
----------------------------------------
(Name of Additional Guarantor)
By
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Title
----------------------------------
Address:
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XVI-17
EXHIBIT XVII
[FORM OF SUBSIDIARY PLEDGE AGREEMENT]
SUBSIDIARY PLEDGE AGREEMENT
This SUBSIDIARY PLEDGE AGREEMENT (this "AGREEMENT") is dated as of
___________ __, 1999 and entered into by and between [INSERT NAME OF PLEDGOR IN
CAPS], a corporation ("PLEDGOR"), and BANKERS TRUST COMPANY, as administrative
agent for and representative of (in such capacity herein called "SECURED
PARTY"), the financial institutions ("LENDERS") party to the Credit Agreement
referred to below and any Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgor is the legal and beneficial owner of (i) the
membership interests and shares of stock or other ownership interests (the
"PLEDGED INTERESTS") described in Part A of Schedule I annexed hereto and issued
by the limited liability companies, corporations and partnerships named therein
and (ii) the indebtedness (the "PLEDGED DEBT") described in Part B of said
Schedule I and issued by the obligors named therein.
B. Secured Party, Fleet National Bank, as Documentation Agent and
First Union Securities, Inc., as Syndication Agent, and Lenders have entered
into a Credit Agreement dated as of October 13, 1999 (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Blackbaud, Inc., a
South Carolina corporation ("COMPANY"), pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
C. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with one or more Lenders (in such capacity,
collectively, "INTEREST RATE EXCHANGERS").
D. Pledgor has executed and delivered that certain Subsidiary
Guaranty dated as of October 13, 1999 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders and
any Interest Rate Exchangers, pursuant to which Pledgor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and all obligations of Company under the Lender Interest Rate
Agreements, including the obligation of Company to make payments thereunder in
the event of early termination thereof.
XVII-1
E. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
SECTION 1. PLEDGE OF SECURITY. Pledgor hereby pledges and assigns to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Pledgor's right, title and interest in and to the following (the "PLEDGED
COLLATERAL"):
(a) the Pledged Interests and the certificates representing the
Pledged Interests and any interest of Pledgor in the entries on the books of any
financial intermediary pertaining to the Pledged Interests, and all dividends,
cash, warrants, rights, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of the Pledged Interests;
(b) the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Debt;
(c) all additional membership interests, shares of stock or other
ownership interests, and all securities convertible into and warrants, options
and other rights to purchase or otherwise acquire, membership interests, shares
of stock or other ownership interests of any issuer of the Pledged Interests
from time to time acquired by Pledgor in any manner (which membership interests,
shares of stock or other ownership interests shall be deemed to be part of the
Pledged Interests), the certificates or other instruments representing such
additional membership interests, shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such additional shares, and all dividends, cash,
warrants, rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such additional membership interests, shares, securities,
warrants, options or other rights; provided, however, that Pledgor shall not be
required to pledge any additional membership interests or shares of, or any
securities convertible into and warrants, options and other rights to purchase
or otherwise acquire, membership interests or stock of any Foreign Subsidiary
issuer of the Pledged Interests pursuant to this Section 1(c) to the extent that
such pledges would constitute an investment of earnings in United States
property under Section 956 (or a successor provision) of the Internal Revenue
Code (the "IRC") that would trigger an increase in the gross income of a United
States owner of Pledgor pursuant to Section 951 (or a successor provision) of
the IRC;
(d) all additional indebtedness from time to time owed to Pledgor
by any obligor on the Pledged Debt and the instruments evidencing such
indebtedness, and all interest, cash,
XVII-2
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness;
(e) all membership interests and equity or other ownership
interests, and all securities convertible into and warrants, options and other
rights to purchase or otherwise acquire, membership interests, shares of stock
or other ownership interests of any Person that, after the date of this
Agreement, becomes, as a result of any occurrence, a direct Subsidiary of
Pledgor (which membership interests and shares or other ownership interests
shall be deemed to be part of the Pledged Interests), the certificates or other
instruments representing such shares, securities, warrants, options or other
rights and any interest of Pledgor in the entries on the books of any financial
intermediary pertaining to such membership interests, shares or other interests,
and all dividends, cash, warrants, rights, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such membership interests, shares,
securities, warrants, options or other rights; provided, however, that Pledgor
shall not be required to pledge the membership interests, shares or other equity
interests of, or any securities convertible into and warrants, options and other
rights to purchase or otherwise acquire, membership interests or stock of any
Foreign Subsidiary otherwise required to be pledged pursuant to this Section
1(e) to the extent that such pledge would constitute an investment of earnings
in United States property under Section 956 (or a successor provision) of the
IRC that would trigger an increase in the gross income of a United States owner
of Pledgor pursuant to Section 951 (or a successor provision) of the IRC;
(f) all indebtedness from time to time owed to Pledgor by any
Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct or indirect Subsidiary of Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such indebtedness; and
(g) to the extent not covered by clauses (a) through (f) above,
all proceeds of any or all of the foregoing Pledged Collateral. For purposes of
this Agreement, the term "PROCEEDS" includes whatever is receivable or received
when Pledged Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guaranty payable to Pledgor or Secured Party from
time to time with respect to any of the Pledged Collateral.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Pledged Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the Guaranty and all extensions or renewals
thereof, whether for principal, interest (including interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees,
XVII-3
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured Party
or any Lender or Interest Rate Exchanger as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Pledgor now or hereafter
existing under this Agreement (all such obligations of Pledgor being the
"SECURED OBLIGATIONS").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by Pledgor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party. Upon the occurrence and during the continuation of an Event of
Default (as defined in the Credit Agreement) or the occurrence of an Early
Termination Date (as defined in a Master Agreement or an Interest Rate Swap
Agreement or Interest Rate and Currency Exchange Agreement each in the standard
form prepared by the International Swap and Derivatives Association Inc. or a
similar event under any similar swap agreement) under any Lender Interest Rate
Agreement (either such occurrence being an "Event of Default" for purposes of
this Agreement), Secured Party shall have the right, without notice to Pledgor,
to transfer to or to register in the name of Secured Party or any of its
nominees any or all of the Pledged Collateral, subject only to the revocable
rights specified in Section 7(a). In addition, Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Collateral for certificates or instruments of smaller or
larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Pledgor represents and
warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Interests have been duly authorized and validly issued and are fully
paid and non-assessable. All of the Pledged Debt has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and binding
obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Interests
constitute the percent of the issued and outstanding
membership interests, shares of stock, or other ownership interest of each
issuer thereof as set forth on Schedule 1, and there are no outstanding
warrants, options or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into, or that
requires the issuance or sale of, any Pledged Interests. The Pledged Debt
constitutes all of the issued and outstanding intercompany indebtedness
evidenced by a promissory note of the respective issuers thereof owing to
Pledgor.
(c) Ownership of Pledged Collateral. Pledgor is the legal, record
and beneficial owner of the Pledged Collateral free and clear of any Lien except
for the security interest created by this Agreement.
XVII-4
SECTION 5. TRANSFERS AND OTHER LIENS; ADDITIONAL PLEDGED COLLATERAL;
ETC. Pledgor shall:
(a) not, except as expressly permitted by the Credit Agreement,
(i) sell, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, any of the Pledged Collateral, (ii) create or
suffer to exist any Lien upon or with respect to any of the Pledged Collateral,
except for the security interest under this Agreement, or (iii) permit any
issuer of Pledged Interests to merge or consolidate unless all the outstanding
membership interests, capital stock, or other ownership interest of the
surviving or resulting Person is, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in respect of
the outstanding membership interests or shares of any other constituent Person;
provided that in the event Pledgor makes an Asset Sale permitted by the Credit
Agreement and the assets subject to such Asset Sale are Pledged Interests,
Secured Party shall release the Pledged Interests that are the subject of such
Asset Sale to Pledgor free and clear of the lien and security interest under
this Agreement concurrently with the consummation of such Asset Sale; provided,
further that, as a condition precedent to such release, Secured Party shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for delivery to Secured Party of the Net Asset Sale Proceeds of such
Asset Sale to the extent required under the Credit Agreement;
(b) (i) cause each issuer of Pledged Interests not to issue any
membership interests, stock or other securities in addition to or in
substitution for the Pledged Interests issued by such issuer, except to Pledgor,
(ii) pledge hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional membership interests, shares of stock or other
securities of each issuer of Pledged Interests, and (iii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
membership interests, shares of stock, or other ownership interests of any
Person that, after the date of this Agreement, becomes, as a result of any
occurrence, a direct Subsidiary of Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any and
all instruments or other evidences of additional indebtedness from time to time
owed to Pledgor by any obligor on the Pledged Debt, and (ii) pledge hereunder,
immediately upon their issuance, any and all instruments or other evidences of
indebtedness from time to time owed to Pledgor by any Person that after the date
of this Agreement becomes, as a result of any occurrence, a direct or indirect
Subsidiary of Pledgor;
(d) promptly notify Secured Party of any event of which Pledgor
becomes aware causing loss or depreciation in the value of the Pledged
Collateral;
(e) promptly deliver to Secured Party all written notices received
by it with respect to the Pledged Collateral; and
(f) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Pledged Collateral,
except to the extent the validity thereof is being contested in good faith and
adequate reserves have been set aside therefor; provided that Pledgor shall in
any event pay such taxes, assessments, charges, levies or claims
XVII-5
not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment entered or filed against Pledgor or any
of the Pledged Collateral as a result of the failure to make such payment.
SECTION 6. FURTHER ASSURANCES; PLEDGE AMENDMENTS.
(a) Pledgor agrees that from time to time, at the expense of
Pledgor, Pledgor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, Pledgor
will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby and (ii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect Pledgor's title to or Secured Party's security interest in all or any
part of the Pledged Collateral.
