EXECUTION COPY
Exhibit 10.8
================================================================================
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
among
COOPERATIVE COMPUTING, INC.,
as Borrower,
COOPERATIVE COMPUTING HOLDING COMPANY, INC.,
as Guarantor,
The Several Lenders
from Time to Time Parties Hereto
and
JPMORGAN CHASE BANK,
as Administrative Agent
Dated as of February 27, 1997
as amended and restated as of February 10, 1998,
as further amended and restated as of December 3, 2002
================================================================================
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Lead Arranger and Bookrunner
Table of Contents
Page
----
ARTICLE 1. DEFINITIONS........................................................................ 1
1.1 Defined Terms...................................................................... 1
1.2 Other Definitional Provisions...................................................... 25
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS.................................................... 26
2.1 Revolving Credit Commitments....................................................... 26
2.2 Revolving Credit Notes............................................................. 26
2.3 Procedure for Revolving Credit Borrowing........................................... 26
2.4 Commitment Fee; Administrative Agent Fees.......................................... 27
2.5 Termination or Reduction of Revolving Credit Commitments........................... 27
2.6 Tranche B Term Loans............................................................... 28
2.7 Tranche B Term Notes............................................................... 28
2.8 Procedure for Tranche B Term Loan Borrowing; Repayment of Loans.................... 29
2.9 Optional Prepayments............................................................... 30
2.10 Mandatory Prepayments and Revolving Credit Commitment Reductions................... 31
2.11 Conversion and Continuation Options................................................ 33
2.12 Minimum Amounts of Tranches........................................................ 33
2.13 Swing Line Commitment.............................................................. 33
ARTICLE 3. LETTERS OF CREDIT.................................................................. 36
3.1 The L/C Commitment................................................................. 36
3.2 Procedure for Issuance of Letters of Credit........................................ 36
3.3 Fees, Commissions and Other Charges................................................ 37
3.4 L/C Participations................................................................. 37
3.5 Reimbursement Obligation of the Borrower........................................... 38
3.6 Obligations Absolute............................................................... 39
3.7 Letter of Credit Payments.......................................................... 39
3.8 Letter of Credit Applications...................................................... 39
ARTICLE 4. GENERAL PROVISIONS................................................................. 39
4.1 Interest Rates and Payment Dates................................................... 39
4.2 Computation of Interest and Fees................................................... 40
4.3 Inability to Determine Interest Rate............................................... 40
4.4 Pro Rata Treatment and Payments.................................................... 41
4.5 Illegality......................................................................... 43
4.6 Requirements of Law................................................................ 43
4.7 Taxes.............................................................................. 45
4.8 Indemnity.......................................................................... 48
4.9 Replacement of Lender.............................................................. 49
i
Page
----
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.................................... 50
5.1 Financial Condition............................................... 50
5.2 No Change......................................................... 51
5.3 Corporate Existence; Compliance with Law.......................... 51
5.4 Corporate Power; Authorization; Enforceable Obligations........... 51
5.5 No Legal Bar...................................................... 51
5.6 No Material Litigation............................................ 52
5.7 No Default........................................................ 52
5.8 Ownership of Property; Liens...................................... 52
5.9 Intellectual Property............................................. 52
5.10 Taxes............................................................. 52
5.11 Federal Regulations............................................... 53
5.12 ERISA............................................................. 53
5.13 Investment Company Act; Other Regulations......................... 54
5.14 Subsidiaries, Etc................................................. 54
5.15 Purpose of Loans.................................................. 54
5.16 Environmental Matters............................................. 54
5.17 Disclosure........................................................ 55
5.18 Guarantee and Collateral Agreement................................ 55
5.19 Solvency.......................................................... 56
5.20 No Fees........................................................... 56
5.21 Insurance......................................................... 56
5.22 Labor Matters..................................................... 56
5.23 Senior Indebtedness............................................... 56
5.24 Provision of License Products; Non-Competition, Etc............... 57
5.25 Lease Transactions; Lease Transaction Obligations................. 57
ARTICLE 6. CONDITIONS PRECEDENT.............................................. 57
6.1 Conditions to Initial Loans....................................... 57
6.2 Conditions to Each Loan........................................... 61
ARTICLE 7. AFFIRMATIVE COVENANTS............................................. 62
7.1 Financial Statements.............................................. 62
7.2 Certificates; Other Information................................... 63
7.3 Payment of Obligations............................................ 64
7.4 Conduct of Business and Maintenance of Existence.................. 64
7.5 Maintenance of Property; Insurance................................ 64
7.6 Inspection of Property: Books and Records; Discussions............ 64
7.7 Notices........................................................... 65
7.8 Environmental Laws................................................ 66
7.9 Pledge of After Acquired Property................................. 66
7.10 Pledge During Event of Default.................................... 67
7.11 Additional Subsidiaries........................................... 67
7.12 Substantive Consolidation......................................... 68
7.13 Intellectual Property............................................. 68
7.14 Covenants Relating to Collateral.................................. 68
ii
Page
----
ARTICLE 8. NEGATIVE COVENANTS............................................................ 68
8.1 Financial Condition Covenants.................................................. 68
8.2 Limitation on Indebtedness..................................................... 70
8.3 Limitation on Liens............................................................ 72
8.4 Limitation on Guarantee Obligations............................................ 74
8.5 Limitation on Fundamental Changes.............................................. 75
8.6 Limitation on Sale of Assets................................................... 75
8.7 Limitation on Dividends........................................................ 76
8.8 Limitation on Capital Expenditures............................................. 78
8.9 Limitation on Investments, Loans and Advances.................................. 78
8.10 Modifications of Lease Transaction Obligations................................. 80
8.11 Limitation on Transactions with Affiliates..................................... 80
8.12 Limitation on Sales and Leasebacks............................................. 81
8.13 Limitation on Changes in Fiscal Year........................................... 81
8.14 Restrictions Affecting Subsidiaries............................................ 81
8.15 Limitation on Lines of Business................................................ 82
8.16 CCHC Holding Company Status; Ownership of Borrower............................. 82
8.17 Amendments to Corporate Documents; Licenses.................................... 82
8.18 Limitation on Optional Payments and Modifications of Debt Instruments, Etc..... 82
8.19 Limitation on Provision of License Products.................................... 83
ARTICLE 9. EVENTS OF DEFAULT............................................................. 83
ARTICLE 10. THE ADMINISTRATIVE AGENT...................................................... 86
10.1 Appointment.................................................................... 86
10.2 Delegation of Duties........................................................... 86
10.3 Exculpatory Provisions......................................................... 86
10.4 Reliance by Administrative Agent............................................... 87
10.5 Notice of Default.............................................................. 87
10.6 Non-Reliance on Administrative Agent and Other Lenders......................... 87
10.7 Indemnification................................................................ 88
10.8 Administrative Agent in Its Individual Capacity................................ 88
10.9 Successor Administrative Agent................................................. 88
10.10 Additional Ministerial Powers of Administrative Agent.......................... 89
ARTICLE 11. GUARANTEE..................................................................... 89
11.1 Guarantee...................................................................... 89
11.2 Waiver of Subrogation.......................................................... 89
11.3 Modification of Obligations.................................................... 89
11.4 Waiver by CCHC................................................................. 90
11.5 Reinstatement.................................................................. 91
11.6 Negative Covenants............................................................. 91
ARTICLE 12. MISCELLANEOUS................................................................. 92
12.1 Amendments and Waivers......................................................... 92
12.2 Notices........................................................................ 93
12.3 No Waiver; Cumulative Remedies................................................. 93
iii
Page
----
12.4 Survival of Representations and Warranties........................ 94
12.5 Payment of Expenses and Taxes..................................... 94
12.6 Successors and Assigns; Participations and Assignments............ 95
12.7 Adjustments; Set-off.............................................. 98
12.8 Counterparts...................................................... 98
12.9 Severability...................................................... 98
12.10 Integration....................................................... 98
12.11 GOVERNING LAW..................................................... 99
12.12 Submission To Jurisdiction; Waivers............................... 99
12.13 Acknowledgements.................................................. 99
12.14 WAIVERS OF JURY TRIAL............................................. 100
12.15 Confidentiality................................................... 100
iv
EXHIBITS
A-1 Form of Revolving Credit Note
A-2 Form of Tranche B Term Note
A-3 Form of Swing Line Note
B Form of Amended and Restated Guarantee and Collateral Agreement
C Form of L/C Participation Certificate
D Form of Swing Line Loan Participation Certificate
E Form of Assignment and Acceptance
F Form of Opinion of Counsel to Borrower
G Form of Borrowing Certificate of Borrower
H Form of Perfection Certificate
I Form of Monthly Operating Report
SCHEDULES
1.1 Addresses for Notices; Commitments
5.2 Dividends and Other Distributions
5.4 Required Consents
5.6 Litigation
5.8 Filing Locations and Properties
5.9 Intellectual Property
5.10 Taxes
5.14 Subsidiaries, Joint Ventures, etc.
5.25 Lease Transaction Obligations
8.2 Existing Indebtedness
8.3 Existing Liens
8.4 Existing Guarantee Obligations
8.9 Existing Investments
v
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December
3, 2002, among COOPERATIVE COMPUTING, INC., a Delaware corporation (the
"Borrower"), COOPERATIVE COMPUTING HOLDING COMPANY, INC., a Delaware corporation
("CCHC"), the several banks and other financial institutions from time to time
parties hereto (the "Lenders") and JPMORGAN CHASE BANK, as administrative agent
for the Lenders hereunder (in such capacity, the "Administrative Agent").
W I T N E S S E T H :
WHEREAS, the Borrower, CCHC, certain lenders (the "Existing
Lenders") and the Administrative Agent are parties to the $100,000,000 Amended
and Restated Credit Agreement dated as of February 10, 1998 (as in effect
immediately prior to the effectiveness of this Agreement, the "Existing Credit
Agreement");
WHEREAS, in order to refinance the Borrower's commitments and
indebtedness under the Existing Credit Agreement, and for other purposes
described herein, the Borrower has requested that the Lenders establish a
$35,000,000 term loan facility (the "Tranche B Term Loan Facility") and a
$17,500,000 revolving credit facility (the "Revolving Credit Facility", with the
Tranche B Term Loan Facility, the "Facilities", and each, a "Facility") pursuant
to which term loans and revolving credit loans may be made to the Borrower and
letters of credit may be issued under the Revolving Credit Facility for the
account of the Borrower; and
WHEREAS, (i) the Existing Credit Agreement is being amended and
restated pursuant to this Agreement, (ii) all Tranche A Term Loans and Tranche B
Term Loans outstanding under the Existing Credit Agreement will be repaid, and
(iii) all obligations of the Credit Parties under the Loan Documents (as such
terms are defined herein) and all liens and security interests created under the
Loan Documents will be continued, amended and restated as provided herein and
therein and will not be cancelled or discharged;
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"Additional Common Stock": the Series A Common Stock, par value
$0.000125, issued by CCHC to HMTF in connection with the Additional
▇▇▇▇▇ Muse Equity Investment.
"Additional ▇▇▇▇▇ Muse Equity Investment": the common stock
investment of up to $10,000,000 in CCHC made by HMTF by its purchase of
the Additional Common Stock.
"Administrative Agent": as defined in the preamble to this
Agreement.
2
"Affected Eurodollar Loans": as defined in Section 2.10(h).
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (i) vote 51% or more of the
securities having ordinary voting power for the election of directors
of such Person or (ii) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Second Amended and Restated Credit Agreement, as
further amended, amended and restated, supplemented or otherwise
modified from time to time.
"Alternate Base Rate": for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by Chase as its prime rate in effect at its principal office in
New York City; "Base CD Rate" shall mean the sum of (a) the product of
(i) the Three-Month Secondary CD Rate and (ii) a fraction, the
numerator of which is one and the denominator of which is one minus the
C/D Reserve Percentage and (b) the C/D Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate
for three-month certificates of deposit reported as being in effect on
such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board of Governors of the Federal
Reserve System (the "Board") through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under
the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next
preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in
New York City received at approximately 10:00 A.M., New York City time,
on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing
selected by it; and "Federal Funds Effective Rate" shall mean, for any
day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business Day
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized
standing selected by it. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or the
Federal Funds Effective Rate, or both, for any reason, including the
inability or failure of the Administrative Agent to obtain sufficient
quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) or (c), or both,
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no
3
longer exist. Any change in the Alternate Base Rate due to a change in
the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds
Effective Rate shall be effective on the effective day of such change
in the Prime Rate, the Three-Month Secondary CD Rate or the Federal
Funds Effective Rate, respectively.
"Alternate Base Rate Loans": Loans the rate of interest
applicable to which is based upon the Alternate Base Rate.
"Applicable Margin": with respect to any Alternate Base Rate
Loan which is a Revolving Credit Loan, 3.50%, and which is a Tranche B
Term Loan, 3.50%; with respect to any Eurodollar Loan which is a
Revolving Credit Loan, 4.50% and which is a Tranche B Term Loan, 4.50%;
and with respect to any commitment fee, as provided in Section 2.4;
provided that in the event that the ratio of Consolidated Total Debt of
the Borrower and its Subsidiaries to Consolidated EBITDA of the
Borrower and its Subsidiaries, as most recently determined in
accordance with Section 8.1(d), is as set forth in the relevant column
heading below for any quarterly period, any such Applicable Margin
(including in the case of Alternate Base Rate Loans, Swing Line Loans)
for Revolving Credit Loans shall be as provided in the relevant column
heading below, but in no event shall any such reductions be effective
prior to December 31, 2003:
Revolving Credit Loans
Relevant Ratio Applicable Margin for Applicable Margin for
of Consolidated Total Debt to Eurodollar Alternate Base Rate
Consolidated EBITDA Loans Loans Commitment Fee
------------------- ----- ----- --------------
Above 2.50x 4.50% 3.50% 0.500%
2.50x to but excluding 2.25x 4.25 3.25 0.500
2.25x to but excluding 2.00x 4.00 3.00 0.500
2.00x to but excluding 1.75x 3.75 2.75 0.500
1.75x and below 3.50 2.50 0.500
(a) if the financial statements required to be delivered
pursuant to Section 7.1(a) or 7.1(b), as applicable, and the related
compliance certificate required to be delivered pursuant to Section
7.2(b), are delivered on or prior to the date when due (or, in the case
of the fourth quarterly period of each fiscal year of the Borrower, if
financial statements which satisfy the requirements of, and are
delivered within the time period specified in, Section 7.l(b) and a
related compliance certificate which satisfies the requirements of, and
is delivered within the time period specified in, Section 7.2(b), with
respect to any such quarterly period are so delivered within such time
periods), then the Applicable Margin for Revolving Credit Loans during
the period from the date upon which such financial statements were
delivered shall be the Applicable Margin as set forth in the relevant
column heading above; provided, however, that in the event that the
financial statements delivered pursuant to Section 7.1(a) or 7.1(b), as
applicable, and the related
4
compliance certificate required to be delivered pursuant to Section
7.2(b), are not delivered when due, then:
(i) if such financial statements and certificate
are delivered after the date such financial statements and
certificate were required to be delivered (without giving
effect to any applicable cure period) and the Applicable
Margin increases from that previously in effect as a result of
the delivery of such financial statements and certificate,
then the Applicable Margin (including in the case of Alternate
Base Rate Loans, Swing Line Loans) for Revolving Credit Loans
during the period from the date upon which such financial
statements and certificate were required to be delivered
(without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall, except
as otherwise provided in clause (iii) below, be the Applicable
Margin as so increased;
(ii) if such financial statements and certificate
are delivered after the date such financial statements and
certificate were required to be delivered (without giving
effect to any applicable cure period) and the Applicable
Margin for Revolving Credit Loans decreases from that
previously in effect as a result of the delivery of such
financial statements and certificate, then such decrease in
the Applicable Margin shall not become applicable until the
date upon which such financial statements and certificate
actually are delivered;
(iii) if such financial statements and certificate
are not delivered prior to the expiration of the applicable
cure period, then, effective upon such expiration, for the
period from the date upon which such financial statements and
certificate were required to be delivered (after the
expiration of the applicable cure period) until two Business
Days following the date upon which they actually are
delivered, the Applicable Margin (including in the case of
Alternate Base Rate Loans, Swing Line Loans) shall be
determined as if the relevant ratio of Consolidated Total Debt
to Consolidated EBITDA was above 2.50x (it being understood
that the foregoing shall not limit the rights of the
Administrative Agent and the Lenders set forth in Section 9);
and
(b) the Applicable Margin for Tranche B Term Loans shall not
be subject to adjustment based on the ratio of Consolidated Total Debt
to Consolidated EBITDA.
"Asset Sale": any sale, transfer or other disposition
(including any sale and leaseback of assets and any sale of accounts
receivable in connection with a receivable financing transaction) by
the Borrower or any of its Subsidiaries of any property of the Borrower
or any such Subsidiary (including property subject to any Lien under
any Security Document), other than as permitted pursuant to paragraphs
(a) through (c) and (e) through (i) of Section 8.6 (provided that,
except with respect to the loss or condemnation of all or substantially
all of the assets of the Borrower and its Subsidiaries, the proceeds
from such casualty or condemnation (including insurance) are used to
replace or rebuild the lost or condemned assets within the time period
specified in Section 2.10(f)).
5
"Assignee": as defined in Section 12.6(c).
"Assignment and Acceptance": an assignment and acceptance
entered into by a Lender or an assignee, substantially in the form of
Exhibit E.
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) the amount of such Revolving Credit Lender's Revolving Credit
Commitment over (b) the aggregate of (i) the aggregate unpaid principal
amount at such time of all Revolving Credit Loans made by such
Revolving Credit Lender, (ii) an amount equal to such Revolving Credit
Lender's Revolving Credit Commitment Percentage of the aggregate unpaid
principal amount at such time of all Swing Line Loans, provided that
for purposes of calculating Available Revolving Credit Commitments
pursuant to Section 2.4 such amount shall be zero, and (iii) an amount
equal to such Revolving Credit Lender's Revolving Credit Commitment
Percentage of the Letter of Credit Outstandings at such time;
collectively, as to all the Lenders, the "Available Revolving Credit
Commitments."
"Borrower": as defined in the preamble to this Agreement.
"Borrowing Date": any Business Day specified in a notice
pursuant to Section 2.3, 2.8, 2.13 or 3.2 as a date on which the
Borrower requests Lenders to make Loans hereunder or the Issuing Lender
to issue a Letter of Credit hereunder.
"Business": the collective reference to the businesses of CCHC
and the Borrower and their respective Subsidiaries, as conducted on the
date hereof.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close, provided that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on
which commercial banks are not open for dealing in Dollar deposits in
the London interbank market.
"Capital Expenditures": expenditures (including, without
limitation, obligations created under Financing Leases but excluding
payments made thereon, capitalized software and database expenditures,
capitalized investments in service parts and purchase money
Indebtedness in the year in which created but excluding payments made
thereon) of the Borrower and its Subsidiaries (and, for any period
prior to the Initial Closing Date, CCHC and its Subsidiaries) in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired (x) in connection with normal
replacement and maintenance programs properly expensed in accordance
with GAAP, (y) with the proceeds of any casualty insurance or
condemnation award, or (z) with the cash proceeds of any asset sale
made pursuant to Section 8.6(d), applied or contractually committed to
be applied within 180 days from receipt of such proceeds), provided
that for purposes of Section 8.8, Investments made pursuant to Section
8.9(k) shall not be a Capital Expenditure.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership
6
interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit, time deposits, overnight bank deposits,
bankers acceptances and repurchase agreements of any commercial bank
which has capital and surplus in excess of $100,000,000 having
maturities of one year or less from the date of acquisition, (c)
commercial paper of an issuer rated at least A-2 by Standard & Poor's
Ratings Group or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency if both of
the two named rating agencies cease publishing ratings of investments,
(d) money market accounts or funds with or issued by Qualified Issuers,
(e) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (a) above
entered into with any bank meeting the qualifications specified in
clause (b) above and (f) demand deposit accounts maintained in the
ordinary course of business with any bank that is not a Lender not in
excess of $100,000 in the aggregate on deposit with any such bank or
any Lender.
"CCHC": as defined in the preamble to this Agreement.
"C/D Assessment Rate": for any day as applied to the Base CD
Rate, the net annual assessment rate (rounded upward to the nearest
1/100th of 1%) determined by Chase to be payable on such day to the
Federal Deposit Insurance Corporation or any successor ("FDIC") for
FDIC's insuring time deposits made in Dollars at offices of Chase in
the United States.
"C/D Reserve Percentage": for any day as applied to the CD
Base Rate, that percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of the Federal
Reserve System (or any successor), for determining the maximum reserve
requirement for a member bank of the Federal Reserve System in New York
City with deposits exceeding one billion Dollars in respect of new
non-personal time deposits in Dollars in New York City having a three
month maturity and in an amount of $100,000 or more.
"Change of Control": (a) HMTF, its principals and Affiliates,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and management ("HMTFS") shall cease to
have the power, directly or indirectly, to vote or direct the voting of
securities having a majority of the ordinary voting power for the
election of directors of CCHC, provided that the occurrence of the
foregoing events shall not be deemed a Change of Control if (i) at any
time prior to the consummation of an Initial Public Offering, and for
any reason whatever, (A) HMTFS otherwise has the right to designate
(and does so designate) a majority of the board of directors of CCHC or
(B) HMTFS and their employees, directors and officers (the "HMTFS
Group") owns of record and beneficially an amount of common stock of
CCHC equal to at least 50% of the amount of common stock of CCHC
(adjusted for stock splits, stock dividends and other similar events on
an equitable basis) owned by the HMTFS Group of record and beneficially
as of the Initial Closing Date and such ownership by the
7
HMTFS Group represents the largest single block of voting securities of
CCHC held by any Person or related group for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or (ii) at any time after the consummation of an Initial Public
Offering, and for any reason whatever, (A) no "Person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act),
excluding the HMTFS Group, shall become the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under such Act), directly or
indirectly, of more than the greater of (x) 15% of the voting shares
then outstanding and (y) the percentage of the then outstanding voting
stock of CCHC owned by the HMTFS Group and (B) the board of directors
of CCHC shall consist of a majority of Continuing Directors, or (b)
CCHC shall cease to have the power, directly or indirectly, to vote or
direct the voting of securities having all of the ordinary voting power
for the election of directors of the Borrower or any Subsidiary of the
Borrower.
"Chase": JPMorgan Chase Bank, a New York banking corporation.
"Chattel Paper: as defined in (S).9-102 of the Uniform Commercial
Code of the State of New York.
"Closing Date": the date on which this Agreement becomes effective
in accordance with Section 6.1.
"Code": the U.S. Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": the collective reference to all collateral in which
the Collateral Agent purports to have a security interest pursuant to
the Security Documents.
"Collateral Agent": Chase in its capacity as collateral agent
under the Security Documents.
"Commitment Letter": each of the commitment letters, dated January
9, 1998, January 20, 1999 and September 17, 2002, respectively,
relating, among other things, to the Loans made hereunder, addressed to
the Borrower from Chase and JPMSI and all exhibits thereto, as each of
the same may be amended, supplemented or otherwise modified from time
to time.
"Commitment Percentage": as to any Lender, at any time, the
percentage of the aggregate Revolving Credit Commitments and Tranche B
Term Loan Commitments constituted by such Lender's Revolving Credit
Commitment and Tranche B Term Loan Commitment.
"Commitments": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitment, the Tranche B Term Loan
Commitments and the L/C Commitment; individually, a "Commitment."
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA
8
or is part of a group which includes the Borrower and which is treated
as a single employer under Section 414 of the Code.
"Consolidated Assets": at any date, the amount which, in
conformity with GAAP, would be set forth opposite the caption "Total
Assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, except that there shall be
excluded therefrom cash and Cash Equivalents and equipment and other
fixed assets held for sale.
"Consolidated Cash Interest Expense": for any period, for any
Person on a consolidated basis, the amount of interest paid in cash
during such period on the aggregate principal amount of its
Indebtedness, which amount shall include any such cash interest expense
in respect of Indebtedness under Financing Leases and purchase money
Indebtedness permitted under Section 8.2(e) of such Person net of cash
interest income (such consolidated cash interest expense to include
fees payable on account of letters of credit but to exclude
amortization of debt discount (including discount of liabilities and
reserves established under Accounting Principles Board Opinion No. 16
as in effect on the date hereof) and costs of debt issuance.
"Consolidated Current Assets": at any date, with respect to
any Person, the amount which, in conformity with GAAP, would be set
forth opposite the caption "Total Current Assets" (or any like caption)
on a consolidated balance sheet of such Person at such date, except
that there shall be excluded therefrom cash and Cash Equivalents and
equipment and other fixed assets held for sale.
"Consolidated Current Liabilities": at any date, with respect
to any Person, the amount which, in conformity with GAAP, would be set
forth opposite the caption "Total Current Liabilities" (or any like
caption) on a consolidated balance sheet of such Person at such date,
except that there shall be excluded therefrom the current portion of
(a) all Loans and, (b) all long-term Indebtedness for borrowed money
(including Financing Leases) in each case, to the extent included
therein.
"Consolidated EBITDA": for any period, with respect to any
Person, Consolidated Net Income of such Person for such period (A)
plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum
of (i) total income and franchise tax expense, (ii) interest expense,
amortization or writeoff of debt discount and debt issuance costs and
commissions and discounts and other fees and charges associated with
Indebtedness, (iii) depreciation and amortization expense, (iv)
amortization of intangibles including, but not limited to, goodwill and
organization costs, (v) other extraordinary noncash charges (in
accordance with GAAP) (including non-cash currency exchange losses),
(vi) any extraordinary and unusual losses (including losses on sales of
assets other than inventory sold in the ordinary course of business),
and (vii) any non-cash losses resulting from the Borrower's investment
in Internet Autoparts, Inc.; and (B) minus, without duplication and to
the extent reflected as a credit or gain in the statement of such
Consolidated Net Income for such period, the sum of (i) any
extraordinary and unusual gains (including gains on the sales of
assets, other than inventory sold in the ordinary course of business),
9
and (ii) other extraordinary non-cash credits or gains (in accordance
with GAAP) (including non-cash currency exchange gains) and (iii) any
non-cash gains resulting from the Borrower's investment in Internet
Autoparts, Inc.; provided that for the purposes of calculating
Consolidated EBITDA for any period of four consecutive fiscal quarters
(each, a "Reference Period") for purposes of Section 8.1, (i) if at any
time during such Reference Period the Borrower or any Subsidiary shall
consummate an acquisition pursuant to Section 8.9(k), the Consolidated
EBITDA for such Reference Period shall be calculated on a pro forma
basis (assuming the consummation of such acquisition and the incurrence
or assumption of any Indebtedness in connection therewith occurred on
the first day of such Reference Period) and (ii) if at any time during
such Reference Period the Borrower or any Subsidiary shall consummate
the Designated Asset Sale or the sale of any line of business or
product line, the Consolidated EBITDA for such Reference Period shall
be reduced on a pro forma basis by an amount equal to the Consolidated
EBITDA (if positive) attributable to the property that is the subject
of the Designated Asset Sale or the sale of any line of business or
product line (the "Reduced EBITDA").