(b) Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) or (c), promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Amendment, duly executed by
Pledgor, in substantially the form of Schedule II annexed hereto (a "PLEDGE
AMENDMENT"), in respect of the additional Pledged Interests or Pledged Debt to
be pledged pursuant to this Agreement. Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Interests or Pledged Debt listed on any Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of Pledgor to execute a Pledge Amendment with respect
to any additional Pledged Interests or Pledged Debt pledged pursuant to this
Agreement shall not impair the security interest of Secured Party therein or
otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto; provided, however, that Pledgor shall not be required to
pledge any additional membership interests or shares of, or any securities
convertible into and warrants, options and other rights to purchase or otherwise
acquire, membership interests or stock of any Foreign Subsidiary issuer of the
Pledged Interests pursuant to this Section 6(b) to the extent that such pledges
would constitute an investment of earnings in United States property under
Section 956 (or a successor provision) of the Internal Revenue Code (the "IRC")
that would trigger an increase in the gross income of a United States owner of
Pledgor pursuant to Section 951 (or a successor provision) of the IRC.
SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.
(a) So long as no Event of Default shall have occurred and be
continuing:
(i) Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement; provided, however, that Pledgor
shall not exercise or refrain from
XVII-6
exercising any such right if Secured Party shall have notified Pledgor
that, in Secured Party's judgment, such action would have a material
adverse effect on the value of the Pledged Collateral or any part
thereof; and provided, further, that Pledgor shall give Secured Party
at least five Business Days' prior written notice of the manner in
which it intends to exercise, or the reasons for refraining from
exercising, any such right. It is understood, however, that neither (A)
the voting by Pledgor of any Pledged Interests for or Pledgor's consent
to the election of directors at a regularly scheduled annual or other
meeting of stockholders or with respect to incidental matters at any
such meeting nor (B) Pledgor's consent to or approval of any action
otherwise permitted under this Agreement and the Credit Agreement shall
be deemed inconsistent with the terms of this Agreement or the Credit
Agreement within the meaning of this Section 7(a)(i), and no notice of
any such voting or consent need be given to Secured Party;
(ii) Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(A) dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for,
any Pledged Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Pledged Collateral in connection with a partial
or total liquidation or dissolution or in connection with a reduction
of capital, capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for any Pledged
Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by Pledgor, be received in trust
for the benefit of Secured Party, be segregated from the other property or
funds of Pledgor and be forthwith delivered to Secured Party as Pledged
Collateral in the same form as so received (with all necessary
indorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgor all such
proxies, dividend payment orders and other instruments as
Pledgor may from time to time reasonably request for the
purpose of enabling Pledgor to exercise the voting and other
consensual rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of an
Event of Default:
XVII-7
(i) upon written notice from Secured Party to Pledgor,
all rights of Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to
exercise pursuant to Section 7(a)(i) shall cease, and all such
rights shall thereupon become vested in Secured Party who
shall thereupon have the sole right to exercise such voting
and other consensual rights;
(ii) all rights of Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to Section 7(a)(ii) shall cease,
and all such rights shall thereupon become vested in Secured
Party who shall thereupon have the sole right to receive and
hold as Pledged Collateral such dividends and interest
payments; and
(iii) all dividends, principal and interest payments which
are received by Pledgor contrary to the provisions of
paragraph (ii) of this Section 7(b) shall be received in trust
for the benefit of Secured Party, shall be segregated from
other funds of Pledgor and shall forthwith be paid over to
Secured Party as Pledged Collateral in the same form as so
received (with any necessary indorsements).
(c) In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
7(b)(i) and to receive all dividends and other distributions which it may be
entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) Pledgor
shall promptly execute and deliver (or cause to be executed and delivered) to
Secured Party all such proxies, dividend payment orders and other instruments as
Secured Party may from time to time reasonably request and (ii) without limiting
the effect of the immediately preceding clause (i), Pledgor hereby grants to
Secured Party an irrevocable proxy to vote the Pledged Interests and to exercise
all other rights, powers, privileges and remedies to which a holder of the
Pledged Interests would be entitled (including giving or withholding written
consents of shareholders, calling special meetings of shareholders and voting at
such meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Interests on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Interests or any officer or agent thereof), upon the occurrence of
an Event of Default and which proxy shall only terminate upon the payment in
full of the Secured Obligations.
SECTION 8. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Pledgor hereby
irrevocably appoints Secured Party as Pledgor's attorney-in-fact, with full
authority in the place and stead of Pledgor and in the name of Pledgor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including:
(a) to file one or more financing or continuation statements, or
amendments thereto, relative to all or any part of the Pledged Collateral
without the signature of Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Pledged Collateral;
XVII-8
(c) to receive, endorse and collect any instruments made payable
to Pledgor representing any dividend, principal or interest payment or other
distribution in respect of the Pledged Collateral or any part thereof and to
give full discharge for the same; and
(d) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Pledged Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Pledged Collateral.
SECTION 9. SECURED PARTY MAY PERFORM. If Pledgor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 13(b).
SECTION 10. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Pledged Collateral in its possession
and the accounting for moneys actually received by it hereunder, Secured Party
shall have no duty as to any Pledged Collateral, it being understood that
Secured Party shall have no responsibility for (a) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not Secured Party has or
is deemed to have knowledge of such matters, (b) taking any necessary steps
(other than steps taken in accordance with the standard of care set forth above
to maintain possession of the Pledged Collateral) to preserve rights against any
parties with respect to any Pledged Collateral, (c) taking any necessary steps
to collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
SECTION 11. REMEDIES.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Pledged Collateral), and Secured Party
may also in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. Secured Party or any Lender or
Interest Rate Exchanger may be the purchaser of any or all of the Pledged
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
XVII-9
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 15(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of Pledgor, and Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to Pledgor of the time and
place of any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Secured Party shall not be obligated
to make any sale of Pledged Collateral regardless of notice of sale having been
given. Secured Party may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Pledgor hereby waives any claims against Secured Party arising by reason of the
fact that the price at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree. If the proceeds of any sale or
other disposition of the Pledged Collateral are insufficient to pay all the
Secured Obligations, Pledgor shall be liable for the deficiency and the fees of
any attorneys employed by Secured Party to collect such deficiency.
(b) Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale thereof. Pledgor acknowledges that any such private
sales may be at prices and on terms less favorable than those obtainable through
a public sale without such restrictions (including a public offering made
pursuant to a registration statement under the Securities Act) and,
notwithstanding such circumstances, Pledgor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Pledged Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any
or all of the Pledged Collateral, upon written request, Pledgor shall and shall
cause each issuer of any Pledged Interests to be sold hereunder from time to
time to furnish to Secured Party all such information as Secured Party may
request in order to determine the number of shares and other instruments
included in the Pledged Collateral which may be sold by Secured Party in exempt
transactions
XVII-10
under the Securities Act and the rules and regulations of the Securities and
Exchange Commission thereunder, as the same are from time to time in effect.
SECTION 12. APPLICATION OF PROCEEDS. All proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Pledged Collateral shall be applied as provided in
subsection 2.4D of the Credit Agreement.
SECTION 13. INDEMNITY AND EXPENSES.
(a) Pledgor agrees to indemnify Secured Party, each Lender and
each Interest Rate Exchanger from and against any and all claims, losses and
liabilities in any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's or Interest Rate Exchanger's gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, or the sale of, collection from, or other realization upon, any
of the Pledged Collateral, (iii) the exercise or enforcement of any of the
rights of Secured Party hereunder, or (iv) the failure by Pledgor to perform or
observe any of the provisions hereof.
SECTION 14. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS.
This Agreement shall create a continuing security interest in the Pledged
Collateral and shall (a) remain in full force and effect until the payment in
full of all Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall revert to Pledgor. Upon any such termination Secured Party will, at
Pledgor's expense, execute and deliver to Pledgor such documents as Pledgor
shall reasonably request to evidence such termination and Pledgor shall be
entitled to the return, upon its request and at its expense, against receipt and
without recourse to Secured Party, of such of the Pledged Collateral as shall
not have been sold or otherwise applied pursuant to the terms hereof.
SECTION 15. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Secured Party shall be
XVII-11
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including the release or substitution of Pledged Collateral),
solely in accordance with this Agreement and the Credit Agreement; provided that
Secured Party shall exercise, or refrain from exercising, any remedies provided
for in Section 11 in accordance with the instructions of (i) Requisite Lenders
or (ii) after payment in full of all Obligations under the Credit Agreement and
the other Loan Documents, the holders of a majority of the aggregate notional
amount (or, with respect to any Lender Interest Rate Agreement that has been
terminated in accordance with its terms, the amount then due and payable
(exclusive of expenses and similar payments but including any early termination
payments then due) under such Lender Interest Rate Agreement) under all Lender
Interest Rate Agreements (Requisite Lenders or, if applicable, such holders
being referred to herein as "Requisite Obligees"). In furtherance of the
foregoing provisions of this Section 15(a), each Interest Rate Exchanger, by its
acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Pledged Collateral hereunder, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 15(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 16. AMENDMENTS; ETC. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by Secured Party and, in the case of any such
amendment or modification, by Pledgor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
XVII-12
SECTION 17. NOTICES. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto.
SECTION 18. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 19. SEVERABILITY. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 20. HEADINGS. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 21. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined. The rules of construction
set forth in subsection 1.3 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
SECTION 22. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇. BY EXECUTING AND
XVII-13
DELIVERING THIS AGREEMENT, PLEDGOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY
SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO PLEDGOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 17;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(III) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER PLEDGOR IN ANY SUCH PROCEEDING IN
ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS
OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SECTION
23 RELATING TO JURISDICTION AND VENUE SHALL BE
BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
SECTION 23. WAIVER OF JURY TRIAL. PLEDGOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. Pledgor and Secured Party each acknowledge that
this waiver is a material inducement for Pledgor and Secured Party to enter into
a business relationship, that Pledgor and Secured Party have already relied on
this waiver in entering into this Agreement and that each will continue to rely
on this waiver in their related future dealings. Pledgor and Secured Party
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 23 AND EXECUTED BY EACH OF
THE PARTIES
XVII-14
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 24. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
XVII-15
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF PLEDGOR]
By:
-------------------------
Title:
Notice Address:
---------------------
---------------------
---------------------
BANKERS TRUST COMPANY,
as Secured Party
By:
-------------------------
Title:
Notice Address:
---------------------
---------------------
---------------------
XVII-16
SCHEDULE I
Attached to and forming a part of the Pledge Agreement dated as of
__________ __, ____ between [INSERT NAME OF PLEDGOR], as Pledgor, and Bankers
Trust Company, as Secured Party.
Part A
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
XVII-17
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated ____________, _____, is delivered pursuant
to Section 6(b) of the Pledge Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge Agreement
dated __________, ____, between the undersigned and Bankers Trust Company, as
Secured Party (the "PLEDGE AGREEMENT," capitalized terms defined therein being
used herein as therein defined), and that the [Pledged Interests] [Pledged Debt]
listed on this Pledge Amendment shall be deemed to be part of the [Pledged
Interests] [Pledged Debt] and shall become part of the Pledged Collateral and
shall secure all Secured Obligations.
[NAME OF PLEDGOR]
By:
---------------------------
Title:
Part A
Number of Percentage
Issuer Class Certificate Nos. Interests/Shares of Interests/Shares
------ ----- ---------------- ---------------- -------------------
Part B
Debt Issuer Amount of Indebtedness
----------- ----------------------
XVII-18
EXHIBIT XVIII
[FORM OF SUBSIDIARY SECURITY AGREEMENT]
SUBSIDIARY SECURITY AGREEMENT
This SUBSIDIARY SECURITY AGREEMENT (this "AGREEMENT") is dated as of
_____________ __, 1999 and entered into by [INSERT SUBSIDIARY NAME], a
_________________ corporation ("GRANTOR"); provided that after the Closing Date,
"Grantor" shall include any Additional Grantors (as hereinafter defined), and
BANKERS TRUST COMPANY, as Administrative Agent for and representative of (in
such capacity herein called "SECURED PARTY") the financial institutions
("LENDERS") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party, Fleet National Bank, as Documentation Agent and
First Union Securities, Inc., as Syndication Agent, and Lenders have entered
into a Credit Agreement dated as of October 13, 1999 (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "CREDIT AGREEMENT", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Blackbaud, Inc., a
South Carolina corporation ("COMPANY") pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. Company may from time to time enter, or may from time to time
have entered, into one or more Interest Rate Agreements (collectively, the
"LENDER INTEREST RATE AGREEMENTS") with one or more Lenders (in such capacity,
collectively, "INTEREST RATE EXCHANGERS").
C. Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of ________________, ____ (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "GUARANTY") in favor of Secured Party for the benefit of Lenders and
any Interest Rate Exchangers, pursuant to which each Grantor has guarantied the
prompt payment and performance when due of all obligations of Company under the
Credit Agreement and the other Loan Documents and all obligations of Company
under the Lender Interest Rate Agreements, including the obligation of Company
to make payments thereunder in the event of early termination thereof;
D. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
XVIII-1
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Grantor hereby agrees with Secured
Party as follows:
SECTION 1. GRANT OF SECURITY.
Grantor hereby assigns to Secured Party, and hereby grants to Secured
Party a security interest in, all of Grantor's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "COLLATERAL"):
(a) all equipment in all of its forms (including, but not
limited to, all computers, office furniture, and other office
equipment), all parts thereof and all accessions thereto (any
and all such equipment, parts and accessions being the
"EQUIPMENT");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by Grantor for sale or lease or
to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished
goods, and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing
or production of such inventory or otherwise used or consumed
in Grantor's business, (iii) all goods in which Grantor has an
interest in mass or a joint or other interest or right of any
kind, and (iv) all goods which are returned to or repossessed
by Grantor) and all accessions thereto and products thereof
(all such inventory, accessions and products being the
"INVENTORY"); provided that inventory considered to be work
product held for or acquired on behalf of customers of Grantor
or required to be delivered to customers of Grantor shall not
be deemed Inventory, and all negotiable and non-negotiable
documents of title (including without limitation warehouse
receipts, dock receipts and bills of lading) issued by any
Person covering any Inventory (any such negotiable document of
title being a "NEGOTIABLE DOCUMENT OF TITLE");
(c) all accounts, contract rights, chattel paper,
documents, instruments, general intangibles and other rights
and obligations of any kind owned by or owing to Grantor and
all rights in, to and under all security agreements, leases
and other contracts securing or otherwise relating to any such
accounts, contract rights, chattel paper, documents,
instruments, general intangibles or other obligations, it
being understood that contracts with clients of Grantor are
not considered to be Collateral (any and all such accounts,
contract rights, chattel paper, documents, instruments,
general intangibles and other obligations being the
"ACCOUNTS", and any and all such security agreements, leases
and other contracts being the "RELATED CONTRACTS");
XVIII-2
(d) all deposit accounts, including without limitation
demand, time, savings, passbooks or similar accounts
maintained with Lenders or other banks, savings and loan
associations or other financial institutions;
(e) the "INTELLECTUAL PROPERTY COLLATERAL", which term
means:
(i) all rights, title and interest (including
rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements
governing such license or other use) in and to all
trademarks, service marks, designs, logos, indicia,
tradenames, trade dress, corporate names, company
names, business names, fictitious business names,
trade styles and/or other source and/or business
identifiers and applications pertaining thereto,
owned by Grantor, or hereafter adopted and used, in
its business (including, without limitation, the
trademarks specifically identified in Schedule 1(b),
as the same may be amended pursuant hereto from time
to time) (collectively, the "TRADEMARKS"); provided
that trademarks, servicemarks, designs, logos,
indicia, tradenames, trade dress, corporate names,
company names, business names, fictitious business
names, trade styles and/or other sources and/or
business identifiers and applications pertaining
thereto considered to be work product performed for
or acquired on behalf of customers of Grantor or
which have been assigned or are required to be
assigned to such customer shall not be deemed
Trademarks or Intellectual Property Collateral; all
registrations that have been or may hereafter be
issued or applied for thereon in the United States
and any state thereof and in foreign countries
(including, without limitation, the registrations and
applications specifically identified in Schedule
1(b), as the same may be amended pursuant hereto from
time to time) (the "TRADEMARK REGISTRATIONS");
provided that registrations that have been made or
may hereafter be issued or applied for thereon in the
United States and any state thereof and in foreign
countries on behalf of or acquired on behalf of
customers of Grantor or which have been assigned or
are required to be assigned to such customer shall
not be deemed Trademark Registrations or Intellectual
Property Collateral; all common law and other rights
(but in no event any of the obligations) in and to
the Trademarks in the United States and any state
thereof and in foreign countries (the "TRADEMARK
RIGHTS"), and all goodwill of Grantor's business
symbolized by the Trademarks and associated therewith
(the "ASSOCIATED GOODWILL"):
(ii) all rights, title and interest (including
rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements
governing such license or other use) in and to all
patents and patent applications and rights and
interests in patents and patent applications under
any domestic or foreign law that are presently, or in
the future may be, owned or held by Grantor and all
patents and patent
XVIII-3
applications and rights, title and interests in
patents and patent applications under any domestic or
foreign law that are presently, or in the future may
be, owned by Grantor in whole or in part (including,
without limitation, the patents and patent
applications listed in Schedule 1(c), as the same may
be amended pursuant hereto from time to time), all
rights (but not obligations) corresponding thereto
(including, without limitation, the right (but not
the obligation), exercisable only upon the occurrence
and during the continuation of an Event of Default,
to ▇▇▇ for past, present and future infringements in
the name of Grantor or in the name of Secured Party
or Lenders), and all re-issues, divisions,
continuations, renewals, extensions and
continuations-in-part thereof (all of the foregoing
being collectively referred to as the "PATENTS"); it
being understood that the rights and interests
included in the Intellectual Property Collateral
hereby shall include, without limitation, all rights
and interests pursuant to licensing or other
contracts in favor of Grantor pertaining to patent
applications and patents presently or in the future
owned or used by third parties but, in the case of
third parties which are not Affiliates of Grantor,
only to the extent permitted by such licensing or
other contracts and, if not so permitted, only with
the consent of such third parties; provided that
patents and patent applications and rights and
interests in patents and patent applications
considered to be work product performed for or
acquired on behalf of customers of Grantor or which
have been assigned or are required to be assigned to
such customer shall not be deemed Patents or
Intellectual Property Collateral; and
(iii) all rights, title and interest (including
rights acquired pursuant to a license or otherwise
but only to the extent permitted by agreements
governing such license or other use) under copyright
in various published and unpublished works of
authorship including, without limitation, computer
programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs,
writings, and formulas owned by Grantor (including,
without limitation, the works listed on Schedule
1(d), as the same may be amended pursuant hereto from
time to time) (collectively, the "COPYRIGHTS");
provided that rights, title and interest under
copyright in various published and unpublished works
of authorship including, without limitation, computer
programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs,
writings, formulas, copyright registrations and
applications for copyright registrations considered
to be work product performed for or acquired on
behalf of Grantor or which have been assigned or are
required to be assigned to such customer shall not be
deemed Copyright Registrations or Intellectual
Property Collateral; all copyright registrations
issued to Grantor and applications for copyright
registration that have been or may hereafter be
issued or applied for thereon by Grantor in the
United States and
XVIII-4
any state thereof and in foreign countries
(including, without limitation, the registrations
listed on Schedule 1(d), as the same may be amended
pursuant hereto from time to time) (collectively, the
"COPYRIGHT REGISTRATIONS") provided that copyright
registrations issued to Grantor and applications for
copyright registration that have been or may
hereafter be issued or applied for thereon by Grantor
in the United States and any state thereof in foreign
countries on behalf of or acquired on behalf of
customers of Grantor or which have been assigned or
are required to be assigned to such customer shall
not be deemed Copyright Registrations or Intellectual
Property Collateral, all common law and other rights
in and to the Copyrights in the United States and any
state thereof and in foreign countries including all
copyright licenses (but with respect to such
copyright licenses, only to the extent permitted by
such licensing arrangements) (the "COPYRIGHT
RIGHTS"), including, without limitation, each of the
Copyrights, rights, titles and interests in and to
the Copyrights and works protectable by copyright,
which are presently, or in the future may be, owned,
created (as a work for hire for the benefit of
Grantor), authored (as a work for hire for the
benefit of Grantor), or acquired by Grantor, in whole
or in part, and all Copyright Rights with respect
thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and
all renewals and extensions thereof, throughout the
world, including all proceeds thereof (such as, by
way of example and not by limitation, license
royalties and proceeds of infringement suits), the
right (but not the obligation) to renew and extend
such Copyright Registrations and Copyright Rights and
to register works protectable by copyright and the
right (but not the obligation) to ▇▇▇ for past,
present and future infringements of the Copyrights
and Copyright Rights;
(f) all information used or useful or arising from the
business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production,
ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information;
provided that information used or useful or arising from the
business including all goodwill, trade secrets, trade secret
rights, know-how, customer lists, processes of production,
ideas, confidential business information, techniques,
processes, formulas, and all other proprietary information
considered to be work product performed for or acquired on
behalf of customers of Grantor which have been assigned or are
required to be assigned to such customer shall not be deemed
Collateral;
(g) to the extent not covered in any other paragraph of
this Section 1, all other general intangibles (including
without limitation tax refunds, rights to payment or
performance, choses in action and judgments taken on any
rights or claims included in the Collateral); provided that
general intangibles
XVIII-5
considered to be work product performed for or acquired on
behalf of customers of Grantor or which have been assigned or
are required to be assigned to such customer, shall not be
deemed Collateral;
(h) all plant fixtures, business fixtures and other
fixtures and storage and office facilities, and all accessions
thereto and products thereof;
(i) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related
data processing software that at any time evidence or contain
information relating to any of the Collateral or are otherwise
necessary or helpful in the collection thereof or realization
thereupon; and
(j) all proceeds, products, rents and profits of or from
any and all of the foregoing Collateral and, to the extent not
otherwise included, all payments under insurance (whether or
not Secured Party is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term
"PROCEEDS" includes whatever is receivable or received when
Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary
or involuntary.