"Consolidated Fixed Charges": for any period, with respect to
any Person, (a) Consolidated Cash Interest Expense of such Person, plus
(b) required amortization of Indebtedness of such Person, plus (c) the
aggregate amount actually paid by such Person on account of Capital
Expenditures, provided that no Indebtedness was incurred in connection
with such expenditures.
"Consolidated Net Income": for any period, with respect to any
Person, the amount which, in conformity with GAAP, would be set forth
opposite the caption "Net Income/(Loss)" (or any like caption) on a
consolidated statement of operations of such Person and its
Subsidiaries for such period.
"Consolidated Senior Debt": at a particular date, with respect
to the Borrower, Consolidated Total Debt less the aggregate outstanding
principal amount of the Senior Subordinated Notes.
"Consolidated Total Debt": at a particular date, with respect
to the Borrower, the aggregate principal amount of Indebtedness
outstanding under this Agreement, Financing Leases, purchase money
Indebtedness and any other Indebtedness for borrowed money of the
Borrower and its Subsidiaries at such date other than Lease Transaction
Obligations.
"Consolidated Working Capital": at any date, for any Person,
the excess of Consolidated Current Assets of such Person at such date
over Consolidated Current Liabilities of such Person at such date.
"Continuing Directors": the directors of CCHC on the Initial
Closing Date and each other director, if, in each case, such other
director's nomination for election to the board of directors of CCHC is
recommended by a majority of the then Continuing Directors or such
other director receives the vote of HMTFS in his or her election by the
shareholders.
10
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Credit Parties": the collective reference to CCHC, the
Borrower and each of their respective Subsidiaries which from time to
time is a party to any Loan Document.
"Customary License Terms": as defined in Section 5.24.
"Customer Partnerships": certain partnerships with customers
of the Borrower, in existence on the date hereof or, if created after
the date hereof, which engage in substantially the same business as is
engaged in by such partnerships in existence on the date hereof and
entered into subject to the provisions hereof, of which CCHC or one of
its Subsidiaries is a general partner.
"Default": any of the events specified in Article 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Departing Lender": as defined in Section 6.1(b)(v).
"Designated Asset Sale": as defined in Section 8.6(k).
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Domestic Subsidiary": any Subsidiary of the Borrower or CCHC
other than a Foreign Subsidiary.
"Environmental Laws": any applicable foreign, federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, legally binding requirements of any
Governmental Authority or other Requirements of Law (including common
law) regulating, relating to or imposing liability or standards of
conduct concerning protection of human health or the environment, as
now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the maximum
rates (expressed as a decimal) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
11
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chase is offered Dollar deposits at or about
10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Article 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess of (a) the sum, without duplication, of (i) Consolidated EBITDA
of the Borrower and its Subsidiaries for such fiscal year, (ii) the
amount of returned surplus assets of any Plan during such fiscal year
to the extent not included in Consolidated Net Income to determine
Consolidated EBITDA of the Borrower and its Subsidiaries for such
fiscal year, (iii) decreases in Consolidated Working Capital of the
Borrower and its Subsidiaries for such fiscal year, (iv) the amount of
any refund received by the Borrower and its Subsidiaries on taxes paid
by the Borrower and its Subsidiaries, (v) cash dividends, cash interest
and other similar cash payments received by the Borrower in respect of
investments to the extent not included in Consolidated Net Income to
determine Consolidated EBITDA of the Borrower and its Subsidiaries for
such fiscal year, (vi) extraordinary cash gains to the extent
subtracted or otherwise not included in Consolidated Net Income to
determine Consolidated EBITDA of the Borrower and its Subsidiaries for
such fiscal year and (vii) decreases in "long-term investments in
leases" (or any like caption) (calculated in accordance with GAAP) over
(b) the sum, without duplication, of (i) the aggregate amount of cash
Capital Expenditures made by the Borrower and its Subsidiaries during
such fiscal year and permitted hereunder (other than Capital
Expenditures permitted under Section 8.8(b)), (ii) payments or
prepayments of the Tranche B Term Loans during such fiscal year other
than pursuant to Section 2.10(a), (b) or (c), (iii) the aggregate
amount of payments of principal in respect of any Indebtedness (other
than revolving credit Indebtedness to the extent the related commitment
is not permanently reduced) permitted hereunder during such fiscal year
(other than under this Agreement), (iv) increases in Consolidated
Working Capital of the Borrower and its Subsidiaries for such fiscal
year, (v) cash interest expense of the
12
Borrower and its Subsidiaries for such fiscal year, (vi) taxes actually
paid in such fiscal year or to be paid in the subsequent fiscal year on
account of such fiscal year to the extent added to Consolidated Net
Income to determine Consolidated EBITDA of the Borrower and its
Subsidiaries for such fiscal year, (vii) extraordinary cash losses to
the extent added to Consolidated Net Income to determine Consolidated
EBITDA of the Borrower and its Subsidiaries for such fiscal year,
(viii) the amount of all Investments made in such fiscal year as
permitted by clauses (d), (h) and (j) of Section 8.9, (ix) Investments
made pursuant to Section 8.9(k) actually made in such fiscal year or
agreed pursuant to a letter of intent or other definitive agreement to
make such Investment during such fiscal year to be made in the
subsequent fiscal year, provided such Investments shall not be deducted
in calculating Excess Cash Flow in any subsequent year and, for
purposes of payments under Section 2.10(c), shall be added back in the
calculation thereof for such year or any subsequent year (a) if such
Investment is terminated or otherwise not consummated within 270 days
of execution of such letter of intent or other agreement or (b) to the
extent such Investment is not fully made, (x) dividends or other direct
payments paid by the Borrower to or for the benefit of CCHC to the
extent permitted by Section 8.7(a) to the extent not subtracted in the
determination of Consolidated Net Income of the Borrower for such
fiscal year and (xi) increases in "long-term investments in leases" (or
any like caption) (calculated in accordance with GAAP).
"Existing Credit Agreement": as defined in the recitals to
this Agreement.
"Existing Lenders": as defined in the recitals to this
Agreement.
"Facilities": as defined in the recitals to this Agreement.
"Fee Properties": the collective reference to the real
properties owned in fee by the Borrower described on Part I of Schedule
5.8, including all buildings, improvements, structures and fixtures now
or subsequently located thereon.
"FinanceCo": CCI/Triad Financial Holding Corporation, a
California corporation.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Foreign Lease Subsidiaries": Tridex Leasing Limited, a United
Kingdom company and TSC Leasing, a division of Triad Systems Canada
Ltd., an Ontario corporation.
"Foreign Subsidiary": any Subsidiary of the Borrower or CCHC
which is organized under the laws of any jurisdiction outside of the
United States of America.
"GAAP": the generally accepted accounting principles in the
United States of America as in effect from time to time set forth in
the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and the
statements and pronouncements of the Financial Accounting
13
Standards Board and the rules and regulations of the Securities and
Exchange Commission, or in such other statements by such other entity
as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of the Borrower
as of the date of determination except that for purposes of Section
8.1, GAAP shall be determined on the basis of such principles in effect
on the date hereof and consistent with those used in the preparation of
the audited financial statements referred to in Section 5.1. In the
event that any "Accounting Change" (as defined below) shall occur and
such change results in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then the
Borrower and the Administrative Agent agree to enter into negotiations
in order to amend such provisions of this Agreement so as to equitably
reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the
same after such Accounting Changes as if such Accounting Changes had
not been made. Until such time as such an amendment shall have been
executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such
Accounting Changes had not occurred. "Accounting Changes" means:
changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the Securities and Exchange Commission
(or successors thereto or agencies with similar functions).
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Second Amended and
Restated Guarantee and Collateral Agreement made by CCHC, the Borrower
and the Domestic Subsidiaries (except FinanceCo) in favor of the
Collateral Agent for the ratable benefit of the Lenders, substantially
in the form of Exhibit B, as the same may be amended, supplemented or
otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
14
obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the board of directors of such Person in good faith.
"▇▇▇▇▇ Muse Equity Investment": the $25,000,000 common stock
investment in CCHC made by HMTF by its purchase of the New Common
Stock.
"HMTF": Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, a Texas
corporation.
"HMTFS": as defined in the definition of "Change of Control".
"HMTFS Group": as defined in the definition of "Change of
Control".
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices and accrued expenses incurred in
the ordinary course of business) or which is evidenced by a note, bond,
debenture or similar instrument, (b) all obligations under Interest
Rate Agreements, (c) all obligations of such Person under Financing
Leases, (d) all obligations of such Person in respect of bankers'
acceptances or similar instruments issued or created for the account of
such Person, and (e) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed
or otherwise become liable for the payment thereof, provided, however,
that the amount of such Indebtedness of any Person described in this
clause (e) shall, for purposes of this Agreement, be deemed to be equal
to the lesser of (i) the aggregate unpaid amount of such Indebtedness
and (ii) the fair market value of the property or asset encumbered, as
determined by such Person in good faith; provided, further, that solely
for purposes of Section 8.2(m) and (n), Lease Transaction Obligations
shall be deemed to be Indebtedness of the Borrower and its
Subsidiaries.
"Initial Closing Date": shall mean February 10, 1998.
"Initial Public Offering": means an underwritten public
offering of Capital Stock of CCHC pursuant to a registration statement
filed with the Securities and Exchange Commission in accordance with
the Securities Exchange Act of 1933, as amended.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
15
"Insolvent": pertaining to a condition of Insolvency.
"Instrument": as defined inss.9-102 of the Uniform Commercial
Code of the State of New York.
"Intellectual Property": as defined in Section 5.9.
"Interest Payment Date": as to any Loan, the last day of each
month to occur while such Loan is outstanding and, if such Loan is a
Tranche B Term Loan, the date of each payment of principal thereof.
"Interest Period": (a) with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three, six or, to the
extent available to all Lenders, nine or twelve months,
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given
with respect thereto; and
(ii) thereafter, each period commencing on the last day of
the immediately preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six or, to the
extent available to all Lenders, nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice
to the Administrative Agent not less than three Business Days
prior to the last day of the then current Interest Period with
respect thereto;
provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such
Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(2) no Interest Period shall extend beyond the Revolving
Credit Commitment Termination Date in the case of Revolving
Credit Loans or the date final payment is due on the Tranche B
Term Loans in the case of Tranche B Term Loans;
(3) no Interest Period with respect to the Tranche B Term
Loans shall extend beyond any date which repayment of
principal thereof is required to be made pursuant to Section
2.7, if, after giving effect to the selection of such Interest
Period, the aggregate principal amount of Tranche B Term Loans
with Interest Periods ending after such date would exceed the
aggregate principal amount of such Tranche B Term Loans
permitted to be outstanding after such scheduled repayment;
and
16
(4) any Interest Period pertaining to a Eurodollar Loan
that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate protection
agreement, interest rate future, interest rate option, interest rate
cap or other interest rate hedge arrangement, to or under which the
Borrower is a party or a beneficiary on the date hereof or becomes a
party or a beneficiary after the date hereof, which is entered into in
the ordinary course of business and which is not entered into for
speculative purposes.
"Investments": as defined in Section 8.9.
"Issuer": as defined in the Guarantee and Collateral
Agreement.
"Issuing Lender": Chase or any of its Affiliates, each in its
capacity as issuer of each Letter of Credit.
"JPMSI": ▇.▇. ▇▇▇▇▇▇ Securities Inc.
"L/C Commitment": the Issuing Lender's obligation to open
Letters of Credit pursuant to Article 3 of this Agreement.
"L/C Obligation": the obligation of the Borrower to reimburse
the Issuing Lender in accordance with the terms of this Agreement and
the related Letter of Credit Application for any payment made by the
Issuing Lender under any Letter of Credit.
"L/C Participating Interest": with respect to any Letter of
Credit (a) in the case of the Issuing Lender with respect thereto, its
interest in such Letter of Credit and any Letter of Credit Application
relating thereto after giving effect to the granting of participating
interests therein, if any, pursuant hereto and (b) in the case of each
Participating Lender, its undivided participating interest in such
Letter of Credit and any Letter of Credit Application relating thereto.
"L/C Participation Certificate": a certificate in
substantially the form of Exhibit C.
"Lease Accounting Change": as defined in Section 1.2.
"Leased Equipment": computer systems, software, accessories,
upgrades and support, maintenance and data software subscriptions and
third party equipment and/or trade fixtures owned by Triad Financial
and the Foreign Lease Subsidiaries.
"Lease Transaction": leases of Leased Equipment by Triad
Financial and the Foreign Lease Subsidiaries as lessors to third party
customers in the ordinary course of business and the sale of the lease
payments thereon to FinanceCo in exchange for a security interest in
the lease payments, the Chattel Paper and the Leased Equipment;
together, the "Lease Transactions".
17
"Lease Transaction Obligations": obligations of Triad
Financial, the Foreign Lease Subsidiaries and FinanceCo incurred to
finance Lease Transactions (a) the principal amount of which is
computed based upon a discount of the lease payments due under such
Lease Transactions, (b) which are unsecured or secured solely by Leased
Equipment, Chattel Paper and/or lease payments due under such Lease
Transactions that are not presented on CCHC's consolidated balance
sheet and (c) which are treated as "off-balance sheet financing" under
GAAP; provided that obligations of FinanceCo shall be deemed to be
Lease Transaction Obligations only to the extent that the proceeds of
such obligations are used to purchase from Triad Financial lease
payments arising in Lease Transactions; provided further that up to
$1,207,000 may be presented on CCHC's consolidated balance sheet as set
forth on Schedule 5.25. It is the intention of the parties that a Lease
Transaction Obligation may be created by FinanceCo only to the extent
that it is created on a back-to-back basis with a corresponding Lease
Transaction Obligation created by Triad Financial and that any such
Lease Transaction Obligation created by FinanceCo is recourse to
FinanceCo only to the extent that the corresponding Lease Transaction
Obligation created by Triad Financial is recourse to Triad Financial.
"Leased Properties": the collective reference to the real
properties leased by the Borrower and its Subsidiaries described on
Part II of Schedule 5.8 including all buildings, improvements,
structures and fixtures now or subsequently located thereon and owned
or leased by the Borrower.
"Lenders": as defined in the recitals to this Agreement.
"Letter of Credit": any Standby L/C or Trade L/C,
collectively, the "Letters of Credit".
"Letter of Credit Application": with respect to (a) a Standby
L/C, a Standby L/C Application and (b) a Trade L/C, a Trade L/C
Application; collectively, the "Letter of Credit Applications."
"Letter of Credit Outstandings": at any date, the sum of (a)
the aggregate amount then available to be drawn under all outstanding
Letters of Credit and (b) the aggregate amount of drawings under
Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"License Products": as defined in Section 5.24.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
18
"Loan Documents": the collective reference to this Agreement,
any Notes, the Letters of Credit, the Letter of Credit Applications,
the Guarantee and Collateral Agreement, and all other agreements,
instruments or certificates executed in connection with the
Transactions, as the same may be amended, supplemented or otherwise
modified.
"Majority Facility Lenders": with respect to any Facility,
Lenders the Total Credit Percentages of which aggregate at least a
majority.
"Material Adverse Effect": any event, development or
circumstance that has had or could reasonably be expected to have a
material adverse effect on (a) the business, operations, assets,
property, condition (financial or otherwise) or prospects of CCHC, the
Borrower and their Subsidiaries taken as a whole, (b) the ability of
CCHC, the Borrower and their Subsidiaries taken as a whole to perform
their respective obligations under any of the Loan Documents or (c) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, friable asbestos, polychlorinated
biphenyls and urea-formaldehyde insulation.
"Mortgages": the collective reference to each of the mortgages
and deeds of trust to be executed and delivered by the Borrower and its
Subsidiaries pursuant to Sections 7.9 and 7.10, in a form determined by
Administrative Agent as necessary or desirable to create a valid and
enforceable first mortgage Lien securing the obligations and
liabilities of the Borrower or any guarantor under the Loan Documents,
as the same may be amended, supplemented, replaced, restated, or
otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale
(including any sale and leaseback of assets and any sale of accounts
receivable in connection with a receivables financing transaction) the
cash proceeds (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale net of all reasonable attorneys' fees,
accountants' fees, investment banking fees, survey costs, title
insurance premiums, required debt payments (other than pursuant hereto)
and other customary fees actually incurred and satisfactorily
documented in connection therewith and net of taxes paid or reasonably
expected to be payable as a result thereof and net of purchase price
adjustments reasonably expected to be payable in connection therewith
and (b) in connection with any issuance by CCHC or any of its
Subsidiaries of equity or debt securities or instruments or any
Permitted Issuance or the incurrence of loans other than Indebtedness
permitted by Section 8.2 or
19
Section 11.6(i), the cash proceeds received from such issuance, net of
all reasonable investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and
expenses, actually incurred and satisfactorily documented in connection
therewith; provided however that, with respect to any issuance of debt
instruments or securities as described in clause (b) above, only in the
event that such net cash proceeds are used to refinance any
Indebtedness permitted by this Agreement, then such net cash proceeds
shall not constitute "Net Cash Proceeds" for the purpose of this
Agreement.
"New Common Stock": the Series A Common Stock, par value $.01,
issued by CCHC to HMTF in connection with the ▇▇▇▇▇ Muse Equity
Investment.
"Nonconsenting Lender": as defined in Section 4.9.
"Non-Excluded Taxes": as defined in Section 4.7(a).
"Non-Funding Lender": as defined in Section 4.4(c).
"Non-U.S. Lender": any Lender, any Issuing Lender, any
Participant or any Administrative Agent that is not a United States
person as defined in Section 7701(a)(30) of the Code.
"Notes": the collective reference to the Revolving Credit
Notes, the Swing Line Note and the Tranche B Term Notes.
"Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of
the Loans and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding)
the Loans and all other obligations and liabilities of the Borrower to
the Administrative Agent or to the Lenders, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any Notes, any other Loan Documents or any
Interest Rate Agreement entered into with a Lender and any other
document made, delivered or given in connection therewith or herewith,
whether on account of principal, interest, reimbursement obligations,
fees, indemnities, costs, expenses (including, without limitation, all
fees and disbursements of counsel to the Administrative Agent or to the
Lenders that are required to be paid by the Borrower pursuant to the
terms of this Agreement) or otherwise.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Participant": as defined in Section 12.6(b).
"Participating Lender": any Revolving Credit Lender (other
than the Issuing Lender) with respect to its L/C Participating Interest
in a Letter of Credit.
20
"Perfection Certificate": a certificate substantially in the
form of Exhibit H.
"Permitted Acquisition": the acquisition by the Borrower and
its Subsidiaries of businesses related to their respective Businesses,
as approved by the board of directors of the Borrower.
"Permitted Issuance": (a) the issuance by CCHC of shares of
Capital Stock as dividends on issued and outstanding Capital Stock of
the same class of CCHC or pursuant to any dividend reinvestment plan,
(b) the issuance by CCHC of options or other equity securities of CCHC
to outside directors, members of management or employees of CCHC, the
Borrower or any Subsidiary of the Borrower, (c) the issuance of
securities as interest or dividends on pay-in-kind debt or preferred
equity securities permitted hereunder and under the Security Documents,
(d) the issuance by CCHC of shares of Capital Stock in connection with
Permitted Acquisitions, (e) the issuance to CCHC by the Borrower of its
Capital Stock or the issuance to the Borrower or any Subsidiary (or any
director, with respect to directors' qualifying shares) by any
Subsidiary of the Borrower of any of their respective Capital Stock, in
each case with respect to this clause (e) to the extent such Capital
Stock is pledged to the Administrative Agent pursuant to the Guarantee
and Collateral Agreement (provided that only 65% of the Capital Stock
of a Foreign Subsidiary is required to be so pledged), (f) cash
payments made in lieu of issuing fractional shares of CCHC Capital
Stock in an aggregate amount not to exceed $100,000, and (g) the
issuance by CCHC of shares of Capital Stock of CCHC to infuse
additional capital into CCHC in an aggregate amount not to exceed
$10,000,000.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledged Notes": as defined in the Guarantee and Collateral
Agreement.
"Pledged Stock": as defined in the Guarantee and Collateral
Agreement.
"Pro Forma Balance Sheet": as defined in Section 5.1(b).
"Pro Forma Statement of Operations": as defined in Section
5.1(b).
"Properties": as defined in Section 5.16.
"Qualified Issuer": any commercial bank (a) which has capital
and surplus in excess of $100,000,000 and (b) the outstanding long-term
debt securities of which are rated at least A-2 by Standard & Poor's
Ratings Group or at least P-2 by ▇▇▇▇▇'▇ Investors Service, Inc., or
carry an equivalent rating by a nationally recognized rating agency if
both of the two named rating agencies cease publishing ratings of
investments.
21
"Reduced EBITDA": as defined in the definition of
"Consolidated EBITDA."
"Refunded Swing Line Loans": as defined in Section 2.13(c).
"Register": as defined in Section 12.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA and the regulations thereunder, other than those
events as to which the thirty day notice period is waived under
subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.(S). 2615.
"Required Lenders": at any time, Lenders the Total Credit
Percentages of which aggregate at least a majority.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": as to any Person, the chief executive
officer, the president, the chief financial officer, any vice
president, the treasurer, any assistant treasurer, the secretary or any
assistant secretary of such Person.
"Restricted Payments": as defined in Section 8.7.
"Revenue Recognition Change": as defined in Section 1.2.
"Revolving Credit Commitment": as to any Revolving Credit
Lender, its obligation to make Revolving Credit Loans to the Borrower
pursuant to Section 2.1 and to participate in Swing Line Loans and
Letters of Credit in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Revolving Credit
Lender's name in Schedule 1.1 under the heading "Revolving Credit
Commitment", as such amount may be reduced from time to time as
provided herein; collectively, as to all the Revolving Credit Lenders,
the "Revolving Credit Commitments."
"Revolving Credit Commitment Percentage": as to any Revolving
Credit Lender, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the Revolving Credit
Commitment Termination Date.
22
"Revolving Credit Commitment Termination Date": the earliest
of (a) the third anniversary of the Closing Date and (b) the date upon
which the Revolving Credit Commitments shall be terminated pursuant
hereto (including any termination pursuant to Article 9).
"Revolving Credit Facility": as defined in the recitals to
this Agreement.
"Revolving Credit Lender": any Lender having a Revolving
Credit Commitment or that holds outstanding Revolving Credit Loans or
L/C Participating Interests hereunder.
"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in Section 2.1.
"Revolving Credit Note" and "Revolving Credit Notes": as
defined in Section 2.2.
"Securities and Exchange Commission": as defined in Section
7.1(a).
"Security Documents": the Guarantee and Collateral Agreement
and any other collateral security document delivered to the
Administrative Agent pursuant to Section 7.9, 7.10 or 7.12;
individually a "Security Document."
"Senior Subordinated Indebtedness": unsecured senior
subordinated Indebtedness of the Borrower (including the Senior
Subordinated Notes and any permanent refinancing thereof); provided
that such indebtedness has (i) no maturity, amortization, mandatory
redemption or purchase option (other than with asset sale proceeds,
subject to the provisions of this Agreement, or following a change of
control) or sinking fund payment prior to the tenth anniversary of the
Initial Closing Date, (ii) no financial maintenance covenants, (iii)
such other terms and conditions (including, without limitation,
interest rate, events of default, subordination and covenants) as shall
be reasonably satisfactory to the Administrative Agent and (iv) any
permanent refinancing shall not be less favorable to the Borrower and
the Lenders as the Senior Subordinated Notes financing taken as a
whole.
"Senior Subordinated Note Indenture": the Indenture dated as
of February 10, 1998 entered into by the Borrower in connection with
the issuance of the Senior Subordinated Notes, together with all
instruments and other agreements entered into by the Borrower or such
Subsidiaries in connection therewith, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with
Section 8.18.
"Senior Subordinated Notes": the unsecured senior subordinated
notes due February 1, 2008 issued pursuant to the Senior Subordinated
Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
23
"Solvent" and "Solvency": with respect to any Person on a
particular date, that on such date, (a) the fair value of the property
of such Person is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such Person,
(b) the present fair saleable value of the assets of such Person is not
less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that
it will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature, and (d) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person's property would
constitute an unreasonably small capital.
"Standby L/C": an irrevocable letter of credit issued by the
Issuing Lender pursuant to this Agreement for the account of the
Borrower in respect of obligations of the type described in Section
3.1.
"Standby L/C Application": as defined in Section 3.2.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person; provided that the Customer Partnerships shall be deemed
Subsidiaries of the Borrower solely for purposes of Sections 8.2, 8.4
and 8.9 only. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"Supermajority Lenders": at any time, Lenders the Total Credit
Percentages of which aggregate at least 66-2/3%.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to Section 2.13.
"Swing Line Lender": Chase in its capacity as provider of the
Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate
substantially in the form of Exhibit D.
"Swing Line Loans": as defined in Section 2.13(a).
"Swing Line Note": as defined in Section 2.13(b).
"Tranche B Term Loan Commitment Percentage": as to any Tranche
B Term Loan Lender, the percentage of the aggregate Tranche B Term Loan
Commitments constituted by its Tranche B Term Loan Commitment or,
following the Closing Date, the percentage of the aggregate outstanding
Tranche B Term Loans constituted by its Tranche B Term Loan.
24
"Total Credit Percentage": as to any Lender at any time, the
percentage of the aggregate Revolving Credit Commitments and
outstanding Tranche B Term Loans then constituted by its Revolving
Credit Commitment and outstanding Tranche B Term Loans (or, if the
Revolving Credit Commitments have terminated or expired, the percentage
of the aggregate outstanding Revolving Credit Loans, outstanding
Tranche B Term Loans and risk interests in the Letter of Credit
Outstandings and Swing Line Loans then constituted by its outstanding
Revolving Credit Loans, outstanding Tranche B Term Loans and risk
interest in Letter of Credit Outstandings and Swing Line Loans).