XVIII-6
SECTION 2. SECURITY FOR OBLIGATIONS.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including without limitation the payment of amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. Section 362(a)), of all obligations and liabilities of every
nature of Grantor now or hereafter existing under or arising out of or in
connection with the Guaranty, and all extensions or renewals thereof, whether
for principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise (all such obligations and
liabilities being the "UNDERLYING DEBT"), and all obligations of every nature of
Grantor now or hereafter existing under this Agreement (all such obligations of
Grantor, together with the Underlying Debt, being the "SECURED OBLIGATIONS").
SECTION 3. GRANTOR REMAINS LIABLE.
Anything contained herein to the contrary notwithstanding, (a) Grantor
shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release Grantor from any of its duties or obligations under the contracts
and agreements included in the Collateral, and (c) Secured Party shall not have
any obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall Secured Party be obligated to
perform any of the obligations or duties of Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Grantor represents and
warrants as follows:
(a) OWNERSHIP OF COLLATERAL. Except for the interests
disclosed in Schedule 4(a) annexed hereto and for the security
interest created by this Agreement, Grantor owns the
Collateral owned by Grantor free and clear of any Lien.
(b) Except with respect to the interests disclosed in
Schedule 4(a) annexed
XVIII-7
hereto and such as may have been filed in favor of Secured
Party relating to this Agreement, no effective financing
statement or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or
recording office.
(c) LOCATIONS OF EQUIPMENT AND INVENTORY. All of the
Equipment and Inventory is, as of the date hereof, located at
the places specified in Schedule 4(b) annexed hereto.
(d) NEGOTIABLE DOCUMENTS OF TITLE. No Negotiable
Documents of Title are outstanding with respect to any of the
Inventory.
(e) OFFICE LOCATIONS. The chief place of business, the
chief executive office and the office where Grantor keeps its
records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is and has been for the
four month period preceding the date hereof, located at the
locations set forth on Schedule 4(d) annexed hereto.
(f) NAMES. Grantor has not in the past done, and Grantor
now does not, conduct business under any other name (including
any trade-name or fictitious business name) except the names
listed in Schedule 4(e) annexed hereto.
(g) DELIVERY OF CERTAIN COLLATERAL. All chattel paper and
all notes and other instruments (excluding checks) comprising
any and all items of Collateral have been delivered to Secured
Party duly endorsed and accompanied by duly executed
instruments of transfer or assignment in blank.
(h) INTELLECTUAL PROPERTY COLLATERAL.
(i) a true and complete list of all Trademark
Registrations and Trademark applications owned, held
(whether pursuant to a license or otherwise) or used
by Grantor, in whole or in part, is set forth in
Schedule 1(b);
(ii) a true and complete list of all Patents
owned, held (whether pursuant to a license or
otherwise) or used by Grantor, in whole or in part,
is set forth in Schedule 1(c);
(iii) a true and complete list of all Copyright
Registrations and applications for Copyright
Registrations held (whether pursuant to a license or
otherwise) by Grantor, in whole or in part, is set
forth in Schedule 1(d);
(iv) after reasonable inquiry, Grantor is not
aware of any pending or threatened claim by any third
party that any of the Intellectual Property
Collateral owned, held or used by Grantor is invalid
or unenforceable; and
XVIII-8
(v) no effective security interest or other Lien
covering all or any part of the Intellectual Property
Collateral is on file in the United States Patent and
Trademark Office or the United States Copyright
Office.
(i) PERFECTION. The security interests in the Collateral
granted to Secured Party hereunder constitute valid security
interests in the Collateral. Upon the filing of UCC financing
statements naming Grantor as "debtor", naming Secured Party as
"secured party" and describing the Collateral in the filing
offices set forth on Schedule 4(h) annexed hereto, and in the
case of the Intellectual Property Collateral, in addition the
filing of a Grant of Trademark Security Interest,
substantially in the form of Exhibit I and a Grant of Patent
Security Interest, substantially in the form of Exhibit II,
with the United States Patent and Trademark Office and the
filing of a Grant of Copyright Security Interest,
substantially in the form of Exhibit III, with the United
States Copyright Office, the security interests in the
Collateral granted to Secured Party will, to the extent a
security interest in the Collateral may be perfected by filing
UCC financing statements and, in the case of the Intellectual
Property Collateral, in addition to the filing of such UCC
Financing Statements, by the filing of a Grant of Trademark
Security Interest and Grant of Patent Security Interest with
the United States Patent and Trademark Office and a Grant of
Copyright Security Interest with the United States Copyright
Office, constitute perfected security interests therein prior
to all other Liens except the interests disclosed in Schedule
4(a) annexed hereto.
SECTION 5. FURTHER ASSURANCES.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all
further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, Grantor will: (i)
▇▇▇▇ conspicuously each item of chattel paper included in the
Accounts, each Related Contract and, at the request of Secured
Party, each of its records pertaining to the Collateral, with
a legend, in form and substance satisfactory to Secured Party,
indicating that such Collateral is subject to the security
interest granted hereby, (ii) at the request of Secured Party,
deliver and pledge to Secured Party hereunder all promissory
notes and other instruments (including checks) and all
original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and
substance satisfactory to Secured Party, (iii) use
commercially reasonable efforts to obtain any necessary
consents of third parties to the assignment and perfection of
a security interest to Secured Party with respect to any
Collateral, (iv) execute and file such financing or
continuation statements, or amendments thereto, and such other
instruments or
XVIII-9
notices, as may be necessary or desirable, or as Secured Party
may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby, (v) at
the request of Secured Party after the acquisition by Grantor
of any item of Equipment which is covered by a certificate of
title under a statute of any jurisdiction under the law of
which indication of a security interest on such certificate is
required as a condition of perfection thereof, execute and
file with the registrar of motor vehicles or other appropriate
authority in such jurisdiction an application or other
document requesting the notation or other indication of the
security interest created hereunder on such certificate of
title, (vi) at the request of Secured Party, deliver to
Secured Party copies of all such applications or other
documents filed during such calendar quarter and copies of all
such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the
items of Equipment covered thereby, (vii) at any reasonable
time, upon request by Secured Party, exhibit the Collateral to
and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (viii) at Secured
Party's request, appear in and defend any action or proceeding
that may affect Grantor's title to or Secured Party's security
interest in all or any part of the Collateral.
(b) Without limiting the generality of the foregoing
clause (a), if Grantor shall hereafter obtain rights to any
new Intellectual Property Collateral or become entitled to the
benefit of (i) any patent application or patent or any
reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any
Patent; or (ii) any Copyright Registration, application for
Registration or renewals or extension of any Copyright, then
in any such case, the provisions of this Agreement shall
automatically apply thereto. Grantor shall promptly notify
Secured Party in writing of any of the foregoing rights
acquired by Grantor after the date hereof and of (i) any
Trademark Registrations issued or application for a Trademark
Registration or application for a Patent made, and (ii) any
Copyright Registrations issued or applications for Copyright
Registration made, in any such case, after the date hereof.