"Total Debt Ratio": the ratio of Consolidated Total Debt of
the Borrower and its Subsidiaries to Consolidated EBITDA of the
Borrower and its Subsidiaries for a period of four consecutive fiscal
quarters.
"Trade L/C": a commercial documentary letter of credit issued
by the Issuing Lender pursuant to Section 3.1 for the account of the
Borrower for the purchase of goods in the ordinary course of business.
"Trade L/C Application": as defined in Section 3.2.
"Tranche": the reference to Eurodollar Loans the Interest
Periods with respect to all of which begin on the same date and end on
the same later date (whether or not such Loans shall originally have
been made on the same day); Tranches may be identified as "Eurodollar
Tranches".
"Tranche B Term Loan Facility": as defined in the recitals to
this Agreement.
"Tranche B Term Loan" and "Tranche B Term Loans": as defined
in Section 2.6.
"Tranche B Term Loan Commitment": as to any Tranche B Term
Loan Lender, its obligation to make a Tranche B Term Loan to the
Borrower pursuant to Section 2.6 of this Agreement in an aggregate
amount not to exceed the amount set forth opposite such Tranche B Term
Loan Lender's name in Schedule 1.1 attached hereto under the heading
"Tranche B Term Loan Commitment."
"Tranche B Term Loan Commitment Percentage": as to any Tranche
B Term Loan Lender, the percentage of the aggregate Tranche B Term Loan
Commitments constituted by its Tranche B Term Loan Commitment or,
following the Closing Date, the percentage of the aggregate outstanding
Tranche B Term Loans constituted by its Tranche B Term Loan.
"Tranche B Term Loan Lender": any Lender having a Tranche B
Term Loan Commitment hereunder or that holds outstanding Tranche B Term
Loans.
"Tranche B Term Note": as defined in Section 2.7(a).
"Transactions": the amendment and restatement of the Existing
Credit Agreement pursuant to this Agreement.
25
"Transferee": as defined in Section 12.6(f).
"Triad Financial": Triad Systems Financial Corporation, a California
corporation.
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
a Eurodollar Loan.
"U.S. Lender": any Lender, any Issuing Lender, any Participant or any
Administrative Agent that is a United States person as defined in Section
7701(a)(30) of the Code.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, and any revisions thereof.
"U.S. Tax Compliance Certificate": as defined in Section 4.7(b)(ii).
"Wholly Owned Subsidiary": as to any Person, any Subsidiary of which
such Person owns, directly or indirectly, all of the Capital Stock of such
Subsidiary other than directors' qualifying shares or any shares held by
nominees.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Note or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Note, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to CCHC
and its Subsidiaries not defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP. In the event that any change shall occur in
(i) the method by which Lease Transaction Obligations and the related
obligations of the Borrower permitted pursuant to the terms of Section 8.4(h) of
this Agreement are accounted for in the financial statements of CCHC and its
Subsidiaries (a "Lease Accounting Change") or (ii) accounting principles
relating to the recognition of revenue required by the promulgation of any rule,
regulation, pronouncement or opinion by applicable authorities including,
without limitation the Financial Accounting Standards Board or the American
Institute of Certified Public Accountants (a "Revenue Recognition Change"), all
financial covenants, standards and terms in this Agreement shall continue to be
calculated or construed as if such Lease Accounting Change or Revenue
Recognition Change, as the case may be, had not occurred.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Article, Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
26
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans (each, a "Revolving Credit Loan", collectively,
"Revolving Credit Loans") to the Borrower from time to time during the Revolving
Credit Commitment Period in an aggregate principal amount at any one time
outstanding, when added to such Revolving Credit Lender's Revolving Credit
Commitment Percentage of all Letter of Credit Outstandings and outstanding Swing
Line Loans, not to exceed the amount of such Revolving Credit Lender's Revolving
Credit Commitment. During the Revolving Credit Commitment Period the Borrower
may use the Revolving Credit Commitments by borrowing, prepaying the Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Alternate Base Rate Loans or (iii) a combination thereof,
as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.3 and 2.11.
(c) On the Closing Date the Revolving Credit Loans and Revolving
Credit Commitments under the Existing Credit Agreement, as amended and restated
hereby, shall be continued hereunder.
2.2 Revolving Credit Notes. The Borrower agrees that, upon the
request to the Administrative Agent by any Revolving Credit Lender, in order to
evidence such Lender's Revolving Credit Loans the Borrower will execute and
deliver to such Lender a promissory note substantially in the form of Exhibit
A-1, with appropriate insertions as to payee, date and principal amount (each,
as amended, supplemented, replaced or otherwise modified from time to time, a
"Revolving Credit Note"), payable to the order of such Revolving Credit Lender,
or its valid and registered assigns, and in a principal amount equal to the
lesser of (a) the amount of the initial Revolving Credit Commitment of such
Revolving Credit Lender and (b) the aggregate unpaid principal amount of all
Revolving Credit Loans made by such Revolving Credit Lender. Each Revolving
Credit Lender is hereby authorized to record the date, Type and amount of each
Revolving Credit Loan made by such Revolving Credit Lender, each continuation
thereof, each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in the case
of Eurodollar Loans, the length of each Interest Period with respect thereto, on
the schedules annexed to and constituting a part of its Revolving Credit Note,
and any such recordation shall, in the absence of manifest error and to the
extent permitted by applicable law, constitute prima facie evidence of the
accuracy of the information so recorded, provided that the failure by any
Revolving Credit Lender to make any such recordation, or any error therein,
shall not affect any of the obligations of the Borrower under such Revolving
Credit Note or this Agreement. Any Revolving Credit Note shall (x) be dated the
Closing Date, (y) be stated to mature on the Revolving Credit Commitment
Termination Date and (z) provide for the payment of interest in accordance with
Section 4.1.
2.3 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice may be telephonic and must
be received by the Administrative Agent prior
27
to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Revolving Credit
Loans are to be Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, otherwise), specifying (i) the amount to be borrowed, (ii) the
requested Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, Alternate Base Rate Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the respective
amounts of each such Type of Loan and the respective lengths of the initial
Interest Periods therefor. Any such telephonic borrowing notice shall be
confirmed promptly by a written borrowing notice to the Administrative Agent,
delivered by hand or by telecopy. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (A) in the case of Alternate Base
Rate Loans, $500,000 or a whole multiple of $100,000 in excess thereof (or, if
the then Available Revolving Credit Commitments are less than $500,000, such
lesser amount) and (B) in the case of Eurodollar Loans, $1,000,000 or a whole
multiple of $250,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving Credit
Lender thereof. Each Revolving Credit Lender will make the amount of its pro
rata share of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent specified in
Section 12.2 prior to 12:30 P.M., New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Revolving Credit Lenders and in like funds as received by the
Administrative Agent.
2.4 Commitment Fee; Administrative Agent Fees (a) The Borrower agrees
to pay to the Administrative Agent for the account of each Revolving Credit
Lender a commitment fee for the period from and including the first day of the
Revolving Credit Commitment Period to the Revolving Credit Commitment
Termination Date, computed at the rate of 1/2 of 1% per annum on the average
daily Available Revolving Credit Commitment of such Revolving Credit Lender
during the period for which payment is made, payable monthly in arrears on the
last day of each month and on the Revolving Credit Commitment Termination Date;
provided that such commitment fee shall be subject to reduction in accordance
with the definition of "Applicable Margin".
(b) The Borrower shall pay to Chase, for its account, such fees as
have been agreed to in writing by the Borrower and Chase, in the amounts and on
the dates set forth in such writing.
2.5 Termination or Reduction of Revolving Credit Commitments (a) The
Borrower shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, reduce the unutilized portion of the amount of the Revolving
Credit Commitments, provided that (i) the Revolving Credit Commitments shall not
be terminated if any Letters of Credit or Swing Line Loans are outstanding and
(ii) any such termination of the Revolving Credit Commitments shall be
accompanied by prepayment in full of the Revolving Credit Loans, Swing Line
Loans and L/C Obligations then outstanding, together with accrued interest
thereon to the date of such prepayment, cancellation of all Letters of Credit
(unless cash collateralized in accordance with the last sentence of this
paragraph) and the payment of any unpaid commitment fee then accrued
28
hereunder. Any such partial reduction shall be in an amount of $500,000, or a
whole multiple of $100,000 in excess thereof, and shall reduce permanently the
amount of the Revolving Credit Commitments then in effect and shall further
include any amounts due in respect thereof under Section 4.8. Upon termination
of the Revolving Credit Commitments, any Letter of Credit then outstanding which
has been fully cash collateralized upon terms reasonably satisfactory to the
Administrative Agent and the Issuing Lender shall no longer be considered a
"Letter of Credit" as defined in Section 1.1, and any L/C Participating Interest
heretofore granted by the Issuing Lender to the Revolving Credit Lenders in such
Letter of Credit shall, at the election of the Issuing Lender, be deemed
terminated but the letter of credit fees payable under Section 3.3 shall
continue to accrue to the Issuing Lender with respect to such Letter of Credit
until the expiry thereof.
(b) In the case of any reduction of the Revolving Credit Commitments
hereunder, to the extent, if any, that the sum of the Revolving Credit Loans,
Swing Line Loans and the Letter of Credit Outstandings exceeds the Revolving
Credit Commitments as so reduced, the Borrower shall make a prepayment equal to
such excess amount, the proceeds of which shall be applied first, to payment of
the Swing Line Loans then outstanding, second, to payment of the Revolving
Credit Loans then outstanding, third, to payment of any L/C Obligations then
outstanding and last, to cash collateralize any outstanding Letter of Credit on
terms reasonably satisfactory to the Administrative Agent and the Issuing
Lender.
(c) The Revolving Credit Commitments once terminated or reduced may
not be reinstated.
2.6 Tranche B Term Loans. Subject to the terms and conditions hereof,
each Tranche B Term Loan Lender severally agrees to make a term loan (a "Tranche
B Term Loan", together the "Tranche B Term Loans"), on the Closing Date in an
aggregate principal amount set forth opposite such Lender's name in Schedule 1.1
under the heading "Tranche B Term Loan Commitment." The Tranche B Term Loans may
from time to time be (i) Eurodollar Loans, (ii) Alternate Base Rate Loans or
(iii) a combination thereof, as determined by the Borrower and notified to the
Administrative Agent in accordance with Section 2.8.
2.7 Tranche B Term Notes . (a) The Borrower agrees that, upon the
request to the Administrative Agent by any Tranche B Term Loan Lender, in order
to evidence such Lender's Tranche B Term Loan the Borrower will execute and
deliver to such Lender a promissory note substantially in the form of Exhibit
A-2 (each, as amended, supplemented, replaced or otherwise modified from time to
time, a "Tranche B Term Note"), with appropriate insertions therein as to payee,
date and principal amount, payable to the order of such Tranche B Term Loan
Lender, or its valid and registered assigns, and in a principal amount equal to
the amount set forth opposite such Tranche B Term Loan Lender's name on Schedule
1.1 under the heading "Tranche B Term Loan Commitment." Each Tranche B Term Loan
Lender is hereby authorized to record the date, Type and amount of its Tranche B
Term Loan, each continuation thereof, each conversion of all or a portion
thereof to another Type, the date and amount of each payment or prepayment of
principal of its Tranche B Term Loan and, in the case of Eurodollar Loans, the
length of each Interest Period with respect thereto, on the schedules annexed to
and constituting a part of its Tranche B Term Note, and any such recordation
shall, in the absence of manifest error and to the extent permitted by
applicable law, constitute prima facie evidence of
29
the accuracy of the information so recorded, provided that the failure by any
Tranche B Term Loan Lender to make any such recordation, or any error therein,
shall not affect any of the obligations of the Borrower under such Tranche B
Term Note or this Agreement. Any Tranche B Term Note shall (i) be dated the
Closing Date, (ii) be payable as provided in Section 2.7(b) and (iii) provide
for the payment of interest in accordance with Section 4.1.
(b) The aggregate Tranche B Term Loans of all the Tranche B Term Loan
Lenders shall be payable in 12 consecutive quarterly installments on the dates
and in a principal amount equal to the amount set forth below (together with all
accrued interest thereon) opposite the applicable installment date (or, if less,
the aggregate amount of the Tranche B Term Loan then outstanding):
Installment Amount
----------- ------
March 31, 2003 $2,000,000
June 30, 2003 $2,000,000
September 30, 2003 $2,000,000
December 31, 2003 $2,000,000
March 31, 2004 $2,750,000
June 30, 2004 $2,750,000
September 30, 2004 $2,750,000
December 31, 2004 $2,750,000
March 31, 2005 $4,000,000
June 30, 2005 $4,000,000
September 30, 2005 $4,000,000
December 31, 2005 $4,000,000
2.8 Procedure for Tranche B Term Loan Borrowing; Repayment of Loans.
(a) The Borrower shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 12:00
Noon, New York City time, one Business Day prior to the Closing Date) requesting
that the Tranche B Term Loan Lenders make the Tranche B Term Loans on the
Closing Date and specifying the amount to be borrowed. Upon receipt of such
notice the Administrative Agent shall promptly notify each Tranche B Term Loan
Lender thereof. On the Closing Date each Tranche B Term Loan Lender shall make
available to the Administrative Agent at its office specified in Section 12.2 an
amount in immediately available funds equal to the Tranche B Term Loan to be
made by such Tranche B Term Loan Lender. The Administrative Agent shall on such
date credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Tranche B Term Loan Lenders.
(b) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of: (i) each Revolving Credit Lender, the
then unpaid principal amount of each Revolving Credit Loan of such Lender, on
the Revolving Credit Commitment Termination Date; (ii) the Swing Line Lender,
the then unpaid principal amount of the Swing Line Loans, on
30
the Revolving Credit Commitment Termination Date; and (iii) each Tranche B Term
Loan Lender, such Tranche B Term Loan Lender's Tranche B Term Loan Commitment
Percentage of the amount specified in Section 2.7(b) (or, if less, the aggregate
amount of the Tranche B Term Loans of such Tranche B Term Loan Lender then
outstanding), on the date specified in Section 2.7(b) (or such earlier date on
which the Tranche B Term Loans become due and payable pursuant to Article 9).
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Loans from time to time outstanding from the date hereof until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 4.1.
(c) Each Lender (including the Swing Line Lender) shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(d) The Administrative Agent shall maintain the Register pursuant to
Section 12.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period, if any, applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(e) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(c) shall, in the absence of manifest error
and to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.
2.9 Optional Prepayments. (a) The Borrower may, at any time and from
time to time, prepay the Loans, in whole or in part, without premium or penalty,
upon at least three Business Days' (or one Business Day in the case of the
payment of Alternate Base Rate Loans) irrevocable notice (no later than 12:00
noon, New York City time, on such day) to the Administrative Agent, specifying
the date and amount of prepayment and whether the prepayment is of (i)
Eurodollar Loans, Alternate Base Rate Loans or a combination thereof, and, if of
a combination thereof, the amount allocable to each and (ii) Tranche B Term
Loans, Revolving Credit Loans or a combination thereof, and if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Tranche B Term Loan Lender or
Revolving Credit Lender, as the case may be, thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with, in the case of prepayments of the Tranche B
Term Loans only, accrued interest to such date on the amount prepaid.
(b) Optional prepayments of the Tranche B Term Loans shall be applied
first to reduce the then remaining installments scheduled to be repaid during
the six months following such optional prepayment in the order in which such
installments are scheduled to be repaid as set forth in Section 2.8(b), and
second to reduce the then remaining installments of the Tranche B
31
Term Loans, pro rata based upon the then remaining number of installments of
such Tranche B Term Loans, after giving effect to all prior reductions thereto
(i.e., each then remaining installment of such Tranche B Term Loans shall be
reduced by an amount equal to the aggregate amount to be applied to such Tranche
B Term Loans divided by the number of the then remaining installments for such
Tranche B Term Loans); provided, that if the amount to be applied to any
installment as required by this Agreement would exceed the then remaining amount
of such installment, then an amount equal to such excess shall be applied to the
next succeeding installment after giving effect to all prior reductions thereto
(including the amount of prepayments theretofore allocated pursuant to the
preceding portion of this sentence). Amounts prepaid on account of the Tranche B
Term Loans may not be reborrowed. Partial prepayments shall be in an aggregate
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
and shall include any amounts due in respect thereof under Section 4.8.
2.10 Mandatory Prepayments and Revolving Credit Commitment
Reductions. (a) Unless the Required Lenders and the Borrower shall otherwise
agree, if CCHC or any of its Subsidiaries (including the Borrower) shall issue
any class of Capital Stock other than a Permitted Issuance or incur any
Indebtedness other than any Indebtedness permitted pursuant to Section 8.2
(excluding Indebtedness to refinance the Senior Subordinated Notes unless there
are any Net Cash Proceeds after giving effect to such refinancing) or 11.6(i),
an amount equal to 100% of the Net Cash Proceeds thereof shall on the first
Business Day after receipt, be applied toward the prepayment of the Loans and
reduction of Commitments as set forth in paragraph (d) of this Section 2.10.
(b) Unless the Required Lenders and the Borrower shall otherwise
agree, if CCHC or any of its Subsidiaries (including the Borrower) shall receive
Net Cash Proceeds from any Asset Sale (including the sale and leaseback of
assets) an amount equal to 100% of such Net Cash Proceeds shall, on the first
Business Day after receipt, be applied toward the prepayment of the Loans and
reduction of Commitments as set forth in paragraph (d) of this Section 2.10.
(c) Unless the Required Lenders and the Borrower shall otherwise
agree, if for any fiscal year, commencing with the fiscal year ending September
30, 2003 there shall be Excess Cash Flow for such fiscal year, an amount equal
to 50% of such Excess Cash Flow shall be applied toward prepayment of the Loans
and reduction of the Commitments as set forth in paragraph (d) of this Section
2.10. Each such prepayment shall be made on or before the date which is seven
Business Days after the earlier of (A) the date on which the financial
statements referred to in Section 7.1(a) are required to be delivered to the
Lenders and (B) the date on which said financial statements are actually
delivered. In addition, no later than three Business Days following the date
that any amount deducted from Excess Cash Flow is required to be returned to
Excess Cash Flow as a result of the proviso to clause (b)(ix) of the definition
of "Excess Cash Flow", an amount equal to 50% of such returned amount shall be
applied toward payment of the Loans and reduction of the Commitments as set
forth in paragraph (d). Notwithstanding the foregoing, the Borrower shall not be
required to make any prepayment pursuant to this paragraph (c) in respect of
Excess Cash Flow for any fiscal year if the Tranche B Term Loans have been
repaid in full and there are no outstanding Tranche B Term Loan Commitments.
(d) (i) All mandatory prepayments shall be applied first to the
Tranche B Term Loans, and second to the permanent reduction of the Revolving
Credit Commitments. The
32
application of prepayments referred to in the preceding sentence shall be made
first to Alternate Base Rate Loans and second to Eurodollar Loans. The amount of
each principal prepayment of Tranche B Term Loans shall be applied to reduce the
then remaining installments of the Tranche B Term Loans in the inverse order of
maturity. Amounts prepaid on account of the Tranche B Term Loans may not be
reborrowed.
(e) If at any time the sum of the Revolving Credit Loans, Swing Line
Loans and the Letter of Credit Outstandings exceeds the Revolving Credit
Commitments (including at any time after any reduction of the Revolving Credit
Commitments pursuant to Section 2.5 or this Section 2.10), the Borrower shall
make a payment in the amount of such excess which payment shall be applied in
the order set forth in Section 2.5(b). To the extent that after giving effect to
any prepayment of the Loans required by the preceding sentence, the sum of the
Revolving Credit Loans, Swing Line Loans and Letter of Credit Outstandings
exceed the Revolving Credit Commitments, the Borrower shall, without notice or
demand, immediately cash collateralize the then outstanding L/C Obligations in
an amount equal to such excess upon terms reasonably satisfactory to the
Administrative Agent.
(f) If at any time the Borrower or any Subsidiary shall receive any
cash proceeds of any casualty or condemnation in excess of $2,000,000 permitted
by Section 8.6(c), such proceeds shall be deposited with the Administrative
Agent who shall hold such proceeds in a cash collateral account reasonably
satisfactory to it. From time to time upon request, the Administrative Agent
will release such proceeds to the Borrower or such Subsidiary, as necessary, to
pay for replacement or rebuilding of the assets lost or condemned. If such
assets are not replaced or rebuilt within one year (subject to reasonable
extension for force majeure or weather delays) following the condemnation or
casualty or if the Borrower fails to notify the Administrative Agent in writing
on or before 180 days after such casualty or condemnation that the Borrower
shall commence the replacement or rebuilding of such asset, then, in either
case, the Administrative Agent may apply any amounts in the cash collateral
account to the repayment of the Loans in accordance with Section 2.10(d).
(g) The provisions of this Section 2.10 shall not be in derogation of
any other covenant or obligation of the Borrower and its Subsidiaries under the
Loan Documents and shall not be construed as a waiver of, or a consent to
departure from, any such covenant or obligation.
(h) Notwithstanding the foregoing provisions of this Section 2.10, if
at any time the mandatory prepayment of the Tranche B Term Loans pursuant to
this Agreement would result, after giving effect to the procedures set forth in
this Agreement, in the Borrower incurring breakage costs and other Eurodollar
Loans related costs under Section 4.5, 4.6 or 4.7 as a result of Eurodollar
Loans being prepaid other than on the last day of an Interest Period applicable
thereto ("Affected Eurodollar Loans") which breakage costs are required to be
paid pursuant to Section 4.8, then, the Borrower may so long as no Default or
Event of Default shall have occurred and be continuing, in its sole discretion,
initially deposit a portion (up to 100%) of the amounts that otherwise would
have been paid in respect to the Affected Eurodollar Loans with the
Administrative Agent (which deposit must be equal in amount to the amount of
Affected Eurodollar Loans not immediately prepaid) to be held as security for
the obligations of the Borrower to make such mandatory prepayment pursuant to a
cash collateral agreement to be entered into in form and substance reasonably
satisfactory to the Administrative Agent, with
33
such cash collateral to be directly applied upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to the
relevant Tranche B Term Loan that is a Eurodollar Loan (or such earlier date or
dates as shall be requested by the Borrower), to repay an aggregate principal
amount of such Tranche B Term Loan equal to the Affected Eurodollar Loans not
initially repaid pursuant to this sentence.
2.11 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Alternate Base Rate Loans, by
giving the Administrative Agent at least two Business Days' prior irrevocable
notice of such election, provided that, unless the Borrower elects to deposit
with the Administrative Agent the amount of any breakage costs and other
Eurodollar Loan related costs to be incurred by the Borrower under this
Agreement with respect to the prepayment or conversion of such Eurodollar Loan
prior to the end of an Interest Period, any such conversion of Eurodollar Loans
may only be made on the last day of an Interest Period with respect thereto. The
Borrower may elect from time to time to convert Alternate Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election. Any such notice of conversion
to Eurodollar Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the Administrative
Agent shall promptly notify each applicable Tranche B Term Loan Lender or
Revolving Credit Lender, as the case may be, thereof. All or any part of
outstanding Eurodollar Loans and Alternate Base Rate Loans may be converted as
provided herein, provided that (i) no Alternate Base Rate Loan may be converted
into a Eurodollar Loan when any Default or Event of Default has occurred and is
continuing and the Administrative Agent has or the Required Lenders have
determined that such a conversion is not appropriate and (ii) any such
conversion may only be made if, after giving effect thereto, Section 2.12 shall
not have been contravened.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such (i) when any Event of Default
has occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined that such a continuation is not appropriate or (ii) if,
after giving effect thereto, Section 2.12 would be contravened and provided,
further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Eurodollar Loans shall be automatically
converted to Alternate Base Rate Loans on the last day of such then expiring
Interest Period.
2.12 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $250,000 in excess thereof and so that there shall not be more than
10 Eurodollar Tranches at any one time outstanding.
2.13 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees to make swing line loans (individually, a
"Swing Line Loan";
34
collectively, the "Swing Line Loans") to the Borrower from time to time during
the Revolving Credit Commitment Period in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000, provided that at no time may the
sum of the Swing Line Loans, the Revolving Credit Loans and Letter of Credit
Outstandings exceed the Revolving Credit Commitments. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, prepaying the Swing Line Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof. All Swing Line Loans
shall be made as Alternate Base Rate Loans and shall not be entitled to be
converted into Eurodollar Loans. The Borrower shall give the Swing Line Lender
irrevocable notice (which notice may be telephonic and must be received by the
Swing Line Lender prior to 1:00 p.m., New York City time) on the requested
Borrowing Date specifying the amount of the requested Swing Line Loan which
shall be in an aggregate minimum amount of $150,000 or a whole multiple of
$25,000 in excess thereof. Any such telephonic borrowing notice shall be
confirmed promptly by a written borrowing notice to the Administrative Agent,
delivered by hand or by telecopy. The proceeds of the Swing Line Loan will be
made available by the Swing Line Lender to the Borrower at the office of the
Swing Line Lender by 3:00 p.m. on the Borrowing Date by crediting the account of
the Borrower at such office with such proceeds. The Borrower may at any time and
from time to time, prepay the Swing Line Loans, in whole or in part, without
premium or penalty, by notifying the Swing Line Lender prior to 1:00 p.m. on any
Business Day of the date and amount of prepayment. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein. Partial prepayments shall be in an aggregate principal amount
of $150,000 or a whole multiple of $25,000 in excess thereof.
(b) The Borrower agrees that, upon the request to the Administrative
Agent by the Swing Line Lender, in order to evidence the Swing Line Loans the
Borrower will execute and deliver to the Swing Line Lender a promissory note
substantially in the form of Exhibit A-3, with appropriate insertions (as the
same may be amended, supplemented, replaced or otherwise modified from time to
time, the "Swing Line Note"), payable to the order of the Swing Line Lender, or
its valid and registered assigns, and representing the obligation of the
Borrower to pay the amount of the Swing Line Commitment or, if less, the unpaid
principal amount of the Swing Line Loans, with interest thereon as prescribed in
Section 4.1. The Swing Line Lender is hereby authorized to record the Borrowing
Date, the amount of each Swing Line Loan and the date and amount of each payment
or prepayment of principal thereof, on the schedule annexed to and constituting
a part of the Swing Line Note and any such recordation shall, in the absence of
manifest error and to the extent permitted by applicable law, constitute prima
facie evidence of the accuracy of the information so recorded, provided that the
failure by the Swing Line Lender to make any such recordation shall not affect
any of the obligations of the Borrower under such Swing Line Note or this
Agreement. Any Swing Line Note shall (a) be dated the Closing Date, (b) be
stated to mature on the Revolving Credit Commitment Termination Date and (c)
bear interest for the period from the date thereof until paid in full on the
unpaid principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as specified in,
Section 4.1.