Promptly after the filing of an application for any (1)
Trademark Registration; (2) Patent; and (3) Copyright
Registration, Grantor shall execute and deliver to Secured
Party and record in all places where this Agreement is
recorded a Security Agreement Supplement, substantially in the
form of Exhibit IV, pursuant to which Grantor shall grant to
Secured Party a security interest to the extent of its
interest in such Intellectual Property Collateral; provided,
if, in the reasonable judgment of Grantor, after due inquiry,
granting such interest would result in the grant of a
Trademark Registration or Copyright Registration in the name
of Secured Party, Grantor shall give written notice to Secured
Party as soon as reasonably practicable and the filing shall
instead be undertaken as soon as practicable but in no case
later than immediately following the grant of the applicable
Trademark Registration or Copyright Registration, as the case
may be.
XVIII-10
(c) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without
the signature of Grantor. Grantor agrees that a carbon,
photographic or other reproduction of this Agreement or of a
financing statement signed by Grantor shall be sufficient as a
financing statement and may be filed as a financing statement
in any and all jurisdictions.
(d) Grantor hereby authorizes Secured Party to modify
this Agreement without obtaining Grantor's approval of or
signature to such modification by amending Schedules 1(b),
1(c), and 1(d), as applicable, to include reference to any
right, title or interest in any existing Intellectual Property
Collateral or any Intellectual Property Collateral acquired or
developed by Grantor after the execution hereof or to delete
any reference to any right, title or interest in any
Intellectual Property Collateral in which Grantor no longer
has or claims any right, title or interest.
(e) Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and
describing the Collateral and such other reports in connection
with the Collateral as Secured Party may reasonably request,
all in reasonable detail.
SECTION 6. CERTAIN COVENANTS OF GRANTOR.
(a) Grantor shall:
(i) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this
Agreement or any applicable statute, regulation or
ordinance or any policy of insurance covering the
Collateral;
(ii) notify Secured Party of any change in
Grantor's name, identity or corporate structure
within 15 days of such change;
(iii) give Secured Party 30 days' prior written
notice of any change in Grantor's chief place of
business, chief executive office or residence or the
office where Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that
evidence Accounts;
(iv) if Secured Party gives value to enable
Grantor to acquire rights in or the use of any
Collateral, use such value for such purposes; and
(v) pay promptly when due all property and other
taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for
labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof
is being contested in good faith and adequate
reserves have been set aside therefor; provided that
Grantor shall in any event pay such taxes,
assessments, charges,
XVIII-11
levies or claims not later than five days prior to
the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed
against Grantor or any of the Collateral as a result
of the failure to make such payment.
SECTION 7. SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.
(a) Grantor shall:
(i) keep the Equipment and Inventory at the
places therefor specified on Schedule 4(b) annexed
hereto or, upon 30 days' prior written notice to
Secured Party, at such other places in jurisdictions
where all action that may be necessary or desirable,
or that Secured Party may request, in order to
perfect and protect any security interest granted or
purported to be granted hereby, or to enable Secured
Party to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and
Inventory shall have been taken;
(ii) cause the Equipment to be maintained and
preserved in the same condition, repair and working
order as when new, ordinary wear and tear excepted,
and in accordance with Grantor's past practices, and
shall forthwith make or cause to be made all repairs,
replacements and other improvements in connection
therewith that are necessary or desirable to such
end. Grantor shall promptly furnish to Secured Party
a statement respecting any material loss or damage to
any of the Equipment;
(iii) keep correct and accurate records of
Inventory owned by Grantor, itemizing and describing
the kind, type and quantity of such Inventory,
Grantor's cost therefor and (where applicable) the
current list prices for such Inventory;
(iv) if any Inventory is in possession or control
of any of Grantor's agents or processors, if the
aggregate book value of all such Inventory exceeds
$100,000, and in any event upon the occurrence of an
Event of Default (as defined in the Credit Agreement)
or the occurrence of an Early Termination Date (as
defined in a Master Agreement or an Interest Rate
Swap Agreement or Interest Rate and Currency Exchange
Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar
event under any similar swap agreement) under any
Lender Interest Rate Agreement (either such
occurrence being an "Event of Default" for purposes
of this Agreement), instruct such agent or processor
to hold all such Inventory for the account of Secured
Party and subject to the instructions of Secured
Party; and
XVIII-12
(v) promptly upon the issuance and delivery to
Grantor of any Negotiable Document of Title, deliver
such Negotiable Document of Title to Secured Party.
SECTION 8. INSURANCE. Grantor shall, at its own expense, maintain
insurance with respect to the Equipment and Inventory in accordance with the
terms of the Credit Agreement.
SECTION 9. SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS AND RELATED
CONTRACTS.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its
records concerning the Accounts and Related Contracts, and all
originals of all chattel paper that evidence Accounts, at the
location therefor specified in Section 4 or, upon 30 days'
prior written notice to Secured Party, at such other location
in a jurisdiction where all action that may be necessary or
desirable, or that Secured Party may request, in order to
perfect and protect any security interest granted or purported
to be granted hereby, or to enable Secured Party to exercise
and enforce its rights and remedies hereunder, with respect to
such Accounts and Related Contracts shall have been taken.
Grantor will hold and preserve such records and chattel paper
and will permit representatives of Secured Party at any time
during normal business hours to inspect and make abstracts
from such records and chattel paper, and Grantor agrees to
render to Secured Party, at Grantor's cost and expense, such
clerical and other assistance as may be reasonably requested
with regard thereto. Promptly upon the request of Secured
Party, Grantor shall deliver to Secured Party complete and
correct copies of each Related Contract.
(b) Grantor shall, for not less than five (5) years from
the date on which such Account arose, maintain (i) complete
records of each Account of Grantor, including records of all
payments received, credits granted and merchandise returned,
and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all
amounts due or to become due to Grantor under the Accounts and
Related Contracts. In connection with such collections,
Grantor may take (and, at Secured Party's direction, shall
take) such action as Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or
to become due under the Accounts; provided, however, that
Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default
or an event which with the passage of time or the giving of
notice or both will become an Event of Default and upon
written notice to Grantor of its intention to do so, to notify
the account debtors or obligors under any Accounts of the
assignment of such Accounts to Secured Party and to direct
such account debtors or obligors to make payment of all
amounts due or to become due to Grantor thereunder
XVIII-13
directly to Secured Party, to notify each Person maintaining a
lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment
to remit all amounts representing collections on checks and
other payment items from time to time sent to or deposited in
such lockbox or other arrangement directly to Secured Party
and, upon such notification and at the expense of Grantor, to
enforce collection of any such Accounts and to adjust, settle
or compromise the amount or payment thereof, in the same
manner and to the same extent as Grantor might have done.
After receipt by Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments)
received by Grantor in respect of the Accounts and the Related
Contracts shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds
of Grantor and shall be forthwith paid over or delivered to
Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and
applied as provided by Section 19, and (ii) Grantor shall not
adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any account debtor or
obligor thereof, or allow any credit or discount thereon.
SECTION 10. DEPOSIT ACCOUNTS. Upon the occurrence and during the
continuation of an Event of Default, Secured Party may exercise dominion and
control over, and refuse to permit further withdrawals (whether of money,
securities, instruments or other property) from any deposit accounts maintained
with Secured Party constituting part of the Collateral.
SECTION 11. SPECIAL PROVISIONS WITH RESPECT TO THE INTELLECTUAL PROPERTY
COLLATERAL.
(a) Grantor shall:
(i) diligently keep reasonable records
respecting the Intellectual Property Collateral and
at all times keep at least one complete set of its
records concerning such Collateral at its chief
executive office or principal place of business;
(ii) hereafter use best efforts so as not to
permit the inclusion in any contract to which it
hereafter becomes a party of any provision that could
or might in any way impair or prevent the creation of
a security interest in, or the assignment of,
Grantor's rights and interests in any property
included within the definitions of any Intellectual
Property Collateral acquired under such contracts;
(iii) take any and all steps to protect the
secrecy of all trade secrets relating to the products
and services sold or delivered under or in connection
with the Intellectual Property Collateral, including,
without limitation, where appropriate entering into
confidentiality agreements
XVIII-14
with employees and labeling and restricting access to
secret information and documents;
(iv) use proper statutory notice in connection
with its use of any of the Intellectual Property
Collateral;
(v) use a commercially appropriate standard of
quality (which may be consistent with Grantor's past
practices) in the manufacture, sale and delivery of
products and services sold or delivered under or in
connection with the Trademarks; and
(vi) furnish to Secured Party from time to time
at Secured Party's reasonable request statements and
schedules further identifying and describing any
Intellectual Property Collateral and such other
reports in connection with such Collateral, all in
reasonable detail.
(b) Except as otherwise provided in this Section 11,
Grantor shall continue to collect, at its own expense, all
amounts due or to become due to Grantor in respect of the
Intellectual Property Collateral or any portion thereof. In
connection with such collections, Grantor may take (and, at
Secured Party's reasonable direction, shall take) such action
as Grantor or Secured Party may deem reasonably necessary or
advisable to enforce collection of such amounts; provided,
Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default
and upon written notice to Grantor of its intention to do so,
to notify the obligors with respect to any such amounts of the
existence of the security interest created hereby and to
direct such obligors to make payment of all such amounts
directly to Secured Party, and, upon such notification and at
the expense of Grantor, to enforce collection of any such
amounts and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as
Grantor might have done. After receipt by Grantor of the
notice from Secured Party referred to in the proviso to the
preceding sentence and during the continuation of any Event of
Default, (i) all amounts and proceeds (including checks and
other instruments) received by Grantor in respect of amounts
due to Grantor in respect of the Intellectual Property
Collateral or any portion thereof shall be received in trust
for the benefit of Secured Party hereunder, shall be
segregated from other funds of Grantor and shall be forthwith
paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii)
Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any
obligor with respect thereto or allow any credit or discount
thereon.
(c) Grantor shall have the duty diligently, through
counsel reasonably acceptable to Secured Party, to prosecute,
file and/or make (i) any application relating to any of the
Intellectual Property Collateral owned, held or used by
Grantor and identified on Schedules 1(b), 1(c) or 1(d), as
applicable, that is
XVIII-15
pending as of the date of this Agreement, (ii) any Copyright
Registration on any existing or future unregistered but
copyrightable works (except for works of nominal commercial
value), (iii) application on any future patentable but
unpatented innovation or invention comprising Intellectual
Property Collateral, and (iv) any Trademark opposition and
cancellation proceedings, renew Trademark Registrations and
Copyright Registrations and do any and all acts which are
necessary or desirable to preserve and maintain all rights in
all Intellectual Property Collateral. Any expenses incurred in
connection therewith shall be borne solely by Grantor. Subject
to the foregoing, Grantor shall give Secured Party prior
written notice of any abandonment of any Intellectual Property
Collateral or any pending patent application or any Patent.
(d) Except as provided herein, Grantor shall have the
right to commence and prosecute in its own name, as real party
in interest, for its own benefit and at its own expense, such
suits, proceedings or other actions for infringement, unfair
competition, dilution, misappropriation or other damage, or
reexamination or reissue proceedings as are necessary to
protect the Intellectual Property Collateral. Secured Party
shall provide, at Grantor's expense, all reasonable and
necessary cooperation in connection with any such suit,
proceeding or action including, without limitation, joining as
a necessary party. Grantor shall promptly, following its
becoming aware thereof, notify Secured Party of the
institution of, or of any adverse determination in, any
proceeding (whether in the United States Patent and Trademark
Office, the United States Copyright Office or any federal,
state, local or foreign court) or regarding Grantor's
ownership, right to use, or interest in any Intellectual
Property Collateral. Grantor shall provide to Secured Party
any information with respect thereto requested by Secured
Party.
(e) In addition to, and not by way of limitation of, the
granting of a security interest in the Collateral pursuant
hereto, Grantor, effective upon the occurrence and during the
continuation of an Event of Default and upon written notice
from Secured Party, shall grant, sell, convey, transfer,
assign and set over to Secured Party, all of Grantor's right,
title and interest in and to the Intellectual Property
Collateral to the extent necessary to enable Secured Party to
use, possess and realize on the Intellectual Property
Collateral and to enable any successor or assign to enjoy the
benefits of the Intellectual Property Collateral. This right
shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and
transferees, whether by voluntary conveyance, operation of
law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or otherwise. Such right and license shall be
granted free of charge, without requirement that any monetary
payment whatsoever be made to Grantor. In addition, Grantor
hereby grants to Secured Party and its employees,
representatives and agents the right to visit Grantor's and
any of its Affiliate's or subcontractor's plants, facilities
and other places of business that are utilized in connection
with the manufacture,
XVIII-16
production, inspection, storage or sale of products and
services sold or delivered under any of the Intellectual
Property Collateral (or which were so utilized during the
prior six month period), and to inspect the quality control
and all other records relating thereto upon reasonable advance
written notice to Grantor and at reasonable dates and times
and as often as may be reasonably requested. If and to the
extent that Grantor is permitted to license the Intellectual
Property Collateral, Secured Party shall promptly enter into a
non-disturbance agreement or other similar arrangement, at
Grantor's request and expense, with Grantor and any licensee
of any Intellectual Property Collateral permitted hereunder in
form and substance reasonably satisfactory to Secured Party
pursuant to which (i) Secured Party shall agree not to disturb
or interfere with such licensee's rights under its license
agreement with Grantor so long as such licensee is not in
default thereunder, and (ii) such licensee shall acknowledge
and agree that the Intellectual Property Collateral licensed
to it is subject to the security interest created in favor of
Secured Party and the other terms of this Agreement.
SECTION 12. TRANSFERS AND OTHER LIENS.
(a) Grantor shall not: (i) sell, assign (by operation of
law or otherwise) or otherwise dispose of any of the
Collateral, except as permitted by the Credit Agreement; or
(ii)except for the interests disclosed on Schedule 4(a)
annexed hereto and the security interest created by this
Agreement, create or suffer to exist any Lien upon or with
respect to any of the Collateral to secure the indebtedness or
other obligations of any Person; provided that in the event
Grantor makes an asset sale permitted by the Credit Agreement
and the assets subject to such asset sale are Collateral,
Secured Party shall release the Collateral that is the subject
of such asset sale to Grantor free and clear of the lien and
security interest under this Agreement concurrently with the
consummation of such asset sale; provided, further that, as a
condition precedent to such release, Secured Party shall have
received evidence satisfactory to it that arrangements
satisfactory to it have been made for delivery to Secured
Party of the Net Asset Sale Proceeds of such asset sale to the
extent required under the Credit Agreement.
SECTION 13. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Grantor hereby
irrevocably appoints Secured Party as Grantor's attorney-in-fact, with full
authority in the place and stead of Grantor and in the name of Grantor, Secured
Party or otherwise, from time to time in Secured Party's discretion to take any
action and to execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including without
limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to
Section 8;
XVIII-17
(b) to ask for, demand, collect, ▇▇▇ for, recover,
compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the
Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with
clauses (a) and (b) above;
(d) to file any claims or take any action or institute
any proceedings that Secured Party may deem necessary or
desirable for the collection of any of the Collateral or
otherwise to enforce the rights of Secured Party with respect
to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied
or placed upon or threatened against the Collateral, the
legality or validity thereof and the amounts necessary to
discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to
become obligations of Grantor to Secured Party, due and
payable immediately without demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in
connection with Accounts and other documents relating to the
Collateral; and
(g) upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though Secured Party
were the absolute owner thereof for all purposes, and to do,
at Secured Party's option and Grantor's expense, at any time
or from time to time, all acts and things that Secured Party
deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's security interest therein in
order to effect the intent of this Agreement, all as fully and
effectively as Grantor might do.
SECTION 14. SECURED PARTY MAY PERFORM. If Grantor fails to perform any
agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Grantor under Section 19(b).
SECTION 15. STANDARD OF CARE. The powers conferred on Secured Party
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and
XVIII-18
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.
SECTION 16. REMEDIES. If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "CODE") (whether
or not the Code applies to the affected Collateral), and also may (a) require
Grantor to, and Grantor hereby agrees that it will at its expense and upon
request of Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a place to
be designated by Secured Party that is reasonably convenient to both parties,
(b) enter onto the property where any Collateral is located and take possession
thereof with or without judicial process, (c) prior to the disposition of the
Collateral, store, process, repair or recondition the Collateral or otherwise
prepare the Collateral for disposition in any manner to the extent Secured Party
deems appropriate, (d) take possession of Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of Grantor's equipment for the purpose of completing any work in process, taking
any actions described in the preceding clause (c) and collecting any Secured
Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 21(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
Grantor, and Grantor hereby waives (to the extent permitted by applicable law)
all rights of redemption, stay and/or appraisal which it now has or may at any
time in the future have under any rule of law or statute now existing or
hereafter enacted. Grantor agrees that, to the extent notice of sale shall be
required by law, at least ten days' notice to Grantor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. Secured
Party may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Grantor hereby
waives any claims against Secured Party arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale, even if Secured
Party accepts the first offer received and does not offer such Collateral to
more than one offeree. If the
XVIII-19
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, Grantor shall be liable for the deficiency and
the fees of any attorneys employed by Secured Party to collect such deficiency.
SECTION 17. ADDITIONAL REMEDIES FOR INTELLECTUAL PROPERTY COLLATERAL.
(a) Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the
continuation of an Event of Default, (i) Secured Party shall
have the right (but not the obligation) to bring suit, in the
name of Grantor, Secured Party or otherwise, to enforce any
Intellectual Property Collateral, in which event Grantor
shall, at the request of Secured Party, do any and all lawful
acts and execute any and all documents required by Secured
Party in aid of such enforcement and Grantor shall promptly,
upon demand, reimburse and indemnify Secured Party as provided
in subsections 10.2 and 10.3 of the Credit Agreement and
Section 19 hereof, in connection with the exercise of its
rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any
Intellectual Property Collateral as provided in this Section,
Grantor agrees to use all reasonable measures, whether by
action, suit, proceeding or otherwise, to prevent the
infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to use its commercially
reasonable judgement in maintaining any action, suit or
proceeding against any Person so infringing reasonably
necessary to prevent such infringement; (ii) upon written
demand from Secured Party, Grantor shall execute and deliver
to Secured Party an assignment or assignments of the
Intellectual Property Collateral and such other documents as
are necessary or appropriate to carry out the intent and
purposes of this Agreement; (iii) Grantor agrees that such an
assignment and/or recording shall be applied to reduce the
Secured Obligations outstanding only to the extent that
Secured Party (or any Lender) receives cash proceeds in
respect of the sale of, or other realization upon, the
Intellectual Property Collateral; and (iv) within five
Business Days after written notice from Secured Party, Grantor
shall make available to Secured Party, to the extent within
Grantor's power and authority, such personnel in Grantor's
employ on the date of such Event of Default as Secured Party
may reasonably designate, by name, title or job
responsibility, to permit Grantor to continue, directly or
indirectly, to produce, advertise and sell the products and
services sold or delivered by Grantor under or in connection
with the Trademarks, Trademark Registrations and Trademark
Rights, such persons to be available to perform their prior
functions on Secured Party's behalf and to be compensated by
Secured Party at Grantor's expense on a per diem, pro-rata
basis consistent with the salary and benefit structure
applicable to each as of the date of such Event of Default.