(c) The Swing Line Lender, at any time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the
Swing Line Lender to act on its behalf) request each Revolving Credit Lender
including the Swing Line Lender, to make a Revolving Credit Loan in an amount
equal to such Lender's Revolving Credit Commitment
35
Percentage of the amount of the Swing Line Loans outstanding on the date such
notice is given (the "Refunded Swing Line Loans"). Unless any of the events
described in paragraph (f) of Article 9 shall have occurred with respect to the
Borrower (in which event the procedures of paragraph (e) of this Section 2.13
shall apply) each Revolving Credit Lender shall make the proceeds of its
Revolving Credit Loan available to the Administrative Agent for the account of
the Swing Line Lender at the office of the Administrative Agent specified in
Section 12.2 prior to 12:00 Noon (New York City time) in funds immediately
available on the Business Day next succeeding the date such notice is given. The
proceeds of such Revolving Credit Loans shall be immediately applied to repay
the Refunded Swing Line Loans. Effective on the day such Revolving Credit Loans
are made, the portion of the Swing Line Loans so paid shall no longer be
outstanding as Swing Line Loans, shall no longer be due under any Swing Line
Note and shall be due under the respective Revolving Credit Loans of the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Commitment Percentages. The Borrower authorizes the Swing Line Lender to charge
the Borrower's accounts with the Administrative Agent (up to the amount
available in each such account) in order to immediately pay the amount of such
Refunded Swing Line Loans to the extent amounts received from the Revolving
Credit Lenders are not sufficient to repay in full such Refunded Swing Line
Loans.
(d) Notwithstanding anything herein to the contrary, the Swing Line
Lender shall not make any Swing Line Loans if the conditions set forth in
Section 6.2 have not been satisfied.
(e) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (c) of Section 2.13 one of the events described in paragraph (f) of
Article 9 shall have occurred and be continuing with respect to the Borrower,
each Revolving Credit Lender will, on the date such Revolving Credit Loan was to
have been made pursuant to the notice in Section 2.13(c), purchase an undivided
participating interest in the Swing Line Loans in an amount equal to (i) its
Revolving Credit Commitment Percentage times (ii) the Swing Line Loans
outstanding as of such date. Each Revolving Credit Lender will immediately
transfer to the Swing Line Lender, in immediately available funds, the amount of
its participation, and upon receipt thereof the Swing Line Lender will deliver
to such Revolving Credit Lender a Swing Line Loan Participation Certificate
dated the date of receipt of such funds and in such amount.
(f) Whenever, at any time after any Revolving Credit Lender has
purchased a participating interest in a Swing Line Loan, the Swing Line Lender
receives any payment on account thereof, the Swing Line Lender will distribute
to such Revolving Credit Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Revolving Credit Lender's participating interest was
outstanding and funded); provided, however, that in the event that such payment
received by the Swing Line Lender is required to be returned, such Revolving
Credit Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it.
(g) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.13(c) and to purchase participating interests pursuant
to Section 2.13(e) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a
36
Default or an Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, CCHC, any of their Subsidiaries or any
other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
ARTICLE 3. LETTERS OF CREDIT
3.1 The L/C Commitment. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Credit Lenders set forth in Section 3.4(a), agrees to issue Letters of Credit
for the account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by the
Issuing Lender; provided that no Issuing Lender shall issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would exceed
$10,000,000 or (ii) the sum of the Revolving Credit Loans, Swing Line Loans and
Letter of Credit Outstandings of all the Revolving Credit Lenders would exceed
the Revolving Credit Commitments of all the Revolving Credit Lenders. Each
Letter of Credit shall (i) be either (x) a Standby L/C issued to provide credit
support for insurance and other general corporate requirements of the Borrower
and its Subsidiaries, or (y) a Trade L/C in respect of the purchase of goods or
services by the Borrower and its Subsidiaries in the ordinary course of business
and (ii) expire no later than the Revolving Credit Commitment Termination Date.
No Standby L/C shall have an expiry date more than 360 days after its date of
issuance, and no Trade L/C shall have an expiry date more than 120 days after
its issuance and no later than five Business Days prior to the Revolving Credit
Commitment Termination Date, provided that Standby L/C's may provide for the
renewal thereof for additional periods not to exceed one year, but in any event
no later than the Revolving Credit Commitment Termination Date. Each Letter of
Credit shall be denominated in Dollars.
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any Participating Lender to exceed any limits imposed by,
any applicable Requirement of Law.
(d) Any Letter of Credit issued and outstanding as of the Closing
Date pursuant to the Existing Credit Agreement shall be deemed to be a Letter of
Credit issued under this Agreement on the Closing Date.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender and the Administrative Agent at their
respective addresses for notices specified herein a commercial letter of credit
application in the Issuing Lender's then customary form (a "Trade L/C
Application") or a standby letter of credit application in the Issuing Lender's
then customary form (a "Standby L/C Application"), as the case may be, in each
case completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as may be customary for
letters of credit of the kind being requested and as the
37
Issuing Lender may reasonably request. Upon receipt of any Letter of Credit
Application, the Issuing Lender will process such Letter of Credit Application
and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and, upon
receipt by the Issuing Lender of confirmation from the Administrative Agent that
issuance of such Letter of Credit will not contravene Section 3.1, the Issuing
Lender shall promptly issue the Letter of Credit requested thereby (but in no
event shall the Issuing Lender be required to issue any Letter of Credit earlier
than three Business Days after its receipt of the Letter of Credit Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the Issuing Lender
and the Borrower. The Issuing Lender shall furnish a copy of such Letter of
Credit to the Borrower and the Administrative Agent promptly following the
issuance thereof and to each Revolving Credit Lender promptly following the end
of each month.
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay
to the Administrative Agent, for the account of the Issuing Lender and the
Participating Lenders, a letter of credit commission with respect to each Letter
of Credit for each day at a per annum rate equal to the Applicable Margin
applicable to Revolving Credit Loans bearing interest at the Eurodollar Rate of
the daily face amount of such Letter of Credit, payable monthly in arrears on
the last day of each month and on the Revolving Credit Commitment Termination
Date. A portion of such commission equal to 1/4 of 1% of the average daily face
amount of such Letter of Credit shall be payable to the Issuing Lender for its
own account, and the remaining portion of such commission shall be payable to
the Issuing Lender and the Revolving Credit Lenders to be shared ratably among
them in accordance with their respective Revolving Credit Commitment
Percentages. Such commissions shall be nonrefundable.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
effecting payment under, amending or otherwise administering any Letter of
Credit.
(c) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the Participating Lenders all fees
and commissions received by the Administrative Agent for their respective
accounts pursuant to this Section 3.3.
3.4 L/C Participations. (a) Effective on the date of issuance of each
Letter of Credit, the Issuing Lender irrevocably agrees to grant and hereby
grants to each Participating Lender, and each Participating Lender irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such Participating
Lender's own account and risk an undivided interest equal to such Participating
Lender's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under each Letter of Credit issued by the Issuing Lender
and the amount of each draft paid by the Issuing Lender thereunder. Each
Participating Lender unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which such
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such Participating Lender shall pay to the
Administrative Agent, for the account of the Issuing Lender, upon demand at the
Administrative Agent's address specified in
38
Section 12.2, an amount equal to such Participating Lender's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed. On the date that any Assignee becomes a Revolving Credit
Lender party to this Agreement in accordance with Section 12.6, participating
interests in any outstanding Letters of Credit held by the transferor Lender
from which such Assignee acquired its interest hereunder shall be
proportionately reallotted between such Assignee and such transferor Lender.
Each Participating Lender hereby agrees that its obligation to participate in
each Letter of Credit, and to pay or to reimburse the Issuing Lender for its
participating share of the drafts drawn or amounts otherwise paid thereunder, is
absolute, irrevocable and unconditional and shall not be affected by any
circumstances whatsoever (including, without limitation, the occurrence or
continuance of any Default or Event of Default), and that each such payment
shall be made without offset, abatement, withholding or other reduction
whatsoever.
(b) If any amount required to be paid by any Participating Lender to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any draft paid by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such Participating Lender shall pay to the Administrative Agent,
for the account of the Issuing Lender, on demand, an amount equal to the product
of (i) such amount, times (ii) the daily average Federal Funds Effective Rate
during the period from and including the date such payment is required to the
date on which such payment is immediately available to the Issuing Lender, times
(iii) a fraction the numerator of which is the number of days that elapse during
such period and the denominator of which is 360. If any such amount required to
be paid by any Participating Lender pursuant to Section 3.4(a) is not in fact
made available to the Administrative Agent, for the account of the Issuing
Lender, by such Participating Lender within three Business Days after the date
such payment is due, the Issuing Lender shall be entitled to recover from such
Participating Lender, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Alternate Base Rate Loans
hereunder. An L/C Participation Certificate of the Issuing Lender submitted to
any Participating Lender with respect to any amounts owing under this Section
shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has paid a draft
under any Letter of Credit and has received from any Participating Lender its
pro rata share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any reimbursement on account of such unreimbursed portion, or
any payment of interest on account thereof, the Issuing Lender will pay to the
Administrative Agent, for the account of such Participating Lender, its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such Participating Lender shall return to the Administrative Agent for
the account of the Issuing Lender, the portion thereof previously distributed to
it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in Dollars and
in
39
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section 3.5 from the date such
amounts become payable in accordance with the first sentence of this Section 3.5
until payment in full, at the rate which would be payable on Alternate Base Rate
Loans at such time.
3.6 Obligations Absolute. The Borrower's Obligations under this
Article 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower or any other Person may have or have had against the Issuing Lender or
any other Lender or any beneficiary of a Letter of Credit. The Borrower also
agrees with the Issuing Lender that the Issuing Lender shall not be responsible
for, and the Borrower's obligations under Section 3.5 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
The Borrower agrees that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or wilful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, including, without limitation, Article 5 thereof,
shall be binding on the Borrower and shall not result in any liability of such
Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower and the Administrative Agent of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
3.8 Letter of Credit Applications. To the extent that any provision
of any Letter of Credit Application, including any reimbursement provisions
contained therein, related to any Letter of Credit is inconsistent with the
provisions of this Article 3, the provisions of this Article 3 shall prevail.
ARTICLE 4. GENERAL PROVISIONS
4.1 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
40
(b) Each Alternate Base Rate Loan shall bear interest at a rate per
annum equal to the Alternate Base Rate plus the Applicable Margin.
(c) Upon the occurrence and during the continuance of any Event of
Default specified in Section 9(a), the Loans and any overdue amounts hereunder
shall bear interest at a rate per annum which is (x) in the case of the Loans,
the rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section 4.1 plus 2% or (y) in the case of overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
Section 4.1 plus 2%.
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
4.1 shall be payable from time to time on demand.
4.2 Computation of Interest and Fees. (a) Interest on Alternate Base
Rate Loans, Eurodollar Loans, commitment fees, interest on overdue interest and
other amounts payable hereunder shall be calculated on the basis of a 360-day
year except interest on Alternate Base Rate Loans (when based on the Prime Rate)
shall be calculated on the basis of a year of 365/366, in either case for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Revolving Credit Lenders or the applicable Tranche B
Term Loan Lenders, as the case may be, of each determination of a Eurodollar
Rate. Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the Revolving Credit Lenders or the applicable Tranche B Term Loan
Lenders, as the case may be, of the effective date and the amount of each such
change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 4.1(a), (b) or (c).
4.3 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination, absent manifest error, shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
41
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Alternate Base Rate Loans, (y) any Loans that
were to have been converted on the first day of such Interest Period to
Eurodollar Loans shall be converted to or continued as Alternate Base Rate Loans
and (z) any outstanding Eurodollar Loans shall be converted, on the first day of
such Interest Period, to Alternate Base Rate Loans. Until such notice has been
withdrawn by the Administrative Agent (which the Administrative Agent agrees to
do when the circumstances that prompted the delivery of such notice no longer
exist), no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Loans to Eurodollar Loans.
4.4 Pro Rata Treatment and Payments. (a) Each borrowing and each
conversion or continuation pursuant to Section 2.11, of Loans (other than Swing
Line Loans) by the Borrower from the Lenders and any reduction of the
Commitments of the Lenders hereunder shall be made pro rata according to the
respective principal amounts of such Loans held by the Lenders or the respective
Commitment Percentages of the Lenders, as the case may be.
(b) Whenever (i) any payment received by the Administrative Agent
under this Agreement or any Note or (ii) any other amounts received by the
Administrative Agent for or on behalf of the Borrower (including, without
limitation, proceeds of collateral or payments under any guarantee) is
insufficient to pay in full all amounts then due and payable to the
Administrative Agent and the Lenders under this Agreement and any Note, such
payment shall be distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: First, to the
payment of fees and expenses due and payable to the Administrative Agent under
and in connection with this Agreement; Second, to the payment of all expenses
due and payable under Section 12.5, ratably among the Administrative Agent and
the Lenders in accordance with the aggregate amount of such payments owed to the
Administrative Agent and each such Lender; Third, to the payment of fees due and
payable under Sections 2.4 and 3.3(a), ratably among the Revolving Credit
Lenders in accordance with the Revolving Credit Commitment Percentage of each
Revolving Credit Lender and, in the case of the Issuing Lender, the amount
retained by the Issuing Lender for its own account pursuant to Section 3.3(a);
Fourth, to the payment of interest then due and payable under the Loans, ratably
in accordance with the aggregate amount of interest owed to each such Lender;
and Fifth, to the payment of the principal amount of the Loans and the L/C
Obligations then due and payable and, in the case of proceeds of collateral or
payments under any guarantee, to the payment of any other obligations to any
Lender not covered in First through Fourth above ratably secured by such
collateral or ratably guaranteed under any such guarantee, ratably among the
Lenders in accordance with the aggregate principal amount and, in the case of
proceeds of collateral or payments under any guarantee, the obligations secured
or guaranteed thereby owed to each such Lender.
(c) If any Revolving Credit Lender (a "Non-Funding Lender") has (x)
failed to make a Revolving Credit Loan required to be made by it hereunder, and
the Administrative Agent has determined that such Revolving Credit Lender is not
likely to make such Revolving Credit Loan or (y) given notice to the Borrower or
the Administrative Agent that it will not make, or that it has disaffirmed or
repudiated any obligation to make, any Revolving Credit Loans, in each case by
reason of the provisions of the Financial Institutions Reform, Recovery
42
and Enforcement Act of 1989, as amended, or otherwise, any payment made on
account of the principal of the Revolving Credit Loans outstanding shall be made
as follows:
(i) in the case of any such payment made on any date when and
to the extent that, in the determination of the Administrative Agent,
the Borrower would be able, under the terms and conditions hereof, to
reborrow the amount of such payment under the Revolving Credit
Commitments and to satisfy any applicable conditions precedent set
forth in Section 6.2 to such reborrowing, such payment shall be made
on account of the outstanding Revolving Credit Loans held by the
Revolving Credit Lenders other than the Non-Funding Lender pro rata
according to the respective outstanding principal amounts of the
Revolving Credit Loans of such Revolving Credit Lenders;
(ii) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Revolving Credit
Lenders pro rata according to the respective outstanding principal
amounts of such Revolving Credit Loans; and
(iii) any payment made on account of interest on the Revolving
Credit Loans shall be made pro rata according to the respective
amounts of accrued and unpaid interest due and payable on the
Revolving Credit Loans with respect to which such payment is being
made.
The Borrower agrees to give the Administrative Agent such assistance in making
any determination pursuant to this paragraph as the Administrative Agent may
reasonably request. Any such determination by the Administrative Agent shall be
conclusive and binding on the Lenders.
(d) All payments (including prepayments) to be made by the Borrower
on account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Administrative Agent, for the account of
the Lenders at the Administrative Agent's office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in Dollars and in immediately available funds. The
Administrative Agent shall promptly distribute such payments in accordance with
the provisions of Section 4.4(b) promptly upon receipt in like funds as
received. If any payment hereunder would become due and payable on a day other
than a Business Day, such payment shall become due and payable on the next
succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise
provided in clause (1) of the definition of "Interest Period") and, with respect
to payments of principal, interest thereon shall be payable at the applicable
rate during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
the amount that would constitute its relevant Commitment Percentage of the
borrowing on such date available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such Borrowing Date, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is made available to the Administrative Agent on a date
after such
43
Borrowing Date, such Lender shall pay to the Administrative Agent on demand an
amount equal to the product of (i) the daily average Federal Funds Effective
Rate during such period, times (ii) the amount of such Lender's relevant
Commitment Percentage of such borrowing, times (iii) a fraction the numerator of
which is the number of days that elapse from and including such Borrowing Date
to the date on which such Lender's relevant Commitment Percentage of such
borrowing shall have become immediately available to the Administrative Agent
and the denominator of which is 360. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this Section
4.4(e) shall be conclusive in the absence of manifest error. If such Lender's
relevant Commitment Percentage of such borrowing is not in fact made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall be entitled to recover such
amount with interest thereon at the rate per annum applicable to Alternate Base
Rate Loans hereunder, on demand, from the Borrower. The failure of any Lender to
make any Loan to be made by it shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on such Borrowing Date, but no
Lender shall be responsible for the failure of any other Lender to make the Loan
to be made by such other Lender on such Borrowing Date.
4.5 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Alternate Base Rate Loans to Eurodollar Loans shall forthwith be
cancelled and (b) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Alternate Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law; provided that before
making any such demand, each Lender agrees to use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as
such efforts would not be disadvantageous to it, in its reasonable discretion,
in any legal, economic or regulatory manner) to designate a different lending
office if the making of such a designation would allow the Lender or its lending
office to continue to perform its obligations to make Eurodollar Loans and avoid
the need for, or materially reduce the amount of, such increased cost. If any
such conversion of a Eurodollar Loan occurs on a day which is not the last day
of the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section 4.8.
If circumstances subsequently change so that any affected Lender shall determine
that it is no longer so affected, such Lender will promptly notify the Borrower
and the Administrative Agent, and upon receipt of such notice, the obligations
of such Lender to make or continue Eurodollar Loans or to convert Alternate Base
Rate Loans into Eurodollar Loans shall be reinstated.
4.6 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Loan, any Note, any Letter of
Credit or any Letter of Credit Application or change the basis of
taxation of payments to such Lender
44
in respect thereof (except for taxes covered by Section 4.7 and the
establishment of a tax based on the net income of such Lender or
changes in the rate of tax on the net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit (including, without limitation,
letters of credit) by, or any other acquisition of funds by, any
office of such Lender; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to increase the cost to such
Lender, by an amount which such Lender deems to be material, of issuing or
maintaining any Letter of Credit or participation therein or to reduce any
amount receivable hereunder in respect thereof, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable, provided that before making any such demand, each Lender agrees to
use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be disadvantageous
to it, in its reasonable discretion, in any legal, economic or regulatory
manner) to designate a different Eurodollar lending office if the making of such
designation would allow the Lender or its Eurodollar lending office to continue
to perform its obligations to make Eurodollar Loans or to continue to fund or
maintain Eurodollar Loans and avoid the need for, or materially reduce the
amount of, such increased cost. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 4.6, it shall promptly notify (in
any event no later than 90 days after such Lender becomes entitled to make such
claim) the Borrower, through the Administrative Agent, of the event by reason of
which it has become so entitled. If the Borrower so notifies the Administrative
Agent within five Business Days after any Lender notifies the Borrower of any
increased cost pursuant to the foregoing provisions of this Section 4.6, the
Borrower may convert all Eurodollar Loans of such Lender then outstanding into
Alternate Base Rate Loans in accordance with Section 2.11 and, additionally,
reimburse such Lender for any cost in accordance with Section 4.8. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder for nine months following such termination
and repayment.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by
45
such Lender to the Borrower (with a copy to the Administrative Agent) of a
prompt written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction;
provided that the Borrower shall not be required to compensate a Lender pursuant
to this paragraph for any amounts incurred more than ninety days prior to the
date that such lender notifies the Borrower of such Lender's intention to claim
compensation therefor; and provided, further that, if the circumstances giving
rise to such claim have a retroactive effect, then such ninety day period shall
be extended to include the period of such retroactive effect. This covenant
shall survive the termination of this Agreement and the payment of any Notes and
all other amounts payable hereunder for nine months following such termination
and repayment.
(c) A certificate as to any additional amounts payable pursuant to
this Section 4.6 showing in reasonable detail the calculation thereof and
certifying that the applicable Lender is generally charging such costs to other
similarly situated borrowers under similar credit facilities, submitted by such
Lender, through the Administrative Agent, to the Borrower shall be conclusive in
the absence of manifest error.
4.7 Taxes. (a) Except as provided below in this Section, all payments
made by the Borrower under this Agreement and any Notes shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, (i) net income
taxes and franchise taxes imposed in lieu of net income taxes and (ii) any
United States withholding taxes payable with respect to payments under this
Agreement or the Notes under laws (including any governing statute, treaty or
regulation) in effect on the Closing Date (or (x) in the case of an Assignee,
the date of the Assignment and Acceptance and (y) in the case of a Participant,
the date of the related purchase) applicable to any Lender, the Issuing Lender,
the Administrative Agent, or any Participant, as the case may be. If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Administrative Agent, any Lender or the Issuing Lender hereunder
or under any Notes, the amounts so payable to the Administrative Agent, such
Lender or the Issuing Lender shall be increased to the extent necessary to yield
to the Administrative Agent, such Lender or the Issuing Lender (after payment of
all Non-Excluded Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement and any Notes, provided,
however, that the Borrower shall be entitled to deduct and withhold any
Non-Excluded Taxes and shall not be required to increase any such amounts
payable to the Administrative Agent, any Lender or the Issuing Lender if the
Administrative Agent, such Lender or the Issuing Lender fails or is unable to
comply with the requirements of paragraph (b) or (c) of this Section 4.7.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender or the Issuing Lender, as the case
may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Administrative Agent, the Lenders and
the Issuing Lender, as the case may be, for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent,
46
any Lender or the Issuing Lender as a result of any such failure. The agreements
in this Section 4.7 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder for a period of
nine months thereafter.
(b) Each Non-U.S. Lender and each U.S. Lender shall:
(i) (x) in the case of a Non-U.S. Lender (other than an Existing
Lender that has previously delivered to the Borrower and the
Administrative Agent a form or certification described in this Section
4.7(b)) on or before the date of any payment by the Borrower under
this Agreement or any Notes to such Non-U.S. Lender, deliver to the
Borrower and the Administrative Agent (A) two duly completed copies of
United States Internal Revenue Service Form W-8BEN (certifying to its
entitlement to treaty benefits and, if applicable, certifying that it
is entitled to an exemption from United States backup withholding tax)
or W-8ECI (certifying that the income received is effectively
connected with a U.S. trade or business and, if applicable, certifying
that it is entitled to an exemption from United States backup
withholding tax), or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this
Agreement, any Notes and any Loan Document without any deduction or
withholding of any United States federal income taxes or, in the case
of a U.S. Lender, on or before the date of any payment under this
Agreement to such Lender, deliver to the Borrower and the
Administrative Agent two properly completed copies of United States
Internal Revenue Service Form W-9 or successor applicable form, as the
case may be, certifying that such U.S. Lender is entitled to an
exemption from United States backup withholding tax (for purposes of
this Section 4.7(b), a U.S. Lender shall not include (x) a U.S. Lender
that may be treated as an exempt recipient based on the indicators
described in Treas. Reg. Section 1.6049-4(c)(1)(ii)) or (y) a U.S.
Lender that is an Existing Lender);
(y) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete, after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower and at any other time or
times reasonably requested by the Borrower; and
(z) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(ii) in the case of any Non-U.S. Lender that is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and that does
not comply with sub-paragraph (i) of this paragraph (b), (x) represent
to the Borrower (for the benefit of the Borrower and the
Administrative Agent) that it is not a bank within the meaning of
Section 881(c)(3)(A) of the Code, (y) deliver to the Borrower on or
before the date of any payment by the Borrower, with a copy to the
Administrative Agent, (A) a certificate stating that such Lender (1)
is not a "bank"
47
under Section 881(c)(3)(A) of the Code, is not subject to regulatory
or other legal requirements as a bank in any jurisdiction, and has not
been treated as a bank for purposes of any tax, securities law or
other filing or submission made to any Governmental Authority, any
application made to a rating agency or qualification for any exemption
from tax, securities law or other legal requirements, (2) is not a
"10-percent shareholder" within the meaning of Sections 881(c)(3)(B)
and 871(h)(3)(B) of the Code and (3) is not a "controlled foreign
corporation" receiving interest from a related person within the
meaning of Section 881(c)(3)(C) of the Code (any such certificate a
"U.S. Tax Compliance Certificate") and (B) two duly completed copies
of Internal Revenue Service Form W-8BEN, or successor applicable form,
certifying to such Non-U.S. Lender's legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the
provisions of Section 881(c) or 871(h) of the Code with respect to
payments to be made under this Agreement, any Notes and any Loan
Document (and to deliver to the Borrower and the Administrative Agent
two further copies of Form W-8BEN on or before the date it expires or
becomes obsolete, after the occurrence of any event requiring a change
in the most recently provided form and at any other time or times
reasonably requested by the Borrower and, if necessary, obtain any
extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (z)
agree, to the extent legally entitled to do so, upon reasonable
request by the Borrower, to provide to the Borrower and the
Administrative Agent such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under this
Agreement, any Notes and any Loan Document;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender, the Issuing Lender or the
Administrative Agent, as the case may be, hereunder which renders any such forms
and certificates previously delivered by such Lender, the Issuing Lender or the
Administrative Agent, as the case may be, inapplicable or which would prevent
such Lender, the Issuing Lender or the Administrative Agent, as the case may be,
from duly completing and delivering such form or certificate with respect to it
and such Lender, the Issuing Lender or the Administrative Agent, as the case may
be, so advises the Borrower and the Administrative Agent. Each Person that shall
become a Lender, the Issuing Lender or the Administrative Agent or a Participant
pursuant to Section 12.6 shall, upon the effectiveness of the related transfer,
be required to provide all of the forms, certifications and statements required
pursuant to this Section; provided that in the case of a Participant the
obligations of such Participant pursuant to this paragraph (b) shall be
determined as if such Participant were a Lender except that such Participant
shall furnish all such required forms, certifications and statements to the
Lender from which the related participation shall have been purchased.