XVIII-20
(b) If (i) an Event of Default shall have occurred and,
by reason of cure, waiver, modification, amendment or
otherwise, no longer be continuing, (ii) no other Event of
Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests
in and to the Intellectual Property Collateral shall have been
previously made, and (iv) the Secured Obligations shall not
have become immediately due and payable, upon the written
request of Grantor, Secured Party shall promptly execute and
deliver to Grantor such assignments as may be necessary to
reassign to Grantor any such rights, title and interests as
may have been assigned to Secured Party as aforesaid, subject
to any disposition thereof that may have been made by Secured
Party; provided, after giving effect to such reassignment,
Secured Party's security interest granted pursuant hereto, as
well as all other rights and remedies of Secured Party granted
hereunder, shall continue to be in full force and effect; and
provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than
Liens (if any) encumbering such rights, title and interest at
the time of their assignment to Secured Party and Permitted
Encumbrances.
SECTION 18. APPLICATION OF PROCEEDS. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations as provided in
subsection 2.4D of the Credit Agreement
SECTION 19. INDEMNITY AND EXPENSES.
(a) Grantor agrees to indemnify Secured Party, each
Lender and each Interest Rate Exchanger from and against any
and all claims, losses and liabilities in any way relating to,
growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without
limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from
Secured Party's or such Lender's or Interest Rate Exchanger's
gross negligence or willful misconduct as finally determined
by a court of competent jurisdiction.
(b) Grantor agrees to pay to Secured Party upon demand
the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts
and agents, that Secured Party may incur in connection with
(i) the administration of this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii)
the exercise or enforcement of any of the rights of Secured
Party hereunder, or (iv) the failure by Grantor to perform or
observe any of the provisions hereof.
XVIII-21
(c) The obligations of Grantor in this Section 19 shall
survive the termination of this Agreement and the discharge of
Grantor's other obligations under this Agreement.
SECTION 20. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the payment in full of the
Secured Obligations, the cancellation or termination of the Commitments, and the
cancellation or expiration of all outstanding Letters of Credit, (b) be binding
upon Grantor and its successors and assigns, and (c) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (c), but subject to the provisions of subsection 10.1 of
the Credit Agreement, any Lender may assign or otherwise transfer any Loans held
by it to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to Lenders herein or otherwise.
Upon the payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration of all
outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantor. Upon any
such termination Secured Party will, at Grantor's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
SECTION 21. SECURED PARTY AS AGENT.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders and, by their acceptance of the
benefits hereof, Interest Rate Exchangers. Secured Party shall
be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any
action (including without limitation the release or
substitution of Collateral), solely in accordance with this
Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies
provided for in Section 16 in accordance with the instructions
of (i) Requisite Lenders or (ii) after payment in full of all
Obligations under the Credit Agreement and the other Loan
Documents, the holders of a majority of the aggregate notional
amount (or, with respect to any Lender Interest Rate Agreement
that has been terminated in accordance with its terms, the
amount then due and payable (exclusive of expenses and similar
payments but including any early termination payments then
due) under such Lender Interest Rate Agreement) under all
Lender Interest Rate Agreements (Requisite Lenders or, if
applicable, such holders being referred to herein as
"REQUISITE OBLIGEES"). In furtherance of the foregoing
provisions of this Section 21(a), each Interest Rate
Exchanger, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any
of the Collateral hereunder, it being understood and agreed by
such Interest Rate Exchanger that all rights and remedies
hereunder may be exercised solely by Secured Party for the
benefit of
XVIII-22
Lenders and Interest Rate Exchangers in accordance with the
terms of this Section 21(a).
(b) Secured Party shall at all times be the same Person
that is Administrative Agent under the Credit Agreement.
Written notice of resignation by Administrative Agent pursuant
to subsection 9.5 of the Credit Agreement shall also
constitute notice of resignation as Secured Party under this
Agreement; removal of Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute
removal as Secured Party under this Agreement; and appointment
of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a
successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Administrative Agent under
subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder,
together with all records and other documents necessary or
appropriate in connection with the performance of the duties
of the successor Secured Party under this Agreement, and (ii)
execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other
actions, as may be necessary or appropriate in connection with
the assignment to such successor Secured Party of the security
interests created hereunder, whereupon such retiring or
removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal
hereunder as Secured Party, the provisions of this Agreement
shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was Secured
Party hereunder.
SECTION 22. AMENDMENTS; ETC. No amendment, modification, termination or
waiver of any provision of this Agreement, and no consent to any departure by
Grantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Secured Party and, in the case of any such amendment or
modification, by Grantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
SECTION 23. NOTICES. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier service, upon
receipt of telefacsimile, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided that
notices to Secured Party shall not be effective until received. For the purposes
XVIII-23
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 24. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Secured Party in the exercise of any power,
right or privilege hereunder shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude any
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 25. SEVERABILITY. In case any provision in or obligation under
this Agreement shall be invalid, illegal or unenforceable in any jurisdiction,
the validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
SECTION 26. HEADINGS. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 27. GOVERNING LAW; TERMS; RULES OF CONSTRUCTION. THIS AGREEMENT
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of New York are used herein as therein defined. The rules of construction
set forth in subsection 1.3 of the Credit Agreement shall be applicable to this
Agreement mutatis mutandis.
SECTION 28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY
EXECUTING AND
XVIII-24
DELIVERING THIS AGREEMENT, GRANTOR, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO GRANTOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION
23; (IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO
CONFER PERSONAL JURISDICTION OVER GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH
COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST GRANTOR IN THE COURTS OF
ANY OTHER JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 28
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
SECTION 29. WAIVER OF JURY TRIAL. GRANTOR AND SECURED PARTY HEREBY AGREE
TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims, and all
other common law and statutory claims. Grantor and Secured Party acknowledge
that this waiver is a material inducement for Grantor and Secured Party to enter
into a business relationship, that Grantor and Secured Party have already relied
on this waiver in entering into this Agreement and that each will continue to
rely on this waiver in their related future dealings. Grantor and Secured Party
further warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 30. COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple
XVIII-25
separate counterparts and attached to a single counterpart so that all signature
pages are physically attached to the same document.
[Remainder of page intentionally left blank]
XVIII-26
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[NAME OF GRANTOR]
By:
------------------------------
Name:
Title:
Address:
BANKERS TRUST COMPANY,
as Secured Party
By:
------------------------------
Name:
Title:
Address:]
XVIII-27
SCHEDULE 1(B) TO
SUBSIDIARY SECURITY AGREEMENT
TRADEMARKS:
-----------
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------------ ------------
XVIII-28
SCHEDULE 1(C) TO
SUBSIDIARY SECURITY AGREEMENT
PATENTS ISSUED:
---------------
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
PATENTS PENDING:
----------------
Applicant's Date Application
Name Filed Number Invention Inventor
----------- ----- ----------- --------- --------
XVIII-29
SCHEDULE 1(D) TO
SUBSIDIARY SECURITY AGREEMENT
U.S. COPYRIGHTS:
----------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
FOREIGN COPYRIGHT REGISTRATIONS:
--------------------------------
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
----------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- --------- ---------
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
-------------------------------------------------------
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
XVIII-30
SCHEDULE 4(A)
TO
SUBSIDIARY SECURITY AGREEMENT
INTERESTS IN COLLATERAL
XVIII-31
SCHEDULE 4(B)
TO
SUBSIDIARY SECURITY AGREEMENT
LOCATIONS OF EQUIPMENT AND INVENTORY
Name of Company/Limited Partnership Locations of Equipment and Inventory
----------------------------------- ------------------------------------
XVIII-32
SCHEDULE 4(D)
TO
SUBSIDIARY SECURITY AGREEMENT
Office Locations
Name of Company Office Locations
--------------- ----------------
XVIII-33
SCHEDULE 4(E)
TO
SUBSIDIARY SECURITY AGREEMENT
Other Names
NAME OF COMPANY/LIMITED PARTNERSHIP OTHER NAMES
----------------------------------- -----------
XVIII-34
SCHEDULE 4(H)
TO
SUBSIDIARY SECURITY AGREEMENT
FILING OFFICES
XVIII-35
EXHIBIT I TO
SUBSIDIARY SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [INSERT SUBSIDIARY NAME], a _________________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Trademark Collateral (as defined
below); and
WHEREAS, Blackbaud, Inc. has entered into a Credit Agreement dated as
of October 13, 1999 (said Credit Agreement, as so amended, restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the financial institutions named therein (collectively, together
with their respective successors and assigns party to the Credit Agreement from
time to time, the "Lenders"), Fleet National Bank, as Documentation Agent and
First Union Securities, Inc., as Syndication Agent, and Bankers Trust Company,
as Administrative Agent (in such capacity, "SECURED PARTY");
WHEREAS, Under the Credit Agreement the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Blackbaud, Inc.; and
WHEREAS, pursuant to the terms of a Subsidiary Security Agreement dated
as of _____________ __, ____ (as amended, supplemented or otherwise modified
from time to time, the "SECURITY AGREEMENT"), among Grantor and Secured Party,
Grantor has agreed to create in favor of Secured Party a secured and protected
interest in, and Secured Party has agreed to become a secured creditor with
respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "TRADEMARK COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all
trademarks, service marks, designs, logos, indicia, tradenames, trade
dress, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by Grantor, or
hereafter adopted and used, in its business (including, without
limitation, the trademarks specifically identified in Schedule A)
(collectively, the "TRADEMARKS"); provided that trademarks,
servicemarks, designs, logos, indicia, tradenames, trade dress,
corporate names, company names, business
XVIII-36
names, fictitious business names, trade styles and/or other sources
and/or business identifiers and applications pertaining thereto
considered to be work product performed for or acquired on behalf of
customers of Grantor or which have been assigned or are required to be
assigned to such customer shall not be deemed Trademarks or Trademark
Collateral; all registrations that have been or may hereafter be issued
or applied for thereon in the United States and any state thereof and
in foreign countries (including, without limitation, the registrations
and applications specifically identified in Schedule A) (the "TRADEMARK
REGISTRATIONS"); provided that registrations that have been or may
hereafter be issued or applied for thereon in the United States and any
state thereof and in foreign countries on behalf of or acquired on
behalf of customers of Grantor or which have been assigned or are
required to be assigned to such customer shall not be deemed Trademark
Registrations or Trademark Collateral; all common law and other rights
(but in no event any of the obligations) in and to the Trademarks in
the United States and any state thereof and in foreign countries (the
"TRADEMARK RIGHTS"), and all goodwill of Grantor's business symbolized
by the Trademarks and associated therewith (the "ASSOCIATED GOODWILL");
and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Trademark Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Trademark Collateral. For purposes of
this Grant of Trademark Security Interest, the term "PROCEEDS" includes
whatever is receivable or received when Trademark Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[The remainder of this page is intentionally left blank.]
XVIII-37
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the __this day of _______, ____.
[NAME OF GRANTOR]
By:
-----------------------------
Name:
Title:
XVIII-38
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ------------- ------------ -------------
XVIII-39
EXHIBIT II TO
SUBSIDIARY SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [INSERT SUBSIDIARY NAME], a ___________________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Patent Collateral (as defined
below); and
WHEREAS, Blackbaud, Inc. has entered into a Credit Agreement dated as
of October 13, 1999 (said Credit Agreement, as so amended, restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the financial institutions named therein (collectively, together
with their respective successors and assigns party to the Credit Agreement from
time to time, the "Lenders"), Fleet National Bank, as Documentation Agent and
First Union Securities, Inc., as Syndication Agent, and Bankers Trust Company,
as Administrative Agent (in such capacity, "SECURED PARTY");
WHEREAS, under the Credit Agreement, the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Blackbaud, Inc.; and
WHEREAS, pursuant to the terms of a Subsidiary Security Agreement dated
as of ___________ __, ____ (as amended, supplemented or otherwise modified from
time to time, the "SECURITY AGREEMENT"), among Grantor and Secured Party,
Grantor has agreed to create in favor of Secured Party a secured and protected
interest in, and Secured Party has agreed to become a secured creditor with
respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "PATENT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all patents
and patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or
in the future may be, owned or held by Grantor and all patents and
patent applications and rights, title and interests in patents and
patent applications under any domestic or foreign law that are
presently, or in the future may be, owned by Grantor
XVIII-40
in whole or in part (including, without limitation, the patents and
patent applications listed in Schedule A), all rights (but not
obligations) corresponding thereto to ▇▇▇ for past, present and future
infringements and all re-issues, divisions, continuations, renewals,
extensions and continuations-in-part thereof (all of the foregoing
being collectively referred to as the "PATENTS"); provided that patents
and patent applications and rights and interests in patents and patent
applications considered to be work product performed for or acquired on
behalf of customers of Grantor or which have been assigned or are
required to be assigned to such customer shall not be deemed Patents or
Patent Collateral; and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Patent Collateral. For purposes of this Grant of
Patent Security Interest, the term "PROCEEDS" includes whatever is
receivable or received when Patent Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[The remainder of this page intentionally left blank.]
XVIII-41
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___this day of ____________, ____.
[NAME OF GRANTOR]
By:
------------------------------
Name:
Title:
XVIII-42
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
PATENTS ISSUED:
---------------
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
PATENTS PENDING:
----------------
Applicant's Date Application
Name Filed Number Invention Inventor
----------- ----- ----------- --------- --------
XVIII-43
EXHIBIT III TO
SUBSIDIARY SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [INSERT SUBSIDIARY NAME], a _________________ corporation
("GRANTOR"), owns and uses in its business, and will in the future adopt and so
use, various intangible assets, including the Copyright Collateral (as defined
below); and
WHEREAS, Blackbaud, Inc. has entered into a Credit Agreement dated as
of October 13, 1999 (said Credit Agreement, as so amended, restated,
supplemented or otherwise modified, being the "CREDIT AGREEMENT"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the financial institutions named therein (collectively, together
with their respective successors and assigns party to the Credit Agreement from
time to time, the "Lenders") and, Fleet National Bank, as Documentation Agent
and First Union Securities, Inc., as Syndication Agent, as Administrative Agent
(in such capacity, "SECURED PARTY");
WHEREAS, under the Credit Agreement, the Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Blackbaud, Inc.; and
WHEREAS, pursuant to the terms of a Subsidiary Security Agreement dated
as of __________ __, ____ (as amended, supplemented or otherwise modified from
time to time, the "SECURITY AGREEMENT"), among Grantor and Secured Party,
Grantor has agreed to create in favor of Secured Party a secured and protected
interest in, and Secured Party has agreed to become a secured creditor with
respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, subject to the terms and conditions
of the Credit Agreement and the Security Agreement, Grantor hereby grants to
Secured Party a security interest in all of Grantor's right, title and interest
in and to the following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and wherever the same
may be located (the "COPYRIGHT COLLATERAL"):
(i) all rights, title and interest (including rights acquired
pursuant to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in
various published and unpublished works of authorship including,
without limitation, computer programs, computer data bases, other
computer software layouts, trade dress, drawings, designs, writings,
and formulas (including, without limitation, the works listed on
Schedule A, as the same may be amended pursuant hereto from time to
time) (collectively, the "COPYRIGHTS"); provided that rights, title and
interest under copyright in various published and unpublished works of
authorship including, without limitation, computer programs,
XVIII-44
computer data bases, other computer software, layouts, trade dress,
drawings, designs, writings, formulas, copyright registrations and
applications for copyright registrations considered to be work product
performed for or acquired on behalf of customers of Grantor or which
have been assigned or are required to be assigned to such customer
shall not be deemed Copyrights or Copyright Collateral, all copyright
registrations issued to Grantor and applications for copyright
registration that have been or may hereafter be issued or applied for
thereon in the United States and any state thereof and in foreign
countries (including, without limitation, the registrations listed on
Schedule A, as the same may be amended pursuant hereto from time to
time) (collectively, the "COPYRIGHT REGISTRATIONS"); provided that
copyright registrations issued to Grantor and applications for
copyright registration that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof and in
foreign countries on behalf of or acquired on behalf of customers of
Grantor or which have been assigned or are required to be assigned to
such customer shall not be deemed Copyright Registrations or Copyright
Collateral, all common law and other rights in and to the Copyrights in
the United States and any state thereof and in foreign countries
including all copyright licenses (but with respect to such copyright
licenses, only to the extent permitted by such licensing arrangements)
(the "COPYRIGHT RIGHTS"), including, without limitation, each of the
Copyrights, rights, titles and interests in and to the Copyrights and
works protectable by copyright, which are presently, or in the future
may be, owned, created (as a work for hire for the benefit of Grantor),
authored (as a work for hire for the benefit of Grantor), or acquired
by Grantor, in whole or in part, and all Copyright Rights with respect
thereto and all Copyright Registrations therefor, heretofore or
hereafter granted or applied for, and all renewals and extensions
thereof, throughout the world, including all proceeds thereof (such as,
by way of example and not by limitation, license royalties and proceeds
of infringement suits), the right (but not the obligation) to renew and
extend such Copyright Registrations and Copyright Rights and to
register works protectable by copyright and the right (but not the
obligation) to ▇▇▇ in the name of Grantor or in the name of Secured
Party or Lenders for past, present and future infringements of the
Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and
all of the foregoing Copyright Collateral and, to the extent not
otherwise included, all payments under insurance (whether or not
Secured Party is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Copyright Collateral. For purposes of
this Grant of Copyright Security Interest, the term "PROCEEDS" includes
whatever is receivable or received when Copyright Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a
XVIII-45
breach of the terms of, or constitute a default under any license, contract or
agreement to which Grantor is a party; provided, that immediately upon the
ineffectiveness, lapse or termination of any such provision, the Copyright
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
[The remainder of this page intentionally left blank.]
XVIII-46
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ___this day of ___________, ____.
[NAME OF GRANTOR]
By:
-----------------------------
Name:
Title:
XVIII-47
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. COPYRIGHTS:
----------------
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
FOREIGN COPYRIGHT REGISTRATIONS:
--------------------------------
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
PENDING U.S. COPYRIGHT REGISTRATIONS & APPLICATIONS:
----------------------------------------------------
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- --------- ---------
PENDING FOREIGN COPYRIGHT REGISTRATIONS & APPLICATIONS:
-------------------------------------------------------
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
XVIII-48
EXHIBIT IV TO
SUBSIDIARY SECURITY AGREEMENT
SUBSIDIARY SECURITY AGREEMENT SUPPLEMENT
This SUBSIDIARY SECURITY AGREEMENT SUPPLEMENT, dated _______, is
delivered pursuant to the Subsidiary Security Agreement, dated as of _________
__, ____ (as it may be from time to time amended, modified or supplemented, the
"SUBSIDIARY SECURITY AGREEMENT"), among [INSERT NAME OF GRANTOR], as Grantor,
and Bankers Trust Company, as Administrative Agent and as Secured Party.
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Subsidiary Security Agreement.
Subject to the terms and conditions of the Subsidiary Security
Agreement, Grantor hereby grants to Secured Party a security interest in all of
Grantor's right, title and interest in and to the Intellectual Property
Collateral listed on Supplemental Schedule [1(b)] [1(c)] [1.(d)] attached hereto
the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located. All such Intellectual Property Collateral shall be deemed to be part of
the Collateral and hereafter subject to each of the terms and conditions of the
Subsidiary Security Agreement.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
XVIII-49