(c) Each Lender, the Issuing Lender and the Administrative Agent, as
the case may be, shall, upon request by the Borrower, deliver to the Borrower or
the applicable Governmental Authority, as the case may be, any form or
certificate required in order that any payment by the Borrower under this
Agreement, any Notes or any Loan Document may be made free and clear of, and
without deduction or withholding for or on account of any Non-Excluded Taxes (or
to allow any such deduction or withholding to be at a reduced rate) imposed on
such
48
payment under the laws of any jurisdiction, provided that such Lender, the
Issuing Lender and the Administrative Agent, as the case may be, is legally
entitled to complete, execute and deliver such form or certificate and such
completion, execution or submission would not materially prejudice the legal
position of such Lender.
(d) Each Lender, the Issuing Lender and the Administrative Agent
agrees that, upon the occurrence of any event giving rise to an obligation of
the Borrower under this Section 4.7 with respect to such Lender, Issuing Lender
or Administrative Agent, it will, if requested by the Borrower, use reasonable
efforts (subject to overall internal policy, legal and regulatory
considerations) to designate another lending office for any Loans affected by
such event with the object of avoiding the consequences of such event; provided,
that such designation is made on terms that, in the reasonable judgment of such
Lender, Issuing Lender or Administrative Agent, causes it or its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section shall affect or postpone any of the
obligations of the Borrower or the rights of any Lender, Issuing Lender or
Administrative Agent pursuant to this Agreement.
(e) In the event that the Administrative Agent, any Lender, or the
Issuing Lender determines, in its sole good-faith discretion, that it has
received a refund of any Non-Excluded Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid additional
amounts pursuant to this Section 4.7, it shall pay over such refund to the
Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 4.7 with respect to
Non-Excluded Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, Issuing Lender or such Lender, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent, Issuing Lender or such Lender agrees to repay the
amount paid over to the Borrowerer (plus any penalties, interest, or other
charges imposed by the relevant Governmental Authority solely with respect to
such refund of Non-Excluded Taxes as determined in the sole good-faith
discretion of the Lender) to the Administrative Agent, Issuing Lender or such
Lender in the event the Administrative Agent, Issuing Lender, or such Lender is
required to pay such refund to such Governmental Authority. Nothing contained in
this paragraph shall interfere with the right of the Administrative Agent, the
Issuing Lender or such Lender to arrange its tax affairs in whatever manner it
thinks fit, nor to disclose any information relating to its tax affairs or any
computations in respect thereof or to do anything that would prejudice its
ability to benefit from other credits, relief, remissions or repayments to which
it may be entitled.
4.8 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss (excluding loss of profit) or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrower in payment when due of the principal amount of or interest on any
Eurodollar Loan, (b) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (c) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (d) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto, including,
without limitation, in each case, any such loss or expense (but excluding loss
of
49
margin) arising from the reemployment of funds obtained by it or from fees
payable to terminate the deposits from which such funds were obtained.
Calculation of all amounts payable to a Lender under this Section 4.8 shall be
made as though such Lender had actually funded its relevant Eurodollar Loan
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of such Eurodollar Loan and having a maturity
comparable to the relevant Interest Period; provided, however, that each Lender
may fund each of its Eurodollar Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 4.8. This covenant shall survive the termination of
this Agreement and the payment of any Notes and all other amounts payable
hereunder for a period of nine months thereafter.
4.9 Replacement of Lender. If at any time (a) the Borrower becomes
obligated to pay additional amounts described in Sections 4.5, 4.6 or 4.7 as a
result of any condition described in such Sections or any Lender ceases to make
Eurodollar Loans pursuant to Section 4.5, (b) any Lender becomes insolvent and
its assets become subject to a receiver, liquidator, trustee, custodian or other
Person having similar powers, (c) any Lender becomes a "Nonconsenting Lender" or
(d) any Lender becomes a "Non-Funding Lender", then the Borrower may, on ten
Business Days' prior written notice to the Administrative Agent and such Lender,
replace such Lender by causing such Lender to (and such Lender shall) assign
pursuant to Section 12.6(c) all of its rights and obligations under this
Agreement to a Lender or other entity selected by the Borrower and acceptable to
the Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and other
amounts payable hereunder (including amounts payable under Section 4.8 as though
such Loans were being paid instead of being purchased); provided that (i) the
Borrower shall have no right to replace the Administrative Agent, (ii) neither
the Administrative Agent nor any Lender shall have any obligation to the
Borrower to find a replacement Lender or other such entity, (iii) in the event
of a replacement of a Nonconsenting Lender or a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to clause (a) of this
Section 4.9, in order for the Borrower to be entitled to replace such a Lender,
such replacement must take place no later than 180 days after (A) the date the
Nonconsenting Lender shall have notified the Borrower and the Administrative
Agent of its failure to agree to any requested consent, waiver or amendment or
(B) the Lender shall have demanded payment of additional amounts under one of
the Sections described in clause (a) of this Section 4.9, as the case may be,
and (iv) in no event shall the Lender hereby replaced be required to pay or
surrender to such replacement Lender or other entity any of the fees received by
such Lender hereby replaced pursuant to this Agreement. In the case of a
replacement of a Lender to which the Borrower becomes obligated to pay
additional amounts pursuant to clause (a) of this Section 4.9, the Borrower
shall pay such additional amounts to such Lender prior to such Lender being
replaced and the payment of such additional amounts shall be a condition to the
replacement of such Lender. In the event that (x) the Borrower or the
Administrative Agent has requested the Lenders to consent to a departure or
waiver of any provisions of the Loan Documents or to agree to any amendment
thereto, (y) the consent, waiver or amendment in question requires the agreement
of all Lenders in accordance with the terms of Section 12.1 and (z) Required
Lenders have agreed to such consent, waiver or amendment, then any Lender who
does not agree to such consent, waiver or amendment shall be deemed a
"Nonconsenting Lender." The Borrower's right to replace a Non-Funding Lender
pursuant to this Section 4.9 is, and shall be, in addition to, and not in lieu
of, all other rights and
50
remedies available to the Borrower against such Non-Funding Lender under this
Agreement, at law, in equity, or by statute.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and to issue and participate in Letters of
Credit, CCHC and the Borrower hereby represent and warrant to the Administrative
Agent and each Lender that:
5.1 Financial Condition. (a) The audited consolidated financial
statements of CCHC for the fiscal years ended September 30, 1999, 2000 and 2001,
reported on by Ernst & Young, LLP, copies of which have heretofore been
furnished to each Lender present fairly in all material respects the
consolidated financial position of CCHC as at such dates, and the consolidated
results of CCHC's operations and CCHC's cash flows for the fiscal periods then
ended. The unaudited consolidated financial statements of CCHC for the one-month
period ended October 31, 2002, certified by a Responsible Officer of CCHC,
copies of which have heretofore been furnished to each Lender present fairly in
all material respects the consolidated financial position of CCHC as of such
date, and the consolidated results of CCHC's operations and CCHC's cash flow for
the one-month period then ended. All such financial statements and the related
schedules and notes thereto have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither CCHC nor any of its Subsidiaries had as at the date of the
most recent balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto and which has any reasonable
likelihood of resulting in a material cost or loss.
(b) The pro forma balance sheet of the Borrower and its Subsidiaries
(the "Pro Forma Balance Sheet") and the pro forma condensed consolidated
statement of operations of the Borrower and its Subsidiaries (the "Pro Forma
Statement of Operations"), certified by a Responsible Officer of CCHC and the
Borrower, copies of which have been heretofore furnished to each Lender, are the
unaudited balance sheet of the Borrower and its consolidated Subsidiaries as at
October 31, 2002, and the unaudited condensed consolidated statement of
operations of the Borrower and its consolidated Subsidiaries for the twelve
months ended October 31, 2002, adjusted to give effect (as if such events had
occurred on October 31, 2002) to (i) the making of the Tranche B Term Loans,
(ii) the making of the Revolving Credit Loans to be made on the Closing Date and
the issuance of the Letters of Credit to be issued on the Closing Date, (iii)
the payment of fees, expenses and financing costs related to the Transactions,
and (iv) the consummation of the other Transactions in accordance with the Loan
Documents. The Pro Forma Balance Sheet and the Pro Forma Statement of
Operations, together with the notes thereto, were prepared based on good faith
assumptions as of the date of delivery thereof, and reflect on a pro forma basis
the financial position of the Borrower and its Subsidiaries as at October 31,
2002 and for the twelve-month period ending October 31, 2002, as adjusted, as
51
described above, assuming that the events specified in the preceding sentence
had actually occurred at October 31, 2002.
5.2 No Change. Since September 30, 2001 (a) there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect and (b) no dividends or other distributions have been
declared, paid or made upon the Capital Stock of CCHC or the Borrower except as
listed on Schedule 5.2 or otherwise permitted hereby nor has any of the Capital
Stock of CCHC or the Borrower been redeemed, retired, purchased or otherwise
acquired for value by CCHC or Borrower or any of their Subsidiaries.
5.3 Corporate Existence; Compliance with Law. CCHC and each of its
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect and (d)
is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Affect.
5.4 Corporate Power; Authorization; Enforceable Obligations. Each
Credit Party has the corporate power and authority, and the legal right, to
make, deliver and perform this Agreement, any of the Notes and the other Loan
Documents to which it is a party and, with respect to the Borrower, to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of, or the granting of any security
interests under, this Agreement, any of the Notes and the other Loan Documents
and to authorize the execution, delivery and performance of this Agreement, any
of the Notes and the other Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery, performance, validity or
enforceability of, or the granting of any security interests under, this
Agreement, any of the Notes or the other Loan Documents to which any Credit
Party is a party, except for (i) those set forth on Schedule 5.4, each of which
have been made or taken and are in full force and effect, (ii) consents under
immaterial Contractual Obligations and (iii) those referred to in Section 5.18.
This Agreement, any Note and each of the other Loan Documents has been duly
executed and delivered on behalf of each Credit Party thereto. This Agreement,
any Note and each of the other Loan Documents constitutes a legal, valid and
binding obligation of each Credit Party thereto enforceable against such Credit
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
5.5 No Legal Bar. The execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents, the borrowings hereunder and
the use of the proceeds
52
thereof will not violate any Requirement of Law or material Contractual
Obligation of any Credit Party or of any of its Subsidiaries.
5.6 No Material Litigation. Except as set forth in Schedule 5.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of CCHC and the Borrower,
threatened by or against any of the Credit Parties or any of their Subsidiaries
or against any of its or their respective properties or revenues (a) with
respect to this Agreement, any Notes, the other Loan Documents or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
5.7 No Default. None of the Credit Parties or any of their
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could reasonably be expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.8 Ownership of Property; Liens. Each of the Credit Parties and
their Subsidiaries has good record and indefeasible title in fee simple to, or a
valid leasehold interest in, all its material real property, and good title to,
or a valid leasehold interest in, all its other material property, and none of
such property is subject to any Lien except as permitted by Section 8.3. Such
real and other properties comprise all of the properties the use of which is
necessary for the conduct of such Credit Party's or such Subsidiaries' business
as presently conducted and as proposed to be conducted by it. As of the date
hereof, the Fee Properties listed on Part I of Schedule 5.8 constitute all the
real properties owned in fee by the Borrower or its Subsidiaries and the Leased
Properties listed on Part II of Schedule 5.8 constitute all of the real
properties leased by the Borrower or its Subsidiaries. As of the date hereof,
each of the leases with respect to material Leased Properties listed on Part II
of Schedule 5.8 is in full force and effect.
5.9 Intellectual Property. Each of the Credit Parties and their
Subsidiaries owns, or is validly licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted except for those the failure of which to own or
license could not reasonably be expected to have a Material Adverse Effect (the
"Intellectual Property"). To the knowledge of CCHC and the Borrower, and except
as set forth on Schedule 5.9, 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 CCHC
or the Borrower know of any valid basis for any such claim which could
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Credit Parties and their 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.
5.10 Taxes. Except as set forth on Schedule 5.10, each of the Credit
Parties and their Subsidiaries has filed or caused to be filed all federal and
all other material tax returns which, to the knowledge of CCHC and the Borrower,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other material taxes, fees or other charges imposed on it or any of its
53
property by any Governmental Authority (other than (i) any such taxes,
assessments, fees or other charges the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Credit Parties or their Subsidiaries, as the case may be, and (ii) taxes,
assessments, fees or other charges imposed by any Governmental Authority, other
than income taxes imposed by the United States of America, with respect to which
the failure to make payments could not, by reason of the amount thereof or of
remedies available to such Governmental Authorities, reasonably be expected to
have a Material Adverse Effect); no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
5.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect or for any purpose which violates the provisions of the Regulations of
such Board of Governors. If requested by any Lender or the Administrative Agent,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.
5.12 ERISA. Except where the liability, individually or in the
aggregate, which could reasonably be expected to result has not had or could not
reasonably be expected to have a Material Adverse Effect: (i) neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan; (ii) each Plan (other than
a Multiemployer Plan) has complied in all material respects with the applicable
provisions of ERISA and the Code; (iii) no termination of a Single Employer Plan
has occurred, and no Lien in favor of the PBGC or a Single Employer Plan has
arisen and remains outstanding, during such five-year period; (iv) the present
value of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits
by an amount which could reasonably be expected to have a Material Adverse
Effect; (v) none of the Credit Parties nor any Commonly Controlled Entity has
had a complete or partial withdrawal from any Multiemployer Plan, and, to the
best knowledge of the Credit Parties, none of the Credit Parties nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Credit Parties or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most closely
preceding the date on which this representation is made or deemed made; (vi) no
such Multiemployer Plan is in Reorganization or Insolvent; (vii) the present
value (determined using actuarial and other assumptions which are reasonable in
respect of the benefits provided and the employees participating) of the
liability of the Borrower and each Commonly Controlled Entity for post
retirement benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of ERISA) does
not, in the aggregate, exceed the assets under all such Plans allocable to such
benefits.
54
5.13 Investment Company Act; Other Regulations. Neither CCHC nor any
of its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. Neither CCHC nor any of its Subsidiaries is subject to regulation
under any Requirement of Law which limits its ability to incur Indebtedness.
5.14 Subsidiaries, Etc. As of the date hereof, the only Subsidiaries
of CCHC, and the only partnerships or joint ventures in which CCHC or any of its
Subsidiaries has an interest are those listed on Schedule 5.14. As of the date
hereof, CCHC owns the percentage of the Capital Stock or other evidences of the
ownership of each Subsidiary, partnership or joint venture listed on Schedule
5.14 as set forth on such Schedule. As of the date hereof, no such Subsidiary,
partnership or joint venture has issued any securities convertible into shares
of its Capital Stock, and the outstanding stock and securities (or other
evidence of ownership) of such Subsidiaries, partnerships or joint ventures
owned by the Borrower and its Subsidiaries are so owned free and clear of all
Liens, warrants, options or rights of others of any kind except as set forth in
Schedule 5.14.
5.15 Purpose of Loans. The proceeds of the Revolving Credit Loans and
Tranche B Term Loans shall be used to (i) refinance the Existing Credit
Agreement and (ii) pay the fees and expenses of the transactions contemplated
hereby. The proceeds of the Revolving Credit Loans shall be used for working
capital purposes and other general corporate purposes of the Borrower and the
Subsidiaries.
5.16 Environmental Matters. (a) The facilities and properties owned,
leased or operated by CCHC or any of its Subsidiaries (the "Properties") do not
contain, and have not previously contained, any Materials of Environmental
Concern in amounts or concentrations or under such conditions which (i)
constitute or constituted a violation of, or could reasonably be expected to
give rise to liability under, any Environmental Law in effect at the time of the
making of this representation, or (ii) could materially and adversely interfere
with the continued operation of the Properties, or (iii) materially impair the
fair saleable value thereof except in each case insofar as such violation,
liability, interference, or reduction in fair market value, or any aggregation
thereof, is not reasonably likely to result in a Material Adverse Effect.
(b) The Business, Properties and all operations at the Properties
are, and to the knowledge of CCHC and the Borrower have been, in compliance in
all material respects with all applicable Environmental Laws except for
noncompliance which is not reasonably likely to result in a Material Adverse
Effect.
(c) Neither CCHC nor any of its Subsidiaries has received any written
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does CCHC or the
Borrower have knowledge or reason to believe that any such notice will be
received or is being threatened except insofar as such notice or threatened
notice, or any aggregation thereof, does not involve a matter or matters that is
or are reasonably likely to result in a Material Adverse Effect.
55
(d) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
which could reasonably be expected to give rise to liability under, any
Environmental Law in effect at the time of the making of this representation,
nor have any Materials of Environmental Concern been generated, treated, stored
or disposed of at, on or under any of the Properties in violation of, or in a
manner that could reasonably be expected to give rise to liability under, any
applicable Environmental Law in effect at the time of the making of this
representation except insofar as any such violation or liability referred to in
this paragraph, or any aggregation thereof, is not reasonably likely to result
in a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of CCHC or the Borrower, threatened, under any
Environmental Law to which CCHC or any Subsidiary is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, is not reasonably likely to result in a Material Adverse
Effect.
(f) There has been no release or, to the best knowledge of CCHC or
the Borrower, threat of release of Materials of Environmental Concern at or from
the Properties, or arising from or related to the operations of CCHC or any
Subsidiary in connection with the Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could reasonably
give rise to liability under Environmental Laws in effect at the time of making
this representation except insofar as any such violation or liability referred
to in this paragraph, or any aggregation thereof, is not reasonably likely to
result in a Material Adverse Effect.
5.17 Disclosure. No information, financial statement, report,
certificate or other document prepared or furnished by or on behalf of any
Credit Party to the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document (but excluding all projections and pro
forma financial statements covered by the next succeeding sentence) contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading. The
projections and pro forma financial information and other estimates and opinions
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of CCHC and the Borrower to be reasonable
at the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the Closing Date, there is no fact known to any Credit
Party (other than general economic conditions, which conditions are commonly
known and affect businesses generally) which has, or which could reasonably be
expected to have, in the reasonable judgment of such Credit Party, a Material
Adverse Effect.
5.18 Guarantee and Collateral Agreement. (a) The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative
Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable
security interest in the Pledged Stock or the Pledged
56
Notes, as the case may be, described therein and proceeds thereof and all
actions have been taken to cause the Guarantee and Collateral Agreement to
constitute a fully perfected first Lien on, and security interest in, all right,
title and interest of CCHC, the Borrower and their Domestic Subsidiaries party
thereto in such Pledged Stock or Pledged Notes, as the case may be, described
therein and in proceeds thereof superior in right to any other Person.
(b) The Guarantee and Collateral Agreement is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal,
valid and enforceable security interest in the respective collateral described
therein and proceeds thereof, and when financing statements in appropriate form
are filed in the offices specified on Schedule 5.8 or in the Guarantee and
Collateral Agreement, and the other actions required to be taken by the
Guarantee and Collateral Agreement have been taken, the Guarantee and Collateral
Agreement shall constitute fully perfected, first priority Liens on, and
security interests in, all right, title and interest of CCHC, the Borrower and
their Subsidiaries party thereto in such collateral and the proceeds thereof
superior in right to any other Person other than Liens permitted hereby.
5.19 Solvency. Each of CCHC and the Borrower is, individually and
together with its Subsidiaries, Solvent.
5.20 No Fees. None of the Credit Parties nor any of their Subsidiaries
is under any obligation to pay any broker's fees, finder's fee, commission,
transaction fee or expenses in connection with the transactions contemplated by
this Agreement or the other Loan Documents.
5.21 Insurance. The insurance maintained by or reserved against on the
books of CCHC, the Borrower and their Subsidiaries is sufficient to protect
CCHC, the Borrower and their Subsidiaries against such risks as are usually
insured against in the same general area by companies engaged in the same or
similar business. None of CCHC, the Borrower or any of their Subsidiaries is in
default under any provisions of any such policy of insurance or has received
notice of cancellation of any such insurance (other than in connection with the
replacement of any such policy). None of CCHC, the Borrower or any of their
Subsidiaries has made any material claims under any policy of insurance with
respect to which the insurance carrier has denied liability.
5.22 Labor Matters. There are no strikes pending or, to the knowledge
of CCHC or the Borrower, threatened against CCHC or any of its Subsidiaries
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The hours worked and payments made to employees of CCHC
and each of its Subsidiaries have not been in violation of any applicable United
States labor laws, rules or regulations or any other applicable laws, rules or
regulations, except where such violations could not reasonably be expected to
have a Material Adverse Effect. The consummation of the Transactions will not
give rise to a right of termination or right of renegotiation on the part of any
union under any collective bargaining agreement to which CCHC or any of its
Subsidiaries (or any predecessor) is a party or by which CCHC or any of its
Subsidiaries (or any predecessor) is bound.
5.23 Senior Indebtedness. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture and any other document evidencing Senior Subordinated
Indebtedness or guarantees thereof. The obligations
57
of each Subsidiary which is a Guarantor under the Guarantee and Collateral
Agreement constitute "Guarantor Senior Indebtedness" of such Subsidiary under
and as defined in the Senior Subordinated Note Indenture and any other document
evidencing Senior Subordinated Indebtedness or guarantees thereof, to the
extent, if any, such subsidiary has guaranteed payment of the Senior
Subordinated Indebtedness.
5.24 Provision of License Products; Non-Competition, Etc. No Credit
Party is party to any agreement, whether written or oral, providing for (i) the
grant by CCHC or any of its Subsidiaries of any right or license to use any
Intellectual Property (as defined in the Guarantee and Collateral Agreement) of
CCHC or any of its Subsidiaries (including, without limitation, the use of any
electronic catalog products) or (ii) the rendering of any related service in
connection with such grant (collectively, "License Products") to any Person
(other than an Affiliate), except for any such agreement (or a related agreement
or agreements) that contains such confidentiality, non-solicitation and
non-competition provisions as are customary in the Borrower's line of business
and in the ordinary course of business (as determined reasonably and in good
faith by the Borrower) ("Customary License Terms").
5.25 Lease Transactions; Lease Transaction Obligations. As of the
Closing Date, none of the Credit Parties nor any of their Subsidiaries is a
party to any Lease Transaction Obligations other than as listed on Schedule 5.25
hereto.
ARTICLE 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans. The agreement of each Lender to make
the initial Loan requested to be made by it and of the Issuing Lender and each
Revolving Credit Lender to issue and participate in Letters of Credit is subject
to the satisfaction, immediately prior to or concurrently with the making of
such Loan or issuance of such Letter of Credit on the Closing Date (which shall
in no event occur later than December 15, 2002), of the following conditions
precedent:
(a) Agreement; Notes. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized Responsible
Officer of each of CCHC and the Borrower with a counterpart for each Lender
and (ii) for the account of each of the Lenders which has requested a Note
pursuant to Section 2.2, 2.7(a) or 2.13(b), a Revolving Credit Note, a
Tranche B Term Note or a Swing Line Note, as the case may be, conforming to
the requirements hereof and executed and delivered by a duly authorized
Responsible Officer of the Borrower and (iii) the Guarantee and Collateral
Agreement, executed and delivered by a duly authorized Responsible Officer
of each appropriate Credit Party.
(b) Existing Credit Agreement. (i) All accrued unpaid interest, fees,
commissions and other amounts (other than principal) owing under the
Existing Credit Agreement shall have been paid.
(ii) All Tranche A Term Loans outstanding under the Existing
Credit Agreement shall have been repaid.
58
(iii) All Tranche B Term Loans outstanding under the Existing Credit
Agreement shall have been repaid.
(iv) The Revolving Credit Loans outstanding under the Existing
Credit Agreement shall be reallocated as directed by the Administrative
Agent, with the result that the Revolving Credit Loans will be held by the
Revolving Credit Lenders in accordance with their respective Revolving
Credit Commitment.
(v) Each Existing Lender which will not continue as a Lender
hereunder (a "Departing Lender") shall deliver to the dministrative Agent
an acknowledgment that its Commitments and Loans under the Existing Credit
Agreement are being assigned and reallocated as set forth herein.
(vi) The Lenders and Departing Lenders will make such payments among
themselves as directed by the Administrative Agent so that, after giving
effect thereto, the outstanding Revolving Credit Loans and Tranche B Term
Loans will be held by the Lenders in accordance with their respective
Revolving Credit Commitment Percentages and Tranche B Term Loan Commitment
Percentages.
(c) Corporate Proceedings of the Credit Parties. The Administrative Agent
shall have received, with a copy for each Lender, a copy of the resolutions, in
form and substance reasonably satisfactory to the Administrative Agent, of the
Board of Directors or duly authorized committee of each of CCHC, the Borrower
and each of their Domestic Subsidiaries authorizing (i) the execution, delivery
and performance of this Agreement and the other Loan Documents to which it is a
party, (ii) the borrowings contemplated hereunder and (iii) the transactions
contemplated by the Transactions (to the extent applicable to such Person),
certified by the Secretary or an Assistant Secretary of each of CCHC, the
Borrower and each of their Domestic Subsidiaries as of the Closing Date, which
certificate shall state that the resolutions thereby certified have not been
amended, modified, revoked or rescinded and shall be in form and substance
reasonably satisfactory to the Administrative Agent.
(d) Incumbency Certificates. The Administrative Agent shall have
received,with a copy for each Lender, a certificate of the Secretary or an
Assistant Secretary (or comparable officer) of each of CCHC, the Borrower and
each of their Domestic Subsidiaries, dated the Closing Date, as to the
incumbency and signature of the Responsible Officers of such Person executing
each Loan Document to which it is a party and any certificate or other document
to be delivered by it pursuant hereto and thereto, together with evidence of the
incumbency of such Secretary or Assistant Secretary.
(e) Corporate Documents. The Administrative Agent shall have received, with
a counterpart for each Lender, true and complete copies of the certificate of
incorporation and by-laws of each of the Credit Parties, certified as of the
Closing Date as complete and correct copies thereof by the Secretary or an
Assistant Secretary of each of the Credit Parties.
59
(f) Consents, Licenses and Approvals. (i) All governmental and material
third party approvals (including debtholders', landlords' and other consents)
necessary or advisable in connection with the Transactions and execution,
delivery and performance of the Loan Documents and the continuing operation of
the Business shall have been obtained and be in full force and effect, (ii) all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent Governmental Authority which would restrain, prevent
or otherwise impose adverse conditions on CCHC, any of its Subsidiaries or the
Transactions and (iii) the Administrative Agent shall have received, with a
counterpart for each Lender, a certificate of a Responsible Officer of each of
the Credit Parties (A) attaching copies of all consents, authorizations and
filings referred to in Section 5.4, and (B) stating that such consents, licenses
and filings are in full force and effect, and each such consent, authorization
and filing shall be in form and substance reasonably satisfactory to the
Administrative Agent.
(g) Fees. Chase shall have received the fees referred to in Section 2.4 to
be received on the Closing Date and the Administrative Agent shall have received
a certificate in a form acceptable to it from a Responsible Officer certifying
that the total aggregate amount of all fees and expenses incurred or to be
incurred in connection with the Transactions are only those expressly agreed to
by the Administrative Agent and the Borrower.
(h) Borrowing Certificate. The Administrative Agent shall have received,
with a copy for each Lender, a borrowing certificate substantially in the form
of Exhibit G hereto and dated the Closing Date, executed by a Responsible
Officer of each of the Borrower and the Guarantor.
(i) [Reserved]
(j) [Reserved]
(k) No Defaults. There shall exist no breach of or default (or condition
which would constitute a default with the giving of notice or the passage of
time) under any capital stock, financing agreements, lease agreements or other
Contractual Obligation (including the Senior Subordinated Note Indenture) of
CCHC, the Borrower or any of their Subsidiaries which, in any case or in the
aggregate, would have a Material Adverse Effect.
(l) Legal Opinions. The Lenders shall have received, with a copy for each
Lender, from (i) Weil, Gotshal & ▇▇▇▇▇▇ LLP, special counsel to CCHC, the
Borrower and each of the Subsidiaries, substantially in the form of Exhibit F,
and (ii) such special and local counsel as may be required by the Administrative
Agent, such legal opinions as are customary for transactions of this type or as
it may reasonably request.
(m) Perfection. All filings and other actions required to create and
perfect a first priority security interest in all collateral granted to the
Administrative Agent pursuant to the Security Documents shall have been duly
made or taken, and all such collateral shall be free and clear of other Liens
except as permitted hereby. The Administrative Agent
60
shall have received evidence satisfactory to it that UCC-3 termination
statements and other Lien release documentation shall have been duly
executed and properly filed, and all other necessary actions shall have
been duly taken, to the extent necessary to effect the complete and
irrevocable release of all Liens other than those permitted pursuant to
Section 8.3 on the assets of CCHC and its Subsidiaries.
(n) Insurance. The Administrative Agent shall have received an
insurance certificate from Aon Risk Services, dated the Closing Date, and
other evidence satisfactory to it that CCHC, the Borrower and their
Subsidiaries have obtained the insurance policies required by this
Agreement and by the Security Documents.
(o) Perfection Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a Perfection Certificate,
dated the Closing Date, substantially in the form of Exhibit H, duly
completed by the Borrower.
(p) [Reserved]
(q) Financial Statements. The Lenders shall have received (i) the
financial statements referred to in Section 5.1 and (ii) unaudited interim
financial statements of the Borrower and its Subsidiaries for each fiscal
quarterly period ended subsequent to June 30, 2002 as to which such
financial statements are available, and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material
adverse change in the financial condition of any of them as reflected in
the financial statements or projections previously furnished to the
Lenders.
(r) Post-Transaction Financial Position. The Administrative Agent
shall have received, with a copy for each Lender, a certificate of a
Responsible Officer of CCHC and the Borrower to the effect that on the
Closing Date after giving effect to the Transactions, there shall exist no
Indebtedness of CCHC and its consolidated Subsidiaries (including the
Borrower) (excluding Indebtedness incurred pursuant to this Agreement and
any Notes and Indebtedness permitted by Section 8.2 and Section 11.6(i)).
(s) Guarantee and Collateral Agreement. The Administrative Agent shall
have received the Pledged Stock to be pledged pursuant to the Guarantee and
Collateral Agreement, together with undated stock powers endorsed in blank
for each stock certificate representing such Pledged Stock, or, as
applicable, such other documents or modifications required by the Guarantee
and Collateral Agreement. The Administrative Agent shall have received, on
behalf of the Lenders, each Pledged Note to be pledged pursuant to the
Guarantee and Collateral Agreement, endorsed as required by the Guarantee
and Collateral Agreement, and the acknowledgement and consent of the maker
of each such Pledged Note.
(t) [Reserved]
(u) Litigation. No litigation, inquiry, injunction or restraining
order shall be pending, entered or threatened (including, without
limitation, any proposed statute, rule or regulation) which, in the
reasonable opinion of the Lenders, could have a Material Adverse Effect.
61
(v) No Adverse Change. There shall not have occurred any change, or
development or event involving a prospective change, which in either case
in the reasonable opinion of the Lenders, could have a Material Adverse
Effect. The Lenders shall not have become aware of any previously
undisclosed materially adverse information with respect to (i) the
Transactions or the business, assets, operations, condition (financial or
otherwise) or prospects of CCHC, the Borrower and their Subsidiaries, taken
as a whole, (ii) their ability to perform their obligations under this
Agreement, any Note or the other Loan Documents or (iii) the rights and
remedies of the Lenders.
(w) Other Documentation. All other documentation, including, without
limitation, any tax sharing agreement, employment agreement, management
compensation arrangement or other financing arrangement of CCHC or any of
its Subsidiaries, as reasonably requested by the Administrative Agent, each
of which shall be reasonably satisfactory in form and substance to the
Lenders.
6.2 Conditions to Each Loan. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan) or of the Revolving Credit Lenders and the Issuing Lender to issue
or participate in any Letter of Credit is subject to the satisfaction of the
following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by the Credit Parties and their Subsidiaries in or pursuant
to the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date, except for any
representation and warranty which is expressly made as of an earlier date,
which representation and warranty shall have been true and correct in all
material respects as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made, or Letters of Credit requested to be issued, on such
date.
(c) Letter of Credit Application. With respect to the issuance of any
Letter of Credit, the Issuing Lender shall have received a Letter of Credit
Application, completed to its reasonable satisfaction and duly executed by
a Responsible Officer of the Borrower; provided that if such Letter of
Credit is being issued to support the repayment of any Indebtedness of any
Subsidiary of the Borrower, such Subsidiary shall also execute such Letter
of Credit Application and shall agree to be jointly and severally liable
with the Borrower for any and all obligations arising under or in
connection with such Letter of Credit or the Letter of Credit Application
related thereto.
Each borrowing by the Borrower hereunder and issuance of any Letter of
Credit shall constitute a representation and warranty by the Credit Parties as
of the date of such Loan or issuance, as the case may be, that the conditions
contained in this Section 6.2 have been satisfied.
62
ARTICLE 7. AFFIRMATIVE COVENANTS
Each of CCHC and the Borrower hereby agrees that, so long as the
Commitments remain in effect, any Note remains outstanding and unpaid, any
Letter of Credit is outstanding or any other Obligations are owing to any Lender
or the Administrative Agent hereunder, CCHC and the Borrower shall and (except
in the case of delivery of financial information, reports and notices) shall
cause each of its Subsidiaries to:
7.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 110 days after the
end of each fiscal year of the Borrower and CCHC, a copy of the
consolidated balance sheet of CCHC and its consolidated Subsidiaries as at
the end of such year and the consolidated statements of income and
retained earnings and consolidated statement of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like qualification
or exception, or qualification arising out of the scope of the audit, by
independent certified public accountants of nationally recognized
standing; provided that, if CCHC submits consolidated financial statements
of the Borrower and its Subsidiaries, as required by the Securities and
Exchange Commission (the "SEC"), the financial statements required to be
delivered in this Section 7.1(a) shall be in respect of the Borrower and
its Subsidiaries; provided, however, that if CCHC submits consolidated
financial statements of the Borrower and its Subsidiaries, as required by
the SEC, then the Borrower shall deliver unaudited consolidated financial
statements of CCHC and its Subsidiaries in accordance with the other terms
of this Section 7.1(a).
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower and CCHC, the unaudited consolidating and
consolidated balance sheet of CCHC and its consolidated Subsidiaries as at
the end of such quarter and the related unaudited consolidating and
consolidated statements of income and retained earnings and consolidated
statement of cash flows of the Borrower and its consolidated Subsidiaries
and of CCHC and its consolidated Subsidiaries for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth
in each case in comparative form (i) the figures for the previous year
commencing with the quarter ending December 31, 2002 and (ii) the figures
set forth in the relevant budgets required to be delivered in accordance
with Section 7.2(c), certified by a Responsible Officer as being fairly
stated in all material respects when considered in relation to the
consolidated financial statements of the Borrower and its consolidated
Subsidiaries (subject to normal year-end audit adjustments);
(c) as soon as available, but in any event not later than 30 days
after the end of each month (other than a month the last day of which
coincides with the last day of any fiscal quarter) of each fiscal year of
the Borrower, monthly operating reports of the Borrower and its
consolidated Subsidiaries in the form of Exhibit I as at the end of such
month, setting forth in each case in comparative form (i) the figures for
the previous year commencing with the 2002 fiscal year and (ii) the
figures set forth in the relevant budgets
63
required to be delivered in accordance with Section 7.2(c); provided that
the provisions of this paragraph (c) shall be inapplicable for so long as
the ratio of Consolidated Total Debt of the Borrower and its Subsidiaries
to Consolidated EBITDA of the Borrower and its Subsidiaries is below 2.00
to 1.00, as most recently determined in accordance with Section 8.1(d);
all such financial statements shall fairly present in all material respects the
consolidated financial position or the consolidating financial position, as the
case may be, of CCHC and its Subsidiaries as of such date and shall be prepared
in reasonable detail and, except with respect to financial statements delivered
pursuant to paragraph (c) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
7.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default relating to the covenants contained in Section
8.1, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b), a certificate of a Responsible
Officer of the Borrower (i) stating that, to the best of such Responsible
Officer's knowledge, the Credit Parties during such period have observed or
performed all of their covenants and other agreements, and satisfied every
condition, contained in this Agreement and in the Notes and the other Loan
Documents to which they are parties to be observed, performed or satisfied
by it, in all material respects, and that such Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate, (ii) stating that all such financial statements fairly present
in all material respects (subject, in the case of interim statements, to
normal year-end audit adjustments) and have been prepared in reasonable
detail and in accordance with GAAP applied consistently throughout the
periods reflected therein (except as disclosed therein) and (iii) showing
in detail the calculations supporting such statement in respect of Sections
8.1, 8.8 and 8.9;
(c) as soon as available but not later than 45 days subsequent to the
end of each fiscal year of the Borrower, a copy of the projections by the
Borrower of the operating budget and cash flow budget of the Borrower and
its Subsidiaries for the succeeding fiscal year (showing the operating
budget and cash flow budget for each quarter within such fiscal year), such
projections to be accompanied by a certificate of a Responsible Officer of
the Borrower to the effect that such projections have been prepared in good
faith and based upon reasonable assumptions;
(d) within five days after the same are filed, copies of all financial
statements and reports which CCHC, the Borrower or any of their
Subsidiaries may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority; and
64
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of CCHC or its Subsidiaries, as the case may be; provided that,
notwithstanding the foregoing, CCHC and each of its Subsidiaries shall have the
right to pay any such obligation and in good faith contest, by proper legal
actions or proceedings, the validity or amount of such claims.
7.4 Conduct of Business and Maintenance of Existence. Except as
provided in Section 8.5, continue to engage in business of the same general type
as now conducted by it and businesses reasonably related thereto and to
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except if (i) in
the reasonable business judgment of CCHC or such Subsidiary, as the case may be,
it is in its best economic interest not to preserve and maintain such rights or
franchises, and (ii) such failure to preserve and maintain such privileges,
rights or franchises would not materially adversely affect the rights of the
Lenders hereunder or the value of the collateral security for the Loans, and as
otherwise permitted pursuant to Section 8.5; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, be reasonably expected to have a Material
Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability, product liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business or as otherwise reasonably requested by the
Administrative Agent; and furnish to each Lender, upon written request, full
information as to the insurance carried except to the extent that the failure to
do any of the foregoing with respect to any such property could not reasonably
be expected to materially adversely affect the value or usefulness of such
property.
7.6 Inspection of Property: Books and Records; Discussions. (a) Keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender (including field examiners who may be employees of
any Lender or independent contractors) to visit and inspect any of its
properties and examine and make abstracts from any of its books and records upon
reasonable advance notice at any reasonable time on any Business Day and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial or other condition of CCHC and its Subsidiaries with
officers and employees of CCHC and its Subsidiaries and with its independent
certified public accountants; provided that the Administrative Agent or such
Lender shall notify the Borrower prior to any contact with such accountants and
give the Borrower the
65
opportunity to participate in such discussions. Upon the request of the
Administrative Agent or any Lender, the Borrower shall enter into (or in the
case of any other necessary party to such a confidentiality agreement, CCHC and
its Subsidiaries shall use their best efforts to cause such party to enter into)
a confidentiality agreement with the Administrative Agent and the Lenders in
form and substance mutually satisfactory to the Administrative Agent and the
Borrower to permit the examination by the Administrative Agent and the Lenders
in accordance with the terms of this Section 7.6 of the books and records of
certain entities in which CCHC or any of its Subsidiaries has an equity
investment as previously disclosed to the Administrative Agent and the Lenders
by the Borrower. If an Event of Default has occurred and is continuing, the
Borrower hereby agrees to reimburse the Administrative Agent for costs and
expenses incurred in connection with each field examination contemplated by this
Section 7.6.
7.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between CCHC or any
of its Subsidiaries and any Governmental Authority, which in either case,
if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any of the Credit Parties or
any of their Subsidiaries in which the amount involved is $1,000,000 or
more and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events: (i) the occurrence or expected occurrence of
any Reportable Event with respect to any Plan (other than a Multiemployer
Plan), a failure to make any required contribution to a Plan, the creation
of any Lien in favor of the PBGC or a Plan or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan or
(ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) any development or event which has had, or could reasonably be
expected to have, a Material Adverse Effect; and
(f) the receipt by CCHC or any Subsidiary of any complaint, order,
citation, notice or other written communication from any Person with
respect to the existence or alleged existence of a violation of any
Environmental Laws or Materials of Environmental Concern or any other
environmental, health or safety matter, including, without limitation, the
occurrence of any spill, discharge or release in a quantity that is
reportable under any Environmental Law on property owned, leased or
utilized by CCHC or any Subsidiary of CCHC but only to the extent that such
complaint, order, citation, notice or written communication individually or
in the aggregate could reasonably be
66
expected to result in material liability or a material obligation
under any Environmental Law.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower, CCHC or the applicable
Commonly Controlled Entity proposes to take with respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and will use reasonable
best efforts to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws;
(b) conduct and complete (or cause to be conducted and completed) all
investigations, studies, sampling and testing, and all remedial, removal
and other actions required under Environmental Laws and in a timely fashion
comply in all material respects with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect; and
(c) defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers, directors
and controlling persons, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of CCHC
or its Subsidiaries or the Properties, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of or relate to
the gross negligence or wilful misconduct of, or any post-foreclosure
actions not taken in accordance with the Asset Conservation, Lender
Liability and Deposit Insurance Protection Act of 1996 and analogous lender
liability laws. The agreements in this paragraph shall survive repayment
of all Loans and all other amounts payable hereunder.
7.9 Pledge of After Acquired Property. If at any time following the
Closing Date the aggregate monetary value (as determined by aggregating the
monetary value of each item or items of property so acquired on the date of the
acquisition thereof) of all property (to the extent not already secured) of any
nature whatsoever acquired by CCHC and/or any Domestic Subsidiary after the
Initial Closing Date is in excess of $1,000,000 (including for this purpose fee
owned real estate having a monetary value of $1,000,000 or less), CCHC and any
such Domestic Subsidiary shall grant to the Administrative Agent for the ratable
benefit of the Lenders a first priority Lien on and security interest in such
property, as collateral security for the Obligations, pursuant to documentation
reasonably satisfactory to the Administrative Agent and take such
67
actions as the Administrative Agent shall reasonably require to ensure the
priority and perfection of such Lien, provided that (i) only 65% of the voting
Capital Stock of any Foreign Subsidiary need be so pledged, (ii) with respect to
real property, only fee owned real estate with a value in excess of $1,000,000
need be mortgaged, (iii) property to the extent subject to a Lien permitted by
Section 8.3(h) or to the extent that creating such Lien on any item of property
is prohibited by any agreement of the type described in clause (ii) or (iii) of
Section 8.14 to which such property is subject such property need not be so
pledged and (iv) Chattel Paper owned by CCHC or any Subsidiary (A) need not be
so pledged to the extent that it is used to secure Lease Transaction Obligations
and (B) shall not be required to be delivered to the Administrative Agent prior
to 180 days after the creation thereof unless an Event of Default exists, in
which case such Chattel Paper shall be delivered to the Administrative Agent
promptly following its request.
7.10 Pledge During Event of Default. At any time during the continuance
of an Event of Default, upon the request of the Administrative Agent or the
Required Lenders, grant to the Administrative Agent for the ratable benefit of
the Lenders a first priority Lien on and security interest in any unencumbered
property of CCHC and its Domestic Subsidiaries of any nature whatsoever, as
collateral security for the Obligations, pursuant to documentation reasonably
satisfactory to the Administrative Agent and take such actions as the
Administrative Agent shall reasonably require to ensure the priority and
perfection of such Lien, provided, however, that if the grant of such Lien would
be reasonably likely to result in CCHC incurring income tax liability (as
determined by the Borrower and agreed to by the Administrative Agent) pursuant
to Subpart F of the Code, the property pledged pursuant hereto will be that
property which can be pledged without incurring such liability; provided,
further, that (i) only 65% of the voting Capital Stock of any Foreign Subsidiary
need be so pledged, (ii) no Foreign Subsidiary shall be required to pledge its
assets, (iii) assets to the extent subject to Liens permitted by Section 8.3(g)
or (h) or to the extent that creating such Lien on any item of property is
prohibited by any agreement of the type described in clause (ii) or (iii) of
Section 8.14 such property need not be so pledged and (iv) Chattel Paper owned
by CCHC or any Subsidiary (A) need not be so pledged to the extent that it is
used to secure Lease Transaction Obligations and (B) shall not be required to be
delivered to the Administrative Agent unless an Event of Default lasts, in which
case such Chattel Paper shall be delivered to the Administrative Agent promptly
following its request.
7.11 Additional Subsidiaries. If, at any time, either the Borrower or
any of its Domestic Subsidiaries shall form any new Subsidiary after the date of
this Agreement (this Section 7.11 not constituting authority to form a new
Subsidiary), the Borrower or such Domestic Subsidiary, as the case may be, shall
(i) cause such new Subsidiary (other than a Foreign Subsidiary) to execute and
deliver a supplement to the Guarantee and Collateral Agreement and become a
party thereto, and (ii) cause each holder of any Capital Stock of such
Subsidiary to pledge 100% of such Capital Stock to the Administrative Agent
pursuant to a supplement to the Guarantee and Collateral Agreement; provided
that in the event such Subsidiary is a Foreign Subsidiary only 65% of the voting
Capital Stock of such Foreign Subsidiary need be pledged to the Collateral
Agent; and provided, further that each such supplement shall be accompanied by
such resolutions, incumbency certificates and legal opinions as are reasonably
requested by the Administrative Agent.
68
7.12 Substantive Consolidation. The Borrower shall maintain a separate
and distinct existence from CCHC and cause each of its Subsidiaries to maintain
a separate and distinct existence from CCHC, the Borrower and each other
Subsidiary of the Borrower in order to avoid substantive consolidation of the
assets and liabilities of CCHC, the Borrower and each Subsidiary of the Borrower
under title 11 of the United States Bankruptcy Code, as amended, through the
honoring of all formalities which shall include, without limitation, no
commingling of assets, sufficient and independent capitalization, and separate
books and records.
7.13 Intellectual Property. Whenever any Credit Party, either by itself
or through any agent, employee, licensee or designee, shall file an application
for the registration of any Copyright, Patent or Trademark with the United
States Patent and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof, cause such Credit Party to report
such filing to the Collateral Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Collateral Agent, such Credit Party shall execute and deliver any and all
agreements, instruments, documents, and papers as the Collateral Agent may
reasonably request to evidence the Collateral Agent's and the Secured Parties'
(as defined in the Guarantee and Collateral Agreement) security interest in any
Copyright, Patent or Trademark of such Intellectual Property and the goodwill
and general intangibles of such Credit Party relating thereto or represented
thereby.
7.14 Covenants Relating to Collateral. (a) Whenever any Credit Party
shall receive any Instrument or Chattel Paper which is intended to be Collateral
under the Guarantee and the Collateral Agreement, CCHC shall cause such Credit
Party to comply with the provisions of Section 5.2 of the Guarantee and
Collateral Agreement.
(b) Whenever any Credit Party shall change its name or its location
(within the meaning of the Uniform Commercial Code of the State of New York),
CCHC shall cause such Credit Party to comply with the provisions of Section 5.6
of the Guarantee and Collateral Agreement. Whenever any Credit Party receives
additional securities of any of its Subsidiaries, CCHC shall cause such Credit
Party to comply with the provisions of Section 5.7 of the Guarantee and
Collateral Agreement.
(c) Within thirty days after the Closing Date, CCHC shall cause the
Administrative Agent to have a perfected first priority security interest in all
cash management accounts of the Borrower.
ARTICLE 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note remains outstanding and unpaid, any Letter of Credit remains
outstanding or any other Obligations are owing to any Lender or the
Administrative Agent hereunder, the Borrower shall not, and (except with respect
to Section 8.1) shall not permit any of its Subsidiaries to, directly or
indirectly:
8.1 Financial Condition Covenants. (a) Maintenance of Consolidated
EBITDA to Consolidated Fixed Charges. Permit the ratio of (i) Consolidated
EBITDA of the Borrower
69
and its Subsidiaries to (ii) Consolidated Fixed Charges of the Borrower
and its Subsidiaries for the period of four consecutive fiscal quarters ending
on the last day of each of the fiscal quarters set forth below to be less than
the amount set forth opposite such fiscal quarter below
Quarter Ending Amount
2002 September 30 1.10 to 1.00
December 31 1.10 to 1.00
2003 March 31 1.10 to 1.00
June 30 1.10 to 1.00
September 30 1.10 to 1.00
December 31 1.10 to 1.00
2004 March 31 1.10 to 1.00
June 30 1.10 to 1.00
September 30 1.10 to 1.00
December 31 1.05 to 1.00
2005 March 31 1.05 to 1.00
June 30 1.05 to 1.00
September 30 and thereafter 1.10 to 1.00
(b) [Reserved]
(c) Maintenance of Consolidated EBITDA. Permit Consolidated EBITDA
of the Borrower and its Subsidiaries for the period of four consecutive fiscal
quarters ending on the last day of each of the fiscal quarters set forth below
to be less than the amount set forth opposite such fiscal quarter below:
Quarter Ending Amount
2002 September 30 $40,500,000
December 31 40,500,000
2003 March 31 41,000,000
June 30 41,250,000
September 30 42,250,000
December 31 42,500,000
2004 March 31 42,500,000
June 30 42,500,000
September 30 and thereafter 43,500,000
(d) Maintenance of Consolidated Total Debt to Consolidated EBITDA.
Permit the ratio of Consolidated Total Debt of the Borrower and its Subsidiaries
to Consolidated EBITDA of the Borrower and its Subsidiaries for the period of
four consecutive fiscal quarters
70
ending on the last day of each of the fiscal quarters set forth below to be
greater than the ratio set forth opposite such fiscal quarter below:
Quarter Ending Ratio
2002 September 30 3.45 to 1.00
December 31 3.45 to 1.00
2003 March 31 3.40 to 1.00
June 30 3.25 to 1.00
September 30 3.25 to 1.00
December 31 3.20 to 1.00
2004 March 31 3.15 to 1.00
June 30 3.10 to 1.00
September 30 and thereafter 3.00 to 1.00
(e) Maintenance of Consolidated Senior Debt to Consolidated
EBITDA. Permit the ratio of Consolidated Senior Debt of the Borrower and its
Subsidiaries to Consolidated EBITDA of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters ending on the last day of each of the
fiscal quarters set forth below to be greater than the ratio set forth opposite
such fiscal quarter below:
Quarter Ending Ratio
2002 September 30 1.30 to 1.00
December 31 1.30 to 1.00
2003 March 31 1.20 to 1.00
June 30 1.15 to 1.00
September 30 1.00 to 1.00
December 31 1.00 to 1.00
2004 March 31 0.90 to 1.00
June 30 0.85 to 1.00
September 30 0.80 to 1.00
December 31 0.70 to 1.00
2005 March 31 0.60 to 1.00
June 30 0.50 to 1.00
8.2 Limitation on Indebtedness. Create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness of the Credit Parties under the Loan Documents;
71
(b) Indebtedness of the Borrower or any Domestic Subsidiary,
including any new Domestic Subsidiary, to the Borrower or any Domestic
Subsidiary arising as a result of intercompany loans;
(c) Indebtedness outstanding on the Initial Closing Date and
listed on Schedule 8.2 and extensions, renewals or replacements thereof
provided that no such extension, renewal or replacement shall increase
the principal amount of the original Indebtedness;
(d) Indebtedness resulting from the endorsement of negotiable
instruments in the ordinary course of business;
(e) Indebtedness in respect of obligations under Financing Leases
and purchase money Indebtedness not to exceed $5,000,000 in the
aggregate at any one time outstanding;
(f) Indebtedness in respect of Interest Rate Agreements;
(g) Indebtedness of any Domestic Subsidiary or the Borrower, as
the case may be, to the Borrower or another Domestic Subsidiary from
intercompany transfers of assets made in the ordinary course of
business or to the extent permitted under Sections 8.6 and 8.9;
(h) Guarantee Obligations permitted by Section 8.4;
(i) Indebtedness (i) of any Foreign Subsidiary of the Borrower to
the Borrower or any Domestic Subsidiary of the Borrower and (ii) of any
Foreign Subsidiary of the Borrower to local financial institutions for
working capital purposes; provided that the aggregate principal amount
of such Indebtedness described in clause (i) above plus the aggregate
commitments of all working capital facilities described in clause (ii)
above plus the aggregate amount of investments made pursuant to clause
(c) (iii) of Section 8.9 shall in no event exceed $12,000,000 at any
one time;
(j) Indebtedness subject to Liens permitted under Sections 8.3(b),
(c), (d), and (e);
(k) additional Indebtedness of the Borrower and its Subsidiaries
which are guarantors under the Guarantee and Collateral Agreement not
exceeding $5,000,000 in aggregate principal amount at any one time
outstanding, which Indebtedness may be secured to the extent permitted
by Section 8.3(n);
(l) Indebtedness of the Borrower or any of its Subsidiaries (i) to
the seller representing the purchase price in a Permitted Acquisition
or (ii) assumed in connection with any Permitted Acquisition; provided
that (A) such assumed Indebtedness under clause (ii) was not created in
contemplation of such acquisition, (B) the aggregate amount of such
Indebtedness in clauses (i) and (ii) shall not exceed $10,000,000 and
(C) at the time of incurrence the requirements of Section 8.9(k) shall
be satisfied;
72
(m) Lease Transaction Obligations of Triad Financial and the
Foreign Lease Subsidiaries in existence on the Closing Date and listed
on Schedule 5.25;
(n) Lease Transaction Obligations of FinanceCo in existence on the
Closing Date and listed on Schedule 5.25;
(o) Indebtedness of Customer Partnerships in an aggregate
principal amount not to exceed $5,000,000; and
(p) Indebtedness of the Borrower in respect of the Senior
Subordinated Indebtedness, including any permanent refinancing thereof
so long as any Net Cash Proceeds of such refinancing after giving
effect thereto are applied in accordance with Section 2.10, in an
aggregate principal amount not to exceed $100,000,000.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens created by the Security Documents in favor of the
Administrative Agent for the benefit of the Lenders and the
Administrative Agent;
(b) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves
with respect to contested taxes are maintained on the books of CCHC or
the Borrower or their respective Subsidiaries, as the case may be, in
conformity with GAAP (or, in the case of Foreign Subsidiaries,
generally accepted accounting principles in effect from time to time in
their respective jurisdictions of incorporation);
(c) carriers', landlord's, warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60
days or which are being contested in good faith by appropriate
proceedings;
(d) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, Intellectual Property,
statutory obligations, insurance contracts, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(f) easements, rights-of-way, zoning restrictions, restrictions
and other similar encumbrances (i) previously or hereinafter incurred
in the ordinary course of business which, in the aggregate, are not
material in amount and, in the case of such encumbrances on any
property, do not materially interfere with the ordinary conduct of the
business of the Borrower or such Subsidiary or (ii) which are set forth
in any "marked up" commitments for title insurance delivered to the
Administrative Agent after the Closing Date;
73
(g) Liens in existence on the Initial Closing Date listed on
Schedule 8.3, securing Indebtedness permitted by Section 8.2(c) (including
extensions, renewals and replacements of such Indebtedness as permitted
under Section 8.2(c)), provided that no such Lien is spread to cover any
additional property (other than after acquired title in or on such property
and proceeds of the existing collateral in accordance with the instrument
creating such Lien) after the Initial Closing Date and that the amount of
Indebtedness secured thereby is not increased except pursuant to the
instrument creating such Lien (without any modification thereof);
(h) purchase money Liens and Liens in respect of Financing Leases
upon or in any property acquired or held by the Borrower or any of its
Subsidiaries to secure Indebtedness permitted under Section 8.2(e) incurred
solely for the purpose of financing the acquisition of such property, and
Liens existing on such property at the time of its acquisition or existing
on property of any Person that becomes a Subsidiary after the date hereof
at the time such Person becomes a Subsidiary (other than any such Lien
created in contemplation of such acquisition);
(i) Liens on the property of the Borrower or any of its
Subsidiaries in favor of landlords securing licenses, subleases or leases
permitted hereunder;
(j) licenses, leases or subleases permitted hereunder granted to
others not interfering in any material respect in the business of the
Borrower or any of its Subsidiaries;
(k) attachment or judgment Liens (other than judgment Liens paid
or fully covered by insurance which are not outstanding for more than sixty
days) in an aggregate amount outstanding at any one time not in excess of
$3,000,000;
(l) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to operating leases or consignment
arrangements entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business;
(m) Liens in favor of a banking institution arising by operation
of law encumbering deposits (including the right of set-off) held by such
banking institutions incurred in the ordinary course of business and which
are within the general parameters customary in the banking industry;
(n) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Borrower and all of its Subsidiaries)
$5,000,000 in an aggregate amount at any time outstanding;
(o) Liens on Leased Equipment and Chattel Paper of Triad
Financial, FinanceCo and the Foreign Lease Subsidiaries securing Lease
Transaction Obligations in existence on the Initial Closing Date and listed
on Schedule 5.25; and
(p) Liens securing Indebtedness permitted by clause (ii) of
Section 8.2(l) provided that (i) such Liens existed at the time of the
relevant Permitted Acquisition and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any
74
other property or assets upon or following consummation of such Permitted
Acquisition and (iii) the amount of Indebtedness secured thereby is not
increased.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations pursuant to the Loan Documents;
(b) guarantees of Indebtedness permitted pursuant to Section 8.2
(c) in existence on the Initial Closing Date and set forth on Schedule 8.4
and extensions, renewals and replacements thereof, provided, however, that
no such extension, renewal or replacement shall (i) amend or modify the
subordination provisions, if any, contained in the original guarantee, (ii)
increase the principal amount of such indebtedness guaranteed by the
original guarantee, or (iii) adversely affect the interests of the Lenders
under this Agreement or any other Loan Document in any material respect;
(c) the L/C Obligations;
(d) indemnities in favor of the companies issuing title insurance
policies insuring the title to any property;
(e) surety bonds issued in respect of the type of obligations
described in Section 8.3(e);
(f) indemnities made in the Commitment Letter and the Loan
Documents and in the monitoring and oversight agreement and the financial
advisory agreement described in Section 8.7(a)(iv) and in the corporate
charter and/or bylaws of the Borrower and its Subsidiaries;
(g) indemnities and guarantees of Indebtedness expressly
permitted hereunder made in the ordinary course of business, provided that
such indemnities or guarantees could not individually or in the aggregate
have a Material Adverse Effect;
(h) agreements by the Borrower (and Triad Financial, in the case
of FinanceCo), in existence on the Closing Date and listed on Schedule 5.25
hereto, to make equity contributions and or subordinated loans to Triad
Financial, FinanceCo and the Foreign Lease Subsidiaries to support payment
of their obligations in respect of Lease Transaction Obligations in
existence on the Closing Date and listed on Schedule 5.25 hereto;
(i) contingent obligations in respect of Indebtedness permitted
under Section 8.2(o) arising solely as a result of the status of the
Borrower as a general partner in Customer Partnerships;
(j) guarantees by the Borrower and its Subsidiaries which are
guarantors under the Guarantee and Collateral Agreement of Indebtedness
permitted by Section 8.2(k);
75
(k) guarantees by the Borrower and its domestic Subsidiaries of
Indebtedness of Foreign Subsidiaries permitted by clause (ii) of
Section 8.2(i); and
(l) Guarantee Obligations of any Subsidiary which is a Guarantor
in respect of the Senior Subordinated Indebtedness; provided that such
Guarantee Obligations are subordinated to the obligations of such
Subsidiary under the Loan Documents to the same extent as are the
obligations of the Borrower in respect of the Senior Subordinated
Indebtedness.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business, except (i) any Subsidiary of the Borrower may be
merged or consolidated with or into the Borrower (provided that the
Borrower shall be the continuing or surviving corporation) or with or into
any one or more Wholly Owned Subsidiaries of the Borrower (provided that no
Domestic Subsidiary may be merged or consolidated with or into any Foreign
Subsidiary unless the Domestic Subsidiary shall be the surviving
corporation) and (ii) any Subsidiary of the Borrower may liquidate or
dissolve if in connection therewith all of its assets are transferred to
the Borrower or any Wholly Owned Subsidiary of the Borrower (provided that
no Domestic Subsidiary may transfer its assets to a Foreign Subsidiary).
8.6 Limitation on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, except:
(a) obsolete or worn out property disposed of in the ordinary
course of business or property that is no longer useful in the conduct
of the Borrower's business disposed of in the ordinary course of
business;
(b) the sale, transfer or exchange of inventory in the ordinary
course of business;
(c) transfers resulting from any casualty or condemnation of
property or assets;
(d) any sale or other transfer of any property or assets
constituting fixed assets for at least 75% cash, provided that the
aggregate net cash proceeds of the sales and transfers made pursuant
to this paragraph (d) in the aggregate do not exceed $3,000,000 in any
fiscal year;
(e) intercompany sales or transfers of assets made in the
ordinary course of business; provided that in no event may the
Borrower or its Domestic Subsidiaries transfer assets to any Foreign
Subsidiaries having a value in excess of $5,000,000;
(f) licenses or sublicenses of intellectual property and general
intangibles and licenses, leases or subleases of other property in the
ordinary course of business and which do not materially interfere with
the business of CCHC and its Subsidiaries;
76
(g) any consignment arrangements or similar arrangements for the sale
of assets in the ordinary course of business;
(h) the sale or discount of overdue accounts receivable and lease
receivables arising in the ordinary course of business, but only in
connection with the compromise or collection thereof;
(i) leases and sales of Leased Equipment and Chattel Paper in
connection with any Lease Transaction and discounting programs and any
refinancings thereof;
(j) dispositions permitted by Section 8.5(ii); and
(k) the sale of a line of business; provided that the aggregate net
cash proceeds of the sale made pursuant to this paragraph (k) do not exceed
$10,000,000 (the "Designated Asset Sale").
8.7 Limitation on Dividends. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any class of Capital Stock of the Borrower or any Subsidiary or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property, obligations of the Borrower or any
Subsidiary or otherwise (such declarations, payments, setting apart, purchases,
redemptions, defeasances, retirements, acquisitions and distributions being
herein called "Restricted Payments"), except that:
(a) the Borrower may make Restricted Payments to CCHC, so long as
(except with respect to clause (iii) below) no Event of Default (or, in the
case of clause (iv) below an Event of Default which relates to a payment
default under Section 9(a)) has occurred and is continuing or would occur
and be continuing after giving effect to any such Restricted Payment:
(i) the proceeds of which shall be used to repurchase the
Capital Stock or other securities of CCHC from outside directors,
employees or members of the management of CCHC, the Borrower or any
Subsidiary, in an aggregate amount not in excess of $5,000,000, net of
the proceeds received by CCHC as a result of any resales of any such
Capital Stock or other securities (and subject to the proviso set
forth in clause (v) below);
(ii) the proceeds of which shall be applied by CCHC directly to
pay out of pocket expenses for administrative, legal and accounting
services provided by third parties which are reasonable and customary
and incurred in the ordinary course of business, to pay outside
directors' fees and to pay franchise fees and similar costs; provided,
however that any such administrative expenses shall not exceed an
aggregate amount of $1,000,000 in each fiscal year;
(iii) the proceeds of which shall be used to pay taxes which are
due and payable of CCHC and the Borrower as part of a consolidated
group;
77
(iv) the proceeds of which shall be used to pay management fees to
HMTF and its Affiliates in accordance with the terms of its monitoring and
oversight agreement and financial advisory agreement; or
(v) if such Restricted Payment is a purchase by CCHC of its Capital
Stock or a distribution to CCHC to permit CCHC to purchase its Capital
Stock, in either case, made in order to fulfill the obligations of CCHC,
the Borrower or any of its Subsidiaries under an employee stock purchase
plan or similar plan covering employees of CCHC or any Subsidiary as from
time to time in effect in an aggregate net amount not to exceed $2,000,000;
except that such Restricted Payment may exceed $2,000,000, provided that
(A) the Tranche B Term Loans have been repaid in full and there are no
outstanding Tranche B Term Loan Commitments, (B) at least $7,500,000 is
available under the Revolving Credit Facility on the date of making such
Restricted Payment and after giving effect thereto and (C) the Total Debt
Ratio is less than 2.50x, and provided, further, the aggregate amount of
Restricted Payments made pursuant to clause (i) above and this clause (v)
shall not exceed $7,000,000 in the aggregate, net of the proceeds received
by CCHC as a result of resale of any Capital Stock or securities of CCHC of
the types contemplated by such clause (i) and this clause (v).
(b) any Subsidiary of the Borrower may make Restricted Payments to the
Borrower or any Subsidiary that is a "Grantor" under the Guarantee and
Collateral Agreement;
(c) Permitted Issuances may be made;
(d) the Borrower may make Restricted Payments to CCHC, and CCHC may
simultaneously make corresponding Restricted Payments to its shareholders, in
any fiscal year in an aggregate amount of up to 50% of Consolidated Net Income
for the immediately preceding fiscal year as long as (i) no Default or Event of
Default has occurred or would result therefrom, (ii) the Tranche B Term Loans
have been repaid in full and there are no outstanding Tranche B Term Loan
Commitments, (iii) at least $7,500,000 is available under the Revolving Credit
Facility on the date of making such Restricted Payment and after giving effect
thereto and (iv) the Total Debt Ratio is less than 2.50x; and
(e) the Borrower may make Restricted Payments to CCHC, and CCHC may
simultaneously make corresponding Restricted Payments to HMTF or any other
holder of the New Common Stock or the Additional Common Stock, to allow CCHC to
redeem, in whole or in part, the New Common Stock or the Additional Common
Stock, as the case may be, in accordance with its terms as long as (i) no
Default or Event of Default has occurred or would result therefrom, (ii) the
Tranche B Term Loans have been repaid in full and there are no outstanding
Tranche B Term Loan Commitments, (iii) at least $7,500,000 is available under
the Revolving Credit Facility on the date of making such Restricted Payment and
after giving effect thereto and (iv) the Total Debt Ratio is less than 2.50x.
78
8.8 Limitation on Capital Expenditures. (a) Make or commit to make
any Capital Expenditure, except for expenditures in the ordinary course of
business not exceeding, in the aggregate for the Borrower and its
Subsidiaries during any of the fiscal years of the Borrower set forth below
the amount set forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
2002 $15,000,000
2003 16,250,000
2004 16,250,000
2005 and thereafter 17,000,000;
provided that the Capital Expenditures permitted pursuant to this Section
8.8(a) shall be increased for (i) fiscal year 2004 by $0.50 for each $1.00
of Consolidated EBITDA of the Borrower that for fiscal year 2003 exceeded
$50,000,000, and (ii) for fiscal year 2005 by $0.50 for each $1.00 of
Consolidated EBITDA of the Borrower that for fiscal year 2004 exceeded
$51,000,000, up to a maximum of $2,000,000 in additional Capital
Expenditures for each of fiscal years 2004 and 2005, respectively.
(b) In addition to the Capital Expenditures permitted pursuant to
paragraph (a) of this Section 8.8, to the extent such proceeds are not
otherwise utilized pursuant to the last paragraph of Section 8.9 or 8.9(k),
the Borrower and its Subsidiaries may make additional Capital Expenditures
(which shall not be counted in the limitations set forth in paragraph (a)
of this Section 8.8) as follows: (i) Capital Expenditures consisting of the
investment of Net Cash Proceeds not required to be applied to prepay the
Loans pursuant to Section 2.10, and (ii) Capital Expenditures consisting of
the investment of Excess Cash Flow generated during prior fiscal years
(beginning with Excess Cash Flow generated in the fiscal year ended in
September 1997 but, in each case, including the retained portion of Excess
Cash Flow for only those periods where the Excess Cash Flow payment has
theretofore occurred) and not required to be applied to prepay the Loans
pursuant to Section 2.10.
8.9 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase
any stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any
Person ("Investments"), except:
(a) extensions of trade credit and investments in leases in the
ordinary course of business;
(b) Investments in Cash Equivalents;
(c) (i) Investments by the Borrower in any Domestic Subsidiary,
including any new Subsidiary, (ii) intercompany loans to the extent
permitted by Section 8.2 and (iii) Investments by the Borrower in any
Foreign Subsidiary (it being agreed for purposes of this clause (iii)
that receivables arising solely from actual bona fide intercompany
transactions entered into in the ordinary course of business shall not
constitute
79
Investments) in an amount not to exceed $10,000,000 minus the amount of any
Indebtedness of Foreign Subsidiaries permitted by Section 8.2(i);
(d) loans and advances by the Borrower or its Subsidiaries to
their respective directors, officers and employees in an aggregate
principal amount not exceeding $2,000,000 at any one time outstanding;
(e) loans, advances or Investments in existence on the Initial
Closing Date and listed on Schedule 8.9, and extensions, renewals,
modifications or restatements or replacements thereof, provided that no
such extension, renewal, modification or restatement shall (i) increase the
amount of the original loan, advance or investment, or (ii) adversely
affect the interests of the Lenders with respect to such original loan,
advance or investment or the interests of the Lenders under this Agreement
or any other Loan Document in any material respect;
(f) Investments permitted by Sections 8.2(b), 8.4(a), (b), (g),
(i), (j), (k) and (l) and 8.8;
(g) promissory notes and other similar non-cash consideration
received by the Borrower and its Subsidiaries in connection with the
dispositions permitted by Section 8.6;
(h) Investments consisting of Interest Rate Agreements;
(i) Investments (including debt obligations and Capital Stock)
received in connection with the bankruptcy or reorganization of suppliers
and customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course of
business;
(j) in addition to the foregoing, Investments by the Borrower or
its Subsidiaries in an aggregate amount (at cost, without regard to any
write down or write up thereof) at any one time outstanding not to exceed
$7,500,000, provided that cash Investments at any one time outstanding
shall not exceed $1,000,000 in Persons other than Subsidiaries or
Affiliates of CCHC; and
(k) so long as after giving effect thereto no Default or Event of
Default shall have occurred and be continuing, Investments by the Borrower
and its Subsidiaries resulting from Permitted Acquisitions in an aggregate
amount which may include Indebtedness permitted by Section 8.2(l) not to
exceed the sum of (A) the amount of $40,000,000 and (B) the amount of
common stock of CCHC issued subsequent to the Initial Closing Date in
connection with Permitted Acquisitions and (C) the portion of Excess Cash
Flow for all prior fiscal years commencing with 1997 retained by the
Borrower and not utilized pursuant to Section 8.8(b) or the last sentence
of this Section 8.9, provided, that (i) the Administrative Agent shall have
received, with copies for each Lender at least 15 days prior to such
Permitted Acquisition, (I) such opinions (including with respect to
environmental matters), certificates and copies of agreements (including
any Permitted Acquisition documents) as it shall reasonably request and
(II) a certificate of a Responsible Officer of the Borrower after giving
effect to such Permitted
80
Acquisition showing the aggregate purchase price (including the
assumption of any Indebtedness) for Permitted Acquisitions made by the
Borrower and its Subsidiaries since the Initial Closing Date, (ii)
such actions as may be required or reasonably requested to ensure that
the Collateral Agent, for the ratable benefit of the Secured Parties,
has a perfected first priority security interest in any assets
acquired, subject to Liens permitted by Section 8.3, shall have been
taken, (iii) (I) on a pro forma basis for the period of four
consecutive fiscal quarters most recently ended (assuming the
consummation of such Permitted Acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the
first day of such period of four consecutive fiscal quarters), the
Borrower shall be in compliance with the covenants contained in
Section 8.1 and (II) the Administrative Agent shall have received
calculations in reasonable detail reasonably satisfactory to it
showing compliance with the requirements of this clause (iii)
certified by a Responsible Officer of the Borrower and (iv) the
Required Lenders shall have given their prior consent to such
Permitted Acquisition (except, with respect to this clause (iv), for
Investments made subsequent to the Closing Date which do not exceed in
the aggregate $5,000,000, provided that at least $7,500,000 is
available under the Revolving Credit Facility on the date such
Investments are made and after giving effect thereto).
In addition to the Investments permitted pursuant to this Section
8. 9, to the extent such proceeds are not otherwise utilized pursuant to
Section 8.8(b) or 8.9(k), the Borrower and its Subsidiaries may make
additional Investments (which shall not be counted in the limitations set
forth above) as follows: (i) Investments consisting of the investment of
Net Cash Proceeds not required to be applied to prepay the Loans pursuant
to Section 2.10, including (x) with respect to the investment of proceeds
of the insurance and condemnation proceeds not required to prepay the Loans
pursuant to Section 2.10 and (y) with respect to the investment of proceeds
of the sale of assets which are permitted pursuant to Section 8.6; and (ii)
Investments consisting of the investment of Excess Cash Flow generated
during prior fiscal years (beginning with Excess Cash Flow generated in the
fiscal year ended in September 1997 but, in each case, including the
retained portion of the Excess Cash Flow for only those periods where the
Excess Cash Flow payment has theretofore occurred) and not required to be
applied to prepay the Loans pursuant to Section 2.10.
8.10 Modifications of Lease Transaction Obligations. Amend,
supplement or otherwise modify any of the provisions of any Lease
Transaction Obligations in a manner that adversely affects the interests of
the Lenders under this Agreement or any other Loan Document in any material
respect.
8.11 Limitation on Transactions with Affiliates. (a) Enter into
any transaction, including, without limitation, any purchase, sale, lease
or exchange of property or the rendering of any service, with any Affiliate
or any Subsidiary (other than a wholly owned Subsidiary) unless such
transaction is (i) otherwise permitted under this Agreement, or (ii) (x) in
the ordinary course of the Borrower's or such Subsidiary's business and (y)
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate.
81
(b) In addition, notwithstanding the foregoing, the Borrower and its
Subsidiaries shall be entitled to make the following payments and/or to enter
into the following transactions:
(i) the payment of reasonable and customary fees and
reimbursement of expenses payable to directors of the Borrower;
(ii) the payment to HMTF and its Affiliates of fees and expenses
pursuant to a monitoring and oversight agreement and financial advisory
agreement approved by the board of directors of the Borrower; and
(iii) the employment arrangements with respect to the procurement
of services of directors, officers and employees in the ordinary course
of business and the payment of reasonable fees in connection therewith.
8.12 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or such Subsidiary.
8.13 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than September 30; provided that the Borrower
may change such fiscal year upon the approval of the Administrative Agent.
8.14 Restrictions Affecting Subsidiaries. Enter into with any Person,
or suffer to exist any agreement which prohibits or limits the ability of the
Borrower or any of its Subsidiaries to (a) create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, other than (i) this Agreement, (ii) any industrial
revenue bonds, purchase money mortgages or Financing Leases or any other
agreement or transaction permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby), (iii) as required pursuant to financing arrangements entered into by
Triad Systems Ireland Limited with the Industrial Development Authority of
Ireland as in effect on the date hereof or such other similar financing
arrangements entered into in furtherance of the development of CCHC and its
Subsidiaries' business outside of the United States provided that the aggregate
amount of assets of CCHC or any Subsidiary of CCHC subject to such restrictions
shall not exceed 5% of Consolidated Assets and (iv) restrictions with respect to
maintaining the special purpose entity treatment of FinanceCo or (b) pay
dividends or make other distributions or pay any Indebtedness owed to the
Borrower or any of its Subsidiaries except as permitted by this Agreement and
the other Loan Documents, as required pursuant to financing arrangements entered
into by Triad Systems Ireland Limited with the Industrial Development Authority
of Ireland as in effect on the date hereof or such other similar financing
arrangements entered into in furtherance of the development of CCHC and its
Subsidiaries' business outside of the United States provided that the aggregate
amount of assets of CCHC or any Subsidiary of CCHC subject to such restrictions
shall not exceed 5% of Consolidated Assets, and pursuant to restrictions imposed
with respect to maintaining the special purpose entity treatment of FinanceCo.
82
8.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are reasonably related thereto.
8.16 CCHC Holding Company Status; Ownership of Borrower. Suffer to
exist any change in the passive holding company status of CCHC except as
otherwise permitted by Section 11.6.
8.17 Amendments to Corporate Documents; Licenses. (a) Amend its
certificate of incorporation or by-laws unless such amendment does not adversely
affect the interests of any Lender in any material respect, (b) amend,
supplement or otherwise modify the terms and conditions of the indemnities and
licenses furnished to the Borrower or any of its Subsidiaries pursuant to any of
the Loan Documents such that after giving effect thereto such indemnities or
licenses shall be materially less favorable to the interests of the Credit
Parties or the Lenders with respect thereto.
8.18 Limitation on Optional Payments and Modifications of Debt
Instruments, Etc. (a) Make or offer to make any payment, prepayment, repurchase
or redemption of (except pursuant to a permanent refinancing of the Senior
Subordinated Notes with other Senior Subordinated Indebtedness) or otherwise
defease or segregate funds with respect to the Senior Subordinated Indebtedness
or any guarantee thereof (except mandatory payments of interest, fees and
expenses required by the terms of the agreement governing or instruments
evidencing such indebtedness, but only to the extent permitted under the
subordination provisions applicable thereto);
(b) amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms of the
Senior Subordinated Indebtedness or any guarantee thereof or the Senior
Subordinated Note Indenture or other agreement evidencing Senior Subordinated
Indebtedness or any guarantee thereof:
(i) which amends or modifies the subordination provisions
contained therein;
(ii) which shortens the fixed maturity, or increases the rate or
shortens the time of payment of interest on, or increases the amount or
shortens the time of payment of any principal or premium payable
whether at maturity, at a date fixed for prepayment or by acceleration
or otherwise of such Indebtedness, or increases the amount of, or
accelerates the time of payment of, any fees payable in connection
therewith;
(iii) which relates to the affirmative or negative covenants,
events of default or remedies under the documents or instruments
evidencing such Indebtedness and the effect of which is to subject the
Borrower or any of its Subsidiaries to any more onerous or more
restrictive provisions; or
(iv) which otherwise adversely affects the interests of the
Lenders as senior creditors or the interests of the Lenders under this
Agreement or any other Loan Document in any respect.
83
(c) make any payment in cash on any equity or debt security that may
be made under the terms thereof by the issuance of any security of the same
nature; or
(d) designate any Indebtedness as "Designated Senior Indebtedness" for
the purposes of the Senior Subordinated Note Indenture or any other agreement
evidencing the Senior Subordinated Indebtedness.
8.19 Limitation on Provision of License Products. Enter into any
agreement, whether written or oral, to provide License Products to any Person
(other than an Affiliate), unless such agreement contains Customary License
Terms.
ARTICLE 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
and/or Note or any L/C Obligation when due in accordance with the terms
thereof or hereof; or the Borrower shall fail to pay any interest on
any Loan and/or Note, or any other amount payable hereunder, within
five days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower, CCHC or any of their Subsidiaries herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect in
any material respect on or as of the date made or deemed made; or
(c) The Borrower, CCHC or any of their Subsidiaries shall default
in the performance or observance of any agreement contained in Article
8 or 11; or
(d) The Borrower, CCHC or any of their Subsidiaries shall default
in the observance or performance of any other agreement contained in
this Agreement or in any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Article), and such default shall
continue unremedied for a period of 30 days; or
(e) The Borrower, CCHC or any of their Subsidiaries shall (i)
default (x) in any payment of principal of or interest on any
Indebtedness (other than the Loans) or (y) in the payment of any
Guarantee Obligation (other than Guarantee Obligations pursuant to the
Loan Documents), having an outstanding principal amount individually or
in the aggregate for both of clauses (x) and (y) in excess of
$3,000,000 beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or
84
beneficiary or beneficiaries of such Guarantee Obligation (or a trustee
or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable; or
(f) (i) The Borrower, CCHC or any of their Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or any of the Borrower, CCHC or any of their Subsidiaries shall
make a general assignment for the benefit of its creditors; or (ii)
there shall be commenced against the Borrower, CCHC or any of their
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower, CCHC or any of their
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower, CCHC or any of their Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower, CCHC or any of their
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts (other than intercompany
debts) as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to result in
a Material Adverse Effect; or
85
(h) One or more judgments or decrees shall be entered against the
Borrower, CCHC or any of their Subsidiaries involving in the aggregate
a liability (not paid or fully covered by insurance) of $3,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) The Borrower, CCHC or any of their Subsidiaries shall incur
any liability (not paid or fully covered by insurance) under any
Environmental Law in an amount which would result in a Material Adverse
Effect; or
(j) Any Loan Document shall, at any time, cease to be in full
force and effect (unless released by the Administrative Agent at the
direction of the Required Lenders or as otherwise permitted under this
Agreement or the other Loan Documents) or shall be declared null and
void (and, if such invalidity is such so as to be amenable to cure
without materially disadvantaging the position of the Administrative
Agent and the Lenders thereunder, the applicable Credit Party shall
have failed to cure such invalidity within 15 days after notice from
the Administrative Agent or such shorter time period as is specified by
the Administrative Agent in such notice and is reasonable in the
circumstances), or the validity or enforceability thereof shall be
contested by any Credit Party, or any of the Liens intended to be
created by any Security Document shall cease to be or shall not be a
valid and perfected Lien having the priority contemplated thereby (and,
if such invalidity is such so as to be amenable to cure without
materially disadvantaging the position of the Administrative Agent and
the Lenders, as secured parties thereunder, the applicable Credit Party
shall have failed to cure such invalidity within 15 days after notice
from the Administrative Agent or such shorter time period as specified
by the Administrative Agent in such notice and is reasonable in the
circumstances); or
(k) A Change of Control shall occur; or
(l) The Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or
the obligations of the Subsidiaries which are Guarantors under the
Guarantee and Collateral Agreement, as the case may be, as provided in
the Senior Subordinated Note Indenture, or any Credit Party, or any
Affiliate of any Credit Party shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon), the maximum amount available to be
drawn under all outstanding Letters of Credit and all other amounts owing under
this Agreement and any Notes shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower declare the Commitments to
be terminated forthwith, whereupon the Commitments shall immediately terminate;
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the
86
Borrower, declare the Loans hereunder (with accrued interest thereon), the
maximum amount available to be drawn under all outstanding Letters of Credit and
all other amounts owing under this Agreement and any Notes to be due and payable
forthwith, whereupon the same shall immediately become due and payable. All
payments under this Article 9 on account of undrawn Letters of Credit shall be
made by the Borrower directly to a cash collateral account established for such
purpose for application to the Borrower's obligations with respect thereto as
drafts are presented under the Letters of Credit. Any remaining amounts paid by
the Borrower in respect of such undrawn Letters of Credit shall be returned to
the Borrower after the last expiry date of the Letters of Credit and after the
Obligations have been paid in full. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
ARTICLE 10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints Chase as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes Chase,
as the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, controlling persons, employees, agents,
attorneys-in-fact or Affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except for its or such Person's own
gross negligence or willful misconduct) or (ii) responsible in any manner to any
of the Lenders for any recitals, statements, representations or warranties made
by the Borrower or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any Notes or any other Loan Document or for any failure of any
Credit Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under
87
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, any Notes or any other Loan Document, or to inspect the properties,
books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement and any Notes and the other Loan Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
10.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Credit Party, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Credit Parties and made its own decision
to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such
88
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Credit Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Credit Parties which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
10.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against the Administrative Agent in any
way relating to or arising out of this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct or, in the case of indemnified
liabilities arising under this Agreement, any Notes and the other Loan
Documents, from material breach by the Administrative Agent of this Agreement,
any Notes or the other Loan Documents, as the case may be. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
10.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Credit Parties as though
the Administrative Agent was not the Administrative Agent hereunder and under
the other Loan Documents. With respect to their Loans made or renewed by it and
any Note issued to it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower (which approval shall not be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and duties of
the Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative
89
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 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 and the other Loan Documents.
10.10 Additional Ministerial Powers of Administrative Agent. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
release any Lien covering any asset of CCHC or any of its Subsidiaries
(including, without limitation, any Properties, accounts receivable or
inventory) that is the subject of a disposition, sale or assignment which is
permitted under this Agreement or, subject to Section 12.1, which has been
consented to by the Required Lenders.
ARTICLE 11. GUARANTEE
11.1 Guarantee. To induce the Lenders to execute and deliver this
Agreement to make Loans and to issue and participate in Letters of Credit for
the account of the Borrower, and in consideration thereof, CCHC hereby
unconditionally and irrevocably guarantees to the Administrative Agent, the
Lenders and their successors, indorsees, transferees and assigns, the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, and CCHC further agrees to pay
the expenses which may be paid or incurred by the Administrative Agent or the
Lenders in collecting any or all of the Obligations and/or enforcing any rights
under this Article 11 or under the Obligations in accordance with Section 12.5.
The guarantee contained in this Article 11 shall remain in full force and effect
until the Obligations are paid in full and the Commitments are terminated,
notwithstanding that from time to time prior thereto the Borrower may be free
from any Obligations.
11.2 Waiver of Subrogation. Notwithstanding any payment or payments
made by CCHC in respect of the Obligations or any setoff or application of funds
of CCHC by the Administrative Agent or the Lenders, until payment in full of the
Obligations and the termination of the Commitments and the Letters of Credit,
CCHC shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or the Lenders against the Borrower or any collateral
security or guarantee or right of offset held by the Administrative Agent or the
Lenders for the payment of the Obligations, nor shall CCHC seek any
reimbursement from the Borrower in respect of payments made by CCHC hereunder
until the Obligations are paid in full.
11.3 Modification of Obligations. CCHC hereby consents that, without
the necessity of any reservation of rights against CCHC and without notice to or
further assent by CCHC, any demand for payment of the Obligations made by the
Administrative Agent, the Issuing Lender or the Lenders may be rescinded by the
Administrative Agent, the Issuing Lender or the Lenders and the Obligations
continued, and the Obligations, or the liability of any other party upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended,
90
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent, the Issuing Lender or the Lenders and that this
Agreement, any Notes and the other Loan Documents, including, without
limitation, any Letter of Credit Application, any collateral security document
or other guarantee or document in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the Administrative Agent,
the Issuing Lender or the Lenders may deem advisable from time to time, and, to
the extent permitted by applicable law, any collateral security or guarantee or
right of offset at any time held by the Administrative Agent, the Issuing Lender
or the Lenders for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released, all without the necessity of any reservation of
rights against CCHC and without notice to or further assent by CCHC which will
remain bound hereunder notwithstanding any such renewal, extension,
modification, acceleration, compromise, amendment, supplement, termination,
sale, exchange, waiver, surrender or release. The Administrative Agent, the
Issuing Lender and the Lenders shall not have any obligation to protect, secure,
perfect or insure any collateral security document or property subject thereto
at any time held as security for the Obligations. When making any demand
hereunder against CCHC, the Administrative Agent, the Issuing Lender or the
Lenders may, but shall be under no obligation to, make a similar demand on any
other party or any other guarantor, and any failure by the Administrative Agent,
the Issuing Lender or the Lenders to make any such demand or to collect any
payments from the Borrower or any such other guarantor shall not relieve CCHC of
its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of the
Administrative Agent, the Issuing Lender or the Lenders against CCHC. For the
purposes of this Section "demand" shall include the commencement and continuance
of any legal proceedings.
11.4 Waiver by CCHC. CCHC waives any and all notice of the creation,
renewal, extension or accrual of the Obligations and notice of or proof of
reliance by the Administrative Agent, the Issuing Lender and the Lenders upon
the guarantee contained in this Article 11 or acceptance of the guarantee
contained in this Article 11, and the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted, continued or incurred
in reliance upon the guarantee contained in this Article 11, and all dealings
between CCHC and the Administrative Agent, the Issuing Lender or the Lenders
shall likewise be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Article 11. CCHC waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or CCHC with respect to any Obligations. This guarantee
shall be construed as a continuing absolute and unconditional guarantee of
payment without regard to the validity, regularity or enforceability of the
Credit Agreement, any Note or any other Loan Document, including, without
limitation, any Letter of Credit Application or any collateral security or
guarantee therefor or right of offset with respect thereto at any time or from
time to time held by the Administrative Agent, the Issuing Lender or the Lenders
and without regard to any defense, setoff or counterclaim which may at any time
be available to or be asserted by the Borrower against the Administrative Agent,
the Issuing Lender, the Lenders or any other Person, or by any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or CCHC) which constitutes, or might be construed to constitute, an equitable or
legal discharge of the Borrower for any of its Obligations, or of CCHC under the
guarantee contained in this Article 11 in bankruptcy or in any other instance,
and the obligations and liabilities of CCHC hereunder shall not be conditioned
or contingent upon the pursuit by the Administrative Agent, the Issuing Lender
or the Lenders or any other Person at
91
any time of any right or remedy against the Borrower or against any other Person
which may be or become liable in respect of any Obligations or against any
collateral security or guarantee therefor or right of offset with respect
thereto. The guarantee contained in this Article 11 shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
CCHC and the successors and assigns thereof, and shall inure to the benefit of
the Lenders and their successors, indorsees, transferees and assigns, until the
Obligations shall have been paid in full and the Commitments shall be
terminated, notwithstanding that from time to time during the term of this
Agreement the Borrower may be free from any Obligations.
11.5 Reinstatement. The guarantee contained in this Article 11 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligations is rescinded or must otherwise
be restored or returned by the Administrative Agent, the Issuing Lender or the
Lenders upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of CCHC or the Borrower or upon or as a result of the appointment
of a receiver, intervenor or conservator of, or trustee or similar officer for,
CCHC, the Borrower or any substantial part of their respective property, or
otherwise, all as though such payments had not been made.
11.6 Negative Covenants. Until the Obligations shall have been paid
in full, the Letters of Credit shall have expired or been terminated and the
Commitments shall have been terminated, CCHC hereby agrees that it shall not (i)
assume or otherwise incur or suffer to exist any Indebtedness (other than
Indebtedness in the nature of Indebtedness specified in Section 8.2(d) or (j))
or Guarantee Obligation (other than (A) the Guarantee Obligations of CCHC
pursuant to the Guarantee and Security Agreement, (B) Guarantee Obligations in
the nature of the Guarantee Obligations specified in Section 8.4(d), 8.4(e) and
8.4(f), (C) Guarantee Obligations (1) of CCHC in respect of real property leases
and/or personal property operating leases of the Borrower and its Subsidiaries
in ordinary course of business and (2) in respect of an equipment lease entered
into by a Customer Partnership not in excess of $300,000, but in any event not
in excess of an aggregate amount of $5,000,000 at any one time outstanding or
(D) indemnities in favor of officers, directors and employees of CCHC in the
ordinary course of business and in connection with the ownership of the
Borrower's capital stock), (ii) create, incur, assume or suffer to exist any
Lien upon any of its assets (other than pursuant to the Security Documents and
other than Liens in the nature of the Liens specified in Section 8.3(b), (d) or
(e)), (iii) cease to own, directly or indirectly, 100% of the Capital Stock of
the Borrower, (iv) amend its certificate of incorporation or by-laws, any of the
Loan Documents to which it is a party or the Senior Subordinated Note Indenture
unless such amendment does not adversely affect the interests of any Lender in
any material respect, (v) engage in any activities other than (A) owning the
stock of the Borrower, (B) its activities incident to the performance of (x) the
Loan Documents and (y) the issuance and/or sale of its common stock or options
or warrants in respect of its Capital Stock, provided that the proceeds thereof
are applied as set forth in Section 2.10, (C) transactions pursuant to or in
connection with the Transactions and (D) activities contemplated by this Article
11 or (vi) make any Restricted Payment except as permitted by Sections
8.7(a)(i), 8.7(a)(v), 8.7(c), 8.7(d) and 8.7(e). CCHC will cause all business
arising after the Initial Closing Date (other than business existing on the
Initial Closing Date which it is not able to transfer to the Borrower because of
applicable Contractual Obligations) to be conducted through the Borrower and its
Subsidiaries.
92
ARTICLE 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any Note, any
other Loan Document, nor any terms hereof or thereof may be waived, amended,
supplemented or otherwise modified except in accordance with the provisions of
this Section. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent may, from time to time, (a) enter
into with the applicable Credit Parties written amendments, supplements or
modifications hereto and to any Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement or any Notes or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Borrower or CCHC or any other Person hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or any Notes or the other Loan Documents or any Default or Event
of Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall (i) reduce the aggregate amount
or extend the scheduled date of maturity of any Loan or of any installment
thereof or any L/C Obligation reimbursement obligation in respect of any Letter
of Credit, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the aggregate
amount or extend the expiration date of any Lender's Commitment, in each case
without the consent of each Lender affected thereby, or (ii) amend, modify or
waive any provision of this Section 12.1 or reduce the percentage specified in
the definition of Required Lenders or consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement and the
other Loan Documents or release all or substantially all of the Collateral or
release the Guarantee Obligations of CCHC under this Agreement or the Guarantee
Obligations of any other guarantors under the Guarantee and Collateral
Agreement, in each case, without the written consent of all the Lenders, (iii)
amend, modify or waive any provision of (x) Section 2.6 or 2.7 without the
written consent of the Tranche B Term Loan Lenders, the Tranche B Term Loan
Percentages of which aggregate at least a majority and (y) Section 4.4(a)
without the written consent of the Tranche B Term Loan Lenders Tranche B Term
Loans Percentages, as the case may be, of which aggregate at least a majority,
(iv) amend, modify or waive any provision of Section 2.1, 2.2, 2.3, 2.4, 2.5,
2.10(e) or Article 3 without the written consent of the Revolving Credit Lenders
the Revolving Credit Commitment Percentages of which aggregate at least a
majority, (v) amend, modify or waive any provision of Article 10 without the
written consent of the Administrative Agent, (vi) amend, modify or waive the
order of application of prepayments specified in Section 2.10(d) or 4.4(b)
without the consent of the Majority Facility Lenders in respect of each Facility
adversely affected thereby, (vii) amend, modify or waive any provision of
Section 2.13 or the Swing Line Note (if any) without the written consent of the
then Swing Line Lender and each other Lender, if any, which holds a
participation in the Swing Line Loan pursuant to Section 2.13(e), (viii) amend,
modify or waive the provisions of Article 3 or any Letter of Credit without the
written consent of the applicable Issuing Lender, (ix) amend, modify or waive
any provision of any Security Document that provides for the ratable sharing by
the Lenders of the proceeds of any realization on the security for the Loans to
provide for a non-ratable sharing thereof, without the consent of the Majority
Facility Lenders in respect of each Facility adversely affected thereby, (x)
amend, modify or waive any provision of Section 6.2, without the written consent
of the Revolving Credit Lenders the Revolving Credit Commitment Percentages of
which aggregate at least a majority, (xi) amend, modify or waive any provision
of Sections 8.1 or 8.8 or Article 9, without the written
93
consent of the Supermajority Lenders or (xii) increase the aggregate amount of
the Tranche B Term Loan Commitments or the Revolving Credit Commitments without
the written consent of the Supermajority Lenders. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the Lenders
and shall be binding upon the Borrower, the Lenders, the Administrative Agent
and all future holders of the Loans. In the case of any waiver, the Borrower,
the Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Loans and the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
12.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or two days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower, CCHC and the
Administrative Agent, the Issuing Lender and the Swing Line Lender, and as set
forth in Schedule 1.1 in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Loans or any Notes:
The Borrower: Cooperative Computing, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative JPMorgan Chase Bank
Agent, the ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or the Swing
Line Lender:
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Section 2.3, 2.5, 2.8, 2.10, 2.11, 2.13, 3.2 or 4.4
shall not be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or
94
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
12.4 Survival of Representations and Warranties. All representations
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the making of the Loans hereunder.
12.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and JPMSI for all their reasonable
out-of-pocket costs and expenses incurred in connection with the syndication of
the Commitments and the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement and any Notes and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender, the Administrative Agent and JPMSI for all of their
reasonable out-of-pocket costs and expenses incurred in connection with the
enforcement or preservation of any rights under this Agreement, any Notes, the
other Loan Documents and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and, at any time after and during the continuance of an
Event of Default, of one counsel to all of the Lenders, (c) to pay, indemnify,
and hold each Lender, the Administrative Agent and JPMSI harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise, documentary, property and
other similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, any Notes, the other Loan Documents and any such other documents, and
(d) to pay, indemnify, and hold each Lender, the Administrative Agent and JPMSI
and their respective officers, directors, employees, agents and controlling
persons harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including, without limitation,
the reasonable fees and disbursements of counsel with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, any
Notes, the other Loan Documents, or the use of the proceeds of the Loans in
connection with the Transactions and any such other documents (all the foregoing
in this clause (d), collectively, the "indemnified liabilities"), provided that
the Borrower shall have no obligation hereunder to the Administrative Agent,
JPMSI or any Lender or their respective officers, directors, employees, agents
and controlling persons with respect to indemnified liabilities that are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the
Administrative Agent, JPMSI or such Lender, as the case may be, or, in the case
of indemnified liabilities arising under this Agreement, any Notes and the other
Loan Documents that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from a material breach by the
Administrative Agent or such Lender, as the case may be, or its respective
officers, directors, employees, agents and controlling persons of this
Agreement, any Notes or the other Loan Documents, as the case may
95
be. The agreements in this Section shall survive repayment of the Loans and all
other amounts payable hereunder.
12.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial lending
or investing business and in accordance with applicable law, at any time sell to
one or more banks, insurance companies or other financial institutions or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. No Lender shall permit any
Participant to have the right to consent to any amendment or waiver in respect
of this Agreement or any of the other Loan Documents, except that such Lender
may grant such Participant the right to consent to any amendment or waiver in
respect of this Agreement or the other Loan Documents that requires the consent
of such Lender pursuant to Section 12.1. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this Agreement
and any Note to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note, provided
that in purchasing such participating interest, such Participant shall be deemed
to have agreed to share with the Lenders the proceeds thereof as provided in
Section 12.7(a) as fully as if it were a Lender hereunder. The Borrower also
agrees that each Participant shall be entitled to the benefits of Sections 4.5,
4.6 and 4.7 with respect to its participation in the Commitments and the Loans
and Letters of Credit outstanding from time to time as if it was a Lender;
provided that in the case of Section 4.6 or 4.7, such Participant shall have
complied with the requirements of such Section and provided, further, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred. In addition, each selling
Lender selling a participation to a Participant (i) shall keep a register,
meeting the requirements of Treasury Regulation Section 5f.103-1(c), of each
such Participant, specifying such Participant's entitlement to payments of
principal and interest with respect to such participation, and (ii) shall
collect, prior to the time such Participant receives payments with respect to
such participation, from each such Participant the appropriate forms,
certificates and statements described in Section 4.7 (and updated as required by
Section 4.7) as if such Participant were a Lender under Section 4.7.
96
(c) Any Lender may, in the ordinary course of its commercial lending
business or investing business and in accordance with applicable law, at any
time and from time to time assign to any Lender, any affiliate thereof or any
fund under common management therewith, with the consent of the Administrative
Agent (such consent not to be unreasonably withheld), to an additional bank or
financial or lending institution or other entity (an "Assignee") all or any part
of its rights and obligations under this Agreement and any Notes pursuant to an
Assignment and Acceptance, executed by such Assignee, such assigning Lender
(and, in the case of an Assignee that is not then a Lender or an affiliate
thereof, by the Administrative Agent) and delivered to the Administrative Agent
for its acceptance and recording in the Register; provided that (v) each such
transfer (if such transfer relates to less than all of such Lenders' rights and
obligations under this Agreement and any Notes) shall be in respect of a portion
of its rights and obligations, with respect to the Tranche B Term Loan Facility,
under this Agreement and any Notes, not less than $1,000,000, and, with respect
to the Revolving Credit Facility, under this Agreement and any Notes, not less
than $5,000,000 (or such other amount as may be agreed by both the Borrower and
the Administrative Agent) if such assignment is to a bank or financial or
lending institution or other entity that is not then a Lender or an affiliate
thereof, (w) the Swing Line Lender may not transfer any portion of the Swing
Line Commitment without the consent of the Borrower (such consent not to be
unreasonably withheld), (x) such assigning Lender shall deliver to the
Administrative Agent or the Borrower any Note (if the assigning Lender's Loans
are evidenced by a Note) subject to such assignment, (y) the Assignee shall
execute and deliver to the Borrower and the Administrative Agent the appropriate
forms, certificates and statements described in Section 4.7 to satisfy the
requirements of Section 4.7 and (z) no Assignee shall be entitled to receive any
greater amount pursuant to Sections 4.5, 4.6 and 4.7 than the assigning Lender
would have been entitled to receive in respect of the amount of the assignment
transferred by such assigning Lender to such Assignee had no such transfer
occurred. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments as set forth therein, and (y) the assigning Lender
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto; provided that such assigning Lender shall
continue to have the benefit of Sections 4.5, 4.6, 4.7 and 12.5(a), (b) and (c)
(to the extent of rights accruing prior to the date of such assignment only) and
12.5(d).
(d) The Administrative Agent, acting for this purpose as agent for
the Borrower, shall maintain at its address referred to in Section 12.2 a copy
of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Issuing Lender and the Commitments of, and principal amount of the Loans,
L/C Obligation and amounts described in Sections 3.3, 3.4 and 3.5, owing to,
each Lender and the Issuing Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent, the Lenders, and the Issuing Lender shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender or the Issuing Lender, as the case may be, hereunder for all
purposes of this Agreement. No assignment or transfer of a Note and the
obligation(s) evidenced thereby shall be effective unless it has been recorded
in the Register as provided in this Section 12.6(d).
97
The Register shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Administrative Agent) together
with payment, by the Assignee, to the Administrative Agent of a registration and
processing fee of $4,000 if the Assignee is not a Lender or affiliate of a
Lender prior to the execution of the Assignment and Acceptance and $1,000
otherwise, the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Borrower. No assignment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 12.6. On or prior to such effective date,
the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent (in exchange for any Revolving Credit Note, Swing Line Note
or Tranche B Term Note of the assigning Lender) a new Revolving Credit Note,
Swing Line Note or Tranche B Term Note, as the case may be, to the order of such
Assignee in an amount equal to the Revolving Credit Commitment, Swing Line
Commitment or portion of the Tranche B Term Loan, as the case may be, assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Revolving Credit Commitment, Swing Line Commitment or portion of a
Tranche B Term Loan hereunder, a new Revolving Credit Note, Swing Line Note, or
Tranche B Term Note, as the case may be, to the order of the assigning Lender in
an amount equal to the Revolving Credit Commitment, Swing Line Commitment or
Tranche B Term Loan, as the case may be, retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Note replaced thereby.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all information in such Lender's possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement, under the condition such Transferee or prospective Transferee agrees
to comply with the provisions of Section 12.15.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(h) For purposes of this Section 12.6, with respect to each Letter of
Credit, (i) if such Letter of Credit is transferred, notice of such transfer
shall be given to the Administrative Agent for notation in the Register, (ii)
each such transfer may only be made upon notation of such transfer in the
Register, and (iii) no such transfer will be effective for purposes of this
Agreement unless it has been recorded in the Register.
98
12.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
shall at any time receive any payment of all or part of the Obligations owing to
it or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such benefitted Lender shall
purchase for cash from the other Lenders an interest in such portion of the
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the Borrower
hereunder or under any Notes (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by any such Lender, Citibank, N.A. or any
branch or agency of any such Lender or Citibank, N.A. to or for the credit or
the account of the Borrower; provided that any rights granted to Citibank, N.A.
under this Section 12.7(b) shall terminate if neither Citicorp USA, Inc. nor any
affiliate thereof is a Lender hereunder. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
12.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
12.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Credit Parties, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
99
12.11 GOVERNING LAW. THIS AGREEMENT AND ANY NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND ANY NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
12.12 Submission To Jurisdiction; Waivers. Each of CCHC and the
Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Credit Parties at their respective addresses set forth in Section 12.2 or
at such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
12.13 Acknowledgements. Each of CCHC and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and any Notes and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Credit Parties arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
the Credit Parties, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Credit
Parties and the Lenders.
100
12.14 WAIVERS OF JURY TRIAL. CCHC, THE BORROWER, THE ADMINISTRATIVE
AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY NOTES OR ANY
OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
12.15 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents or affiliates
who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender on a non-confidential basis from any source or such information that is
in the public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the Borrower unless such notice is legally
prohibited) or requested or required by bank, securities or investment company
regulations or auditors or any administrative body or commission to whose
jurisdiction such Lender may be subject, (d) to assignees or participants or
potential assignees or participants or to professional advisors or direct or
indirect contractual counterparties in swap agreements provided in each case
such Person agrees to be bound by the provisions of this Section 12.15, (e) to
the extent required in connection with any litigation between any Credit Party
and any Lender with respect to the Loans or this Agreement and the other Loan
Documents, (f) to rating agencies, their employees, representatives, attorneys,
agents or affiliates who are advised of the confidential nature of such
information and agree to be bound by provisions of this Section 12.15, (g) to
the National Association of Insurance Commissioners and (h) with the Borrower's
prior written consent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
COOPERATIVE COMPUTING, INC.
By _______________________
Name:
Title:
COOPERATIVE COMPUTING HOLDING
COMPANY, INC.,
as a Guarantor
By _______________________
Name:
Title:
JPMORGAN CHASE BANK,
as Administrative Agent,
a Lender and Issuing Lender
By _______________________
Name:
Title:
BANK OF AMERICA, N.A.
By ________________________
Name:
Title:
COMERICA BANK--CALIFORNIA
By _____________________
Name:
Title:
KZH CYPRESSTREE-1 LLC
By ________________________
Name:
Title:
KZH ING-2 LLC
By ________________________
Name:
Title:
KZH STERLING LLC
By ________________________
Name:
Title:
▇▇▇ ▇▇▇▇▇▇ CLO I, LIMITED
By ______________________
Name:
Title:
CITICORP USA, INC.
By ________________________
Name:
Title: