EXECUTION COPY
Exhibit 10.1
JOSTENS, INC.
------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 31, 2002
------------------------------------
Senior Secured Credit Facility
------------------------------------
DEUTSCHE BANK SECURITIES INC.,
as Syndication Agent,
JPMORGAN CHASE BANK,
as Administrative Agent,
and
DEUTSCHE BANK SECURITIES INC. and
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
as Co-Lead Arrangers and Co-Bookrunners
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS........................................................................................ 1
1.1 Defined Terms.................................................................................... 1
1.2 Other Definitional Provisions.................................................................... 22
SECTION 2. TERM LOANS......................................................................................... 23
2.1 Term Loans....................................................................................... 23
2.2 Repayment of Term Loans.......................................................................... 23
2.3 Use of Proceeds.................................................................................. 23
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS................................................... 23
3.1 Revolving Credit Commitments..................................................................... 23
3.2 Commitment Fee................................................................................... 24
3.3 Proceeds of Revolving Credit Loans............................................................... 24
3.4 Swing Line Commitment............................................................................ 24
3.5 Issuance of Letters of Credit.................................................................... 25
3.6 Participating Interests.......................................................................... 26
3.7 Procedure for Opening Letters of Credit.......................................................... 26
3.8 Payments in Respect of Letters of Credit......................................................... 26
3.9 Letter of Credit Fees............................................................................ 26
3.10 Letter of Credit Reserves....................................................................... 27
3.11 Further Assurances.............................................................................. 28
3.12 Obligations Absolute............................................................................ 28
3.13 Assignments..................................................................................... 28
3.14 Participations.................................................................................. 29
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS............................................................. 29
4.1 Procedure for Borrowing.......................................................................... 29
4.2 Conversion and Continuation Options.............................................................. 29
4.3 Changes of Commitment Amounts.................................................................... 30
4.4 Optional and Mandatory Prepayments; Repayments of Term Loans..................................... 31
4.5 Interest Rates and Payment Dates................................................................. 34
4.6 Computation of Interest and Fees................................................................. 34
4.7 Certain Fees..................................................................................... 35
4.8 Inability to Determine Interest Rate............................................................. 35
4.9 Pro Rata Treatment and Payments.................................................................. 35
4.10 Illegality...................................................................................... 37
4.11 Requirements of Law............................................................................. 38
4.12 Indemnity....................................................................................... 40
4.13 Repayment of Loans; Evidence of Debt............................................................ 40
4.14 Replacement of Lenders.......................................................................... 41
4.15 Reliance on Representation of the Borrower...................................................... 42
SECTION 5. REPRESENTATIONS AND WARRANTIES..................................................................... 42
5.1 Financial Condition.......................................................................... 42
5.2 No Change.................................................................................... 42
5.3 Existence; Compliance with Law............................................................... 43
5.4 Power; Authorization......................................................................... 43
5.5 Enforceable Obligations...................................................................... 43
5.6 No Legal Bar................................................................................. 44
5.7 No Material Litigation....................................................................... 44
5.8 Investment Company Act....................................................................... 44
5.9 Federal Regulation........................................................................... 44
5.10 No Default.................................................................................. 44
5.11 Taxes....................................................................................... 45
5.12 Subsidiaries................................................................................ 45
5.13 Ownership of Property; Liens................................................................ 45
5.14 ERISA....................................................................................... 45
5.15 Collateral Documents........................................................................ 46
5.16 Copyrights, Patents, Permits, Trademarks and Licenses....................................... 47
5.17 Environmental Matters....................................................................... 47
5.18 Accuracy and Completeness of Information.................................................... 48
SECTION 6. CONDITIONS PRECEDENT........................................................................... 48
6.1 Conditions to Initial Loans and Letters of Credit............................................ 48
6.2 Conditions to All Loans and Letters of Credit................................................ 51
6.3 Conditions to Effectiveness of Amended and Restated Credit Agreement......................... 52
SECTION 7. AFFIRMATIVE COVENANTS.......................................................................... 52
7.1 Financial Statements......................................................................... 52
7.2 Certificates; Other Information.............................................................. 53
7.3 Payment of Obligations....................................................................... 54
7.4 Conduct of Business and Maintenance of Existence............................................. 54
7.5 Maintenance of Property; Insurance........................................................... 55
7.6 Inspection of Property; Books and Records; Discussions....................................... 55
7.7 Notices...................................................................................... 55
7.8 Environmental Laws........................................................................... 56
7.9 Additional Collateral........................................................................ 57
7.10 Pledge of Certain Subsidiaries.............................................................. 58
SECTION 8. NEGATIVE COVENANTS............................................................................. 58
8.1 Indebtedness................................................................................. 58
8.2 Limitation on Liens.......................................................................... 60
8.3 Limitation on Contingent Obligations......................................................... 62
8.4 Prohibition of Fundamental Changes........................................................... 63
8.5 Prohibition on Sale of Assets................................................................ 63
8.6 Limitation on Investments, Loans and Advances................................................ 64
8.7 Capital Expenditures......................................................................... 66
8.8 Interest Rate Agreements..................................................................... 67
8.9 Debt to EBITDA............................................................................... 67
8.10 Interest Coverage........................................................................... 68
8.11 Limitation on Dividends..................................................................... 69
iii
8.12 Transactions with Affiliates.................................................. 70
8.13 Limitation on Changes in Fiscal Year.......................................... 71
8.14 Limitation on Lines of Business............................................... 71
8.15 Amendments to Certain Documents............................................... 71
8.16 Limitation on Prepayments and Amendments of Certain Debt...................... 71
SECTION 9. EVENTS OF DEFAULT............................................................. 71
SECTION 10. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENT AND THE
ISSUING LENDER...................................................................... 74
10.1 Appointment................................................................... 74
10.2 Delegation of Duties.......................................................... 74
10.3 Exculpatory Provisions........................................................ 74
10.4 Reliance by Administrative Agent.............................................. 74
10.5 Notice of Default............................................................. 75
10.6 Non-Reliance on Administrative Agent, Syndication Agent and Other Lenders..... 75
10.7 Indemnification............................................................... 76
10.8 The Administrative Agent in its Individual Capacity........................... 76
10.9 Successor Administrative Agent................................................ 76
10.10 Issuing Lender as Issuer of Letters of Credit................................. 76
10.11 Administrative Agent as Joint and Several Creditor............................ 76
SECTION 11. MISCELLANEOUS................................................................ 77
11.1 Amendments and Waivers........................................................ 77
11.2 Notices....................................................................... 78
11.3 No Waiver; Cumulative Remedies................................................ 79
11.4 Survival of Representations and Warranties.................................... 79
11.5 Payment of Expenses and Taxes................................................. 79
11.6 Successors and Assigns; Participations and Assignments........................ 80
11.7 Adjustments; Set-off.......................................................... 83
11.8 Counterparts.................................................................. 84
11.9 Governing Law; No Third Party Rights.......................................... 84
11.10 Submission to Jurisdiction; Waivers........................................... 84
11.11 Releases...................................................................... 85
11.12 Interest...................................................................... 85
11.13 Special Indemnification....................................................... 85
11.14 Permitted Payments and Transactions........................................... 86
iv
SCHEDULES
Schedule I List of Addresses for Notices; Lending Offices; Commitment
Amounts
Schedule II Pricing Grid
Schedule 5.7 Litigation
Schedule 5.12 Subsidiaries
Schedule 5.13 Fee and Leased Properties
Schedule 5.15(b) UCC Filing Offices
Schedule 5.16 Trademarks and Copyrights
Schedule 8.1(a) Existing Indebtedness
Schedule 8.2(h) Existing Liens
Schedule 8.3(d) Existing Contingent Obligations
EXHIBITS
EXHIBIT A Form of Revolving Credit Note
EXHIBIT B-1 Form of Tranche A Term Note
EXHIBIT B-2 Form of Tranche C Term Note
EXHIBIT C Form of Swing Line Note
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Collateral Agreement
EXHIBIT F Form of Subsidiary Guarantee
EXHIBIT G Form of L/C Participation Certificate
EXHIBIT H Form of Swing Line Loan Participation Certificate
EXHIBIT I Form of Subsection 4.11(d)(2) Certificate
EXHIBIT J-1 Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
EXHIBIT J-2 Form of Opinion of General Counsel to the Borrower
EXHIBIT K-1 Form of Borrower Closing Certificate
EXHIBIT K-2 Form of Credit Parties Closing Certificate
v
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 31,
2002, among JOSTENS, INC., a Minnesota corporation (the "Borrower"), the several
lenders from time to time parties hereto (the "Lenders"), DEUTSCHE BANK
SECURITIES INC., as syndication agent (in such capacity, the "Syndication
Agent"), JPMORGAN CHASE BANK, formerly known as THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent") and DEUTSCHE BANK SECURITIES INC. and ▇.▇.
▇▇▇▇▇▇ SECURITIES INC., as Co-Lead Arrangers and Co-Bookrunners (in such
capacities, the "Co-Lead Arrangers"and "Co-Bookrunners").
WITNESSETH:
WHEREAS, the Borrower, the lenders party thereto, the
Syndication Agent and the Administrative Agent are parties to a Credit Agreement
dated as of May 10, 2000 (as amended, the "Existing Credit Agreement"), as in
effect immediately prior to the Restatement Effective Date (as defined herein);
and
WHEREAS, the Borrower, the Required Restatement Lenders (as
defined therein), the Syndication Agent and the Administrative Agent are parties
to an Amendment and Restatement Agreement, dated as of July 30, 2002 (the
"Amendment and Restatement Agreement");
NOW, THEREFORE, the Borrower, the Syndication Agent, the
Administrative Agent, the Co-Lead Arrangers, the Co-Bookrunners, and the Lenders
agree that, subject to the conditions to effectiveness hereof in the Amendment
and Restatement Agreement, the Existing Credit Agreement is amended and restated
in its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
defined in the caption hereto shall have the meanings set forth therein, and the
following terms have the following meanings:
"1995 Credit Agreement": the Credit Agreement, dated as of
December 20, 1995, among the Borrower, the lenders named therein and
The First National Bank of Chicago, as amended.
"Accepting Tranche C Lenders": as defined in subsection
4.4(e).
"Adjustment Date": as defined in the definition of Applicable
Margin.
"Administrative Agent": as defined in the Preamble hereto.
"Affiliate": of any Person (a) any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or (b) any
Person who is a director or officer (i) of such Person, (ii) of any
Subsidiary of such Person or (iii) of any Person described in clause
(a) above. For purposes of this definition, control of a Person shall
mean the power, direct or indirect, (x) to vote 25% or more of the
securities having ordinary voting power for the election of directors
of such Person, whether by ownership of securities, contract, proxy or
otherwise, or (y) to direct or cause the direction of the management
and policies of such Person, whether by ownership of securities,
contract, proxy or otherwise.
"Agents": the collective reference to the Syndication Agent
and the Administrative Agent.
"Agreement": this Credit Agreement, as amended, supplemented
or 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 the Administrative Agent as its prime rate in effect at its
principal office in New York City (the Prime Rate not being intended to
be the lowest rate of interest charged by the Administrative Agent in
connection with extensions of credit to debtors); "Base CD Rate" shall
mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) a fraction, the numerator of which is one and the
denominator of which is one minus the CD Reserve Percentage and (b) the
CD Assessment Rate; "Three-Month Secondary CD Rate" shall mean, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published
on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Base CD Rate
or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Alternate Base Rate Loans": Loans at such time as they are
made and/or being maintained at a rate of interest based upon the
Alternate Base Rate.
"Amendment and Restatement Agreement": the Amendment and
Restatement Agreement dated as of July 30, 2002, among the Borrower,
the Required Restatement Lenders (as defined therein), the Syndication
Agent and the Administrative Agent.
"Applicable Margin": for Term Loans, Revolving Credit Loans
and Swing Line Loans of the Types set forth below, the rate per annum
set forth under the relevant column heading opposite such Loans below:
2
Alternate
Base Rate Eurodollar
Loans Loans
----- -----
Tranche A Term Loans 2.00% 3.00%
Tranche C Term Loans 1.75% 2.75%
Revolving Credit Loans: 2.00% 3.00%
Swing Line Loans: 2.00% Not applicable
; provided that, (a) from and after the first anniversary of the
Closing Date, the Applicable Margin with respect to Tranche A Term
Loans, Revolving Credit Loans and Swing Line Loans will be adjusted on
each Adjustment Date (as defined below) to the applicable rate per
annum set forth in the pricing grid attached hereto as Schedule II
based on the Leverage Ratio as determined from the relevant financial
statements delivered pursuant to subsection 7.1 and (b) from and after
the date on which financial statements for the fiscal quarter ending
September 30, 2002 are delivered pursuant to subsection 7.1, the
Applicable Margin with respect to Tranche C Term Loans will be adjusted
on each Adjustment Date to the applicable rate per annum set forth in
the pricing grid attached hereto as Schedule II based on the Leverage
Ratio as determined from the relevant financial statements most
recently delivered pursuant to subsection 7.1. Changes in the
Applicable Margin resulting from changes in the Leverage Ratio shall
become effective on the date (the "Adjustment Date") on which such
financial statements are delivered to the Lenders (but in any event not
later than the 50th day after the end of each of the first three
quarterly periods of each fiscal year or the 95th day after the end of
each fiscal year as the case may be) and shall remain in effect until
the next change to be effected pursuant to this definition; provided
that (a) the Applicable Margin shall be initially the rate per annum
set forth under the relevant column heading above; (b) if for any
reason the financial statements required by subsection 7.1 are not
timely delivered to the Lenders, (i) during the period from the date
upon which such financial statements were required to be delivered
until the date upon which they actually are delivered, the Applicable
Margin shall be the Applicable Margin in effect immediately prior to
the date such financial statements were due, and (ii) if such financial
statements, when actually delivered, would have required an increase in
the Applicable Margin over the Applicable Margin in effect immediately
prior to the date such financial statements were due, the Borrower
shall promptly following the delivery of such financial statements pay
to the Lenders and the Administrative Agent any additional amounts of
interest or fees which would have been payable on any previous Interest
Payment Date had such higher Applicable Margin been in effect from the
date such financial statements were required to be delivered; (c) any
change in the Applicable Margin as a result of a change in the Leverage
Ratio shall apply to all Loans for each day during the period
commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change in the
Applicable Margin; and (d) if an Event of Default exists on any
Adjustment Date or other date upon which the Applicable Margin would
otherwise be adjusted hereunder, the Applicable Margin shall in no
event be reduced on such Adjustment Date or other date from the
Applicable Margin in effect immediately prior to such Adjustment Date
or other date until such Event of Default is cured or waived.
"Asset Sale": any sale, sale-leaseback, or other disposition
by the Borrower or any of its Subsidiaries restricted by subsection 8.5
of any of its property or assets, including the stock of any
Subsidiary, except sales and dispositions permitted by subsections
8.5(a), (b), (c), (f), (g) and (j).
"Assignee": as defined in subsection 11.6(c).
3
"Assignment and Acceptance": an assignment and acceptance
substantially in the form of Exhibit D.
"Available Revolving Credit Commitment": as to any Lender, at
a particular time, an amount equal to (a) the amount of such Lender's
Revolving Credit Commitment at such time less (b) the sum of (i) the
aggregate unpaid principal amount at such time of all Revolving Credit
Loans made by such Lender pursuant to subsection 3.1, (ii) such
Lender's Revolving Credit Commitment Percentage of the aggregate unpaid
principal amount at such time of all Swing Line Loans; provided that
for purposes of calculating the Available Revolving Credit Commitments
pursuant to subsection 3.2 the amount referred to in this clause (ii)
shall be zero, (iii) such Lender's L/C Participating Interest in the
aggregate amount available to be drawn at such time under all
outstanding Letters of Credit issued by the Issuing Lender and (iv)
such Lender's Revolving Credit Commitment Percentage of the aggregate
outstanding amount of L/C Obligations; collectively, as to all the
Lenders, the "Available Revolving Credit Commitments."
"Bankers Trust": Bankers Trust Company, a New York banking
corporation, and its successors.
"Bankruptcy Code": Title I of the Bankruptcy Reform Act of
1978, as amended and codified at Title 11 of the United States Code.
"Base Amount": as defined in Subsection 8.7 hereof.
"Board": the Board of Governors of the Federal Reserve System,
together with any successor.
"Borrower": as defined in the Preamble hereto.
"Borrower Capital Stock": as defined in paragraph (e) of
subsection 8.11.
"Borrowing Date": any Business Day specified in a notice
pursuant to (a) subsection 3.4 or 4.1 as a date on which the Borrower
requests the Swing Line Lender or the Lenders to make Loans hereunder
or (b) subsection 3.5 as a date on which the Borrower requests the
Issuing Lender to issue a Letter of Credit hereunder.
"Bridge Commitment Letter": the Commitment Letter and term
sheet relating thereto dated as of December 24, 1999 by and between
Investcorp Investment Equity Limited, on its behalf and on behalf of
certain of its affiliates and other investors and Bankers Trust, UBS ▇▇
▇▇▇▇▇▇▇▇ Branch, JPMorgan Chase and Goldman.
"Bridge Loan Agreement": the Bridge Loan Agreement that may be
entered into pursuant to the Bridge Commitment Letter, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with its terms and the terms of this Agreement.
"Bridge Subordinated Debt": the subordinated bridge loans or
exchange notes of the Borrower outstanding from time to time pursuant
to the Bridge Loan Agreement or the indenture contemplated thereby.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close.
4
"Capital Expenditures": for any period, all amounts which
would, in accordance with GAAP, be set forth as capital expenditures
(exclusive of any amount attributable to capitalized interest) on the
consolidated statement of cash flows or other similar statement of the
Borrower and its Subsidiaries for such period but shall exclude (a) any
expenditures made with the proceeds of condemnation or eminent domain
proceedings affecting real property or with insurance proceeds and (b)
any expenditures made in connection with subsection 8.5(g) or (h);
provided that any Capital Expenditures financed with the proceeds of
any Indebtedness permitted hereunder (other than Indebtedness incurred
hereunder) shall be deemed to be a Capital Expenditure only in the
period in which, and by the amount which, any principal of such
Indebtedness is repaid.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof having maturities of not more than six months
from the date of acquisition, (b) certificates of deposit and
eurodollar time deposits with maturities of one year or less from the
date of acquisition, bankers' acceptances with maturities not exceeding
one year and overnight bank deposits, in each case with any Lender or
with any domestic (in the case of any investments, acquisitions or
holdings by the Borrower or its Domestic Subsidiaries) commercial bank
or trust company having capital and surplus in excess of $300,000,000,
(c) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b)
entered into with any financial institution meeting the qualifications
specified in clause (b) above, (d) commercial paper having the highest
rating obtainable from S&P or ▇▇▇▇▇'▇ and in each case maturing within
one year after date of acquisition; (e) investment funds investing 95%
of their assets in securities of the type described in clauses (a)
through (d) above, (f) readily marketable direct obligations issued by
any state of the United States or any political subdivision thereof
having one of the two highest rating categories obtainable from either
S&P or ▇▇▇▇▇'▇ and (g) indebtedness with a rating of "A" or higher from
S&P or "A2" or higher from ▇▇▇▇▇'▇.
"CD Assessment Rate": for any day the net annual assessment
rate (rounded upwards, if necessary, to the next 1/100 of 1%)
determined by the Administrative Agent to be payable on such day to the
Federal Deposit Insurance Corporation or any successor ("FDIC") for
FDIC's insuring time deposits made in Dollars at offices of the
Administrative Agent in the United States.
"CD Reserve Percentage": for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed
by the Board for determining maximum reserve requirement for a
Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity
of 30 days or more.
"Certificate of Designation": the Certificate of Designation
of the redeemable, payment-in-kind preferred stock of Jostens, Inc. to
be filed upon consummation of the Merger.
"Change in Law": with respect to any Lender, the adoption of,
or change in, any law, rule, regulation, policy, guideline or directive
(whether or not having the force of law) or any change in the
interpretation or application thereof by any Governmental Authority
having jurisdiction over such Lender, in each case after the Closing
Date.
5
"Change of Control": shall be considered to have occurred if
(i) at any time prior to an IPO by the Borrower: Investcorp or any of
its Affiliates (provided that, for purposes of this definition only,
the reference to 25% in the definition of Affiliate contained in
subsection 1.1 shall be deemed to be 51%) or Subsidiaries, any member
of the Investor Group, any Person that is a member of the senior
management of the Borrower, or any entity the majority of the equity
ownership interests of which is owned by such senior management of the
Borrower, shall cease to own, directly or indirectly, in the aggregate,
at least 51% of the issued and outstanding voting stock of the
Borrower, free and clear of all Liens, (ii) at any time after an IPO by
the Borrower: if any Person (other than Investcorp, any of its
Affiliates or Subsidiaries, any member of the Investor Group, any
Person that is a member of the senior management of the Borrower, any
entity the majority of the equity ownership interests of which is owned
by such senior management of the Borrower or any Person acting in the
capacity of an underwriter), whether singly or in concert with one or
more Persons, shall, directly or indirectly, have acquired, or acquire
the power (x) to vote or direct the voting of 30% or more, on a fully
diluted basis, of the outstanding common stock of the Borrower or (y)
to elect or designate for election a majority of the Board of Directors
of the Borrower by voting power, contract or otherwise, or (iii) a
Specified Change of Control shall have occurred.
"Closing Date": May 10, 2000.
"Co-Bookrunners": as defined in the Preamble hereto.
"Co-Lead Arrangers": as defined in the Preamble hereto.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Credit Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
"Collateral Agreement": the Collateral Agreement,
substantially in the form of Exhibit E, to be made by the Borrower and
its Domestic Subsidiaries from time to time parties thereto in favor of
the Administrative Agent, for the ratable benefit of the Lenders, as
the same may be amended, modified or supplemented from time to time.
"Commercial L/C": a commercial documentary Letter of Credit
under which the Issuing Lender agrees to make payments in Dollars for
the account of the Borrower, on behalf of the Borrower or a Subsidiary
of the Borrower, in respect of obligations of the Borrower or such
Subsidiary in connection with the purchase of goods or services in the
ordinary course of business.
"Commitment": as to any Lender at any time, such Lender's
Swing Line Commitment, Tranche A Term Loan Commitment, Tranche C Term
Loan Commitment and/or Revolving Credit Commitment; collectively, as to
all the Lenders, the "Commitments."
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that
from and after the first anniversary of the Closing Date and so long as
no Event of Default has occurred and is continuing, the Commitment Fee
Rate will be determined pursuant to the pricing grid attached hereto as
Schedule II based upon the Leverage Ratio as determined from the
relevant financial statements delivered pursuant to subsection 7.1.
6
"Commitment Percentage": as to any Lender at any time, its
Term Loan Commitment Percentage or its Revolving Credit Commitment
Percentage, as the context may require.
"Commodity Hedging Agreements": any futures contract or other
similar agreement or arrangement designed to protect the Borrower
against fluctuations in commodities prices and not for purposes of
speculation.
"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 or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414(b) or (c) of the Code.
"Consolidated Current Assets": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
assets on a consolidated balance sheet of the Borrower and its
Subsidiaries as at such date.
"Consolidated Current Liabilities": at a particular date, all
amounts which would, in conformity with GAAP, be included under current
liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries as at such date, excluding the current portion of
long-term debt and the entire outstanding principal amount of the
Revolving Credit Loans.
"Consolidated EBITDA": for any period, the Consolidated Net
Income of the Borrower and its Subsidiaries for such period, plus,
without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of
(a) total income tax expense, (b) interest expense, amortization or
write-off of debt discount, debt issuance, warrant and other equity
issuance costs and commissions, discounts, redemption premium and other
fees and charges associated with the Loans, letters of credit permitted
hereunder, Financing Leases (excluding any precious metals leases) or
the acquisition or repayment of any debt securities of the Borrower or
its Subsidiaries permitted hereunder, and net costs associated with
Interest Rate Agreements to which the Borrower is a party in respect of
the Loans (including commitment fees and other periodic bank charges),
(c) costs of surety bonds, (d) depreciation and amortization expense,
(e) amortization of inventory write-up under APB 16, amortization of
intangibles (including, but not limited to, goodwill and costs of
interest-rate caps and the cost of non-competition agreements) and
organization costs, (f) non-cash amortization of Financing Leases, (g)
franchise taxes, (h) management fees paid as contemplated by subsection
11.14 and charges related to management fees prepaid in connection with
the Transactions, (i) all cash dividend payments (and non-cash dividend
expenses) on any series of preferred stock, (j) any expenses incurred
in connection with any merger, any acquisition or joint venture
permitted herein, including, without limitation, the Transactions
(including any payments of success/transition bonuses to management of
the Borrower in connection therewith), (k) any other write-downs,
write-offs, minority interests and other non-cash charges or expenses,
(l) any non-cash restructuring or other type of non-cash special charge
or reserve, (m) expenses and charges related to any equity offering,
(n) expenses consisting of internal software development costs that are
expensed during the period but could have been capitalized in
accordance with GAAP, (o) securitization expense and (p) nonrecurring
litigation or claim settlement charges or expenses; provided that (i)
the cumulative effect of a change in accounting principles (effected
either through cumulative effect adjustment or a retroactive
application) shall be excluded, (ii) the net income of any Person
acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded, (iii) the impact of
foreign currency and hedging translations and transactions shall be
excluded, (iv) all other extraordinary or non-recurring gains, losses
and
7
charges shall be excluded and (v) up to $5,000,000 of the amount of
expenditures made in any fiscal year of the Borrower in respect of
subsection 8.6(h) shall be excluded.
"Consolidated Indebtedness": at a particular date, all
Indebtedness other than Indebtedness described in clauses (b) or (c) of
the definition of "Indebtedness" included in this subsection 1.1 of the
Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP at such date.
"Consolidated Net Income": for any period, net income of the
Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP; provided that: (i) the net income (but not loss)
of any Person that is not a Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to the Borrower or a
wholly owned Subsidiary and (ii) the net income of any Subsidiary shall
be excluded to the extent that the declaration or payment of dividends
or similar distributions by that Subsidiary of that net income is
prohibited or not permitted at the date of determination.
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness
("primary obligations") of any other Person (the "primary obligor") in
any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent
(a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of
the primary obligor, (c) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the
owner of any such primary obligation against loss in respect thereof;
provided, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount
(based on the maximum reasonably anticipated net liability in respect
thereof as determined by the Borrower in good faith) of the primary
obligation or portion thereof in respect of which such Contingent
Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated net liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by the Borrower
in good faith.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of
the property owned by it is bound.
"Credit Documents": the collective reference to this
Agreement, the Notes, the Security Agreements, the Mortgages and the
Guarantees.
"Credit Parties": the collective reference to the Borrower and
each of its direct and indirect Subsidiaries other than any Foreign
Subsidiaries of the Borrower (or any other United States Person).
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
8
"Dollars" and "$": refers to lawful money of the United States.
"Domestic Subsidiary": as to any Person, any Subsidiary of such Person
other than a Foreign Subsidiary of such Person.
"Environmental Laws": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees or requirements of any Governmental Authority or requirements of
law (including, without limitation, common law) regulating or imposing
liability or standards of conduct concerning environmental or public health
protection matters, including, without limitation, Hazardous Materials, as
now or may at any time hereafter be in effect.
"Environmental Permits": any and all permits, licenses, registrations,
notifications, exemptions and any other authorizations required under any
Environmental Law.
"Equity Contribution": as defined in subsection 6.1(c).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board or other Governmental
Authority having jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on
the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period
appearing on Page 3750 of the Dow ▇▇▇▇▇ Markets screen as of 11:00 A.M.,
London time, two Business Days prior to the beginning of such Interest
Period. In the event that such rate does not appear on Page 3750 of the Dow
▇▇▇▇▇ Markets screen (or otherwise on such screen), the "Eurodollar Base
Rate" for purposes of this definition shall be determined by reference to
such other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the rate at which the Administrative
Agent is offered Dollar deposits at or about 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.
"Eurodollar Lending Office": as to any Lender the office of such
Lender which shall be making or maintaining Eurodollar Loans.
"Eurodollar Loans": Loans at such time as they are made and/or being
maintained at a rate of interest based upon a Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
9
Eurodollar Base Rate
--------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 9; provided
that any requirement for the giving of notice, the lapse of time, or both,
has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, commencing
with the fiscal year ending on December 29, 2001, the excess of (a)
Consolidated EBITDA for such fiscal year over (b) the sum, without
duplication, of (i) the aggregate amount actually paid by the Borrower and
its Subsidiaries in cash during such fiscal year on account of capital
expenditures or acquisitions (other than capital expenditures made with the
proceeds of eminent domain or condemnation proceedings to the extent such
proceeds are not included in the determination of Consolidated EBITDA for
such fiscal year), (ii) the aggregate amount of payments of principal in
respect of any Indebtedness during such fiscal year (other than any such
payments of principal pursuant to subsections 4.4(b)(i), (ii), (iii), (iv)
and (v) to the extent such amounts are not included in Consolidated EBITDA,
the repayment of Tranche B Term Loans in connection with the Restatement
Transactions or any such payments of principal in respect of any revolving
credit facility to the extent that there is not an equivalent reduction in
such facility), (iii) increases in working capital (excluding any customer
deposits) (calculated as Consolidated Current Assets at the end of such
fiscal year minus Consolidated Current Liabilities as at the end of such
fiscal year) of the Borrower and its Subsidiaries for such fiscal year
(excluding any increase in cash or Cash Equivalents above an increase
deemed in good faith by the Borrower to be necessary or desirable for the
operation of the business of the Borrower and its Subsidiaries), (iv) cash
interest expense (including fees paid in connection with letters of credit
and surety bonds and commitment fees and other periodic bank charges) of
the Borrower and its Subsidiaries, (v) the amount of taxes actually paid in
cash by the Borrower and its Subsidiaries for such fiscal year either
during such fiscal year or within a normal payment period thereof, (vi) to
the extent added to Consolidated Net Income of the Borrower and its
Subsidiaries in calculating Consolidated EBITDA for such fiscal year, the
net cash cost of Interest Rate Agreements, franchise taxes and management
fees, (vii) the net income of any Subsidiary shall be excluded to the
extent that such amount is accounted for under the equity method to the
extent cash dividends are not paid or the declaration or payment of
dividends is not permitted without prior governmental approval (which has
not been obtained), (viii) the dividend actually paid in cash by the
Borrower on March 1, 2000, (ix) the amount of cash actually paid by the
Borrower and its Subsidiaries in connection with clauses (b) (without
duplication), (g), (h), (i), (j), (m), (n), (o), (p) and clauses (iii) and
(iv) of the proviso in the definition of Consolidated EBITDA and (x) the
amount of any cash actually paid in connection with reserves established in
accordance with GAAP; provided that to the extent any amount of cash is
actually paid by the Borrower and its Subsidiaries in connection with
clause (p) in the definition of Consolidated EBITDA in any fiscal year in
which the Borrower does not have Excess Cash Flow, such amount, to the
extent it was not applied to reduce Consolidated EBITDA in determining the
existence of Excess Cash Flow in the year such amount was paid, may be
carried forward to subsequent fiscal years of the Borrower and applied once
to reduce the amount or any Excess Cash Flow for any such fiscal years.
"Existing Credit Agreement": as defined in the recitals hereto.
"Fee Property": as defined in subsection 5.13.
"Financing Lease": (a) any lease of property, real or personal, the
obligations under which are capitalized on a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries and (b) any other such lease
to the extent that the then present value of any rental
10
commitment thereunder should, in accordance with GAAP, be capitalized on a
balance sheet of the lessee.
"Foreign Subsidiary": as to any Person, any Subsidiary of such Person
which is not organized under the laws of the United States or any state
thereof or the District of Columbia.
"GAAP": generally accepted accounting principles in the United States
in effect from time to time.
"Goldman": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners, L.P., and its successors.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government. "Guarantees": the collective reference to the
Subsidiary Guarantee and any guarantee which may from time to time be
executed and delivered by a Subsidiary pursuant to subsection 7.9.
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous pesticides or hazardous or toxic substances, and any other
material that may give rise to liability under any Environmental Law,
including, without limitation, asbestos, petroleum, any other petroleum
products (including gasoline, crude oil or any fraction thereof),
polychlorinated biphenyls and urea-formaldehyde insulation.
"Indebtedness": of a Person, at a particular date, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) the undrawn face amount of all letters
of credit issued for the account of such Person and, without duplication,
all drafts drawn thereunder and unpaid reimbursement obligations with
respect thereto, (c) all liabilities (other than Lease Obligations and
liabilities in connection with reserves established in accordance with
GAAP) secured by any Lien on any property owned by such Person, even though
such Person has not assumed or become liable for the payment thereof, (d)
Financing Leases, (e) all indebtedness of such Person arising under
acceptance facilities, but excluding (i) trade and other accounts payable
and accrued expenses payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than
90 days, as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of such Person, (ii) letters
of credit supporting the purchase of goods in the ordinary course of
business and expiring no more than six months from the date of issuance and
(iii) precious metal leases, whether capital or operating; provided that
obligations in respect of Interest Rate Agreements and Commodity Hedging
Agreements shall not be included in this definition.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": on the last day of any fiscal quarter of
the Borrower, the ratio of (a) Consolidated EBITDA for the period of twelve
months ending on such day to (b) cash interest expense (excluding (i) fees
payable on account of letters of credit, (ii) to the extent included in
interest expense in accordance with GAAP, net costs associated with
Interest Rate Agreements to which the Borrower is a party in respect of the
Loans and other periodic bank
11
charges and amortization of debt discount (including discount of
liabilities and reserves established under APB 16), (iii) interest expense
in respect of costs of debt issuance and interest expense on customer
deposits for such period net of interest income and (iv) interest in
respect of seasonal borrowings occurring in the third fiscal quarter of the
Borrower which seasonal borrowings shall be calculated as the lesser of (i)
$85,000,000 and (ii) the amount of Revolving Credit Loans outstanding on
the date of such calculation, at the applicable interest rate for the
relevant period), in each case, for or during such period on a consolidated
basis for the Borrower and its Subsidiaries in accordance with GAAP; and
provided, further, that for the periods ending on December 30, 2000 and
March 31, 2001 cash interest expense for the relevant period shall be
deemed to equal actual cash interest expense for such period (excluding
interest in respect of seasonal borrowings occurring in the fiscal quarter
ending on September 30, 2000 which seasonal borrowings shall be calculated
as the lesser of (i) $85,000,000 and (ii) the amount of Revolving Credit
Loans outstanding on the date of such calculation, at the applicable
interest rate for such quarter) multiplied by 2 and 4/3, respectively. For
clarification, cash interest expense does not include the accretion of
interest expense.
"Interest Payment Date": (a) as to Alternate Base Rate Loans, the last
day of each March, June, September and December, commencing on the first
such day to occur after any Alternate Base Rate Loans are made or any
Eurodollar Loans are converted to Alternate Base Rate Loans, (b) as to any
Eurodollar Loan in respect of which the Borrower has selected an Interest
Period of one, two or three months, the last day of such Interest Period
and (c) as to any Eurodollar Loan in respect of which the Borrower has
selected a longer Interest Period than the periods described in clause (b),
the last day of each three calendar month interval during such Interest
Period and, in addition, the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on, as the case may be,
the Borrowing Date or conversion date with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter (or, if and
when available to all the relevant Lenders, nine or twelve months
thereafter) as selected by the Borrower in its notice of borrowing as
provided in subsection 4.1 or its notice of conversion as provided in
subsection 4.2; and
(b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter (or, if and when
available to all the relevant Lenders, nine or twelve months
thereafter) as selected by the 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 to such
Eurodollar Loan;
provided that the foregoing provisions relating to Interest Periods are
subject to the following:
(A) if any Interest Period would otherwise end on a day
which is not a Business Day, that Interest Period shall be extended to
the next succeeding Business Day, unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period that would otherwise extend beyond
(i) in the case of an Interest Period for a Term Loan, the final
Tranche A or Tranche C Installment Payment Date shall end on such
Tranche A or Tranche C Installment Payment Date or, if such
12
Tranche A or Tranche C Installment Payment Date shall not be a
Business Day, on the next preceding Business Day; and (ii) in the case
of any Interest Period for a Revolving Credit Loan, the Revolving
Credit Termination Date shall end on the Revolving Credit Termination
Date, or if the Revolving Credit Termination Date shall not be a
Business Day, on the next preceding Business Day;
(C) if the Borrower shall fail to give notice as provided above
in clause (b), it shall be deemed to have selected a conversion of a
Eurodollar Loan into an Alternate Base Rate Loan (which conversion
shall occur automatically and without need for compliance with the
conditions for conversion set forth in subsection 4.2);
(D) any Interest Period that begins on the last day of a calendar
month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month; and
(E) the Borrower shall select Interest Periods so as not to
require a prepayment (to the extent practicable) or a scheduled
payment of a Eurodollar Loan during an Interest Period for such
Eurodollar Loan.
"Interest Rate Agreement": any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement.
"Investcorp": Investcorp S.A., a Luxembourg corporation.
"Investment Grade Securities": (i) securities issued or directly and
fully guaranteed or insured by the Unites States government or any agency
or instrumentality thereof (other than Cash Equivalents), (ii) debt
securities or debt instruments with a rating of BBB- or higher by S&P or
Baa3 by Moody's or the equivalent of such rating by such rating
organization, or if no rating of S&P's or Moody's then exists, the
equivalent of such rating by any other nationally recognized securities
rating agency, but excluding any debt securities or instruments
constituting loans or advances among the Borrower and its Subsidiaries and
(iii) investments in any fund that invests exclusively in investments of
the type described in clauses (i) and (ii) which fund may also hold
immaterial amounts of cash pending investment and/or distribution.
"Investor Group": the collective reference to Investcorp, certain
affiliated entities and other international investors arranged by
Investcorp, certain members of senior management of the Borrower, DB
Capital Investors and First Union Leveraged Capital.
"IPO": as to any Person, any sale by such Person through a public
offering of its common (or other voting) stock pursuant to an effective
registration statement (other than a registration statement on Form ▇-▇,
▇-▇ or any successor or similar form) filed under the Securities Act of
1933, as amended.
"Issuing Lender": collectively, JPMorgan Chase and any of its
Affiliates, including JPMorgan Chase Bank Delaware, as issuer of the
Letters of Credit; with respect to any Letter of Credit, the term "Issuing
Lender" shall mean the Issuing Lender with respect to such Letter of
Credit.
"JPMorgan Chase": JPMorgan Chase Bank
"L/C Application": as defined in subsection 3.5(a).
13
"L/C Obligations": the obligations of the Borrower to reimburse the
Issuing Lender for any payments made by the Issuing Lender under any Letter
of Credit that have not been reimbursed by the Borrower pursuant to
subsection 3.8(a).
"L/C Participating Interest": an undivided participating interest in
the face amount of each issued and outstanding Letter of Credit and the L/C
Application relating thereto.
"L/C Participation Certificate": a certificate in substantially the
form of Exhibit G.
"Lease Obligations": of the Borrower and its Subsidiaries, as of the
date of any determination thereof, the rental commitments of the Borrower
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP, if any, under leases for real and/or personal property (net of rental
commitments from sub-leases thereof), excluding however, obligations under
Financing Leases.
"Leased Properties": as defined in subsection 5.13.
"Lenders": as defined in the Preamble hereto.
"Letters of Credit": the collective reference to the Commercial L/Cs,
the Standby L/Cs, individually, a "Letter of Credit."
"Leverage Ratio": as defined in subsection 8.9; provided that for
purposes of calculating the Leverage Ratio, the unencumbered (other than
Liens permitted pursuant to subsection 8.2 (other than subsections 8.2(i)
(only to the extent such Lien is in respect of cash and Cash Equivalents
specifically securing Indebtedness in respect of one or more Commercial
L/Cs and not all Indebtedness under this Agreement generally) and 8.2(l))
cash and Cash Equivalents balances of the Borrower and its Subsidiaries on
such date shall be deducted from the amount of Consolidated Indebtedness on
such date; provided, further, the amount of cash and Cash Equivalent
balances of Foreign Subsidiaries of the Borrower which are not Credit
Parties deducted pursuant to the immediately preceding proviso shall not
exceed $7,500,000.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing,
except for the filing of financing statements in connection with Lease
Obligations incurred by the Borrower or its Subsidiaries to the extent that
such financing statements relate to the property subject to such Lease
Obligations).
"Loans": the collective reference to the Swing Line Loans, the Term
Loans, and the Revolving Credit Loans; individually, a "Loan."
"Merger": the collective reference to the merger and recapitalization
transactions pursuant to which the Investor Group acquired its interest in
the Borrower.
"Merger Agreement": the Agreement and Plan of Merger, as amended,
between the Borrower and MergerCo, dated as of December 27, 1999.
14
"MergerCo": Saturn Acquisition Corporation.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgaged Properties": (a) the Real Property designated as "Mortgaged
Property" on Schedule 5.13 and (b) any fee Real Property covered by a
Mortgage delivered pursuant to subsection 7.9(d).
"Mortgages": each of the mortgages and deeds of trust made by any
Credit Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, in a form reasonably acceptable to the
Administrative Agent and the Borrower, as the same may be amended,
supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds": the aggregate cash proceeds received by the Borrower
or any Subsidiary in respect of:
(a) (i) any issuance or borrowing of any debt securities or loans
by the Borrower or any of its Subsidiaries other than debt or loans
permitted to be incurred or borrowed pursuant to subsection 8.1 or
(ii) any issuance by the Borrower or any of its Subsidiaries of
Capital Stock (excluding any such issuance to any member of the
Investor Group or any Affiliate thereof or any such issuance to
employees of the Borrower or any of its Subsidiaries);
(b) any Asset Sale, excluding (i) any net proceeds received upon
any condemnation or exercise of rights of eminent domain to the extent
the same shall be deemed not to constitute Net Proceeds pursuant to
the proviso to subsection 8.5(d) and (ii) any proceeds of insurance
received upon any casualty or loss;
(c) any cash received in respect of substantially like-kind
exchanges of property to the extent provided in the proviso to
subsection 8.5(e); and
(d) any cash payments received in respect of promissory notes
delivered to the Borrower or any of its Subsidiaries in respect of an
Asset Sale delivered to the Borrower or such Subsidiary in respect of
an Asset Sale;
in each case net of (without duplication) (A) the amount required to repay
any Indebtedness (other than the Loans) secured by a Lien on any assets of
the Borrower or any of its Subsidiaries that are collateral for any such
debt securities or loans that are sold or otherwise disposed of in
connection with such Asset Sale, (B) the reasonable expenses (including
legal fees and brokers' and underwriters' commissions, lenders fees or
credit enhancement fees, in any case, paid to third parties or, to the
extent permitted hereby, Affiliates) incurred in effecting such issuance or
sale and (C) any taxes reasonably attributable to such sale and reasonably
estimated by the Borrower or its Subsidiaries to be actually payable.
"Non-Funding Lender": as defined in subsection 4.9(c).
"Notes": the collective reference to the Swing Line Note, the
Revolving Credit Notes and the Term Loan Notes; each of the Notes, a
"Note."
15
"Offering Memorandum": the offering memorandum dated May 5, 2000 with
respect to the Senior Subordinated Notes.
"Participants": as defined in subsection 11.6(b).
"Participating Lender": any Revolving Credit Lender (other than the
Issuing Lender) with respect to its L/C Participating Interest in each
Letter of Credit.
"Payment Sharing Notice": a written notice from the Borrower or any
Lender informing the Administrative Agent that an Event of Default has
occurred and is continuing and directing the Administrative Agent to
allocate payments thereafter received from or on behalf of any Borrower in
accordance with the provisions of subsection 4.9.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
"Permanent Subordinated Debt": (i) unsecured notes or debentures of
the Borrower, subordinated to the prior payment of the Loans and the other
obligations under the Credit Documents, that were issued by the Borrower on
the Closing Date or that may be issued by the Borrower after the Closing
Date (including the Senior Subordinated Notes); provided that either (x)
such notes or debentures have terms which are as favorable to the Lenders
as the terms set forth in the Bridge Commitment Letter or the Offering
Memorandum and the conditions contained in clauses (i)(y)(b) and (c) of
this definition are met or (y) (a) unless otherwise agreed to by the
Required Lenders, (I) the subordination provisions of which are as
favorable to the Lenders as such provisions set forth in the Bridge
Commitment Letter or the Offering Memorandum and (II) the terms and
conditions thereof (including, without limitation, subordination, covenant
and events of default provisions thereof but excluding any call protection
provisions) taken as a whole shall be at least as favorable to the Borrower
and the Lenders as such terms and conditions set forth in the Bridge
Commitment Letter or the Offering Memorandum, (b) no covenant contained in
this Agreement or any of the other Credit Documents would be violated on
the proposed issuance date after giving effect to (I) the issuance of such
notes or debentures, (II) the payment of all issuance costs, commissions,
discounts, redemption premiums and other fees and charges associated
therewith, (III) the use of proceeds thereof and (IV) the redemption,
repayment, retirement and repurchase of all Indebtedness of the Borrower
and its Subsidiaries to be redeemed, repaid or repurchased in connection
therewith and (c) substantially final drafts of the documentation governing
any such notes or debentures, showing the terms thereof, shall have been
furnished to the Administrative Agent at least 5 days prior to the date of
issuance of such notes or debentures and (ii) unsecured notes or debentures
of the Borrower, subordinated to the prior payment of the Loans and the
other obligations under the Credit Documents, that may be issued by the
Borrower to refinance previously issued Permanent Subordinated Debt;
provided that (a) unless otherwise agreed to by the Required Lenders, the
interest rate and subordination provisions shall be at least as favorable
to the Borrower and the Lenders as such provisions of refinanced Permanent
Subordinated Debt and the other terms and conditions thereof (including,
without limitation, the covenant and event of default provisions thereof)
taken as a whole shall be at least as favorable to the Borrower and the
Lenders as such refinanced Permanent Subordinated Debt and (b) the
conditions contained in clauses (i)(y)(b) and (c) of this definition shall
be met.
"Permitted Liens": Liens permitted to exist under subsection 8.2.
16
"Person": an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Photography Division": businesses relating to selling
portraits and activity photos.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the 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.
"Preferred Stock": the preferred stock of the Borrower
described in the Certificate of Designation.
"Real Property": each Fee Property and Leased Property listed
on Schedule 5.13.
"Recognition Division": businesses relating to selling service
and related recognition affinity awards to companies or other Persons.
"Refunded Swing Line Loans": as defined in subsection 3.4(b).
"Register": as defined in subsection 11.6(d).
"Related Document": any agreement, certificate, document or
instrument relating to a Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization as such term is used in
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day
notice is waived under subpart B of PBGC Reg. (S) 4042.
"Required Lenders": at a particular time, the holders of at
least 51% of the sum of (i) the aggregate unpaid principal amount of
the Term Loans, if any, and (ii) the Revolving Credit Commitments or,
if the Revolving Credit Commitments are terminated, the aggregate
unpaid principal amount of the Revolving Credit Loans, and
participations in Swing Line Loans and the aggregate amount available
to be drawn at such time under all outstanding Letters of Credit and
L/C Obligations. The Term Loans and the Revolving Credit Commitments of
any Non-Funding Lender shall be disregarded in determining Required
Lenders at any time.
"Requirement of Law": as to any Person, the Articles or
Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, order, or determination of an arbitrator or a court or
other Governmental Authority, in each case, applicable to or binding
upon such Person or any of its property or to which such Person or any
of its property is subject.
"Responsible Officer": with respect to any Person, the
president, treasurer, chief executive officer, the chief operating
officer, the chief financial officer, assistant treasurer, corporate
controller or any vice president of such Person.
"Restatement Effective Date": July 31, 2002.
17
"Restatement Transactions": means the execution and delivery
of the Amendment and Restatement Agreement by each Person party
thereto, the satisfaction of the conditions to the effectiveness
thereof, and the consummation of the transactions contemplated thereby,
including the borrowing of Tranche C Loans on the Restatement Effective
Date and the use of the proceeds thereof to prepay all Tranche B Term
Loans outstanding on the Restatement Effective Date.
"Revolving Credit Commitment": as to any Lender, its
obligations to (i) make Revolving Credit Loans to the Borrower pursuant
to subsection 3.1, (ii) to participate in Swingline Loans and (iii) to
purchase its L/C Participating Interest in any Letter of Credit, in an
aggregate amount not to exceed the amount set forth under such Lender's
name in Schedule I opposite the caption "Revolving Credit Commitment"
or in Schedule 1 to the Assignment and Acceptance by which such Lender
acquired its Revolving Credit Commitment, as the same may be reduced
from time to time pursuant to subsection 4.3 or adjusted pursuant to
subsection 11.6(c); collectively, as to all the Lenders, the "Revolving
Credit Commitments". The original aggregate principal amount of the
Revolving Credit Commitments is $150,000,000.
"Revolving Credit Commitment Percentage": as to any Lender at
any time, the percentage of the aggregate Revolving Credit Commitments
then constituted by such Lender's Revolving Credit Commitment.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to but not including the Revolving Credit
Termination Date.
"Revolving Credit Lender": any Lender with a Revolving Credit
Commitment.
"Revolving Credit Loans" as defined in subsection 3.1(a).
"Revolving Credit Note": as defined in subsection 4.13(e).
"Revolving Credit Termination Date": the earlier of (a) May
31, 2006 and (b) such other earlier date as the Revolving Credit
Commitments shall terminate hereunder.
"Security Agreements": the collective reference to the
Collateral Agreement and any security agreement which may from time to
time be executed and delivered by a Subsidiary of the Borrower pursuant
to subsection 7.9.
"Security Documents": the collective reference to the Security
Agreements and the Mortgages.
"Senior Leverage Ratio": as of any date, the Leverage Ratio,
excluding, for purposes of determining the Senior Leverage Ratio only,
the Permanent Subordinated Debt and other subordinated Indebtedness
permitted pursuant to subsection 8.1(i) from Consolidated Indebtedness
to the extent otherwise included at such date.
"Senior Subordinated Note Indenture": the indenture to be
entered into by the Borrower in connection with the issuance of the
Senior Subordinated Notes, with such material terms and conditions as
are not materially less favorable to the Lenders than those of the
subordinated bridge loans under the Bridge Commitment Letter or the
Offering Memorandum, together with all instruments and other agreements
entered into by the Borrower in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in
accordance with subsection 8.16.
18
"Senior Subordinated Notes": the senior subordinated notes of
the Borrower (or any refinancing thereof permitted hereunder) which
shall be issued under the Senior Subordinated Note Indenture and shall
have material terms and conditions not materially less favorable to the
Lenders than those of the subordinated bridge loans under the Bridge
Commitment Letter or the Offering Memorandum.
"Shares": as defined in the Recitals hereto.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"S&P": Standard and Poor's Ratings Services, a division of
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Specified Change of Control": a "Change of Control" as
defined from time to time in the Senior Subordinated Note Indenture, so
long as the Senior Subordinated Note Indenture exists.
"Specified Debt": the (a) Bridge Subordinated Debt and (b)
Permanent Subordinated Debt.
"Standby L/C": an irrevocable letter of credit under which the
Issuing Lender agrees to make payments in Dollars for the account of
the Borrower, on behalf of the Borrower or any Subsidiary of the
Borrower in respect of obligations of the Borrower or such Subsidiary
incurred pursuant to contracts made or performances undertaken or to be
undertaken or like matters relating to contracts to which the Borrower
or such Subsidiary is or proposes to become a party in the ordinary
course of the Borrower's or such Subsidiary's business, including,
without limiting the foregoing, for insurance purposes or in respect of
advance payments or as bid or performance bonds or for any other
purpose for which a standby letter of credit might customarily be
issued.
"Subsection 4.11(d)(2) Certificate": as defined in subsection
4.11(d).
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock of
each class or other interests having ordinary voting power (other than
stock or other interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other
entity are at the time owned, or the management of which is otherwise
controlled, by such Person or by one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such Person. A
Subsidiary shall be deemed wholly-owned by a Person who owns directly
or indirectly all of the voting shares of stock or other interests of
such Subsidiary having voting power under ordinary circumstances to
vote for directors or other managers of such corporation, partnership
or other entity, except for (i) directors' qualifying shares, (ii)
shares owned by multiple shareholders to comply with local laws and
(iii) shares owned by employees. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement
shall refer to a Subsidiary or Subsidiaries of the Borrower; provided
that any joint venture or Person in which an investment is existing on
the Closing Date or is made pursuant to subsection 8.6(h) shall, so
long as such investment is maintained in reliance on such subsection,
not be a "Subsidiary" of the Borrower for any purpose of this
Agreement.
19
"Subsidiary Guarantee": the Subsidiary Guarantee,
substantially in the form of Exhibit F, to be made by certain Domestic
Subsidiaries of the Borrower in favor of the Administrative Agent for
the ratable benefit of the Lenders, as the same may be amended,
modified or supplemented from time to time.
"Supermajority Lenders": at a particular time, the holders of
at least 66-2/3% of the sum of (i) the aggregate unpaid principal
amount of the Term Loans, if any, and (ii) the Revolving Credit
Commitments or, if the Revolving Credit Commitments are terminated, the
aggregate unpaid principal amount of the Revolving Credit Loans, and
participations in Swing Line Loans and the aggregate amount available
to be drawn at such time under all outstanding Letters of Credit and
L/C Obligations. The Term Loans and the Revolving Credit Commitments of
any Non-Funding Lender shall be disregarded in determining
Supermajority Lenders at any time.
"Swing Line Commitment": the Swing Line Lender's obligation to
make Swing Line Loans pursuant to subsection 3.4.
"Swing Line Lender": JPMorgan Chase, in its capacity as lender
of the Swing Line Loans.
"Swing Line Loan Participation Certificate": a certificate in
substantially the form of Exhibit H.
"Swing Line Loans": as defined in subsection 3.4(a).
"Swing Line Note": as defined in subsection 4.13(e).
"Term Loan" and "Term Loans": as defined in subsection 2.1.
"Term Loan Commitment Percentage": as to any Lender at any
time, the percentage of the aggregate Term Loan Commitments then
constituted by such Lender's Term Loan Commitment (or, after the Term
Loans are made, the percentage of the aggregate outstanding principal
amount of all Term Loans then constituted by the aggregate outstanding
principal amount of such Lender's Term Loans).
"Term Loan Commitments": collectively, the Tranche A Term Loan
Commitments and the Tranche C Term Loan Commitments; individually, a
"Term Loan Commitment."
"Term Loan Lender": collectively, the Tranche A Lenders and
the Tranche C Lenders.
"Term Loan Note": a Tranche A Term Note or a Tranche C Term
Note, as the context shall require, collectively, the "Term Notes."
"Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day); Tranches may be
identified as "Eurodollar Tranches."
"Tranche A Installment Payment Date": as defined in subsection
4.4(c).
"Tranche A Lender": each Lender that has a Tranche A Term Loan
Commitment or is the holder of a Tranche A Term Loan.
20
"Tranche A Maturity Date": May 31, 2006.
"Tranche A Term Loan": as defined in subsection 2.1.
"Tranche A Term Loan Commitment": as to any Tranche A Lender, its
obligation to make a Tranche A Term Loan to the Borrower pursuant to
subsection 2.1 in an aggregate amount not to exceed the amount set forth
under such Lender's name in Schedule I opposite the caption "Tranche A Term
Loan Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant
to which a Lender acquires its Tranche A Term Loan Commitment, as the same
may be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche A Lenders, the "Tranche A Term Loan Commitments". The original
aggregate principal amount of the Tranche A Term Loan Commitments was
$150,000,000.
"Tranche A Term Loan Commitment Percentage": as to any Tranche A
Lender at any time, the percentage of the aggregate Tranche A Term Loan
Commitments then constituted by such Lender's Tranche A Term Loan
Commitment (or, after the Tranche A Term Loans are made, the percentage of
the aggregate outstanding principal amount of the Tranche A Term Loans then
constituted by the principal amount of such Tranche A Lender's Tranche A
Term Loan).
"Tranche A Term Note": as defined in subsection 4.13(e).
"Tranche B Term Loan": a Loan made on the Closing Date pursuant to
Section 2.1 of the Existing Credit Agreement.
"Tranche C Installment Payment Date": as defined in Section 4.4(d).
"Tranche C Lender": each Lender that has a Tranche C Term Loan
Commitment or is the holder of a Tranche C Term Loan.
"Tranche C Mandatory Prepayment Date": as defined in subsection
4.4(e).
"Tranche C Maturity Date": December 31, 2009.
"Tranche C Prepayment Amount": as defined in subsection 4.4(e).
"Tranche C Prepayment Option Notice": as defined in subsection 4.4(e).
"Tranche C Term Loan": as defined in subsection 2.1.
"Tranche C Term Loan Commitment": as to any Tranche C Lender, its
obligation to make a Tranche C Term Loan to the Borrower pursuant to
subsection 2.1 in an aggregate amount not to exceed the amount set forth
under such Lender's name in Schedule I opposite the caption "Tranche C Term
Loan Commitment" or in Schedule 1 to the Assignment and Acceptance pursuant
to which a Lender acquires its Tranche C Term Loan Commitment, as the same
may be adjusted pursuant to subsection 11.6(c); collectively, as to all the
Tranche C Lenders, the "Tranche C Term Loan Commitments." The original
aggregate principal amount of the Tranche C Term Loan Commitments is
$330,000,000.
"Tranche C Term Loan Commitment Percentage": as to any Tranche C
Lender at any time, the percentage of the aggregate Tranche C Term Loan
Commitments then constituted by
21
such Lender's Tranche C Term Loan Commitment (or, after the Tranche C Term
Loans are made, the percentage of the aggregate outstanding principal
amount of the Tranche C Term Loans then constituted by the principal amount
of such Tranche C Lender's Tranche C Term Loan).
"Tranche C Term Note": as defined in subsection 4.13(e).
"Transactions": the collective reference to the Merger, the issuance
of the Senior Subordinated Notes, the Equity Contribution, the repayment of
certain of the Borrower's existing indebtedness, including, without
limitation, amounts outstanding under the 1995 Credit Agreement, and the
making of the Loans on the Closing Date under the Existing Credit
Agreement.
"Transferee": as defined in subsection 11.6(f).
"Type": as to any Loan, its nature as an Alternate Base Rate Loan or
Eurodollar Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500, and any subsequent revisions thereof.
"United States": the United States of America.
"United States Person": any Person organized under the laws of the
United States or any state thereof or the District of Columbia.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes, any other Credit Document or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes, any other Credit Document and any
certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Borrower and its Subsidiaries not defined in subsection
1.1 and accounting terms partly defined in subsection 1.1 to the extent not
defined, shall have the respective meanings given to them under GAAP. To the
extent there are any changes in GAAP from the date of this Agreement, the
financial covenants set forth herein at the option of the Borrower will either
(i) continue to be determined in accordance with GAAP in effect on the Closing
Date, as applicable, or (ii) be adjusted or reset to reflect such changes in
GAAP, such adjustments or resets to be mutually agreed to by the Borrower and
the Administrative Agent. All references in this Agreement to the 2000 fiscal
year of the Borrower shall mean the fiscal year commencing on January 2, 2000
and ending on December 30, 2000, and each reference to each subsequent fiscal
year of the Borrower shall refer to the corresponding periods of subsequent
calendar years.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to the singular and plural forms of such terms.
22
SECTION 2. TERM LOANS
2.1 Term Loans. Subject to the terms and conditions hereof, (i) each
Tranche A Lender severally agrees to make a loan in Dollars (individually, a
"Tranche A Term Loan"; and collectively, the "Tranche A Term Loans") to the
Borrower on the Closing Date, in an aggregate principal amount equal to such
Lender's Tranche A Term Loan Commitment and (ii) each Tranche C Lender severally
agrees to make a loan in Dollars (individually, a "Tranche C Term Loan"; and
collectively, the "Tranche C Term Loans"; together with the Tranche A Term
Loans, the "Term Loans") to the Borrower on the Restatement Effective Date, in
an aggregate principal amount equal to such Lender's Tranche C Term Loan
Commitment. All Tranche A Term Loans outstanding under the Existing Credit
Agreement shall remain outstanding hereunder on the Restatement Effective Date
on the terms set forth herein.
2.2 Repayment of Term Loans. The Borrower shall repay the Term Loans
as provided in subsection 4.4.
2.3 Use of Proceeds. The proceeds of the Term Loans, other than
Tranche C Term Loans, shall be used to repay existing indebtedness (including
amounts outstanding under the 1995 Credit Agreement), to finance the
Transactions and to pay fees, expenses and financing costs in connection
therewith. The proceeds of the Tranche C Term Loans shall be used to prepay the
Tranche B Term Loans outstanding on the Restatement Effective Date.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to the extent of its Revolving
Credit Commitment to extend credit to the Borrower from time to time on any
Borrowing Date during the Revolving Credit Commitment Period (i) by purchasing
an L/C Participating Interest in each Letter of Credit issued by the Issuing
Lender and (ii) by making loans in Dollars (individually, a "Revolving Credit
Loan," and collectively, the "Revolving Credit Loans") to the Borrower from time
to time. Notwithstanding the above, in no event shall any Revolving Credit Loans
be made, or Letter of Credit be issued, if the aggregate amount of the Revolving
Credit Loans to be made or Letter of Credit to be issued would, after giving
effect to the use of proceeds, if any, thereof, exceed the aggregate Available
Revolving Credit Commitments nor shall any Letter of Credit be issued if after
giving effect thereto the sum of the undrawn amount of all outstanding Letters
of Credit and the amount of all L/C Obligations would exceed $20,000,000. All
Revolving Commitment Credit Loans outstanding under the Existing Credit
Agreement shall remain outstanding hereunder on the Restatement Effective Date
on the terms set forth herein.
(b) 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, and/or by having the Issuing Lender issue Letters
of Credit, having such Letters of Credit expire undrawn upon or if drawn upon,
reimbursing the Issuing Lender for such drawing, and having the Issuing Lender
issue new Letters of Credit.
(c) Each borrowing of Revolving Credit Loans pursuant to the Revolving
Credit Commitments shall be in an aggregate principal amount of the lesser of
(i) $500,000 or a whole multiple of $100,000 in excess thereof in the case of
Alternate Base Rate Loans, and $1,000,000 or a whole multiple of $500,000 in
excess thereof, in the case of Eurodollar Loans, and (ii) the Available
Revolving Credit Commitments, except that any borrowing of Revolving Credit
Loans to be used solely to pay a like amount of Swing Line Loans may be in the
aggregate principal amount of such Swing Line Loans.
23
3.2 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender (other than any Non-Funding Lender) a
commitment fee from and including the Closing Date to and including the
Revolving Credit Termination Date computed at the Commitment Fee Rate on the
average daily amount of the Available Revolving Credit Commitment of such Lender
during the period for which payment is made (whether or not the Borrower shall
have satisfied the applicable conditions to borrow or for the issuance of a
Letter of Credit set forth in Section 6). Such commitment fee shall be payable
quarterly in arrears on the last day of each March, June, September and December
and on the Revolving Credit Termination Date, commencing on the first such date
to occur following the Closing Date (or, if earlier, the Revolving Credit
Termination Date).
3.3 Proceeds of Revolving Credit Loans. The Borrower shall use the
proceeds of Revolving Credit Loans (a) to finance up to $5,000,000 of the
consideration paid in connection with the Merger (in addition to seasonal
working capital usage of up to $40,000,000), (b) to repay existing indebtedness
and (c) for general corporate purposes.
3.4 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees, so long as the Administrative Agent has
not received notice that an Event of Default has occurred and is continuing, to
make swing line loans (individually, a "Swing Line Loan"; collectively, the
"Swing Line Loans") to the Borrower from time to time during the Revolving
Credit Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed $10,000,000; provided that no Swing Line Loan may be
made if the aggregate principal amount of the Swing Line Loans to be made would
exceed the aggregate Available Revolving Credit Commitments at such time.
Amounts borrowed by the Borrower under this subsection 3.4 may be repaid and,
through but excluding the Revolving Credit Termination Date, reborrowed. All
Swing Line Loans shall be made as Alternate Base Rate Loans and shall not be
entitled to be converted into Eurodollar Loans. The Borrower shall give the
Swing Line Lender irrevocable notice (which notice must be received by the Swing
Line Lender prior to 3:00 P.M., New York City time) on the requested Borrowing
Date specifying the amount of each requested Swing Line Loan, which shall be in
an aggregate minimum amount of $250,000 or a whole multiple of $100,000 in
excess thereof. The proceeds of each Swing Line Loan will be made available by
the Swing Line Lender to the Borrower by crediting the account of the Borrower
at the office of the Swing Line Lender with such proceeds. The proceeds of Swing
Line Loans may be used solely for the purposes referred to in subsection 3.3.
(b) The Swing Line Lender at any time in its sole and absolute
discretion may, and on the fifteenth day (or if such day is not a Business Day,
the next Business Day) and last Business Day of each month shall, on behalf of
the 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 Percentage of the amount of the Swing Line Loans
(the "Refunded Swing Line Loans") outstanding on the date such notice is given.
Unless any of the events described in paragraph (f) of Section 9 shall have
occurred (in which event the procedures of paragraph (c) of this subsection 3.4
shall apply) each such Lender shall make the proceeds of its Revolving Credit
Loan available to the Swing Line Lender for the account of the Swing Line Lender
at the office of the Swing Line Lender specified in subsection 11.2 (or such
other location as the Swing Line Lender may direct) prior to 12:00 noon (New
York City time) in funds immediately available on the Business Day next
succeeding the date such notice is given. The proceeds of such Revolving Credit
Loans shall be immediately applied to repay the Refunded Swing Line Loans.
(c) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of this subsection 3.4 one of the events described in paragraph
(f) of Section 9 shall have occurred, each Revolving Credit Lender will, on the
date such Loan was to have been made, purchase an undivided participating
interest in the Refunded Swing Line Loan in an amount equal to its Revolving
Credit
24
Commitment Percentage of such Refunded Swing Line Loan. Each such Lender will
immediately transfer to the Swing Line Lender in immediately available funds,
the amount of its participation and upon receipt thereof the Swing Line Lender
will deliver to such Lender a Swing Line Loan Participation Certificate dated
the date of receipt of such funds and in such amount.
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's participating interest in a
Refunded Swing Line Loan, the Swing Line Lender receives any payment on account
thereof, the Swing Line Lender will distribute to such Lender its participating
interest in such amount (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's participating
interest was outstanding and funded) in like funds as received; provided that in
the event that such payment received by the Swing Line Lender is required to be
returned, such Lender will return to the Swing Line Lender any portion thereof
previously distributed by the Swing Line Lender to it in like funds as such
payment is required to be returned by the Swing Line Lender.
(e) The obligation of each Revolving Credit Lender to purchase
participating interests pursuant to subsection 3.4(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Borrower; (iv) any breach of this Agreement by the Borrower or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
3.5 Issuance of Letters of Credit. (a) The Borrower may from time to
time request the Issuing Lender to issue a Standby L/C or a Commercial L/C by
delivering to the Administrative Agent at its address specified in subsection
11.2 (or such other location as the Issuing Lender may direct) a letter of
credit application in the Issuing Lender's then customary form (the "L/C
Application") completed to the satisfaction of the Issuing Lender, together with
the proposed form of such Letter of Credit (which shall comply with the
applicable requirements of paragraph (b) below) and such other certificates,
documents and other papers and information as the Issuing Lender may reasonably
request; provided that if the Issuing Lender informs the Borrower that it is for
any reason unable to open such Letter of Credit, the Borrower may request any
Lender to open such Letter of Credit upon the same terms offered to the Issuing
Lender and each reference to the Issuing Lender for purposes of subsections 3.5
through 3.14, 6.1 and 6.2 shall be deemed to be a reference to such Issuing
Lender. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any L/C Application or other
document submitted by the Borrower to, or entered into by the Borrower with, the
Issuing Lender relating to any Letter of Credit, the terms and conditions of
this Agreement shall control. All Letters of Credit outstanding under the
Existing Credit Agreement shall remain outstanding hereunder on the Restatement
Effective Date on the terms set forth herein.
(b) Each Standby L/C and Commercial L/C issued hereunder shall be
issued for the account of the Borrower and shall, among other things, (i) be
denominated in Dollars and be in such form requested by the Borrower as shall be
acceptable to the Issuing Lender in its sole discretion and (ii) have an expiry
date occurring not later than 365 days after the date of issuance of such Letter
of Credit and, in the case of Standby L/Cs, may be automatically renewed on its
expiry date for an additional period equal to the initial term, but in no case
shall any Letter of Credit have an expiry date occurring later than the
Revolving Credit Termination Date. Each L/C Application and each Letter of
Credit shall be subject to the International Standby Practices (ISP 98) of the
International Chamber of Commerce (in the case of Standby L/Cs) or the Uniform
Customs (in the case of Commercial L/Cs) and, to the extent not inconsistent
therewith, the laws of the State of New York.
25
3.6 Participating Interests. Effective in the case of each Standby L/C
and Commercial L/C (if applicable) as of the date of the opening thereof, the
Issuing Lender agrees to allot and does allot, to itself and each other
Revolving Credit Lender, and each such Lender severally and irrevocably agrees
to take and does take in such Letter of Credit and the related L/C Application
(if applicable), an L/C Participating Interest in a percentage equal to such
Lender's Revolving Credit Commitment Percentage.
3.7 Procedure for Opening Letters of Credit. The Issuing Lender will
notify each Lender after the end of each calendar month of any L/C Applications
received by the Issuing Lender from the Borrower during such month. Upon receipt
of any L/C Application from the Borrower, the Issuing Lender will process such
L/C Application, and the other certificates, documents and other papers
delivered to the Issuing Lender in connection therewith, in accordance with its
customary procedures and, subject to the terms and conditions hereof, shall
promptly open such Letter of Credit by issuing the original of such Letter of
Credit to the beneficiary thereof and by furnishing a copy thereof to the
Borrower and, after the end of the calendar month in which such Letter of Credit
was opened, to the other Lenders; provided that no such Letter of Credit shall
be issued if subsection 3.1 would be violated thereby.
3.8 Payments in Respect of Letters of Credit. (a) The Borrower agrees
forthwith upon demand by the Issuing Lender and otherwise in accordance with the
terms of the L/C Application relating thereto, (i) to reimburse the Issuing
Lender for any payment made by the Issuing Lender under any Letter of Credit
issued for the account of the Borrower and (ii) to pay interest on any
unreimbursed portion of any such payment from the date of such payment until
reimbursement in full thereof at a rate per annum equal to (A) on or prior to
the date which is one Business Day after the day on which the Issuing Lender
demands reimbursement from the Borrower for such payment, the Alternate Base
Rate plus the Applicable Margin for the Revolving Credit Loans and (B)
thereafter, the Alternate Base Rate plus the Applicable Margin for the Revolving
Credit Loans plus 2%.
(b) In the event that the Issuing Lender makes a payment under any
Letter of Credit and is not reimbursed in full therefor forthwith upon demand of
the Issuing Lender, and otherwise in accordance with the terms of the L/C
Application relating to such Letter of Credit, the Issuing Lender will promptly
notify each other Revolving Credit Lender. Forthwith upon its receipt of any
such notice, each such other Lender will transfer to the Issuing Lender, in
immediately available funds, an amount equal to such other Lender's pro rata
share (based on its Revolving Credit Commitment) of the L/C Obligation arising
from such unreimbursed payment. Promptly, upon its receipt from such other
Lender of such amount, the Issuing Lender will complete, execute and deliver to
such other Lender an L/C Participation Certificate dated the date of such
receipt and in such amount.
(c) Whenever, at any time after the Issuing Lender has made a payment
under any Letter of Credit and has received from any other Revolving Credit
Lender such other Lender's pro rata share of the L/C Obligation arising
therefrom, the Issuing Lender receives any reimbursement on account of such L/C
Obligation or any payment of interest on account thereof, the Issuing Lender
will promptly distribute to such other Lender its pro rata share thereof in like
funds as received; provided that in the event that the receipt by the Issuing
Lender of such reimbursement or such payment of interest (as the case may be) is
required to be returned, such other Lender will return to the Issuing Lender any
portion thereof previously distributed by the Issuing Lender to it in like funds
as such reimbursement or payment is required to be returned by the Issuing
Lender.
3.9 Letter of Credit Fees. (a) In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby or
Commercial L/Cs (other than standard issuance, amendment and negotiation fees),
the Borrower agrees to pay the Administrative Agent, for the account of the
Issuing Lender and the Participating Lenders, with respect to each Standby or
Commercial
26
L/C issued for the account of the Borrower, a Standby or Commercial L/C fee, as
the case may be, equal to the Applicable Margin for Revolving Credit Loans which
are Eurodollar Loans per annum (of which the Issuing Lender shall retain for its
own account, as the issuing bank and not on account of its L/C Participating
Interest therein, 0.25% per annum) on the daily average amount available to be
drawn under each Standby L/C in the case of a Standby L/C and on the maximum
face amount of each Commercial L/C in the case of a Commercial L/C, in either
case, payable, in arrears, on the last day of each fiscal quarter of the
Borrower. The Administrative Agent will disburse any Standby or Commercial L/C
fees received pursuant to this subsection 3.9(a) to the respective Lenders
promptly following the receipt of any such fees. Notwithstanding the foregoing,
the Borrower agrees to pay standard issuance, amendment and negotiation fees to
the Issuing Lender.
(b) For purposes of any payment of fees required pursuant to this
subsection 3.9, the Administrative Agent agrees to provide to the Borrower a
statement of any such fees to be so paid; provided that the failure by the
Administrative Agent to provide the Borrower with any such invoice shall not
relieve the Borrower of its obligation to pay such fees.
3.10 Letter of Credit Reserves. (a) If any Change in Law shall either
(i) impose, modify, deem or make applicable any reserve, special deposit,
assessment or similar requirement against letters of credit issued by the
Issuing Lender or (ii) impose on the Issuing Lender any other condition
regarding this Agreement (with respect to Letters of Credit) or any Letter of
Credit, and the result of any event referred to in clause (i) or (ii) above
shall be to increase the cost of the Issuing Lender of issuing or maintaining
any Letter of Credit (which increase in cost shall be the result of the Issuing
Lender's reasonable allocation of the aggregate of such cost increases resulting
from such events), then, upon demand by the Issuing Lender, the Borrower shall
immediately pay to the Issuing Lender, from time to time as specified by the
Issuing Lender, additional amounts which shall be sufficient to compensate the
Issuing Lender for such increased cost, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the rate applicable to Alternate Base Rate Loans pursuant to subsection
4.5(b). The Borrower shall not be required to make any payments to the Issuing
Lender for any additional amounts pursuant to this subsection 3.10(a) unless the
Issuing Lender has given written notice to the Borrower of its intent to request
such payments prior to or within 60 days after the date on which the Issuing
Lender became entitled to claim such amounts. A certificate, setting forth in
reasonable detail the calculation of the amounts involved, submitted by the
Issuing Lender to the Borrower concurrently with any such demand by the Issuing
Lender, shall be conclusive, absent manifest error, as to the amount thereof.
(b) In the event that any Change in Law with respect to the Issuing
Lender shall, in the opinion of the Issuing Lender, require that any obligation
under any Letter of Credit be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
the Issuing Lender or any corporation controlling the Issuing Lender, and such
Change in Law shall have the effect of reducing the rate of return on the
Issuing Lender's or such corporation's capital, as the case may be, as a
consequence of the Issuing Lender's obligations under such Letter of Credit to a
level below that which the Issuing Lender or such corporation, as the case may
be, could have achieved but for such Change in Law (taking into account the
Issuing Lender's or such corporation's policies, as the case may be, with
respect to capital adequacy) by an amount deemed by the Issuing Lender to be
material, then from time to time following notice by the Issuing Lender to the
Borrower of such Change in Law, within 15 days after demand by the Issuing
Lender, the Borrower shall pay to the Issuing Lender such additional amount or
amounts as will compensate the Issuing Lender or such corporation, as the case
may be, for such reduction. The Issuing Lender agrees that, upon the occurrence
of any event giving rise to the operation of paragraph (a) or (b) of this
subsection 3.10 with respect to the Issuing Lender, it will, if requested by the
Borrower and to the extent permitted by law or by the relevant Governmental
Authority, endeavor in good faith to avoid or minimize the increase in costs or
reduction in payments resulting from
27
such event; provided that such avoidance or minimization can be made in such a
manner that the Issuing Lender, in its sole determination, suffers no economic,
legal or regulatory disadvantage. The Borrower shall not be required to make any
payments to the Issuing Lender for any additional amounts pursuant to this
subsection 3.10(b) unless the Issuing Lender has given written notice to the
Borrower of its intent to request such payments prior to or within 60 days after
the date on which the Issuing Lender became entitled to claim such amounts. A
certificate, in reasonable detail setting forth the calculation of the amounts
involved, submitted by the Issuing Lender to the Borrower concurrently with any
such demand by the Issuing Lender, shall be conclusive, absent manifest error,
as to the amount thereof.
(c) The Borrower and each Participating Lender agree that the
provisions of the foregoing paragraphs (a) and (b) shall apply equally to each
Participating Lender in respect of its L/C Participating Interest in such Letter
of Credit, as if the references in such paragraphs and provisions referred to,
where applicable, such Participating Lender or, in the case of paragraph (b),
any corporation controlling such Participating Lender.
3.11 Further Assurances. The Borrower hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by the Issuing Lender more fully to effect the
purposes of this Agreement and the issuance of Letters of Credit hereunder.
3.12 Obligations Absolute. The payment obligations of the Borrower
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(i) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
any beneficiary, or any transferee, of any Letter of Credit (or any Persons
for whom any such beneficiary or any such transferee may be acting), the
Issuing Lender, the Administrative Agent or any Lender, or any other
Person, whether in connection with this Agreement, any Credit Document, the
transactions contemplated herein, or any unrelated transaction;
(ii) any statement or any other document presented under any Letter
of Credit proving to be forged, fraudulent or invalid or any statement
therein being untrue or inaccurate in any respect;
(iii) payment by the Issuing Lender under any Letter of Credit against
presentation of a draft or certificate or other document which does not
comply with the terms of such Letter of Credit or is insufficient in any
respect, except where such payment constitutes gross negligence or willful
misconduct on the part of the Issuing Lender; or
(iv) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing, except for any such circumstances or
happening constituting gross negligence or willful misconduct on the part
of the Issuing Lender.
3.13 Assignments. No Participating Lender's participation in any
Letter of Credit or any of its rights or duties hereunder shall be subdivided,
assigned or transferred (other than in connection with a transfer of part or all
of such Participating Lender's Revolving Credit Commitment in accordance with
subsection 11.6(c)) without the prior written consent of the Issuing Lender,
which consent will not be unreasonably withheld. Such consent may be given or
withheld without the consent or agreement of any
28
other Participating Lender. Notwithstanding the foregoing, a Participating
Lender may subparticipate its L/C Participating Interest without obtaining the
prior written consent of the Issuing Lender.
3.14 Participations. The obligation of each Revolving Credit Lender to
purchase participating interests pursuant to subsection 3.6 shall be absolute
and unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Issuing Lender, the Borrower or any
other Person for any reason whatsoever; (ii) the occurrence or continuance of an
Event of Default; (iii) any adverse change in the condition (financial or
otherwise) of the Borrower; (iv) any breach of this Agreement by the Borrower or
any other Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
Section 4. GENERAL PROVISIONS APPLICABLE TO LOANS
4.1 Procedure for Borrowing. (a) The Borrower may borrow under the
Commitments on any Business Day; provided that, with respect to any borrowing,
the Borrower shall give the Administrative Agent irrevocable notice (which
notice must be received by the Administrative Agent (i) before 12:00 noon, New
York City time, three Business Days prior to the requested Borrowing Date if all
or any part of the Loans are to be Eurodollar Loans and (ii) on the requested
Borrowing Date if the applicable notice is received prior to 9:00 A.M. (or, with
respect to Swing Line Loans, 3:00 P.M), New York City time, on such Borrowing
Date and if the borrowing is to be solely of Alternate Base Rate Loans) and
specifying (A) the amount of the borrowing, (B) whether such Loans are initially
to be Eurodollar Loans or Alternate Base Rate Loans or a combination thereof,
(C) if the borrowing is to be entirely or partly Eurodollar Loans, the length of
the Interest Period for such Eurodollar Loans and (D) whether the Loan is a Term
Loan, a Swing Line Loan or Revolving Credit Loan. Upon receipt of such notice
the Administrative Agent shall promptly notify each affected Lender thereof. Not
later than 12:00 noon, New York City time, on the Borrowing Date specified in
such notice, each affected Lender shall make available to the Administrative
Agent at the office of the Administrative Agent specified in subsection 11.2 (or
at such other location as the Administrative Agent may direct) an amount in
immediately available funds equal to the amount of the Loan to be made by such
Lender (except that proceeds of Swing Line Loans will be made available to the
Borrower in accordance with subsection 3.4(a)). Loan proceeds received by the
Administrative Agent hereunder shall promptly be made available to the Borrower
by the Administrative Agent's crediting the account of the Borrower, at the
office of the Administrative Agent specified in subsection 11.2, with the
aggregate amount actually received by the Administrative Agent from the Lenders
and in like funds as received by the Administrative Agent. The initial Tranche C
Term Loans shall be made on the Restatement Effective Date as Alternate Base
Rate Loans.
(b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $1,000,000 or a whole multiple of
$500,000 in excess thereof and (ii) no more than sixteen Interest Periods shall
be in effect at any one time.
4.2 Conversion and Continuation Options. (a) Subject to subsection
4.12, the Borrower may elect from time to time to convert Eurodollar Loans into
Alternate Base Rate Loans by giving the Administrative Agent irrevocable notice
of such election, to be received by the Administrative Agent prior to 12:00
noon, New York City time, at least three Business Days prior to the proposed
conversion date. The Borrower may elect from time to time to convert all or a
portion of the Alternate Base Rate Loans (other than Swing Line Loans) then
outstanding to Eurodollar Loans by giving the Administrative Agent irrevocable
notice of such election, to be received by the Administrative Agent prior to
12:00 noon, New York City time, at least three Business Days prior to the
proposed conversion date, specifying the
29
Interest Period selected therefor, and, if no Default or Event of Default has
occurred and is continuing, such conversion shall be made on the requested
conversion date or, if such requested conversion date is not a Business Day, on
the next succeeding Business Day. Upon receipt of any notice pursuant to this
subsection 4.2, the Administrative Agent shall promptly notify each affected
Lender thereof. All or any part of the outstanding Loans (other than Swing Line
Loans) may be converted as provided herein; provided that partial conversions of
Alternate Base Loans shall be in the aggregate principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof and the aggregate principal amount
of the resulting Eurodollar Loans outstanding in respect of any one Interest
Period shall be at least $1,000,000 or a whole multiple of $500,000 in excess
thereof.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in accordance with the applicable provisions
of the term "Interest Period" set forth in subsection 1.1, of the length of the
next Interest Period to be applicable to such Loans; provided that no Eurodollar
Loan may be continued as such (i) when any Event of Default has occurred and is
continuing and the Administrative Agent or the Required Lenders have, by written
notice to the Borrower, determined that such a continuation is not appropriate,
(ii) if, after giving effect thereto, subsection 4.1(b) would be contravened or
(iii) after the date that is one month prior to the Revolving Credit Termination
Date (in the case of continuations of Revolving Credit Loans) or the final
Installment Payment Date of the Term Loans.
4.3 Changes of Commitment Amounts. (a) The Borrower shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate or from time to time to permanently reduce the Revolving
Credit Commitments, subject to the provisions of this subsection 4.3. To the
extent, if any, that the sum of the amount of the Revolving Credit Loans, Swing
Line Loans and L/C Obligations then outstanding and the amounts available to be
drawn under outstanding Letters of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Borrower shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied,
first, to payment of the Swing Line Loans then outstanding, second, to payment
of the Revolving Credit Loans then outstanding, third, to payment of any L/C
Obligations then outstanding, and fourth, to cash collateralize any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Any such termination of the Revolving Credit Commitments shall be accompanied by
prepayment in full of the Revolving Credit Loans, Swing Line Loans and L/C
Obligations then outstanding and by cash collateralization of any outstanding
Letters of Credit on terms reasonably satisfactory to the Administrative Agent.
Upon termination of the Revolving Credit Commitments, any Letter of Credit then
outstanding that has been so cash collateralized shall no longer be considered a
"Letter of Credit" as defined in subsection 1.1 and any L/C Participating
Interests heretofore granted by the Issuing Lender to the Lenders in such Letter
of Credit shall be deemed terminated (subject to automatic reinstatement in the
event that such cash collateral is returned and the Issuing Lender is not fully
reimbursed for any such L/C Obligations) but the Letter of Credit fees payable
under subsection 3.9 shall continue to accrue to the Issuing Lender and the
Participating Lenders (or, in the event of any such automatic reinstatement, as
provided in subsection 3.9) with respect to such Letter of Credit until the
expiry thereof (provided that in lieu of paying a Standby or Commercial L/C fee,
as the case may be, equal to the Applicable Margin for Revolving Credit Loans
which are Eurodollar Loans per annum, the Borrower shall pay to the
Administrative Agent an amount equal to 0.25% per annum).
(b) In the case of termination of the Revolving Credit Commitments,
interest accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such termination.
Any such partial reduction of the Revolving Credit Commitments shall be in an
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall, in each case, reduce permanently the amount of the Revolving Credit
Commitments then in effect.
30
4.4 Optional and Mandatory Prepayments; Repayments of Term Loans. (a)
Subject to subsection 4.12, the Borrower may at any time and from time to time
prepay Loans, in whole or in part, without premium or penalty, by irrevocable
notice to the Administrative Agent by 10:00 A.M., New York City time, on the
same Business Day (or, in the case of Swing Line Loans, by irrevocable notice to
the Administrative Agent by 12:00 noon, New York City time, on the same Business
Day) in the case of Alternate Base Rate Loans, and three Business Days'
irrevocable notice to the Administrative Agent in the case of Eurodollar Loans,
specifying the date and amount of prepayment and whether the prepayment is of
Revolving Credit Loans or Term Loans. Upon receipt of such notice the
Administrative Agent shall promptly notify each Lender thereof. If such notice
is given, the Borrower shall make such prepayment, and the payment amount
specified in such notice shall be due and payable, on the date specified
therein. Partial prepayments (i) of Term Loans shall be in an aggregate
principal amount equal to the lesser of (A) (I) $1,000,000, or a whole multiple
of $500,000 in excess thereof with respect to Eurodollar Loans or (II) $500,000,
or a whole multiple of $100,000 in excess thereof with respect to Alternate Base
Rate Loans and (B) the aggregate unpaid principal amount of the Term Loans, and
(ii) of Revolving Credit Loans shall be in an aggregate principal amount equal
to the lesser of (A) $1,000,000, or a whole multiple of $500,000 in excess
thereof with respect to Eurodollar Loans or (II) $500,000, or a whole multiple
of $100,000 in excess thereof with respect to Alternate Base Rate Loans and (B)
the aggregate unpaid principal amount of the Revolving Credit Loans, as the case
may be. Prepayments of the Term Loans pursuant to this subsection 4.4(a) shall
be applied pro rata to the Tranche A Term Loans and the Tranche C Term Loans,
and shall be applied first, to any installment due to be paid within three
months of such prepayment and, second, ratably to the remaining installments
thereof.
(b) (i) So long as any Term Loans are outstanding, if, subsequent to
the Closing Date, the Borrower or any of its Subsidiaries shall issue any
Capital Stock (other than warrants issued in connection with the issuance
of Preferred Stock or the Senior Subordinated Notes), 50% of the Net
Proceeds thereof (excluding amounts provided by the Investor Group or their
Affiliates or by management employees of such issuer) shall be promptly
applied toward the prepayment of the Term Loans pro rata to the Tranche A
Term Loans and Tranche C Term Loans (with such application being made
first, to any installment due to be paid within three months of such
prepayment and, second, ratably to the remaining installments thereof);
provided that Net Proceeds of such issuance shall be deemed to be Net
Proceeds of such issuance for purposes of this subsection 4.4(b)(i) only
after deducting therefrom any cash proceeds therefrom actually applied to
the redemption of (a) any then outstanding aggregate principal amount of
Bridge Subordinated Debt (including all accrued interest on such
subordinated bridge loans and the amount of all expenses, premium or
penalties associated therewith) and (b) up to 35% of the Specified Debt
under any "equity clawback" provisions and (c) the redemption of up to 35%
of the Preferred Stock under any "equity clawback" provisions and the
payment of any expenses, premium or penalties or accrued interest with
respect thereto.
(ii) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall incur or permit the incurrence of any Indebtedness
(other than Indebtedness permitted pursuant to subsection 8.1, unless
otherwise specified in such subsection), 100% of the Net Proceeds thereof
shall be promptly applied toward the prepayment of the Term Loans pro rata
to the Tranche A Term Loans and Tranche C Term Loans (with such application
being made first, to any installment due to be paid within three months of
such prepayment and, second, ratably to the remaining installments
thereof).
(iii) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall incur or permit the incurrence of any Indebtedness
permitted pursuant to subsection 8.1(c)(ii) in excess of the Permitted
Specified Debt Amount (as defined in subsection 8.1(c)(ii)), 100% of the
Net Proceeds thereof shall be promptly applied toward the prepayment of the
Tranche C Term
31
Loans (with such application being made first, to any installment due to be
paid within three months of such prepayment and, second, ratably to the
remaining installments thereof).
(iv) If, subsequent to the Closing Date, the Borrower or any of its
Subsidiaries shall receive Net Proceeds from any Asset Sale, such Net
Proceeds shall be promptly applied toward the prepayment of the Term Loans
pro rata to the Tranche A Term Loans and Tranche C Term Loans (with such
application being made first, to any installment due to be paid within
three months of such prepayment and, second, ratably to the remaining
installments thereof); provided that such Net Proceeds need not be applied
to the prepayment of the Term Loans until the earlier of the date that the
aggregate amount of Net Proceeds received by the Borrower or any of its
Subsidiaries from any Asset Sales exceeds $1,000,000 (and has not yet been
applied to the prepayment of the Term Loans hereunder) and the date which
is six months after the last application of Net Proceeds pursuant to this
subsection 4.4(b)(iv).
(v) If for any fiscal year commencing with its fiscal year ending on
December 29, 2001, there shall be Excess Cash Flow for such fiscal year,
50% of such Excess Cash Flow shall be promptly applied toward prepayment of
the Term Loans pro rata to the Tranche A Term Loans and Tranche C Term
Loans (with such application being made first, to any installment due to be
paid within three months of such prepayment and, second, ratably to the
remaining installments thereof). Each such prepayment shall be made not
later than 120 days after the end of such fiscal year.
(vi) The Borrower shall give the Administrative Agent (which shall
promptly notify each Lender) at least one Business Day's notice of each
prepayment or mandatory reduction pursuant to this subsection 4.4(b)
setting forth the date, amount and the Borrower thereof. Except as
otherwise may be agreed by the Borrower, as agent for the Required Lenders,
any prepayment of Loans pursuant to this subsection 4.4 shall be applied,
first, to any Alternate Base Rate Loans then outstanding and the balance of
such prepayment, if any, to the Eurodollar Loans then outstanding; provided
that prepayments of Eurodollar Loans, if not on the last day of the
Interest Period with respect thereto, shall, at the option of the Borrower,
be prepaid subject to the provisions of subsection 4.12 or the amount of
such prepayment (after application to any Alternate Base Rate Loans) shall
be deposited with the Administrative Agent as cash collateral for the Loans
on terms reasonably satisfactory to the Administrative Agent and thereafter
shall be applied in the order of the Interest Periods next ending most
closely to the date such prepayment is required to be made and on the last
day of each such Interest Period. After such application, unless an Event
of Default shall have occurred and be continuing, any remaining interest
earned on such cash collateral shall be paid to the Borrower.
(c) The Tranche A Term Loans shall be repaid in consecutive
semi-annual installments on the dates set forth below (each such day, a "Tranche
A Installment Payment Date"), commencing on December 31, 2002, in an aggregate
amount equal to the amount specified for each such Tranche A Installment Payment
Date:
Installment Payment Date Installment Amount
------------------------ ------------------
December 31, 2002 9,580,981.83
June 30, 2003 10,539,080.01
December 31, 2003 11,497,178.20
June 30, 2004 12,455,276.38
32
December 31, 2004 13,413,374.56
June 30, 2005 14,371,472.74
December 31, 2005 15,329,570.93
Tranche A Maturity Date 7,664,785.46
(d) The Tranche C Term Loans shall be repaid in consecutive
semi-annual installments on the dates set forth below (each such day, a "Tranche
C Installment Payment Date"), commencing on December 31, 2002, in an aggregate
amount equal to the amount specified for each such Tranche C Installment Payment
Date:
Installment Payment Date Installment Amount
------------------------ ------------------
December 31, 2002 1,000,000.00
June 30, 2003 1,000,000.00
December 31, 2003 1,000,000.00
June 30, 2004 1,000,000.00
December 31, 2004 1,000,000.00
June 30, 2005 1,000,000.00
December 31, 2005 1,000,000.00
June 30, 2006 1,000,000.00
December 31, 2006 1,000,000.00
June 30, 2007 1,000,000.00
December 31, 2007 1,000,000.00
June 30, 2008 1,000,000.00
December 31, 2008 106,000,000.00
June 30, 2009 106,000,000.00
Tranche C Maturity Date 106,000,000.00
Amounts repaid on account of the Term Loans pursuant to this subsection or
otherwise may not be reborrowed. Accrued interest on the amount of any
prepayments shall be paid on the Interest Payment Date next succeeding the date
of any partial prepayment and on the date of such prepayment in the case of a
prepayment in full of the Term Loans.
(e) Notwithstanding the provisions of subsection 4.4, with
respect to the amount of any mandatory prepayment described therein that is
allocated to Tranche C Term Loans (such amount, the "Tranche C Prepayment
Amount"), at any time when Tranche A Term Loans remain outstanding, the
Administrative Agent shall promptly provide to each Tranche C Lender a notice
(each a "Tranche C Prepayment Option Notice") as described below. Each Tranche C
Prepayment Option Notice shall be in writing, shall refer to this subsection
4.4(e) and shall (i) set forth the Tranche C Prepayment Amount and the portion
thereof that the applicable Tranche C Lender will be entitled to receive if it
accepts such mandatory prepayment in accordance with this subsection 4.4(e),
(ii) state that the Borrower is offering to prepay on a specified date (each a
"Tranche C Mandatory Prepayment Date"), which shall be not less than four days
or more than six days after the date of the Tranche C Option Prepayment Notice,
the Tranche C
33
Term Loans of such Tranche C Lender in an amount equal to the portion of the
Tranche C Prepayment Amount indicated in such Tranche C Lender's Tranche C
Prepayment Option Notice as being applicable to such Tranche C Lender, (iii)
request such Tranche C Lender to notify the Borrower and the Administrative
Agent in writing, no later than the second day prior to the Tranche C Mandatory
Prepayment Date, of such Tranche C Lender's acceptance or rejection of such
offer of prepayment and (iv) inform such Tranche C Lender that failure by such
Tranche C Lender to accept or reject such offer in writing on or before the
second day prior to the Tranche C Mandatory Prepayment Date shall be deemed an
acceptance of such prepayment offer. Each Tranche C Prepayment Option Notice
shall be given by telecopy, confirmed by hand delivery, overnight courier
service or registered or certified mail, in each case addressed as provided in
subsection 11.2. On the Tranche C Mandatory Prepayment Date, the Borrower shall
pay the Administrative Agent in immediately available funds (i) the aggregate
amount necessary to prepay the portion of the Tranche C Prepayment Amount in
respect of which the Tranche C Lenders have accepted prepayment as described
above (such Tranche C Lenders, the "Accepting Tranche C Lenders"), and the
Administrative Agent shall apply such amount on behalf of the Borrower pro rata
against the remaining installments of principal due in respect of the Tranche C
Term Loans of the Accepting Tranche C Lenders, and (ii) the aggregate amount of
the portion of the Tranche C Prepayment Amount not accepted by the Tranche C
Lenders, and the Administrative Agent shall apply such amount on behalf of the
Borrower pro rata against the remaining installments of principal due in respect
of the Tranche A Term Loans.
4.5 Interest Rates and Payment Dates. (a) Eurodollar Loans
shall bear interest for each day during each Interest Period applicable thereto,
commencing on (and including) the first day of such Interest Period to, but
excluding, the last day of such Interest Period, on the unpaid principal amount
thereof at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Margin.
(b) Alternate Base Rate Loans shall bear interest for the
period from and including the date such Loans are made to, but excluding, the
maturity date thereof, or to, but excluding, the conversion date if such Loans
are earlier converted into Eurodollar Loans on the unpaid principal amount
thereof at a rate per annum equal to the Alternate Base Rate plus the Applicable
Margin.
(c) If all or a portion of (i) the principal amount of any of
the Loans or (ii) any interest payable thereon shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise) such Loan, if a
Eurodollar Loan, shall be converted into an Alternate Base Rate Loan at the end
of the then-current Interest Period for such Eurodollar Loan (which conversion
shall occur automatically and without need for compliance with the conditions
for conversion set forth in subsection 4.2), and any such overdue amount shall,
without limiting the rights of the Lenders under Section 9, bear interest (which
shall be payable on demand) at a rate per annum which is 2% plus the Alternate
Base Rate plus the Applicable Margin (or, in the case of a Eurodollar Loan, the
Eurodollar Rate for the Interest Period plus the Applicable Margin plus 2%, if
higher) from the date of such non-payment until paid in full (as well after as
before judgment).
(d) Except as otherwise expressly provided for in this
subsection 4.5, interest shall be payable in arrears on each Interest Payment
Date.
4.6 Computation of Interest and Fees. (a) Interest in respect
of Alternate Base Rate Loans, at any time that the Alternate Base Rate is
determined by reference to the Prime Rate, and all fees hereunder shall be
calculated on the basis of a 365 (or 366 as the case may be) day year for the
actual days elapsed. Interest in respect of Eurodollar Loans and in respect of
Alternate Base Rate Loans at any time that the Alternate Base Rate is determined
by reference to the Base CD Rate or the Federal Funds Effective Rate shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
34
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a Eurodollar Rate. Any change in the interest
rate on a Loan resulting from a change in the Alternate Base Rate or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate is announced
or such change in the Eurocurrency Reserve Requirements becomes effective, as
the case may be. The Administrative Agent shall as soon as practicable notify
the Borrower and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of
manifest error. The Administrative Agent shall, at the request of the Borrower,
or any Lender, deliver to the Borrower or such Lender a statement showing the
quotations used by the Administrative Agent in determining the Eurodollar Rate.
4.7 Certain Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, a non-refundable agent's fee in an
amount previously agreed to with the Administrative Agent, payable in advance on
the Closing Date and on the first day of each fiscal year of the Borrower
thereafter.
4.8 Inability to Determine Interest Rate. In the event that
the Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that (a) by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Borrower has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of the Alternate Base Rate Loans into Eurodollar Loans or (iii)
the continuation of any Eurodollar Loan as such for an additional Interest
Period, or (b) dollar deposits in the relevant amount and for the relevant
period with respect to any such Eurodollar Loan are not generally available to
the Lenders in their respective Eurodollar Lending Offices' interbank eurodollar
markets, the Administrative Agent shall forthwith give telecopy or e-mail notice
of such determination, confirmed in writing, to the Borrower and the Lenders at
least one day prior to, as the case may be, the requested Borrowing Date, the
conversion date or the last day of such Interest Period. If such notice is given
(i) any requested Eurodollar Loans shall be made as Alternate Base Rate Loans,
(ii) any Alternate Base Rate Loans that were to have been converted to
Eurodollar Loans shall be continued as Alternate Base Rate Loans, and (iii) any
outstanding Eurodollar Loans shall be converted on the last day of the then
current Interest Period applicable thereto into Alternate Base Rate Loans. Until
such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made and no Alternate Base Rate Loans shall be
converted to Eurodollar Loans.
4.9 Pro Rata Treatment and Payments. (a) Except to the extent
otherwise provided herein, each borrowing of 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 relevant Commitment Percentages of the Lenders
with respect to the Loans borrowed or the Commitments to be reduced.
(b) Whenever any payment received by the Administrative Agent
under this Agreement or any Note or any other Credit Document is insufficient to
pay in full all amounts then due and payable to the Administrative Agent and the
Lenders under this Agreement:
(i) If the Administrative Agent has not received a Payment
Sharing Notice (or, if the Administrative Agent has received a Payment
Sharing Notice but the Event of Default specified in such Payment
Sharing Notice has been cured or waived in accordance with the
provisions of this Agreement), such payment shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the
Lenders in the following order: first, to the payment of fees and
35
expenses due and payable to the Administrative Agent under and in
connection with this Agreement and the other Credit Documents; second,
to the payment of all expenses due and payable under subsection 11.5,
ratably among the Lenders in accordance with the aggregate amount of
such payments owed to each such Lender; third, to the payment of fees
due and payable under subsections 3.2 and 3.9, ratably among the
Lenders in accordance with the Commitment Percentage of each Lender of
the Commitment for which such payment is owed and, in the case of the
Issuing Lender, the amount retained by the Issuing Lender for its own
account pursuant to subsection 3.9; fourth, to the payment of interest
then due and payable on the Loans and the L/C Obligations ratably in
accordance with the aggregate amount of interest owed to each such
Lender; and fifth, to the payment of the principal amount of the Loans
and the L/C Obligations which is then due and payable ratably among the
Lenders in accordance with the aggregate principal amount owed to each
such Lender; or
(ii) If the Administrative Agent has received a Payment
Sharing Notice which remains in effect, all payments received by the
Administrative Agent under this Agreement or any Note shall be
distributed by the Administrative Agent and applied by the
Administrative Agent and the Lenders in the following order: first, to
the payment of all amounts described in clauses "first" through "third"
of the foregoing clause (i) in the order set forth therein; second, to
the payment of the interest accrued on all Loans and L/C Obligations,
regardless of whether any such amount is then due and payable, ratably
among the Lenders in accordance with the aggregate accrued interest
plus the aggregate principal amount of all Loans and L/C Obligations
then due and payable and owed to such Lender; and third, to the payment
of the principal amount of all Loans and L/C Obligations, regardless of
whether any such amount is then due and payable, ratably among the
Lenders in accordance with the aggregate principal amount owed to such
Lender.
(c) If any Lender (a "Non-Funding Lender") has (x) failed to
make a Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan or (y) given notice to the Borrower or the Administrative
Agent that it will not make, or that it has disaffirmed or repudiated any
obligation to make, any Revolving Credit Loan, in each case by reason of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989, as amended, or otherwise, (i) any payment made on account of the principal
of the Revolving Credit Loans outstanding shall be made as follows:
(A) in the case of any such payment made on any date when and
to the extent that in the determination of the Administrative Agent the
Borrower would be able under the terms and conditions hereof to
reborrow the amount of such payment under the Commitments and to
satisfy any applicable conditions precedent set forth in Section 6 to
such reborrowing, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders other than the
Non-Funding Lender pro rata according to the respective outstanding
principal amounts of the Revolving Credit Loans of such Lenders; and
(B) otherwise, such payment shall be made on account of the
outstanding Revolving Credit Loans held by the Lenders pro rata
according to the respective outstanding principal amounts of such
Revolving Credit Loans; and
(ii) any payment made on account of interest on the Revolving Credit Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest due and payable on the Revolving Credit Loans with respect to which
such payment is being made. The Borrower agrees to give the Administrative Agent
such assistance in making any determination pursuant to subparagraph (i)(A) of
this
36
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 lawful money of the United States and in immediately
available funds. The Administrative Agent shall promptly distribute such
payments in accordance with the provisions of subsection 4.9(b) upon receipt in
like funds as received. If any payment hereunder (other than payments on
Eurodollar Loans) would become due and payable on a day other than a Business
Day, such payment shall become due and payable on the next succeeding Business
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day (and with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension), unless the result of such extension
would be to extend such payment into another calendar month in which event such
payment shall be made on the immediately preceding Business Day.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount which would constitute its Commitment Percentage of such borrowing
available to the Administrative Agent, the Administrative Agent may assume that
such Lender is making such amount available to the Administrative Agent in
accordance with subsection 4.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative Agent by the required
time on the Borrowing Date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this subsection 4.9(e) shall be conclusive absent manifest error. If such
Lender's Commitment Percentage of such borrowing is not in fact made available
to the Administrative Agent by such Lender within three Business Days of such
Borrowing Date, the Administrative Agent shall also be entitled to recover such
amount with interest thereon at the rate per annum applicable to Alternate Base
Rate Loans hereunder (in lieu of any otherwise applicable interest), on demand,
from the Borrower, without prejudice to any rights which the Borrower or the
Administrative Agent may have against such Lender hereunder. Nothing contained
in this subsection 4.9 shall relieve any Lender which has failed to make
available its ratable portion of any borrowing hereunder from its obligation to
do so in accordance with the terms hereof.
(f) The failure of any Lender to make the Loan to be made by it on any
Borrowing Date shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on such Borrowing Date.
(g) All payments and optional prepayments (other than prepayments as
set forth in subsection 4.11 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $1,000,000
or a whole multiple of $500,000 in excess thereof.
4.10 Illegality. Notwithstanding any other provision herein, if (i)
any Change in Law occurring after the date that any lender becomes a Lender
party to this Agreement, shall make it unlawful
37
for such Lender to make or maintain Eurodollar Loans as contemplated by this
Agreement, the commitment of such Lender hereunder to make Eurodollar Loans or
to convert all or a portion of Alternate Base Rate Loans into Eurodollar Loans
shall forthwith be suspended until such time, if any, as such illegality shall
no longer exist and such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Alternate Base Rate Loans for the
duration of the respective Interest Periods (or, if permitted by applicable law,
at the end of such Interest Periods) and all payments of principal which would
otherwise be applied to such Eurodollar Loans shall be applied instead to such
Lender's Alternate Base Rate Loans. The Borrower hereby agrees to pay any
Lender, promptly upon its demand, any amounts payable pursuant to subsection
4.12 in connection with any conversion in accordance with this subsection 4.10
(such Lender's notice of such costs, as certified in reasonable detail as to
such amounts to the Borrower through the Administrative Agent, to be conclusive
absent manifest error).
4.11 Requirements of Law. (a) In the event that any Change in Law or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority
occurring after the date that any lender becomes a Lender party to this
Agreement:
(i) does or shall subject any such Lender or its Eurodollar Lending
Office to any tax of any kind whatsoever with respect to this Agreement,
any Note or any Eurodollar Loans made by it, or change the basis of
taxation of payments to such Lender or its Eurodollar Lending Office of
principal, the commitment fee, interest or any other amount payable
hereunder (except for (x) net income and franchise taxes imposed on the net
income of such Lender or its Eurodollar Lending Office by the jurisdiction
under the laws of which such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction
in which such Lender's Eurodollar Lending Office is located or any
political subdivision or taxing authority thereof or therein, including
changes in the rate of tax on the overall net income of such Lender or such
Eurodollar Lending Office, and (y) taxes resulting from the substitution of
any such system by another system of taxation; provided that the taxes
payable by Lenders subject to such other system of taxation are not
generally charged to borrowers from such Lenders having loans or advances
bearing interest at a rate similar to the Eurodollar Rate);
(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, or deposits or other liabilities in or for the account of, advances or
loans by, or other credit extended by, or any other acquisition of funds
by, any office of such Lender which are not otherwise included in the
determination of the Eurodollar Rate; or
(iii) does or shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender or
its Eurodollar Lending Office of making, converting, renewing or maintaining
advances or extensions of credit or to reduce any amount receivable hereunder,
in each case, in respect of its Eurodollar Loans, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender deems to be material as determined by such Lender
with respect to such Eurodollar Loans, together with interest on each such
amount from the date demanded until payment in full thereof at a rate per annum
equal to the Alternate Base Rate plus 1%.
(b) In the event that any Change in Law occurring after the date that
any lender becomes a Lender party to this Agreement with respect to any such
Lender shall, in the opinion of such Lender,
38
require that any Commitment of such Lender be treated as an asset or otherwise
be included for purposes of calculating the appropriate amount of capital to be
maintained by such Lender or any corporation controlling such Lender, and such
Change in Law shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital, as the case may be, as a consequence of
such Lender's obligations hereunder to a level below that which such Lender or
such corporation, as the case may be, could have achieved but for such Change in
Law (taking into account such Lender's or such corporation's policies, as the
case may be, with respect to capital adequacy) by an amount deemed by such
Lender to be material, then from time to time following notice by such Lender to
the Borrower of such Change in Law as provided in paragraph (c) of this
subsection 4.11, within 15 days after demand by such Lender, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate such
Lender or such corporation on an after-tax basis, as the case may be, for such
reduction.
(c) The Borrower shall not be required to make any payments to any
Lender for any additional amounts pursuant to this subsection 4.11 unless such
Lender has given written notice to the Borrower, through the Administrative
Agent, of its intent to request such payments prior to or within 60 days after
the date on which such Lender became entitled to claim such amounts. If any
Lender has notified the Borrower through the Administrative Agent of any
increased costs pursuant to paragraph (a) of this subsection 4.11, the Borrower
at any time thereafter may, upon at least three Business Days' notice to the
Administrative Agent (which shall promptly notify the Lenders thereof), and
subject to subsection 4.12, prepay (or convert into Alternate Base Rate Loans)
all (but not a part) of the Eurodollar Loans then outstanding. Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
paragraph (a) of this subsection 4.11 with respect to such Lender, it will, if
requested by the Borrower to the extent permitted by law or by the relevant
Governmental Authority, endeavor in good faith to avoid or minimize the increase
in costs or reduction in payments resulting from such event (including, without
limitation, endeavoring to change its Eurodollar Lending Office); provided, that
such avoidance or minimization can be made in such a manner that such Lender, in
its sole determination, suffers no economic, legal or regulatory disadvantage.
If any Lender requests compensation from the Borrower under this subsection
4.11, the Borrower may, by notice to such Lender (with a copy to the
Administrative Agent), suspend the obligation of such Lender thereafter to make
or continue Loans of the Type with respect to which such compensation is
requested, or to convert Loans of any other Type into Loans of such Type, until
the Requirement of Law giving rise to such request ceases to be in effect;
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested.
(d) Each Lender (and in case of an Assignee on the date it becomes a
Lender) that is not a United States Person (as defined in Section 7701(a)(30) of
the Code) for federal income tax purposes either (1) in the case of a Lender
that is a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i)
represents to Borrower (for the benefit of the Borrower and the Administrative
Agent) that under applicable law and treaties no taxes are required to be
withheld by the Borrower or the Administrative Agent with respect to any
payments to be made to such Lender in respect of the Loans or the L/C
Participating Interests, (ii) agrees to furnish to the Borrower, with a copy to
the Administrative Agent, either U.S. Internal Revenue Service Form W-8ECI or
U.S. Internal Revenue Service Form W-8BEN (wherein such Lender claims
entitlement to complete exemption from U.S. federal withholding tax on all
interest payments hereunder) and (iii) agrees (for the benefit of the Borrower
and the Administrative Agent), to the extent it may lawfully do so at such
times, to provide the Borrower, with a copy to the Administrative Agent, a new
Form W-8ECI or Form W-8BEN upon the expiration or obsolescence of any previously
delivered form and comparable statements in accordance with applicable U.S. laws
and regulations and amendments duly executed and completed by such Lender, and
to comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption or (2) in the case of a Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (i) agrees
to furnish to the Borrower, with a copy to the Administrative Agent, (A) a
certificate substantially
39
in the form of Exhibit I hereto (any such certificate, a "Subsection 4.11(d)(2)
Certificate") and (B) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN, certifying to such Lender's legal
entitlement at the Closing Date (or, in the case of an Assignee, on the date it
becomes a Lender) to an exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Code with respect to all payments to be made under this
Agreement, and (ii) agrees, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower (for the benefit
of the Borrower and the Administrative Agent) such other forms as may be
required in order to establish the legal entitlement of such Lender to an
exemption from withholding with respect to payments under this Agreement.
Notwithstanding any provision of this subsection 4.11 or 4.9(d) to the contrary,
the Borrower shall have no obligation to pay any amount to or for the account of
any Lender (or the Eurodollar Lending Office of any Lender) on account of any
taxes pursuant to this subsection 4.11, to the extent that such amount results
from (i) the failure of any Lender to comply with its obligations pursuant to
this subsection 4.11, (ii) any representation or warranty made or deemed to be
made by any Lender pursuant to this subsection 4.11(d) proving to have been
incorrect, false or misleading in any material respect when so made or deemed to
be made or (iii) any Change in Law or compliance by any Lender with any request
or directive (whether or not having the force of law) from any central bank or
other Governmental Authority, the effect of which would be to subject to any
taxes any payment made pursuant to this Agreement to any Lender making the
representation and covenants set forth in subsection 4.11(d)(2), which payment
would not be subject to such taxes were such Lender eligible to make and comply
with, and actually made and complied with, the representation and covenants set
forth in subsection 4.11(d)(1) hereinabove.
(e) A certificate in reasonable detail as to any amounts submitted by
such Lender, through the Administrative Agent, to the Borrower, shall be
conclusive in the absence of manifest error. The covenants contained in this
subsection 4.11 shall survive the termination of this Agreement and repayment of
the Loans.
4.12 Indemnity. The Borrower agrees to indemnify each Lender and to
hold such Lender harmless from any loss or expense (but without duplication of
any amounts payable as default interest) which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Eurodollar Loans of such Lender, including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder, (b) default by the Borrower in making a borrowing
after the Borrower has given a notice in accordance with subsection 4.1 or in
making a conversion of Alternate Base Rate Loans to Eurodollar Loans or in
continuing Eurodollar Loans as such, in either case, after the Borrower has
given notice in accordance with subsection 4.2, (c) default by the Borrower in
making any prepayment after the Borrower has given a notice in accordance with
subsection 4.4 or (d) a payment or prepayment of a Eurodollar Loan or conversion
(including without limitation, as a result of subsection 4.4 and/or a conversion
pursuant to subsection 4.10) of any Eurodollar Loan into an Alternate Base Rate
Loan, in either case on a day which is not the last day of an Interest Period
with respect thereto, including, but not limited to, any such loss or expense
arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Eurodollar Loans hereunder (but
excluding loss of profit). This covenant shall survive termination of this
Agreement and repayment of the Loans.
4.13 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender (i) the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Termination Date, (ii) the principal
amount of the Tranche A Term Loan of such Lender, in eight consecutive
installments, payable on each Tranche A Installment Payment Date, in accordance
with subsection 4.4(c) (or the then unpaid principal amount of such Tranche A
Term Loan on the date that the Tranche A Term Loans become due
40
and payable pursuant to Section 9), (iii) the principal amount of the Tranche C
Term Loan of such Lender, in fifteen consecutive installments, payable on each
Tranche C Installment Payment Date, in accordance with subsection 4.4(d) (or the
then unpaid principal amount of such Tranche C Term Loan on the date that the
Tranche C Term Loans become due and payable pursuant to Section 9), and (iv) the
then unpaid principal amount of the Swing Line Loans of the Swing Line Lender on
the Revolving Credit Termination Date. The 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 subsection 4.5.
(b) Each 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.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 11.6(d), and a subaccount therein for each Lender, in
which shall be recorded (i) the amount of each Revolving Credit Loan, Tranche A
Term Loan and Tranche C Term Loan made hereunder, the Type thereof and each
Interest Period applicable thereto, (ii) the Borrower, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iv) both the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to subsection 4.13(b) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided that the failure of any
Lender or the Administrative Agent to maintain the Register or any such account,
or any error therein, shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Loans made to the Borrower by
such Lender or to repay any other obligations in accordance with the terms of
this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender (i) a promissory note of the Borrower evidencing the Revolving
Credit Loans of such Lender, substantially in the form of Exhibit A with
appropriate insertions as to date and principal amount (a "Revolving Credit
Note"), (ii) a promissory note of the Borrower evidencing the Tranche A Term
Loan of such Lender, substantially in the form of Exhibit B-1 with appropriate
insertions as to date and principal amount (a "Tranche A Term Note"), (iii) a
promissory note of the Borrower evidencing the Tranche C Term Loan of such
Lender, substantially in the form of Exhibit B-2 with appropriate insertions as
to date and principal amount (a "Tranche C Term Note"), and/or (iv) in the case
of the Swing Line Lender, a promissory note of the Borrower evidencing the Swing
Line Loans of the Swing Line Lender, substantially in the form of Exhibit C with
appropriate insertions as to date and principal amount (the "Swing Line Note").
4.14 Replacement of Lenders. In the event any Lender or the
Issuing Lender is a Non-Funding Lender, exercises its rights pursuant to
subsection 4.10 or requests payments pursuant to subsections 3.10 or 4.11, the
Borrower may require, at its own expense (including payment of any processing
fees under subsection 11.6(e)) and subject to subsection 4.12, such Lender or
the Issuing Lender to assign, at par plus accrued interest and fees, without
recourse (in accordance with subsection 11.6) all of its interests, rights and
obligations hereunder (including all of its Commitments and the Loans and other
amounts at the time owing to it hereunder and its Notes and its interest in the
Letters of Credit) to a bank, financial institution or other entity specified by
the Borrower; provided that (i) such assignment shall not conflict with or
violate any law, rule or regulation or order of any court or other Governmental
41
Authority, (ii) the Borrower shall have received the written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, to such
assignment, (iii) the Borrower shall have paid to the assigning Lender or the
Issuing Lender all monies other than principal, interest and fees accrued and
owing hereunder to it (including pursuant to subsections 3.10, 4.10, 4.11 and
4.12) and (iv) in the case of a required assignment by the Issuing Lender, the
Letters of Credit shall be canceled and returned to the Issuing Lender.
4.15 Reliance on Representation of the Borrower. The Borrower
hereby agrees that the Administrative Agent and the Lenders may rely on any
representation, warranty, certificate, notice, document or telephone request
which purports to be executed or made, and which the Administrative Agent or the
Lenders in good faith believe to have been executed or made, by the Borrower or
any of its authorized officers, and the Borrower further agrees to indemnify and
hold the Administrative Agent and the Lenders harmless for any action, including
the making of the borrowings hereunder, and any loss or expense, taken or
incurred by any of them as a result of their good faith reliance upon any such
representations, warranty, certificate, notice, document or telephone request.
Section 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans and to induce the Issuing Lender to issue, and the
Participating Lenders to participate in, the Letters of Credit, the Borrower
hereby represents and warrants to each Lender and the Administrative Agent as of
the Restatement Effective Date and as of the making of any extension of credit
hereunder:
5.1 Financial Condition. (a) The audited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at December 29, 2001,
and the related consolidated statements of income and of cash flows for the
fiscal year ended on such date, reported on by and accompanied by an unqualified
report from Pricewaterhouse Coopers LLP, present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the respective fiscal years then ended.
(b) The unaudited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at March 30, 2002, and the related
unaudited consolidated statements of income and cash flows for the three-month
period ended on each such date, certified by a Responsible Officer of the
Borrower, copies of which have heretofore been furnished to each Lender, present
fairly the consolidated financial condition of the Borrower and its consolidated
Subsidiaries as at such date, and the consolidated results of its operations and
its consolidated cash flows for the three-month period then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by the aforementioned firm of accountants
and disclosed therein). The Borrower and its Subsidiaries do not have any
material Contingent Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.
5.2 No Change. Since January 1, 2000, (a) there has been no
change, and (as of the Closing Date and as of the Restatement Effective Date
only) no development or event which has had or could reasonably be expected to
have a material adverse effect on (i) the business, assets, condition (financial
or otherwise) or results of operations of the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of the Borrower and its Subsidiaries to
perform their obligations under the Credit Documents and with respect to the
other financings contemplated hereby or (iii) the rights and remedies of the
Lenders under the Credit Documents and (b) no dividends or other distributions
(other than the dividend
42
paid March 1, 2000) have been declared, paid or made upon the Capital
Stock of the Borrower nor has any of the Capital Stock of the Borrower been
redeemed, retired, repurchased or otherwise acquired for value by the Borrower
or any of its Subsidiaries, except in connection with the Transactions and as
permitted under this Agreement.
5.3 Existence; Compliance with Law. Each of the Borrower and
its Subsidiaries (a) is duly organized and validly existing under the laws of
the jurisdiction of its incorporation, (b) has full power and authority and
possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to use its corporate name and to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted other than such franchises, licenses, permits,
authorizations and approvals the lack of which, individually or in the
aggregate, would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Borrower and
its Subsidiaries taken as a whole, (c) is duly qualified and in good standing
(to the extent such concept is applicable in the applicable jurisdiction) to do
business in each jurisdiction in which the nature of its business or the
ownership, leasing or holding of its properties makes such qualification
necessary, except such jurisdictions where the failure so to qualify would not
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries taken
as a whole and (d) is in compliance with all applicable statutes, laws,
ordinances, rules, orders, permits and regulations of any governmental authority
or instrumentality, domestic or foreign (including, without limitation, those
related to Hazardous Materials and substances), except where noncompliance would
not have a material adverse effect on the business, assets, condition (financial
or otherwise) or results of operations of the Borrower and its Subsidiaries
taken as a whole. Neither the Borrower nor any of its Subsidiaries has received
any written communication from a Governmental Authority that alleges that the
Borrower or any of its Subsidiaries is not in compliance with federal, state,
local or foreign laws, ordinances, rules and regulations except to the extent
such noncompliance, individually or in the aggregate, would not reasonably be
expected to have a material adverse effect on the Borrower and its Subsidiaries
taken as a whole.
5.4 Power; Authorization. Each of the Borrower and its
Subsidiaries has the power and authority to make, deliver and perform each of
the Credit Documents to which it is a party, and Borrower has the power and
authority and legal right to borrow hereunder and to have Letters of Credit
issued for its account hereunder. Each of the Borrower and its Subsidiaries has
taken all necessary action to authorize the execution, delivery and performance
of each of the Credit Documents to which it is or will be a party and the
Borrower has taken all necessary action to authorize the borrowings hereunder
and the issuance of Letters of Credit for its account hereunder. No consent or
authorization of, or filing with, any Person (including, without limitation, any
Governmental Authority) is required in connection with the execution, delivery
or performance by the Borrower or any of its Subsidiaries, or for the validity
or enforceability in accordance with its terms against the Borrower or any of
its Subsidiaries, of any Credit Document except for consents, authorizations and
filings which have been obtained or made and are in full force and effect and
except (i) such consents, authorizations and filings, the failure to obtain or
perform (x) which would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole and (y) which would not adversely
affect the validity or enforceability of any of the Credit Documents or the
rights or remedies of the Administrative Agent or the Lenders thereunder, and
(ii) such filings as are necessary to perfect the Liens of the Lenders created
pursuant to this Agreement and the Security Documents.
5.5 Enforceable Obligations. This Agreement and the Merger
Agreement have been, and each of the other Credit Documents and any other
agreement to be entered into by any Credit Party pursuant to the Merger
Agreement has been or will be, duly executed and delivered on behalf of each
Credit Party that is party thereto. This Agreement and the Merger Agreement each
constitutes, and each of the other Credit Documents and any other agreements
entered into by any Credit Party pursuant to the
43
Merger Agreement constitute the legal, valid and binding obligation of each
Credit Party that is party thereto, and is enforceable against each Credit Party
that is party thereto in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
5.6 No Legal Bar. The execution, delivery and performance of
each Credit Document, the incurrence or issuance of and use of the proceeds of
the Loans and of drawings under the Letters of Credit and the transactions
contemplated by the Merger Agreement and the Credit Documents, (a) will not
violate any Requirement of Law or any Contractual Obligation applicable to or
binding upon each of the Borrower or any Subsidiary of the Borrower or any of
their respective properties or assets, in any manner which, individually or in
the aggregate, (i) would have a material adverse effect on the ability of the
Borrower or any such Subsidiary taken as a whole to perform its obligations
under the Credit Documents and the Merger Agreement and any other agreement
entered into pursuant to the Merger Agreement, to which it is a party, (ii)
would give rise to any liability on the part of the Administrative Agent or any
Lender, or (iii) would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Borrower and
its Subsidiaries taken as a whole, and (b) will not result in the creation or
imposition of any Lien on any of its properties or assets pursuant to any
Requirement of Law applicable to it, as the case may be, or any of its
Contractual Obligations, except for the Liens arising under the Security
Documents and Permitted Liens.
5.7 No Material Litigation. Other than as set forth on
Schedule 5.7, (i) no litigation by, investigation known to the Borrower by, or
proceeding of, any Governmental Authority is pending against the Borrower or any
of its Subsidiaries (including after giving effect to the Transactions) with
respect to the validity, binding effect or enforceability of the Merger
Agreement, any Credit Document, the Loans made hereunder, the use of proceeds
thereof, or of any drawings under a Letter of Credit and the other transactions
contemplated hereby or by the Merger Agreement and (ii) no lawsuits, claims,
proceedings or investigations are pending or, to the best knowledge of the
Borrower, threatened as of the Restatement Effective Date against or affecting
the Borrower or any of its Subsidiaries or any of their respective properties,
assets, operations or businesses (including after giving effect to the
Transactions), in which there is a probability of an adverse determination, and
is reasonably likely, if adversely decided, to have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole.
5.8 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).
5.9 Federal Regulation. No part of the proceeds of any of the
Loans or any drawing under a Letter of Credit will be used for any purpose which
violates the provisions of Regulation T, U or X of the Board. Neither the
Borrower nor any of its Subsidiaries is engaged or will engage, principally or
as one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under said Regulation U.
5.10 No Default. The Borrower and each of its Subsidiaries
have performed all material obligations required to be performed by them under
their respective Contractual Obligations (including after giving effect to the
Transactions and the Restatement Transactions) and they are not (with or without
the lapse of time or the giving of notice, or both) in breach or default in any
respect thereunder, except to the extent that such breach or default would not
have a material adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries taken
as a
44
whole. Neither the Borrower nor any of its Subsidiaries (including after
giving effect to the Transactions and the Restatement Transactions) is in
default under any material judgment, order or decree of any Governmental
Authority, domestic or foreign, applicable to it or any of its respective
properties, assets, operations or business, except to the extent that any such
defaults would not, in the aggregate, have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Borrower and its Subsidiaries taken as a whole.
5.11 Taxes. Each of the Borrower and its Subsidiaries (including after
giving effect to the Transactions) has filed or caused to be filed all material
tax returns which, to the knowledge of the 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 taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves (or other
sufficient provisions) in conformity with GAAP have been provided on the books
of the Borrower or its Subsidiaries (including after giving effect to the
Transactions), as the case may be); and no tax Lien has been filed, and, to the
knowledge of the Borrower, no written claim is being asserted, with respect to
any such tax, fee or other charges.
5.12 Subsidiaries. The Subsidiaries of the Borrower and their
jurisdictions of incorporation on the Restatement Effective Date are as set
forth on Schedule 5.12.
5.13 Ownership of Property; Liens. As of the Restatement Effective
Date and as of the making of any extension of credit hereunder (subject to
transfers and dispositions of property permitted under subsection 8.5), each of
the Borrower and its Subsidiaries has good and valid title to all of its
material assets (other than real property or interests in real property) in each
case free and clear of all mortgages, liens, security interests or encumbrances
of any nature whatsoever except Permitted Liens. With respect to real property
or interests in real property, as of the Restatement Effective Date, each of the
Borrower and its Subsidiaries has (i) fee title to all of the real property
listed on Schedule 5.13 under the heading "Fee Properties" (each, a "Fee
Property"), and (ii) good and valid title to the leasehold estates in all of the
real property leased by it and, in the case of any such leasehold estates
located in the United States with a base aggregate annual rent in excess of
$50,000, listed on Schedule 5.13 under the heading "Leased Properties" (each, a
"Leased Property"), in each case, free and clear of all mortgages, liens,
security interests, easements, covenants, rights-of-way and other similar
restrictions of any nature whatsoever, except (A) Permitted Liens and (B) as to
Leased Property, the terms and provisions of the respective lease therefor,
including, without limitation, the matters set forth on Schedule 5.13, and any
matters affecting the fee title and any estate superior to the leasehold estate
related thereto. The Fee Properties and the Leased Properties constitute, as of
the Restatement Effective Date, all of the real property owned in fee or leased
by the Borrower and its Subsidiaries in the United States.
5.14 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan that would result
in a material liability to the Borrower or any of its Subsidiaries, and each
Plan has complied during such period in all material respects with the
applicable provisions of ERISA and the Code. Neither the Borrower nor any
Commonly Controlled Entity has been involved in any transaction that would cause
the Borrower or any of its Subsidiaries to be subject to material liability with
respect to a Plan to which the Borrower or any of its Subsidiaries or any
Commonly Controlled Entity contributed or was obligated to contribute during the
six-year period ending on the date this representation is made or deemed made;
or incurred any material liability under Title IV of ERISA which would become or
remain a material liability of the Borrower or any of its Subsidiaries after the
Restatement Effective Date. No termination of a Single Employer Plan has
occurred, and no Lien in favor of the PBGC or a Plan has
45
arisen, during such five-year period that would result in a material liability
to the Borrower or any of its Subsidiaries. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits that would result in a
material liability to the Borrower or any of its Subsidiaries. Neither the
Borrower, nor any of its Subsidiaries nor any Commonly Controlled Entity has had
a complete or partial withdrawal from any Multiemployer Plan, and neither the
Borrower, nor any of its Subsidiaries nor any Commonly Controlled Entity would
become subject to any liability under ERISA if the Borrower or any of its
Subsidiaries or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made, in either case that
would result in a material liability to the Borrower or any of its Subsidiaries.
To the knowledge of the Borrower, no such Multiemployer Plan is in
Reorganization or Insolvent. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrower, its Subsidiaries
and each Commonly Controlled Entity for post retirement benefits to be provided
to their current and former employees under Plans which are welfare benefit
plans (as defined in Section 3(1) of ERISA) does not, in the aggregate, exceed
the assets under all such Plans allocable to such benefits by an amount that
would result in a material liability to the Borrower or any of its Subsidiaries
except as disclosed in the audited financial statements of the Borrower and its
consolidated Subsidiaries provided to the Lenders prior to the Restatement
Effective Date. For purposes of this subsection 5.14, a material liability shall
exceed $10,000,000.
5.15 Collateral Documents. (a) The 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
described therein (to the extent such matter is governed by the law of the
United States or a jurisdiction therein) and, when stock certificates
representing or constituting the pledged stock described in the Collateral
Agreement are delivered to the Administrative Agent, such security interest
shall constitute a perfected first lien on, and security interest in, all right,
title and interest of the pledgor party thereto in the pledged stock described
therein (to the extent such matter is governed by the law of the United States
or a jurisdiction therein).
(b) The 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 collateral described therein (to the extent
such matter is governed by the law of the United States or a jurisdiction
therein), and Uniform Commercial Code financing statements have been filed in
each of the jurisdictions listed on Schedule 5.15(b), or arrangements have been
made for such filing in such jurisdictions, and upon such filing, and upon the
taking of possession by the Administrative Agent of any such collateral the
security interests in which may be perfected only by possession, such security
interests will, subject to the existence of Permitted Liens, constitute
perfected first priority liens on, and security interests in, all right, title
and interest of the debtor party thereto in the collateral described therein,
except to the extent that a security interest cannot be perfected therein by the
filing of a financing statement or the taking of possession under the Uniform
Commercial Code of the relevant jurisdiction.
(c) Upon execution and delivery thereof by the relevant Credit Party,
each Mortgage will be effective to create in favor of the Administrative Agent,
for the ratable benefit of the Lenders, a legal, valid and enforceable security
interest in the collateral described therein, and upon recording the Mortgages
in the jurisdictions listed on Schedule 5.13 (or, in the case of a Mortgage
delivered pursuant to subsection 7.9, the jurisdiction in which the property
covered by such Mortgage is located), such security interests will, subject to
the existence of Permitted Liens, constitute first liens on, and perfected
security interests in, all rights, title and interest of the debtor party
thereto in the collateral described therein.
46
5.16 Copyrights, Patents, Permits, Trademarks and Licenses. Schedule
5.16 sets forth a true and complete list as of the Restatement Effective Date of
all material registered trademarks, trade names, service marks, patents, pending
patent applications and registered copyrights and applications therefor owned,
used or filed by or licensed to the Borrower and its Subsidiaries (after giving
effect to the Transactions) and, with respect to registered trademarks (if any),
contains a list of all jurisdictions in which such trademarks are registered or
applied for and all registration and application numbers. Except as set forth on
Schedule 5.16, the Borrower or one of its Subsidiaries (after giving effect to
the Transactions) owns or has the right to use, registered trademarks, trade
names, service marks, patents, pending patent applications and copyrights and
applications therefor referred to in such Schedule. Except as set forth on
Schedule 5.16, to the best knowledge of the Borrower, no claims are pending by
any Person with respect to the ownership, validity, enforceability or the
Borrower's or any Subsidiary's use of any such registered trademarks, trade
names, service marks, patents, pending patent applications and copyrights, or
applications therefor, challenging or questioning the validity or effectiveness
of any of the foregoing, in any jurisdiction, domestic or foreign, except to the
extent such claims could not reasonably be expected to have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole.
5.17 Environmental Matters. Other than as disclosed in the annual
report on Form 10-K of the Borrower for the fiscal year ended December 29, 2001
or except insofar as any exceptions to the following, individually or in the
aggregate, could not reasonably be expected to result in a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole:
(a) to the best knowledge of the Borrower, the properties owned,
leased, or otherwise operated by the Borrower or any of its Subsidiaries do
not contain, and have not previously contained, in, on or under, including,
without limitation, the soil and groundwater thereunder, any Hazardous
Materials in amounts or concentrations that constitute or constituted a
violation of, or could reasonably give rise to liability under,
Environmental Laws;
(b) to the best knowledge of the Borrower, the properties owned or
leased, or otherwise operated by the Borrower or any of its Subsidiaries
and all operations and facilities at such properties are in compliance with
all Environmental Laws, and there is no contamination or violation of any
Environmental Law which could interfere with the continued operation of, or
impair the fair saleable value of, such property;
(c) neither the Borrower nor any of its Subsidiaries has received or
is aware of any written complaint, notice of violation, alleged violation,
or notice of investigation or of potential liability under Environmental
Laws with regard to the Borrower or its Subsidiaries, nor does the Borrower
or any of its Subsidiaries have knowledge that any such action is being
contemplated, considered or threatened;
(d) to the best knowledge of the Borrower, Hazardous Materials have
not been generated, treated, stored or disposed of at, on or under any
properties presently or formerly owned, leased, or otherwise operated by
the Borrower or any of its Subsidiaries, nor have any Hazardous Materials
been transported from any such property, or come to be located at any other
property, in violation of or in a manner that could reasonably give rise to
liability under any Environmental Laws; and
(e) there are no governmental administrative actions or judicial
proceedings pending or, to the best knowledge of the Borrower, threatened
under any Environmental Law to which the Borrower or any of its
Subsidiaries is a party, nor are there any consent decrees or other
decrees,
47
consent orders, administrative orders or other orders, or other
administrative or judicial requirements, other than permits authorizing
operations by the Borrower or any of its Subsidiaries, outstanding under
any Environmental Law.
5.18 Accuracy and Completeness of Information. The factual statements
contained in the financial statements referred to in subsection 5.1, the Credit
Documents (including the schedules thereto), the Merger Agreement and any other
certificates or documents furnished or to be furnished to the Administrative
Agent or the Lenders from time to time in connection with this Agreement, taken
as a whole, do not and will not, to the best knowledge of the Borrower, as of
the date when made, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which the same were
made, all except as otherwise qualified herein or therein, such knowledge
qualification being given only with respect to factual statements made by
Persons other than the Borrower or any of its Subsidiaries; provided that with
respect to projected financial information, the Borrower represents only that
such information has been and will be prepared in good faith based upon
assumptions (in accordance with GAAP) believed by the Borrower to be reasonable
at the time.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Loans and Letters of Credit. The obligation
of each Lender to make its Loans, and the obligation of the Issuing Lender to
issue any Letter of Credit, on the Closing Date are subject to the satisfaction,
or waiver by such Lender, immediately prior to or concurrently with the making
of such Loans or the issuance of such Letters of Credit, as the case may be, of
the following conditions:
(a) Agreement; Notes. The Administrative Agent shall have received (i)
a counterpart of this Agreement for each Lender duly executed and delivered
by a duly authorized officer of the Borrower, (ii) for the account of each
Revolving Credit Lender requesting the same pursuant to subsection 4.13, a
Revolving Credit Note of the Borrower conforming to the requirements hereof
and executed by a duly authorized officer of Borrower, (iii) for the
account of each Tranche A Term Loan Lender requesting the same pursuant to
subsection 4.13, a Tranche A Term Note, conforming to the requirements
hereof and executed by a duly authorized officer of Borrower, (iv) for the
account of each Tranche B Term Loan Lender requesting the same pursuant to
subsection 4.13, a Tranche B Term Note, conforming to the requirements
hereof and executed by a duly authorized officer of Borrower, and (v) if
requested by JPMorgan Chase, for the account of JPMorgan Chase, a Swing
Line Note, conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower.
(b) Transactions. (i) The Transactions shall be consummated
simultaneously pursuant to the Merger Agreement with all fees, costs and
expenses incurred in connection therewith not to exceed approximately
$82,000,000 (provided that if such fees exceed $82,000,000, the Investor
Group shall contribute any such excess amount) and (ii) no material
provision of the Merger Agreement shall have been amended, supplemented,
waived or otherwise modified in any material respect without the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld.
(c) Capitalization; Capital Structure. (i) MergerCo shall have
received directly or indirectly (A) at least $275,000,000 in equity from
the Investor Group (which includes equity retained by existing shareholders
of up to $20,000,000) and up to $60,000,000 of Preferred Stock (the "Equity
Contribution"), and (B) the Borrower and MergerCo shall have collectively
received at least $215,871,750 in gross cash proceeds from the issuance of
the Specified Debt.
48
(ii) The terms, conditions and documentation of the Senior
Subordinated Note Indenture and of all equity securities (excluding
any Preferred Stock) of the Borrower or any of its Subsidiaries to be
outstanding at or after the Closing Date, the certificate of
incorporation, by-laws, other governing documents and the corporate
and capital structure of the Borrower and its Subsidiaries (excluding
the identity and amount of equity contribution of any member of the
Investor Group), in each case after giving effect to the consummation
of the Transactions, shall be in form and substance as set forth in
the Offering Memorandum or otherwise acceptable to the Administrative
Agent.
(iii) The terms, conditions and documentation of the Preferred
Stock to be outstanding at or after the Closing Date after giving
effect to the consummation of the Transactions, shall be in form and
substance as set forth in the Certificate of Designation or otherwise
acceptable to the Administrative Agent.
The execution and delivery of this Agreement by the Lenders and the
Administrative Agent shall be deemed to evidence the satisfaction of the
Lenders and the Administrative Agent with such of the matters referenced
and in clauses (i) and (ii) of this paragraph (c) as shall have been
disclosed and made available to the Administrative Agent prior to the date
hereof.
(d) Financial Statements. The Administrative Agent shall have received
the financial statements described in subsection 5.1.
(e) Fees. The Administrative Agent, the Co-Lead Arrangers and the
Lenders shall have received all fees, expenses and other consideration
presented for payment required to be paid or delivered on or before the
Closing Date.
(f) Lien Searches; Lien Perfection. (i) The Administrative Agent shall
have received the results of a search of Uniform Commercial Code, tax and
judgment filings made with respect to the Borrower and its Subsidiaries in
the jurisdictions set forth on Schedule 5.15(b), together with copies of
financing statements disclosed by such searches and such searches shall
disclose no Liens on any assets encumbered by any Security Document, except
for Liens permitted hereunder or, if unpermitted Liens are disclosed, the
Administrative Agent shall have received satisfactory evidence of the
release of such Liens and (ii) the Administrative Agent shall have received
duly executed financing statements on Form UCC-1, necessary or, in the
opinion of the Administrative Agent, desirable to perfect the Liens created
by the Security Documents.
(g) Environmental. The Agents shall be reasonably satisfied, based
upon the results of the environmental diligence conducted by the
Administrative Agent and its advisors in cooperation with the Borrower,
with respect to environmental hazards, conditions or liabilities to which
the Borrower or any of its Subsidiaries may be subject (the execution and
delivery of this Agreement by the Lenders and the Administrative Agent
being deemed to evidence the satisfaction of the Administrative Agent with
such due diligence as shall have been disclosed and made available to the
Administrative Agent prior to the date hereof).
(h) Collateral Agreement. The Administrative Agent shall have received
the Collateral Agreement executed and delivered by a duly authorized
officer of the parties thereto, together with stock certificates
representing 100% (or 65%, in the case of Foreign Subsidiaries of the
Borrower) of all issued and outstanding certificated shares of Capital
Stock of each Subsidiary of the Borrower (excluding Jostens Can Investments
B.V., a Netherlands corporation and Jostens International Holdings B.V., a
Netherlands corporation), and undated stock powers for each
49
certificate, executed in blank and delivered by a duly authorized officer
of the applicable pledgor and the acknowledgment and consent of the issuer
thereunder in the form annexed thereto.
(i) Indebtedness. After giving effect to the Transactions, the
Borrower and its Subsidiaries shall have no (i) outstanding preferred stock
(other than up to $60,000,000 of Preferred Stock issued to the Investor
Group on the Closing Date) and (ii) Indebtedness other than any
Indebtedness permitted under Section 8.1 hereof.
(j) Subsidiary Guarantee. The Administrative Agent shall have received
a Subsidiary Guarantee, executed and delivered by a duly authorized officer
of each of the Subsidiaries of the Borrower (other than Foreign
Subsidiaries of the Borrower).
(k) Merger Agreement. The Administrative Agent shall have received the
Merger Agreement, executed and delivered by a duly authorized officer of
the parties thereto and in form and substance reasonably satisfactory to
the Administrative Agent, with no material change to such agreement from
the copy thereof delivered to the Administrative Agent prior to the Closing
Date.
(l) Legal Opinions. The Administrative Agent shall have received,
dated the Closing Date and addressed to the Administrative Agent and the
Lenders, (i) an opinion of ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to the
Credit Parties, in substantially the form of Exhibit J-1, (ii) an opinion
of the general counsel of the Borrower, in substantially the form of
Exhibit J-2, and (iii) an opinion of local counsel in each of Minnesota and
Kansas, each with such changes thereto as may be approved by the
Administrative Agent and its counsel.
(m) Closing Certificate. The Administrative Agent shall have received
a Closing Certificate of the Borrower and each other Credit Party dated the
Closing Date, in substantially the form of Exhibits K-1 and K-2,
respectively, with appropriate insertions and attachments, in form and
substance satisfactory to the Administrative Agent and its counsel,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary (or other appropriate officers or representatives) of
the Borrower and its Subsidiaries, respectively.
(n) Solvency Certificate. The Administrative Agent shall have received
a certificate of the chief financial officer of the Borrower in form and
substance reasonably satisfactory to it which shall document the solvency
of the Borrower and its Subsidiaries after giving effect to the
consummation of the Transactions and the other transactions and related
financings contemplated hereby.
(o) Insurance. The Administrative Agent shall have received (i) a
schedule describing all insurance (including but not limited to business
interruption insurance as reasonably requested by the Administrative Agent)
maintained by the Borrower and its Subsidiaries pursuant to subsection 7.5
and (ii) binders (or other customary evidence as to the obtaining and
maintenance by the Borrower of such insurance) for each policy set forth on
such schedule insuring against casualty and other usual and customary
risks.
(p) Other Agreements. The Administrative Agent shall have received
each additional document or instrument reasonably requested by the Required
Lenders.
(q) Litigation. On the Closing Date, other than as disclosed in the
Offering Memorandum, there shall be no actions, suits, injunctions,
restraining orders or proceedings pending or threatened against any Credit
Party (a) with respect to this Agreement or any other
50
Credit Document or the transactions contemplated hereby or thereby
(including the Transactions) which would be reasonably expected to have a
material adverse effect on the rights or remedies of the Lenders under the
Credit Documents or on the ability of any Credit Party to perform its
respective obligations to the Lenders hereunder or under any other Credit
Document or (b) which the Administrative Agent or the Required Lenders
shall determine could reasonably be expected to have a material adverse
effect on the rights or remedies of the Lenders hereunder or under any
other Credit Document or on the ability of any Credit Party to perform its
respective obligations to the Lenders hereunder or under any other Credit
Document.
(r) Consents, Approvals and Filings. Except for the financing
statements contemplated by the Collateral Agreement, on the Closing Date,
all necessary governmental and other third party authorizations, consents,
approvals or waivers required in connection with the execution, delivery
and performance by the Credit Parties, and the validity and enforceability
against the Credit Parties, of the Credit Documents to which any of them is
a party, or otherwise in connection with the transactions contemplated by
the Credit Documents and the Merger Agreement, shall have been obtained or
made and remain in full force and effect (except where the failure to do so
would not reasonably be expected to have a material adverse effect on (x)
the business, operations, property, condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole or (y) (I) the validity
or enforceability of this Agreement, any of the Notes or the other Credit
Documents or (II) the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder), and all applicable waiting periods shall
have expired without any action being taken by any competent authority
which restrains or prevents such transactions or imposes materially adverse
conditions upon the consummation of such transactions.
(s) Contractual Restrictions. Neither the Borrower nor any of its
Subsidiaries shall be subject to any Requirement of Law or any contractual
or other restrictions that would be violated by the consummation of the
Transactions or the other transactions hereby, including the granting of
security interests and guarantees required by this Agreement, except to the
extent that any such violation would not reasonably be expected to have a
material adverse effect on (i) the business, assets, condition (financial
or otherwise) or results of operations of the Borrower and its Subsidiaries
taken as a whole, (ii) (A) the validity or enforceability of this Agreement
or the other Credit Documents, or (B) the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder, or (iii) the
ability of the Borrower or any of its Subsidiaries taken as a whole to
satisfy their obligations hereunder or thereunder.
(t) Consolidated EBITDA. The Administrative Agent shall be satisfied
that Consolidated EBITDA for the twelve month period ending January 1, 2000
shall equal or exceed $123,000,000 from planned continuing operations
(excluding restructuring and special charges and related adjustments taken
by the Borrower and any charges relating to the Transactions and the other
transactions contemplated hereby), and the Borrower shall have provided
support for such calculation of a nature that is reasonably satisfactory to
the Administrative Agent.
6.2 Conditions to All Loans and Letters of Credit. The obligation of
each Lender to make any Loan (other than any Revolving Credit Loan the proceeds
of which are to be used to repay Refunded Swing Line Loans) and the obligation
of the Issuing Lender to issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Representations and Warranties. Each of the representations and
warranties made in or pursuant to Section 5 or which are contained in any
other Credit Document shall be true and correct in all material respects on
and as of the date of such Loan or of the issuance of such Letter
51
of Credit as if made on and as of such date (unless stated to relate to a
specific earlier date, in which case, such representations and warranties
shall be true and correct in all material respects as of such earlier
date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such Borrowing Date or after
giving effect to such Loan to be made or such Letter of Credit to be issued
on such Borrowing Date.
Each borrowing by the Borrower hereunder and the issuance of each Letter of
Credit by the Issuing Lender hereunder shall constitute a representation and
warranty by the Borrower as of the date of such borrowing or issuance that the
conditions in clauses (a) and (b) and of this subsection 6.2 have been
satisfied.
6.3 Conditions to Effectiveness of Amended and Restated Credit
Agreement. The conditions precedent to the effectiveness of this Amended and
Restated Credit Agreement shall be as set forth in Section 4 of the Amendment
and Restatement Agreement.
Section 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Loan, Note or L/C Obligation remains outstanding and unpaid, any
amount (unless cash in an amount equal to such amount has been deposited to a
cash collateral account established by the Administrative Agent) remains
available to be drawn under any Letter of Credit or any other amount is owing to
any Lender or the Administrative Agent hereunder or under any of the other
Credit Documents, it shall, and, in the case of the agreements contained in
subsections 7.3 through 7.6, and 7.8 through 7.9, the Borrower shall cause each
of its Subsidiaries to:
7.1 Financial Statements. Furnish to the Administrative Agent (which
furnishing may be made to the Administrative Agent via a secured internet web
page or via delivery of a hard copy to the Administrative Agent with sufficient
copies for each Lender which the Administrative Agent shall promptly furnish to
each Lender):
(a) as soon as available, but in any event within 95 days after the
end of each fiscal year of the Borrower to end after the Closing Date, a
copy of the consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of stockholders' equity and cash flows and the consolidated
statements of income of the Borrower and its Subsidiaries for such fiscal
year, setting forth in each case in comparative form the figures for the
previous year and, in the case of the consolidated balance sheet referred
to above, reported on, without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, or
qualification which would affect the computation of financial covenants, by
independent certified public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower to end after the Closing Date, the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of each such quarter and the related unaudited consolidated statements
of income and cash flows of the Borrower and its Subsidiaries for such
quarterly period and the portion of the fiscal year of the Borrower through
such date, setting forth in each case in comparative form the figures for
the corresponding quarter in, and year to date portion of, the previous
year, and the figures for such periods in the budget prepared by the
Borrower and furnished to the Administrative Agent,
52
certified by the chief financial officer, controller or treasurer of the
Borrower as being fairly stated in all material respects;
(c) as soon as available, but in any event not later than 45 days
after the beginning of each fiscal year of the Borrower to end after the
Closing Date, to which such budget relates, a preliminary consolidated
operating budget for the Borrower and its Subsidiaries taken as a whole;
and as soon as available, any material revision to or any final revision of
any such preliminary annual operating budget or any such consolidated
operating budget; and
(d) concurrently with the delivery of financial statements pursuant to
subsection 7.1(a) or (b), a certificate of the chief financial officer or
treasurer of the Borrower setting forth, in reasonable detail, the
computations of Capital Expenditures as of the last day of the fiscal
period covered by such financial statements, the Leverage Ratio as of such
last day, and the Interest Coverage Ratio as of such last day;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal year-end audit
adjustments) and to be prepared in reasonable detail and (except in the case of
the statements referred to in paragraphs (c) and (d) of this subsection 7.1) in
accordance with GAAP.
7.2 Certificates; Other Information. Furnish to the Administrative
Agent (with sufficient copies for each Lender which the Administrative Agent
shall promptly deliver to each Lender):
(a) concurrently with the delivery of the consolidated financial
statements referred to in subsection 7.1(a), a letter from the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary to express their opinion on such
financial statements no knowledge was obtained of any Default or Event of
Default under subsections 4.4(b), 8.1, 8.3, and 8.5 through 8.11, except as
specified in such letter;
(b) within 15 days of the delivery of the financial statements
referred to in subsections 7.1(a) and (b) (except that the certificate
referred to in clause (iii) below shall be delivered concurrently with such
financial statements), a certificate of the chief financial officer or
treasurer of the Borrower stating that, to the best of such officer's
knowledge, during such period (i) no Subsidiary has been formed or acquired
(or, if any such Subsidiary has been formed or acquired, the Borrower has
complied with the requirements of subsection 7.9 with respect thereto),
(ii) neither the Borrower nor any of its Subsidiaries has changed its name,
its principal place of business, its chief executive office or the location
of any material item of tangible Collateral without complying with the
requirements of this Agreement and the Security Documents with respect
thereto, (iii) each of the Borrower and its Subsidiaries has observed or
performed all of its respective covenants and other agreements, and
satisfied every material condition, contained in this Agreement, the Notes
and the other Credit Documents to be observed, performed or satisfied by
it, and that such officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate, (iv) showing in detail
as of the end of the related fiscal period the figures and calculations
supporting such statement in respect of clause (e) of subsection 8.1,
clauses (b) and (e) of subsection 8.3 and subsections 8.6 through 8.11 and
any other calculations reasonably requested by the Administrative Agent
with respect to the quantitative aspects of the other covenants contained
herein, (v) if not specified in the financial statements delivered pursuant
to subsection 7.1, specifying the aggregate amount of interest paid or
accrued by the Borrower and its Subsidiaries, and the aggregate amount of
depreciation, depletion and amortization charged on the books of the
Borrower and its Subsidiaries, during such accounting period, and (vi)
identify any owned Real Property of the Borrower or a Domestic
53
Subsidiary of the Borrower acquired during such accounting period that,
together with any improvements thereon, has a value of at least $5,000,000;
(c) promptly upon receipt thereof, copies of all final reports
submitted to the Borrower or to any of its Subsidiaries by independent
certified public accountants in connection with each annual, interim or
special audit of the books of the Borrower or any of its Subsidiaries made
by such accountants, and, upon the request of any Lender (through the
Administrative Agent), any final comment letter submitted by such
accountants to management in connection with their annual audit;
(d) promptly upon their becoming available, copies of all financial
statements, reports, notices and proxy statements sent or made available to
the public generally by the Borrower or any of its Subsidiaries, if any,
and all regular and periodic reports and all final registration statements
and final prospectuses, if any, filed by the Borrower or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any Governmental Authority succeeding to any of its
functions;
(e) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a management summary describing
and analyzing the performance of the Borrower and its Subsidiaries during
the periods covered by such financial statements;
(f) within 50 days after the end of each fiscal quarter, a summary of
all Asset Sales during such fiscal quarter including the amount of all Net
Proceeds from such Asset Sales not previously applied to prepayments of the
Term Loans pursuant to the proviso to subsection 4.4(b)(iv); and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request (through the Administrative
Agent).
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations and liabilities of whatever nature, except (a) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or any of its Subsidiaries, as the case
may be, (b) for delinquent obligations which do not have a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole and (c) for
trade and other accounts payable in the ordinary course of business which are
not overdue for a period of more than 90 days or, if overdue for more than 90
days, as to which a dispute exists and adequate reserves in conformity with GAAP
have been established on the books of the Borrower or any of its Subsidiaries,
as the case may be.
7.4 Conduct of Business and Maintenance of Existence. Continue to
engage in businesses of the same general type as now conducted by it, and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all material rights, material privileges,
franchises, copyrights, patents, trademarks and trade names necessary or
desirable in the normal conduct of its business except for rights, privileges,
franchises, copyrights, patents, trademarks and tradenames the loss of which
would not in the aggregate have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole, and except as otherwise
permitted by subsections 8.4 and 8.5; and comply with all applicable
Requirements of Law except to the extent that the failure to comply therewith
would not, in the aggregate, have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole.
54
7.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition (ordinary wear
and tear excepted); and
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks (but
including, in any event, public liability and business interruption insurance)
as are usually insured against in the same general area by, companies engaged in
the same or a similar business, and furnish to the Administrative Agent (which
furnishing may be made to the Administrative Agent via a secured internet web
page or via electronic mail), (i) annually, a schedule disclosing (in a manner
substantially similar to that used in the schedule provided pursuant to
subsection 6.1(o) all insurance against products liability risk maintained by
the Borrower and its Subsidiaries pursuant to this subsection 7.5(b) or
otherwise and (ii) upon written request of any Lender, full information as to
the insurance carried; provided that the Borrower may implement programs of self
insurance in the ordinary course of business and in accordance with industry
standards for a company of similar size so long as reserves are maintained in
accordance with GAAP for the liabilities associated therewith.
7.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
which permit financial statements to be prepared in conformity with GAAP and all
Requirements of Law; and permit representatives of any Lender upon reasonable
notice (made through the Administrative Agent and no more frequently than
quarterly unless a Default or Event of Default shall have occurred and be
continuing) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be requested upon reasonable notice, and to discuss the
business, operations, assets and financial and other condition of the Borrower
and its Subsidiaries with officers and employees thereof and with their
independent certified public accountants with prior reasonable notice to, and
coordination with, the chief financial officer or the treasurer of the Borrower.
7.7 Notices. Promptly give notice to the Administrative Agent (to be
distributed by the Administrative Agent to the Lenders):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument or
other agreement, guarantee or collateral document of the Borrower or any of
its Subsidiaries which default or event of default has not been waived and
would have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole, or any other default or event of default
under any such instrument, agreement, guarantee or other collateral
document which, assuming for the purposes of this subsection 7.7(b) only
that the threshold amount contained in the proviso to clause (e) of Section
9 were $5,000,000, would have constituted a Default or Event of Default
under this Agreement, or (ii) litigation, investigation or proceeding which
may exist at any time between the Borrower or any of its Subsidiaries and
any Governmental Authority, or receipt of any notice of any environmental
claim or assessment against the Borrower or any of its Subsidiaries by any
Governmental Authority, which in any such case would have a material
adverse effect on the business, assets, condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries taken as a
whole;
(c) of any litigation or proceeding against the Borrower or any of its
Subsidiaries (i) in which more than $10,000,000 of the amount claimed is
not covered by insurance, or (ii) in which injunctive or similar relief is
sought which if obtained would have a material adverse effect on the
55
business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole;
(d) of the following events, as soon as practicable after, and in any
event within 30 days after, the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan which Reportable Event could reasonably result in material liability
to the Borrower and its Subsidiaries taken as a whole or (ii) the
institution of proceedings or the taking of any other action by PBGC, the
Borrower or any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan and, with respect to a Multiemployer Plan,
the Reorganization or Insolvency of such Plan, in each of the foregoing
cases which could reasonably result in material liability to the Borrower
and its Subsidiaries taken as a whole, and in addition to such notice,
deliver to the Administrative Agent and each Lender whichever of the
following may be applicable: (A) a certificate of a Responsible Officer of
the Borrower setting forth details as to such Reportable Event and the
action that the Borrower or such Commonly Controlled Entity proposes to
take with respect thereto, together with a copy of any notice of such
Reportable Event that may be required to be filed with PBGC, or (B) any
notice delivered by PBGC evidencing its intent to institute such
proceedings or any notice to PBGC that such Plan is to be terminated, as
the case may be;
(e) concurrently with the delivery of the information delivered
pursuant to subsection 7.2(f) and each prepayment required pursuant to
subsection 4.4(b)(iv), of any Asset Sale or substantially like-kind
exchange of real property by the Borrower or any of its Subsidiaries; and
(f) of a material adverse change known to the Borrower or its
Subsidiaries in the business, assets, condition (financial or otherwise) or
results of operations of the Borrower and its Subsidiaries taken as a
whole.
Each notice pursuant to this subsection 7.7 shall be accompanied by a statement
of a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating what
action the Borrower proposes to take with respect thereto.
7.8 Environmental Laws. (a) (i) Comply with all Environmental Laws
applicable to it, and obtain, comply with and maintain any and all Environmental
Permits necessary for its operations as conducted and as planned; and (ii) take
reasonable efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors, and invitees comply with all Environmental Laws, and obtain,
comply with and maintain any and all Environmental Permits, applicable to any of
them insofar as any failure to so comply, obtain or maintain as set forth in (i)
and (ii) above could result in a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Borrower and its Subsidiaries taken as a whole. Noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law or Environmental
Permit shall be deemed not to constitute a breach of this 7.8(a); provided that,
upon learning of any such noncompliance, the Borrower and its Subsidiaries shall
promptly undertake reasonable efforts to achieve compliance or to contest by
appropriate proceedings any alleged noncompliance and; provided, further, that,
in any case, such noncompliance, and any other noncompliance with Environmental
Law and any contesting of allegations of noncompliance with Environmental Laws,
individually or in the aggregate, after giving effect to any compliance efforts
undertaken, would not reasonably be expected to give rise to a material adverse
effect on the business, assets, condition (financial or otherwise) or results of
operations of the Borrower and its Subsidiaries taken as a whole.
(b) Comply in a timely manner with all orders and lawful directives
regarding Environmental Laws issued to the Borrower or any of its Subsidiaries
by any Governmental Authority,
56
other than such orders and lawful directives as to which an appeal or other
challenge has been timely and properly taken in good faith and the pendency of
any and all such appeals and other challenges could not reasonably be expected
to give rise to a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Borrower and its
Subsidiaries taken as a whole.
(c) Maintain, update as appropriate, and implement in all material
respects an environmental program reasonably designed to (i) ensure that the
Borrower and its Subsidiaries, any of their respective operations (including,
without limitation, disposal), and any properties owned, leased or operated by
any of them, attain and remain in substantial compliance with all applicable
Environmental Laws; (ii) reasonably and prudently manage any liabilities or
potential liabilities that the Borrower, any of the other Credit Parties, any of
their respective operations (including, without limitation, disposal), and any
properties owned or leased by any of them, may have under all applicable
Environmental Laws; and (iii) ensure that the Borrower and its Subsidiaries
undertake reasonable efforts to identify, and reasonably evaluate, issues of
compliance with and liability under Environmental Laws prior to acquiring,
directly or indirectly, any ownership or leasehold interest in real property, or
other interest in any real property that could give rise to the Borrower or any
of its Subsidiaries being subjected to liability under any Environmental Law as
a result of such acquisition.
7.9 Additional Collateral. (a) Subject to subsection 7.9(d), with
respect to any assets acquired after the Closing Date by the Borrower or any of
its Domestic Subsidiaries that are intended to be subject to the Lien created by
any of the Security Documents but which are not so subject (but, in any event,
excluding (i) any assets described in paragraph (b) or (c) of this subsection,
(ii) assets acquired or owned pursuant to subsection 8.6(h) and (iii) immaterial
assets, promptly (and in any event within 30 days after the acquisition
thereof): (i) execute and deliver to the Administrative Agent such amendments or
supplements to the relevant Security Documents or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on such assets, and
(ii) take all actions necessary or advisable to cause such Lien to be duly
perfected to the extent required by such Security Document in accordance with
all applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent.
(b) With respect to any Person that is or becomes a Subsidiary (other
than any Foreign Subsidiary of the Borrower) that has material assets, promptly
(and in any event within 30 days after such Person becomes a Subsidiary): (i)
execute and deliver to the Administrative Agent, for the benefit of the Lenders,
a new pledge agreement or such amendments to the relevant Security Agreement as
the Administrative Agent reasonably shall deem necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers executed and
delivered in blank by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and (iii) cause such new Subsidiary (A) to
become a party to the Subsidiary Guarantee and/or the Collateral Agreement or
such comparable documentation which is in form and substance reasonably
satisfactory to the Administrative Agent, and (B) to take all actions necessary
or advisable to cause the Lien created by the Collateral Agreement to be duly
perfected to the extent required by such agreement in accordance with all
applicable Requirements of Law, including, without limitation, the filing of
financing statements in such jurisdictions as may be reasonably requested by the
Administrative Agent.
(c) With respect to any Person that is or becomes a Foreign Subsidiary
of the Borrower and that has material assets, promptly (and in any event within
30 days after such Person becomes a Subsidiary): (i) execute and deliver to the
Administrative Agent a new pledge agreement or such amendments to the relevant
Security Agreement as the Administrative Agent reasonably shall deem
57
necessary or advisable to grant to the Administrative Agent, for the benefit of
the Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by
the Borrower or any of its Subsidiaries (provided that in no event shall more
than 65% of the Capital Stock of any such Foreign Subsidiary be required to be
so pledged), and (ii) if such Capital Stock is issued in certificated form,
deliver to the Administrative Agent any certificates representing such Capital
Stock, together with undated stock powers executed and delivered in blank by a
duly authorized officer of the Borrower or such Subsidiary, as the case may be,
and take or cause to be taken all such other actions under the law of the
jurisdiction of organization of such Foreign Subsidiary as may be necessary or
advisable to perfect such Lien on such Capital Stock, and if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described in clauses (i) and (ii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) Upon the request of the Administrative Agent, the Borrower will,
and will cause its Domestic Subsidiaries to, promptly grant to the
Administrative Agent, within 60 days of such request, security interests and
Mortgages in such owned Real Property of the Borrower and its Domestic
Subsidiaries as are acquired after the Closing Date by the Borrower or such
Subsidiary and that, together with any improvements thereon, individually have a
value of at least $5,000,000, as additional security for the obligations of the
Credit Parties under any Credit Document (unless the subject property is already
mortgaged to a third party to the extent permitted by subsection 8.2). Such
Mortgages shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Administrative Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Liens and such other Liens
reasonably acceptable to the Administrative Agent. The Mortgages or instruments
related thereto shall be duly recorded or filed in such manner and in such
places as are required by law to establish, perfect, preserve and protect the
Liens in favor of the Administrative Agent required to be granted pursuant to
the Mortgages and all taxes, fees and other charges payable in connection
therewith shall be paid in full. If requested by the Administrative Agent or the
Required Lenders, the Borrower shall provide a lender's title policy with
respect to each such Mortgage paid for by the Borrower, issued by a nationally
recognized title insurance company, together with such endorsements, coinsurance
and reinsurance as may be reasonably requested by the Administrative Agent, in
form and substance reasonably acceptable to the Administrative Agent, insuring
each Mortgage as a first lien on the relevant Mortgaged Property and subject
only to Liens expressly agreed to by the Administrative Agent.
7.10 Pledge of Certain Subsidiaries. Deliver to the Administrative
Agent within ten Business Days of the Closing Date (i) evidence of the pledge of
shares representing 65% of all issued and outstanding shares of Capital Stock of
Jostens Can Investments B.V., a Netherlands corporation and Jostens
International Holdings B.V., a Netherlands corporation and (ii) the
acknowledgment and consent of such issuers in the form annexed to the Collateral
Agreement.
Section 8. NEGATIVE COVENANTS
The Borrower hereby agrees that it shall not, and it shall not permit
any of its Subsidiaries to, directly or indirectly so long as the Commitments
remain in effect or any Loan, Note or L/C Obligation remains outstanding and
unpaid, any amount (unless cash in an amount equal to such amount has been
deposited to a cash collateral account established by the Administrative Agent)
remains available to be drawn under any Letter of Credit or any other amount is
owing to any Lender or the Administrative Agent hereunder or under any other
Credit Document (it being understood that each of the permitted exceptions to
each of the covenants in this Section 8 is in addition to, and not overlapping
with, any other of such permitted exceptions except to the extent expressly
provided):
8.1 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
58
(a) the Indebtedness outstanding on the Closing Date and reflected on
Schedule 8.1(a), including the refinancing of any such Indebtedness on
terms and conditions taken as a whole no less favorable to the Borrower and
its Subsidiaries or the Lenders;
(b) Indebtedness consisting of the Loans and in connection with the
Letters of Credit and this Agreement;
(c) Indebtedness of the Borrower in respect of:
(i) (A) up to $225,000,000 aggregate principal amount of Bridge
Subordinated Debt issued on or prior to the Closing Date, and additional
principal amount of Bridge Subordinated Debt issued in lieu of cash
interest on the outstanding Bridge Subordinated Debt and otherwise as
contemplated by the Bridge Loan Agreement upon exchange of Bridge
Subordinated Debt into exchange notes or (B) up to $225,000,000 aggregate
principal amount of Senior Subordinated Notes issued on the Closing Date;
and
(ii) Permanent Subordinated Debt in an aggregate principal amount at
any time outstanding not to exceed the sum of (A) $365,000,000 in aggregate
principal amount of Permanent Subordinated Debt (or any refinancing thereof
permitted hereunder) plus (B) 6% of such amount for related fees and
expenses; provided that the Net Proceeds of any such Indebtedness in excess
of the then outstanding aggregate principal amount of the Specified Debt
issued or permitted by subsection 8.1(c)(i) plus 6% of such amount for
related fees and expenses plus the accreted value of the Senior
Subordinated Notes (or any refinancing thereof permitted hereunder)
(including all accrued and accreted interest on such Indebtedness and the
amount of all expenses, premiums or penalties associated therewith) (such
amount the "Permitted Specified Debt Amount") shall be applied to prepay
the Tranche C Term Loans in accordance with subsection 4.4(b)(iii), subject
to the provisions of subsection 4.4(e);
(d) Indebtedness (i) of the Borrower to any Subsidiary, (ii) of any
Domestic Subsidiary (with respect to which the requirements of subsection
7.9 have been satisfied) to the Borrower or any other Subsidiary, and (iii)
of any Foreign Subsidiary to the Borrower or any other Subsidiary in an
aggregate principal amount for all Foreign Subsidiaries at any time
outstanding not to exceed $35,000,000 (plus the sum of any amounts
dividended or distributed by any Foreign Subsidiary to the Borrower or any
Domestic Subsidiary), minus the sum of the amount of (A) any Indebtedness
outstanding pursuant to subsection 8.1(j), (B) the amount of any
investments made in a Foreign Subsidiary pursuant to subsection 8.6(b)(iv)
and (C) the amount of any guarantees of obligations of Foreign Subsidiaries
pursuant to subsection 8.3(c)(ii). For purpose of this subsection 8.1(d),
the payment, or intercompany loans or advances for such purpose, by the
Borrower or any Subsidiary of expenses and operating costs of the Borrower
or any Subsidiary (x) incurred in the ordinary course of business (provided
that, any such payment by the Borrower or any Subsidiary of expenses and
operating costs of Foreign Subsidiaries of the Borrower pursuant to this
clause shall be promptly repaid by such Foreign Subsidiaries as soon as
such Foreign Subsidiaries have funds available to make such repayment and
any such repayment shall not increase the amount of loans which may be made
to such Foreign Subsidiaries pursuant to clause (iii) of this paragraph) or
(y) incurred in association with the initial establishment, start up and
capitalization of the Borrower and its Subsidiaries shall not be considered
to be a loan, advance, dividend or other investment, and shall be permitted
under this Agreement and such payments shall not reduce any permitted
amounts to be so made as specified herein;
(e) other unsecured Indebtedness of the Borrower and its Subsidiaries
in an aggregate principal amount at any one time outstanding not in excess
of $35,000,000;
59
(f) Indebtedness in respect of letters of credit or surety bonds
(other than Letters of Credit issued hereunder) in an aggregate principal
amount equal to $10,000,000 at any one time outstanding;
(g) (i) Indebtedness of the Borrower or any of its Subsidiaries
assumed in connection with acquisitions permitted by subsection 8.6(g) (so
long as such Indebtedness was not incurred in anticipation of such
acquisitions), (ii) Indebtedness of newly acquired Subsidiaries of the
Borrower acquired in such acquisitions (so long as such Indebtedness was
not incurred in anticipation of such acquisition) and (iii) Indebtedness of
the Borrower or any of its Subsidiaries owed to the seller in any
acquisition permitted by subsection 8.6(g) constituting part of the
purchase price thereof, all of which Indebtedness permitted by this
subsection 8.1(g) shall not exceed in the aggregate at any one time
$20,000,000 outstanding;
(h) Indebtedness in connection with workmen's compensation obligations
and general liability exposure of the Borrower and its Subsidiaries;
(i) additional unsecured subordinated Indebtedness of the Borrower and
its Subsidiaries in an aggregate principal amount at any time outstanding
not to exceed (i) $25,000,000 plus (ii) any additional principal amount of
such Indebtedness issued in lieu of cash interest on such outstanding
Indebtedness or any refinancing thereof; provided that (i) no part of the
principal amount of such Indebtedness shall have a maturity date earlier
than the one-year anniversary of the final Tranche C Installment Payment
Date, (ii) the non-default cash interest rate thereon shall not exceed 13%
per annum, and (iii) such Indebtedness shall be subordinated to the
obligations of the Credit Parties under the Credit Documents on customary
terms and conditions;
(j) Indebtedness of Foreign Subsidiaries of the Borrower in an
aggregate principal amount at any time outstanding not in excess of the
equivalent at the date of each incurrence thereof of $35,000,000;
(k) Indebtedness of the Borrower and its Subsidiaries for industrial
revenue bonds or other similar governmental and municipal bonds, for the
deferred purchase price of newly acquired property and to finance equipment
of the Borrower and its Subsidiaries (pursuant to purchase money mortgages
or otherwise and whether owed to the seller or a third party) used in the
ordinary course of business (provided such financing is entered into within
180 days of the acquisition of such property) of the Borrower and its
Subsidiaries in an amount (based on the remaining balance of the
obligations therefor on the books of the Borrower and its Subsidiaries)
which shall not exceed $25,000,000 in the aggregate at any one time
outstanding and Indebtedness of the Borrower and its Subsidiaries in
respect of Financing Leases to the extent subsections 8.7 and 8.9 would not
be contravened; and
(l) Indebtedness of Jostens Canada in an amount not to exceed the
equivalent of $15,000,000 at the time of incurrence thereof.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets, income or profits, whether now owned or
hereafter acquired, except:
(a) Liens for taxes, assessments or other governmental charges not yet
delinquent or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Borrower or the relevant Subsidiary, as the case may be, in
accordance with GAAP;
60
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
in respect of obligations which are not yet due or which are bonded or
which are being contested in good faith and by appropriate proceedings if
adequate reserves with respect thereto are maintained on the books of the
Borrower or the relevant Subsidiary, as the case may be, in accordance with
GAAP;
(c) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases, licenses,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements (including, without limitation, reciprocal easement
agreements), rights-of-way, building, zoning and similar restrictions,
utility agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of business,
which do not in the aggregate materially detract from the aggregate value
of the properties of the Borrower and its Subsidiaries, taken as a whole,
or in the aggregate materially interfere with or adversely affect in any
material respect the ordinary conduct of the business of the Borrower and
its Subsidiaries on the properties subject thereto, taken as a whole;
(f) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Credit Documents, including Liens pursuant to the Credit
Documents in respect of Interest Rate Agreements, and bankers' liens
arising by operation of law;
(g) Liens on property of the Borrower or any of its Subsidiaries
created solely for the purpose of securing (i) Indebtedness not exceeding
$20,000,000 in aggregate amount at any time outstanding permitted by
subsection 8.1(g) (so long as in the case of clauses (i) and (ii) of
subsection 8.1(g) such Lien was not incurred in anticipation of the related
acquisition), (ii) Indebtedness not exceeding $35,000,000 in aggregate
amount at any time outstanding permitted by subsection 8.1(j), or (iii)
Indebtedness permitted by subsection 8.1(k) representing or incurred to
finance, refinance or refund the purchase price of property; provided that
no such Lien incurred in connection with Indebtedness pursuant to
subsection 8.1(g) or 8.1(k) shall extend to or cover other property of the
Borrower or such Subsidiary other than the respective property so acquired,
and the principal amount of Indebtedness secured by any such Lien shall at
no time exceed the original purchase price of such property;
(h) Liens existing on the Closing Date after giving effect to the
consummation of the Transactions and described in subsection 5.13 or
Schedule 8.2(h) (including the extension of any Liens listed on such
Schedule relating to any Indebtedness permitted under subsection 8.1(a) in
connection with any refinancing of such Indebtedness permitted by such
subsection and any Liens securing Indebtedness to be repaid on the Closing
Date to the extent the Borrower has made arrangements to terminate such
Liens in a manner satisfactory to the Administrative Agent); provided that
(i) no such Lien shall extend to or cover other property of the Borrower or
its Subsidiaries other than the respective property so encumbered and (ii)
the principal amount of Indebtedness secured by any such Lien shall at no
time exceed the original principal amount of the Indebtedness so secured;
61
(i) Liens on documents of title and the property covered thereby
securing Indebtedness in respect of the Commercial L/Cs;
(j) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matter of record that have been placed by any
developer, landlord or other third party on property over which the
Borrower or any of its Subsidiaries has easement rights or on any Leased
Property and subordination or similar agreements relating thereto and (ii)
any condemnation or eminent domain proceedings affecting any real property;
(k) Liens in connection with workmen's compensation obligations and
general liability exposure of the Borrower and its Subsidiaries;
(l) Liens on goods (and proceeds thereof) financed with drawings under
commercial letters of credit securing reimbursement obligations in respect
of such commercial letters of credit issued in accordance with the terms of
this Agreement;
(m) Liens in connection with Indebtedness permitted by subsection
8.1(l); and
(n) Liens in connection with Commodity Hedging Agreements and Interest
Rate Agreements entered into by the Borrower in the ordinary course of
business.
8.3 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) the Guarantees;
(b) other guarantees by the Borrower incurred in the ordinary course
of business for an aggregate amount not to exceed $5,000,000 at any one
time;
(c) guarantees by the Borrower or any Domestic Subsidiary (i) of
obligations of Domestic Subsidiaries of the Borrower or the Borrower and
(ii) of obligations of Foreign Subsidiaries of the Borrower in an aggregate
principal amount at any one time not to exceed $35,000,000 (plus the sum of
any amounts dividended or distributed by such Foreign Subsidiaries to the
Borrower or any Domestic Subsidiary), as reduced by amounts outstanding in
accordance with subsections 8.1(d)(iii), 8.1(j) or 8.6(b)(iv); provided
that, in each case, if the primary obligation being guaranteed is
subordinated, such guarantees are subordinated to the Guarantees on
substantially the same basis as such primary obligation is subordinated to
the Loans. For purpose of this subsection 8.3(c), the payment, or
intercompany loans or advances for such purpose, by the Borrower or any
Subsidiary of expenses and operating costs of the Borrower or any
Subsidiary (x) incurred in the ordinary course of business (provided that,
any such payment by the Borrower or any Subsidiary of expenses and
operating costs of Foreign Subsidiaries of the Borrower pursuant to this
clause shall be promptly repaid by such Foreign Subsidiaries as soon as
such Foreign Subsidiaries have funds available to make such repayment and
any such repayment shall not increase the amount of guarantees permitted
pursuant to clause (ii) of this paragraph) or (y) incurred in association
with the initial establishment, start up and capitalization of the Borrower
and its Subsidiaries shall not be considered to be a loan, advance,
dividend or other investment, and shall be permitted under this Agreement
and such payments shall not reduce any permitted amounts to be so made as
specified herein;
(d) Contingent Obligations existing on the Closing Date and described
in Schedule 8.3(d) and Contingent Obligations relating to any Indebtedness
permitted under subsection 8.1(a);
62
(e) guarantees of obligations to third parties in connection with
relocation of employees of the Borrower or any of its Subsidiaries, in an
amount which, together with all loans and advances made pursuant to
subsection 8.6(f), shall not exceed $7,500,000 at any time outstanding;
(f) Contingent Obligations in connection with workmen's compensation
obligations and general liability exposure of the Borrower and its
Subsidiaries; and
(g) subordinated guarantees in respect of (i) Indebtedness permitted
under subsection 8.1(i) and (ii) the Specified Debt issued by Subsidiaries
of the Borrower which have also issued Guarantees; provided that such
subordinated guarantees are subordinated to the Guarantees on substantially
the same basis as such Indebtedness is subordinated to the Loans.
8.4 Prohibition of Fundamental Changes. Enter into any merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or engage in any type of business other
than of the same general type now conducted by it, except (a) for the
transactions otherwise permitted pursuant to clause (b) of subsection 8.5, (b)
any Domestic Subsidiary of the Borrower may be merged with and into the Borrower
or a wholly owned Domestic Subsidiary of the Borrower, (c) any Foreign
Subsidiary of the Borrower may be merged with and into the Borrower or a wholly
owned Subsidiary of the Borrower, (d) Subsidiaries with a net book value not
greater than $100,000 may be dissolved and (e) any Subsidiary may otherwise be
dissolved; provided that upon dissolution, the assets of such Subsidiary are
transferred to the Borrower or one of its wholly owned Domestic Subsidiaries
(or, in the case of a dissolution of a Foreign Subsidiary, such assets are
transferred to the Borrower or one of its wholly owned Subsidiaries) on the
terms and subject to the conditions set forth in subsection 8.5(b).
8.5 Prohibition on Sale of Assets. Convey, sell, lease (other than a
sublease of real property), assign, transfer or otherwise dispose of (including
through a transaction of merger or consolidation of any Subsidiary) any of its
property, business or assets (including, without limitation, other payments and
receivables but excluding leasehold interests), whether now owned or hereafter
acquired, except:
(a) for sales or other dispositions of inventory in the ordinary
course of business;
(b) that the Borrower or any Subsidiary of the Borrower may sell,
lease, transfer, or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to, and any Subsidiary of the Borrower
merge with and into, the Borrower or a wholly owned Domestic Subsidiary of
the Borrower (or, in the case of any Foreign Subsidiary of the Borrower,
the Borrower or a wholly owned Subsidiary of the Borrower), and the
Borrower or any Subsidiary of the Borrower may sell or otherwise dispose
of, or part with control of any or all of, the Capital Stock of any
Subsidiary to a wholly owned Domestic Subsidiary of the Borrower or the
Borrower; provided that (i) no such transaction may be effected if it would
result in the transfer of any assets of, or any Capital Stock of, the
Borrower or a Subsidiary to, or the merger with and into, another
Subsidiary all of the Capital Stock of which owned by the Borrower or any
Subsidiary has not been pledged to the Administrative Agent and which has
not guaranteed the obligations of the Borrower, for the benefit of the
Lenders, under the Notes and this Agreement, and granted liens or security
interests in favor of the Administrative Agent, for the benefit of the
Lenders, on substantially all of its assets to secure such guarantee,
pursuant to a guarantee, security agreement and other documentation
reasonably satisfactory to the Administrative Agent and (ii) the Borrower
shall not transfer all or substantially all of its assets pursuant to this
paragraph;
63
(c) leases of Fee Properties and other real property owned in fee;
(d) any condemnation or eminent domain proceedings affecting any real
property; provided that the parties hereto agree that the net proceeds
received in connection with such proceeding shall be deemed not to
constitute "Net Proceeds" if such net proceeds are reinvested in new or
existing properties within eighteen months;
(e) substantially like-kind exchanges of real property or equipment;
provided that only any cash received by the Borrower or any Subsidiary of
the Borrower in connection with such an exchange (net of all costs and
expenses incurred in connection with such transaction or with the
commencement of operation of real property received in such exchange) shall
be deemed to be Net Proceeds and shall be applied as provided for in
subsection 4.4(b)(iv);
(f) for the sale or other disposition of any property that, in the
reasonable judgment of the Borrower has become uneconomic, obsolete or worn
out, and which is sold or disposed of in the ordinary course of business;
(g) for the sale or other disposition of any property the aggregate
amount of the net proceeds received in respect of which shall not exceed
$10,000,000 during the term of this Agreement after the Closing Date; and
(h) any sale or disposition of any interest in property; provided that
(i) the net proceeds of any such sale shall constitute Net Proceeds only to
the extent such net proceeds are not reinvested in new or existing
properties within twelve months from the date of such sale, (ii) if the
property so sold constituted Collateral under the Security Documents then
any property purchased with the net proceeds thereof shall be mortgaged or
pledged, as the case may be, for the benefit of the Lenders if required by
subsection 7.9 and in accordance therewith and (iii) the aggregate
outstanding amount of net proceeds held by the Borrower and its
Subsidiaries at any time for reinvestment in respect of any property sold
pursuant to this paragraph shall not exceed $15,000,000;
(i) for the sale or other disposition of the Photography Division and
the Recognition Division; provided that (i) 50% of the net proceeds shall
constitute Net Proceeds to be applied to the Term Loans in accordance with
subsection 4.4(b)(iv), (ii) 50% of the net proceeds of any such sale shall
constitute Net Proceeds only to the extent such net proceeds are not
reinvested in new or existing properties within twelve months from the date
of such sale and (iii) if the property so sold constituted Collateral under
the Security Documents then any property purchased with the net proceeds
thereof shall be mortgaged or pledged, as the case may be, for the benefit
of the Lenders if required by subsection 7.9 and in accordance therewith;
and
(j) any sale or other disposition of any minority interests in a joint
venture or other Person.
8.6 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment in
(including, without limitation, any acquisition of all or any substantial
portion of the assets, and any acquisition of a business or a product line, of
other companies, other than the acquisition of inventory in the ordinary course
of business), any Person (except to the extent permitted by Section 8.7 or
8.11), except:
64
(a) loans or advances, to the extent, in each case, the
Indebtedness created thereby is permitted by subsection 8.1(d);
(b) (i) any Subsidiary may make investments in the Borrower (by
way of capital contribution or otherwise), (ii) the Borrower and any
Subsidiary may make investments in, or create, any wholly owned Domestic
Subsidiary (by way of capital contribution or otherwise) or make
investments permitted by subsection 8.5(b); provided that, in any such
case, the requirements of subsection 7.9 are satisfied, (iii) the
Borrower and any Subsidiary may make investments in any Subsidiary
financed with contributions of equity after the Closing Date directly or
indirectly to the entity making such investment from the Investor Group
or their Affiliates, and (iv) the Borrower and any Subsidiary may make
investments in, or create, any Foreign Subsidiary (by way of capital
contribution or otherwise) or make investments permitted by subsection
8.5(b); provided that (x) the requirements of subsection 7.9 are
satisfied and (y) the aggregate amount at any one time of all investments
in such Foreign Subsidiaries shall not exceed (I) $35,000,000 (plus the
sum of any amounts dividended or distributed by such Foreign Subsidiaries
to the Borrower or any Domestic Subsidiary), minus (II) the amount of any
Indebtedness of any Foreign Subsidiary at any such time outstanding in
accordance with subsection 8.1(j) or 8.3(c)(ii);
(c) the Borrower and its Subsidiaries may (i) invest in, acquire
and hold Cash Equivalents and Investment Grade Securities (ii) make loans
in an aggregate amount at any time outstanding not to exceed $1,000,000
in connection with a sale of assets permitted by subsection 8.5;
(d) the Borrower and its Subsidiaries may make payroll advances in
the ordinary course of business (including advances against commissions);
(e) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms (provided that nothing in this clause (e) shall prevent the
Borrower or any of its Subsidiaries from offering such concessionary
trade terms, or from receiving such investments, in connection with the
bankruptcy or reorganization of their respective suppliers or customers
or the settlement of disputes with such customers or suppliers arising in
the ordinary course of business, as management deems reasonable in the
circumstances);
(f) the Borrower or any of its Subsidiaries may make travel and
entertainment advances and relocation and other loans to officers and
employees of the Borrower or any such Subsidiary; provided that the
aggregate principal amount of all such loans and advances outstanding at
any one time, together with the guarantees of such loans and advances
made pursuant to subsection 8.3(e), shall not exceed $7,500,000 at any
one time outstanding; and
(g) the Borrower and its Subsidiaries may make expenditures to
acquire all or a portion of the Capital Stock or assets of any Person
engaged primarily in one or more businesses in which the Borrower and its
Subsidiaries are engaged or directly related thereto; provided that,
after giving pro forma effect to any such acquisition and the financing
thereof, (i) the amount of the expenditures in connection with such
acquisition does not exceed $30,000,000 without the prior written consent
of the Required Lenders, (ii) the provisions of subsection 7.9 are
satisfied, (iii) the Borrower is in compliance with subsections 8.9 and
8.10 as of the end of the immediately preceding fiscal quarter for which
the appropriate financial information is available; provided that the
last four fiscal quarters of Consolidated EBITDA (as may be adjusted for
identified post acquisition cost savings reasonably agreed to by the
Borrower and the Administrative Agent) of
65
each acquired company, business or group of assets during the testing
period shall be added for purposes of determining compliance with such
subsections, and (iv) no Default or Event of Default has occurred and is
continuing or would result therefrom; and
(h) the Borrower or any of its Subsidiaries may make investments
in, or loans or investments to or expenditures relating to, joint
ventures or other Persons engaged primarily in one or more businesses in
which the Borrower and its Subsidiaries are engaged or generally related
thereto in an aggregate amount not to exceed (i) $20,000,000 in the
aggregate after the Closing Date or (ii) $12,500,000 in the aggregate
after the Closing Date in connection with expenditures relating to such
investments (plus the sum of (A) any amounts dividended or distributed to
the Borrower or any Domestic Subsidiary of the Borrower (whichever party
is making such investment, loan or expenditure) by such joint venture or
other Person, (B) the net cash proceeds of any issuance of Capital Stock
by the Borrower to, or any capital contribution to the Borrower by, the
Investor Group or its Affiliates (which has not been used to increase the
Base Amount of Capital Expenditures permitted under subsection 8.7 for
any period) and/or any incurrence of Indebtedness permitted under
subsection 8.1(i) in respect of loans made by the Investor Group or its
Affiliates and (C) any amounts from sales or distributions permitted by
subsection 8.5(j)); provided that at the time of and after giving effect
thereto no Default or Event of Default shall have occurred and be
continuing or would result therefrom.
For purposes of this subsection 8.6, the payment, or intercompany
loans or advances for such purpose, by the Borrower or any Subsidiary of
expenses and operating costs of the Borrower or any Subsidiary (x) incurred in
the ordinary course of business (provided that, any such payment by the Borrower
or any Subsidiary of expenses and operating costs of Foreign Subsidiaries of the
Borrower pursuant to this clause shall be promptly repaid by such Foreign
Subsidiaries as soon as such Foreign Subsidiaries have funds available to make
such repayment) or (y) incurred in association with the initial establishment,
start up and capitalization of the Borrower and its Subsidiaries shall not be
considered to be a loan, advance, dividend or other investment, and shall be
permitted under this Agreement and such payments shall not reduce any permitted
amounts to be so made as specified herein.
8.7 Capital Expenditures. Make or commit to make any Capital
Expenditures, except that the Borrower and its Subsidiaries may make or commit
to make Capital Expenditures not exceeding the amount set forth below (the "Base
Amount") for each of the fiscal years or periods of the Borrower (or other
period) set forth below:
Fiscal Year
or Period Base Amount
--------- -----------
Closing Date to the end of
FY 2000 $40,000,000
FY 2001 $50,000,000
FY 2002 $32,000,000
FY 2003 $30,000,000
FY 2004 $30,000,000
FY 2005 and thereafter $30,000,000
provided that (i) for any period set forth above, the Base Amount set forth
above may be increased by a maximum of 50% of the Base Amount for any such
period by carrying over to any such period any portion of the Base Amount (as
increased) not spent in the immediately preceding period, (ii) for each
66
period of the Borrower, the Base Amount for such period set forth above shall be
increased by the amount of any net cash proceeds from the issuance of Capital
Stock of the Borrower to, or any capital contribution to the Borrower by, the
Investor Group or its Affiliates and (iii) for each period of the Borrower, the
Base Amount for such period set forth above shall be increased in the event any
Person or assets of such Person (an "Acquired Person") is acquired as permitted
herein by an amount equal to 110% of the amount of capital expenditures
(determined in accordance with GAAP) of such Acquired Person for the twelve
months prior to the date it was acquired ("Acquired Capital Expenditures");
provided that, with respect to the fiscal year in which such Person becomes an
Acquired Person, the Base Amount shall be increased by the product of (A) the
Acquired Capital Expenditures of such Acquired Person times (B) a fraction, the
numerator of which is the number of days remaining in the fiscal year of the
Borrower in which such Acquired Person was acquired and the denominator of which
is 365; and provided, further, that, notwithstanding anything to the contrary
herein, additional Capital Expenditures may be made with net proceeds received
in property sales or dispositions under subsection 8.5(g), 8.5(h) or 8.5(i).
8.8 Interest Rate Agreements. Enter into, create, incur, assume or
suffer to exist any Interest Rate Agreements or obligations in respect thereof
except in the ordinary course of business for non-speculative purposes.
8.9 Debt to EBITDA. At the last day of any fiscal quarter set
forth below, permit the ratio (the "Leverage Ratio") of Consolidated
Indebtedness (excluding seasonal borrowings occurring in the third fiscal
quarter of the Borrower which shall be calculated as the lesser of (i)
$85,000,000 and (ii) the amount of Revolving Credit Loans outstanding on the
date of such calculation) as of such day to Consolidated EBITDA for the period
of twelve months ending on such day to be greater than the ratio set forth below
for such fiscal quarter; provided that, for purposes of calculating Consolidated
EBITDA, any costs related to employee and business terminations described in the
definition of "consolidated net income" contained in the Offering Memorandum
shall be excluded; and provided further that, with respect to any acquisition
permitted by subsection 8.6(g), the last four fiscal quarters of Consolidated
EBITDA (as may be adjusted for post acquisition cost savings reasonably agreed
to by the Borrower and the Administrative Agent) of the acquired company shall
be added for the purposes of calculating this ratio:
Fiscal Year Fiscal Quarter Ratio
----------- -------------- -----
2000 Fourth 6.00 to 1.00
2001 First 6.00 to 1.00
Second 5.75 to 1.00
Third 5.75 to 1.00
Fourth 5.50 to 1.00
2002 First 5.25 to 1.00
Second 5.25 to 1.00
Third 5.00 to 1.00
Fourth 4.75 to 1.00
2003 First 4.75 to 1.00
Second 4.50 to 1.00
Third 4.50 to 1.00
Fourth 4.25 to 1.00
2004 First 4.25 to 1.00
67
Second 4.00 to 1.00
Third 4.00 to 1.00
Fourth 3.75 to 1.00
2005 First 3.50 to 1.00
Second 3.50 to 1.00
Third 3.50 to 1.00
Fourth 3.50 to 1.00
2006 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2007 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2008 3.00 to 1.00
and thereafter
8.10 Interest Coverage. At the last day of any fiscal quarter set
forth below, permit the Interest Coverage Ratio to be less than the ratio set
forth below for such fiscal quarter; provided that, for purposes of calculating
Consolidated EBITDA, any costs related to employee and business terminations
described in the definition of "consolidated net income" contained in the
Offering Memorandum shall be excluded:
Fiscal Year Fiscal Quarter Interest Coverage Ratio
----------- -------------- -----------------------
▇▇▇▇ ▇▇▇▇▇▇ 1.50 to 1.00
2001 First 1.50 to 1.00
Second 1.50 to 1.00
Third 1.50 to 1.00
Fourth 1.65 to 1.00
2002 First 1.70 to 1.00
Second 1.70 to 1.00
Third 1.75 to 1.00
Fourth 1.90 to 1.00
2003 First 1.90 to 1.00
Second 2.00 to 1.00
Third 2.00 to 1.00
Fourth 2.25 to 1.00
2004 First 2.25 to 1.00
Second 2.25 to 1.00
Third 2.25 to 1.00
68
Fourth 2.50 to 1.00
2005 First 2.75 to 1.00
Second 2.75 to 1.00
Third 2.75 to 1.00
Fourth 2.75 to 1.00
2006 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2007 First 3.00 to 1.00
Second 3.00 to 1.00
Third 3.00 to 1.00
Fourth 3.00 to 1.00
2008 3.00 to 1.00
and thereafter
8.11 Limitation on Dividends. Declare any dividends on any
shares of any class of Capital Stock, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of any shares of any class of
Capital Stock, or any warrants or options to purchase such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any of its Subsidiaries; except that:
(a) Subsidiaries may pay dividends to the Borrower or to
Domestic Subsidiaries of the Borrower which are directly or indirectly
wholly owned by the Borrower (or, in case of Foreign Subsidiaries, to
the Borrower or to Subsidiaries of the Borrower which are directly or
indirectly wholly owned by the Borrower) and any Foreign Subsidiary of
the Borrower organized under the laws of Ireland may pay dividends to
its employee shareholders as part of such employee shareholders'
compensation package;
(b) the Borrower and its Subsidiaries may pay or make
dividends or distributions to any holder of its Capital Stock in the
form of additional shares of Capital Stock of the same class and type;
(c) the Borrower may repurchase shares of Capital Stock of the
Borrower owned by former, present or future employees of the Borrower
or its Subsidiaries or their assigns, estates and heirs; provided that
the aggregate amount expended by the Borrower pursuant to this clause
(c) shall not in the aggregate exceed (i) $7,500,000 in any fiscal year
or (ii) $15,000,000 during the term of this Agreement after the Closing
Date, plus any amounts contributed to the Borrower as a result of
resales of such repurchased shares of Capital Stock;
(d) the Borrower may redeem Preferred Stock or any outstanding
Senior Subordinated Notes with the proceeds of the issuance of Capital
Stock so long as such proceeds are not required to be applied to prepay
any Loans pu rsuant to subsection 4.4(b)(i) and provided that the
aggregate amount expended by the Borrower pursuant to this clause (d)
shall not exceed $60,000,000 during the term of this Agreement after
the Closing Date;
69
(e) subject to compliance with subsection 4.4(b)(v), the
Borrower may repurchase Class A common stock, Preferred Stock and other
Capital Stock of the Borrower (the "Borrower Capital Stock") or redeem
any outstanding Senior Subordinated Notes with any Excess Cash Flow
which is not applied to prepay the Term Loans in accordance with
subsection 4.4(b)(v); provided that no Default or Event of Default
exists at the time of, or would result from, such redemptions or
repurchases;
(f) the Borrower may repurchase Borrower Capital Stock and
Senior Subordinated Notes; provided that (i) the aggregate amount
expended by the Borrower pursuant to this clause (f) shall not exceed
$25,000,000 during the term of this Agreement after the Closing Date,
(ii) the Borrower is in pro forma compliance with the financial
covenants as set forth in Section 8.9 and Section 8.10 (for purposes of
this subsection 8.11(f) only, such pro forma compliance shall be
determined after giving effect to such redemptions and repurchases, and
any occurrence of Indebtedness in connection therewith, on a pro forma
basis as of the last day of the most recent fiscal quarter for which
financial statements have been delivered pursuant to Section 7.1) and
(iii) no Default or Event of Default exists at the time of, or would
result from, such repurchases;
(g) the Borrower may repurchase Borrower Capital Stock and
Senior Subordinated Notes; provided that (i) the aggregate amount
expended by the Borrower pursuant to this clause (g) shall not exceed
$25,000,000 during the term of this Agreement after the Closing Date,
(ii) the Senior Leverage Ratio is less than 3.00:1.00, determined after
giving effect to such repurchases on a pro forma basis as of the last
day of the most recent fiscal quarter for which financial statements
have been delivered pursuant to Section 7.1, and (iii) no Default or
Event of Default exists at the time of, or would result from, such
repurchases; and provided further that the Borrower shall not make such
repurchases as set forth in this clause (g) until the Borrower has
expended the total aggregate amount in respect of repurchases permitted
pursuant to paragraph (f) of subsection 8.11;
(h) the Borrower may repurchase Senior Subordinated Notes;
provided that (i) the aggregate amount expended by the Borrower
pursuant to this clause (h) shall not exceed $25,000,000 during the
term of this Agreement after the Closing Date, (ii) the Senior Leverage
Ratio is less than 2.75:1.00, determined after giving effect to such
repurchases on a pro forma basis as of the last day of the most recent
fiscal quarter for which financial statements have been delivered
pursuant to Section 7.1, and (iii) no Default or Event of Default
exists at the time of, or would result from, such repurchases; and
provided further that the Borrower shall not make such repurchases as
set forth in this clause (h) until the Borrower has expended the total
aggregate amount in respect of repurchases permitted pursuant to
paragraphs (f) and (g) of subsection 8.11; and
(i) Notwithstanding anything to the contrary in this
Agreement, any holder of shares of the Borrower's Class E common stock
may exchange such shares for shares of the Borrower's Class A common
stock at any time.
8.12 Transactions with Affiliates. Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Borrower's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate; provided that nothing in this subsection 8.12 shall prohibit
the Borrower or its Subsidiaries from engaging in the following
70
transactions: (x) the performance of the Borrower's or any Subsidiary's
obligations under any employment contract, collective bargaining agreement,
employee benefit plan, related trust agreement or any other similar arrangement
heretofore or hereafter entered into in the ordinary course of business, (y) the
payment of compensation to employees, officers, directors or consultants in the
ordinary course of business or (z) the maintenance of benefit programs or
arrangements for employees, officers or directors, including, without
limitation, vacation plans, health and life insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans, in each
case, in the ordinary course of business.
8.13 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Borrower to end on a day other than on the Saturday closest to
December 31 in any calendar year.
8.14 Limitation on Lines of Business. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Borrower or any Subsidiary is engaged on the date of this Agreement (or
which are directly related thereto or generally related thereto, including,
without limitation, the provision of goods or services related to educational
institutions, parents and students and the recognition businesses).
8.15 Amendments to Certain Documents. Amend, modify, waive or
terminate any provisions of the Merger Agreement in a manner which is materially
adverse to the Borrower or the Lenders, without the consent of the
Administrative Agent, which consent shall not be unreasonably withheld.
8.16 Limitation on Prepayments and Amendments of Certain Debt.
(a) Optionally prepay, retire, redeem, purchase, defease or exchange, or make or
arrange for any mandatory prepayment, retirement, redemption, purchase or
defeasance of any Indebtedness outstanding pursuant to subsection 8.1(i) or with
respect to any Specified Debt (other than (x) any redemption of the Specified
Debt with proceeds of Permanent Subordinated Debt as permitted by subsection
8.1(c), (y) any refinancing of the Specified Debt contemplated in the definition
thereof or (z) any redemption of Specified Debt or Preferred Stock (1) with the
proceeds of the issuance of Capital Stock to the extent permitted by subsection
4.4(b)(i) and 8.11(d) or (2) to the extent permitted by subsections 8.11(e),
(f), (g) and (h)), (b) waive, amend, supplement, modify, terminate or release
any of the provisions of any such Indebtedness outstanding pursuant to
subsection 8.1(i) if, after giving effect to such waiver, amendment, supplement,
modification, termination or release, such Indebtedness would not have been
permitted to be incurred pursuant to such subsection, or (c) waive, amend,
supplement, modify, terminate or release any of the provisions with respect to
any Specified Debt without the prior consent of the Administrative Agent, to the
extent that any such waiver, amendment, supplement, modification, termination or
release would be materially adverse to the Lenders.
Section 9. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) The Borrower shall fail to (i) pay any principal of any
Loan or Note when due in accordance with the terms hereof or thereof or
to reimburse the Issuing Lender in accordance with subsection 3.8 or
(ii) pay any interest on any Loan or Note or any fee or other amount
payable hereunder within five days after any such interest or other
amount becomes due in accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Credit Party in any Credit Document shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
71
(c) The Borrower shall default in the observance or
performance of any agreement contained in subsection 7.7(a) or 7.9 or
Section 8 of this Agreement; or
(d) Any Credit Party shall default in the observance or
performance of any other covenant or agreement contained in any Credit
Document and such default shall continue unremedied for a period of 30
days; or
(e) The Borrower or any of its Subsidiaries shall (i) default
in any payment of principal of or interest on or other amounts in
respect of any Indebtedness (other than the Loans, the L/C Obligations
and any inter-company debt) or Interest Rate Agreement or in the
payment of any Contingent Obligation, beyond the period of grace, if
any, provided in the instrument or agreement under which such
Indebtedness, Interest Rate Agreement or Contingent Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness, Interest Rate
Agreement or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness, the party or parties to such Interest Rate
Agreements or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity,
any applicable grace period having expired, such Interest Rate
Agreement to be terminated, any applicable grace period having expired
or such Contingent Obligation to become payable, any applicable grace
period having expired; in each case; provided that the aggregate
principal amount of all such Indebtedness, Interest Rate Agreements and
Contingent Obligations under which a default exists or which would then
become due or payable equals or exceeds $15,000,000; or
(f) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it as bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for
all or any substantial part of its assets, or the Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of its Subsidiaries shall
take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the
72
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 events or
conditions shall occur or exist with respect to a Plan, and such event
or condition, together with all other such events or conditions,
relating to a Plan, if any, would be reasonably likely to subject the
Borrower or any of its Subsidiaries to any tax, penalty or other
liabilities in the aggregate resulting in a material adverse effect to
the Borrower and its Subsidiaries taken as a whole; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (to the extent not paid or reserved for or to the extent not
covered by insurance or indemnities to the extent the Borrower, in its
reasonable good faith judgment, believes that such judgment or decree
will be paid when due by the parties providing such indemnities) of
$15,000,000 or more and all such judgments or decrees shall not have
been vacated, discharged, paid, stayed or bonded pending appeal within
the time required by the terms of such judgment; or
(i) Any Credit Document shall cease, for any reason, to be in
full force and effect or any Credit Party or any of its Subsidiaries
shall so assert in writing, or any Security Document shall cease to be
effective to grant a perfected Lien on the collateral described
therein with the priority purported to be created thereby (other than
as a result of any action or inaction on the part of the
Administrative Agent or the Lenders), subject to such exceptions as
may be permitted therein or herein, and in the case of any Security
Agreement, such condition shall continue unremedied for 30 days after
notice thereof to the Borrower by the Administrative Agent or any
Lender; or
(j) There shall have occurred a Change of Control; or
(k) The subordination provisions of any document governing any
Indebtedness permitted under subsection 8.1(c) or 8.1(i) (including,
without limitation, the Senior Subordinated Notes) shall cease, for
any reason, to be valid or any Credit Party or any of its Subsidiaries
shall so assert in writing;
then, and in any such event, (a) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically (i) the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes shall immediately become due and payable, and (ii) all
obligations of the Borrower in respect of the Letters of Credit, although
contingent and unmatured, shall become immediately due and payable and the
Issuing Lender's obligations to issue the Letters of Credit shall immediately
terminate and (b) if such event is any other Event of Default, so long as any
such Event of Default shall be continuing, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Commitments
and the Issuing Lender's obligations to issue the Letters of Credit to be
terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Borrower, (A) declare
all or a portion of the Loans hereunder (with accrued
73
interest thereon) and all other amounts owing under this Agreement and the Notes
to be due and payable forthwith, whereupon the same shall immediately become due
and payable, and (B) declare all or a portion of the obligations of the Borrower
in respect of the Letters of Credit, although contingent and unmatured, to be
due and payable forthwith, whereupon the same shall immediately become due and
payable and/or demand that the Borrower discharge any or all of the obligations
supported by the Letters of Credit by paying or prepaying any amount due or to
become due in respect of such obligations. All payments under this Section 9 on
account of undrawn Letters of Credit shall be made by the Borrower directly to a
cash collateral account established by the Administrative Agent for such purpose
for application to the Borrower's reimbursement obligations under subsection 3.8
as drafts are presented under the Letters of Credit, with the balance, if any,
to be applied to the Borrower's obligations under this Agreement and the Notes
as the Administrative Agent shall determine with the approval of the Required
Lenders. Except as expressly provided above in this Section 9, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 10. THE ADMINISTRATIVE AGENT; THE SYNDICATION AGENT AND THE
ISSUING LENDER
10.1 Appointment. Each Lender hereby irrevocably designates and
appoints JPMorgan Chase as the Administrative Agent and Deutsche Bank Securities
Inc. as the Syndication Agent under this Agreement and irrevocably authorizes
JPMorgan Chase as Administrative Agent and Deutsche Bank Securities Inc. as
Syndication Agent for such Lender to take such action on its behalf under the
provisions of the Credit Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent or the Syndication
Agent by the terms of the Credit Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent and the Syndication Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into the Credit Documents or otherwise exist against the Administrative Agent or
the Syndication Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and each of the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care, except as otherwise
provided in subsection 10.3.
10.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Credit Party or any officer thereof
contained in the Credit Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, the Credit Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of the
Credit Documents or for any failure of any Credit Party to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, any Credit
Document, or to inspect the properties, books or records of any Credit Party.
10.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
entries maintained in the Register, writing,
74
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
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 any Credit Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, where a
higher percentage of the Lenders is expressly required hereunder, such Lenders)
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under any Credit Document in accordance with a request of the Required
Lenders (unless a higher percentage of Lenders is expressly required), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
10.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower or any other Credit Party referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall promptly give notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
10.6 Non-Reliance on Administrative Agent, Syndication Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent, the Syndication Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereafter taken,
including any review of the affairs of the Credit Parties, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, the
Syndication Agent 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 Borrower and its Subsidiaries and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent, the Syndication Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under the Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Credit
Parties which may come into the possession of the Administrative Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
75
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Credit Parties and without limiting the obligation of the Credit Parties to
do so), ratably according to the respective amounts of their respective
Commitments (or, to the extent such Commitments have been terminated, according
to the respective outstanding principal amounts of the Loans and the L/C
Obligations and the respective obligations, whether as Issuing Lender or a
Participating Lender, under the Letter of Credit), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the payment of the Loans) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Credit Documents or any documents contemplated
by or referred to herein or the transactions contemplated hereby or any action
taken or omitted by the Administrative Agent under or in connection with any of
the foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this subsection 10.7 shall survive the repayment of the Loans and all other
amounts payable hereunder.
10.8 The Administrative Agent in its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower and its
Subsidiaries as though the Administrative Agent were not the Administrative
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, the Administrative Agent shall have the same rights and powers,
duties and liabilities under the Credit Documents as any Lender and may exercise
the same as though it were not the Administrative Agent and the terms "Lender"
and "Lenders" shall include the Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under the Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders which successor agent shall, so long as no Event
of Default has occurred and is continuing, be approved by the Borrower, which
shall not unreasonably withhold its approval, whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. After any retiring
Administrative Agent's resignation hereunder as Administrative Agent, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Agent under the
Credit Documents.
10.10 Issuing Lender as Issuer of Letters of Credit. Each Revolving
Credit Lender hereby acknowledges that the provisions of this Section 10 shall
apply to the Issuing Lender, in its capacity as issuer of the Letters of Credit,
in the same manner as such provisions are expressly stated to apply to the
Administrative Agent, except that obligations to indemnify the Issuing Lender
shall be ratable among the Revolving Credit Lenders in accordance with their
respective Revolving Credit Commitments (or, if the Revolving Credit Commitments
have been terminated, the outstanding principal amount of their respective
Revolving Credit Loans and L/C Obligations and their respective participating
interests in the outstanding Letters of Credit).
10.11 Administrative Agent as Joint and Several Creditor. Solely for
purposes of the pledge of shares of Jostens Can Investments B.V., a Netherlands
corporation and Jostens International Holdings B.V., a Netherlands corporation,
the Borrower and each Lender agree that the Administrative
76
Agent shall be the joint and several creditor (together with the relevant
Lenders) of each obligation of the Borrower towards each Lender under the Credit
Documents, and that accordingly, the Administrative Agent will have its own
independent right to demand performance by the Borrower of those obligations.
However, (i) any discharge of any such obligation to one of the Administrative
Agent or a Lender shall, to the same extent, discharge the corresponding
obligation owing to the other, and (ii) a Lender and the Administrative Agent
shall not, by virtue of this subsection 10.11, be entitled to pursue the
Borrower concurrently for the same obligation.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, no Credit Document nor any terms thereof may be
amended, supplemented, waived or modified except in accordance with the
provisions of this subsection 11.1. With the written consent of the Required
Lenders, the Administrative Agent and the respective Credit Parties or their
Subsidiaries may, from time to time, enter into written amendments, supplements
or modifications hereto for the purpose of adding any provisions to any Credit
Document to which they are parties or changing in any manner the rights of the
Lenders or of any such Credit Party or its Subsidiaries thereunder or waiving,
on such terms and conditions as the Administrative Agent may specify in such
instrument, any of the requirements of any such Credit Document or any Default
or Event of Default and its consequences; provided that:
(a) no such waiver and no such amendment, supplement or
modification shall (i) release all or substantially all of the
collateral without the written consent of all Lenders or (ii) release
collateral not required or permitted by any Credit Document to be
released and which, in the aggregate with all other collateral released
pursuant to this clause (a) (ii) (other than collateral released
pursuant to the proviso to this clause (a)) during the calendar year in
which such proposed release would be effected and the immediately
preceding calendar year, has fair market value on the proposed date of
release in excess of 20% of the fair market value of all collateral
(including any Guarantee) on such date without the written consent of
the Supermajority Lenders; provided that, notwithstanding the
foregoing, this clause (a) shall not be applicable to and no consent
shall be required for (i) releases of collateral in connection with any
dispositions permitted by subsection 8.5, (ii) releases of collateral
in accordance with subsection 11.11 or (iii) upon the reincorporation
of the Borrower or any Subsidiary in a new jurisdiction or the creation
of a new Subsidiary of the Borrower, any release of collateral in
connection with the transfer of such released collateral to such
reincorporated entity or new Subsidiary in compliance with subsection
8.4; provided that the Administrative Agent, in its sole discretion,
determines that such release and transfer, together with any grant and
perfection of a new Lien therein in favor of the Administrative Agent,
will cause no material impairment of the value of the collateral taken
as a whole, after giving effect to such release and transfer;
(b) no such waiver and no such amendment, supplement or
modification shall extend the final maturity date or termination date
of any Loan or Commitment or the scheduled payment date of any
installment of any Loan, or reduce the rate or extend the time of
payment of interest thereon, or change the method of calculating
interest thereon, or reduce or extend the time of payment of any fee
payable to the Lenders hereunder, or reduce the principal amount
thereof, or change the amount of any Lender's Commitment or Commitment
Percentage, or amend, modify or waive any provision of subsection
4.9(b) or this subsection 11.1 or reduce the percentage specified in
the definition of Required Lenders or reduce the percentage specified
in the definition of Supermajority Lenders or consent to the assignment
or transfer by any Credit Party of any of its rights and obligations
under any Credit Document, in each case, without the prior written
consent of each Lender directly affected thereby;
77
(c) no such waiver and no such amendment, supplement or
modification affecting the then Administrative Agent or Issuing Lender
shall amend, modify or waive any provision of Section 10 without the
written consent of such Administrative Agent or Issuing Lender, as the
case may be;
(d) without the consent of each of the Lenders which are
Revolving Credit Lenders and/or Tranche C Lenders only, each of the
Tranche A Lenders may amend this Agreement and the Tranche A Term Notes
to extend the maturities of the installments of the Tranche A Term
Loans; without the consent of each of the Lenders which are Revolving
Credit Lenders and/or Tranche A Lenders only, each of the Tranche C
Lenders may amend this Agreement and the Tranche C Term Notes to extend
the maturities of the installments of the Tranche C Term Loans; and
without the consent of each of the Lenders which are holders of the
Term Loans only, each of the Revolving Credit Lenders may amend this
Agreement and the Revolving Credit Notes to extend the Revolving Credit
Termination Date; and
(e) no such waiver, and no such amendment, supplement or
modification shall amend, modify or waive the order of application of
prepayments specified in subsection 4.4(a) or subsections 4.4(b)(i)
through 4.4(b)(v) without the written consent of the holders of at
least 51% of each of (i) the aggregate unpaid principal amount of the
Term Loans, if any, and (ii) the Revolving Credit Commitments or, if
the Revolving Credit Commitments are terminated, the aggregate unpaid
principal amount of the Revolving Credit Loans (the Term Loans and the
Revolving Credit Commitments of any Non-Funding Lender to be
disregarded in determining such percentage at any time);
any such waiver and any such amendment, supplement or modification described in
this subsection 11.1 shall apply equally to each of the Lenders and shall be
binding upon each Credit Party and its Subsidiaries, the Lenders, the
Administrative Agent and the Issuing Lender and all future holders of the Notes
and the Loans. Any extension of a Letter of Credit by the Issuing Lender shall
be treated hereunder as a new Letter of Credit. In the case of any waiver, the
Credit Parties, the Lenders, the Administrative Agent and Issuing Lender shall
be restored to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made when delivered by hand,
or three Business Days after being deposited in the mail, postage prepaid, or,
in the case of telecopy notice, when sent, confirmation of receipt received, or,
in the case of telex notice, when sent, answerback received, addressed as
follows in the case of the Borrower, the Administrative Agent, and as set forth
in Schedule I in the case of any Lender, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower: Jostens, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
78
With a copy to: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent
and Swing Line Lender: JPMorgan ▇▇▇▇▇ ▇▇▇▇
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Plaza, 8/th/ floor
New York, New York 10081
Attention: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: JPMorgan Chase Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsections 3.4, 3.5, 4.1, 4.2, 4.3 and 4.4 shall not
be effective until received and; provided, further, that the failure to provide
the copies of notices to the Borrower provided for in this subsection 11.2 shall
not result in any liability to the Administrative Agent.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement, the Letters of Credit and the
Notes.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to
pay or reimburse the Administrative Agent, the Syndication Agent and the Co-Lead
Arrangers for all their reasonable out-of-pocket costs and expenses incurred in
connection with the development, negotiation, preparation and execution of the
Credit Documents and any other documents prepared in connection herewith, and
the consummation of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of one counsel to the
Administrative Agent, the Syndication Agent and the Co-Lead Arrangers, (b) to
pay or reimburse all of the reasonable expenses, including without limitation,
reasonable fees and expenses of counsel, incurred by the Administrative Agent in
connection with the administration of the facilities provided for herein or in
connection with any amendments, waivers, work-outs or restructurings in respect
thereof, (c) to pay or reimburse the Administrative Agent, the Syndication
Agent, the Co-Lead Arrangers, the Issuing Lender and each Lender for all their
costs and expenses incurred in connection with, and to pay, indemnify, and hold
the Administrative Agent, the Syndication Agent, the Co-Lead Arrangers, the
Issuing Lender and each Lender harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever arising out of
or in connection with, the enforcement or preservation of any rights under any
Credit Document and any such other documents,
79
including, without limitation, reasonable fees and disbursements of counsel to
the Administrative Agent, the Co-Lead Arrangers and each Lender incurred in
connection with the foregoing and in connection with advising the Administrative
Agent with respect to its rights and responsibilities under this Agreement and
the documentation relating thereto, (d) to pay, indemnify, and to hold the
Administrative Agent, the Syndication Agent, the Co-Lead Arrangers and each
Lender harmless from any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes (other than withholding taxes), if any, which may
be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, any Credit Document and any such other documents, and (e) to pay,
indemnify, and hold the Administrative Agent, the Syndication Agent, the Co-Lead
Arrangers, the Issuing Lender and each Lender and their respective Affiliates,
officers, directors and trustees harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever (including,
without limitation, reasonable fees and disbursements of counsel) which may be
incurred by or asserted against the Administrative Agent, the Syndication Agent,
the Co-Lead Arrangers, the Issuing Lender or the Lenders or such Affiliates,
officers, directors or trustees (x) arising out of or in connection with any
investigation, litigation or proceeding related to this Agreement, the other
Credit Documents, the proceeds of the Loans and the transactions contemplated by
or in respect of such use of proceeds, or any of the other transactions
contemplated hereby, whether or not the Administrative Agent, the Syndication
Agent, the Co-Lead Arrangers, the Issuing Lender or any of the Lenders or such
Affiliates, officers, directors or trustees is a party thereto, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
Borrower, any of its Subsidiaries or any of the facilities and properties owned,
leased or operated by the Borrower or any of its Subsidiaries, or (y) without
limiting the generality of the foregoing, by reason of or in connection with the
execution and delivery or transfer of, or payment or failure to make payments
under, Letters of Credit (it being agreed that nothing in this subsection
11.5(d)(y) is intended to limit the Borrower's obligations pursuant to
subsection 3.8) (all the foregoing, collectively, the "indemnified
liabilities"); provided that the Borrower shall have no obligation hereunder
with respect to indemnified liabilities of the Administrative Agent, the
Syndication Agent, the Co-Lead Arrangers, the Issuing Lender or any Lender or
any of their respective Affiliates, officers, directors and trustees arising
from (i) the gross negligence or willful misconduct of the person seeking
indemnification or (ii) legal proceedings commenced against the Administrative
Agent, the Syndication Agent, the Co-Lead Arrangers, the Issuing Lender or
Lender by any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its capacity as
such or (iii) legal proceedings commenced against the Administrative Agent, the
Syndication Agent, the Co-Lead Arrangers, the Issuing Lender or any such Lender
by any Transferee (as defined in subsection 11.6). Without limiting the
foregoing, and to the extent permitted by applicable law, the Borrower agrees
not to assert, and hereby waives (and shall cause the Subsidiaries not to assert
and to waive) all rights for contribution or any other rights of recovery with
respect to all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever, under or related to Environmental Laws, that any of them might have
by statute or otherwise against the Administrative Agent, the Syndication Agent,
the Co-Lead Arrangers, the Issuing Lender or any Lender. The agreements in this
subsection 11.5 shall survive repayment of the Loans and all other amounts
payable hereunder.
11.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, the Syndication Agent, the
Co-Lead Arrangers, all future holders of the Notes and the Loans, and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
80
(b) Any Lender may, in the ordinary course of its commercial banking,
lending or investment business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any participating interest in the
Letters of Credit of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder. In the event of
any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement and the 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 Credit
Documents. The Borrower agrees that if amounts outstanding under this Agreement
and the Notes are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement or any Note; provided that such right of
setoff shall be subject to the obligation of such Participant to share with the
Lenders, and the Lenders agree to share with such Participant, as provided in
subsection 11.7. The Borrower also agrees that each Participant shall be
entitled to the benefits of subsections 3.10, 4.11 and 4.12 with respect to its
participation in the Letters of Credit and in the Commitments and the Loans
outstanding from time to time as if it were a Lender; provided that no
Participant shall be entitled to receive any greater amount pursuant to any such
subsection than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred. Each Lender agrees that the
participation agreement pursuant to which any Participant acquires its
participating interest (or any other document) may afford voting rights to such
Participant, or any right to instruct such Lender with respect to voting
hereunder, only with respect to matters requiring the consent of either all of
the Lenders hereunder or all of the Lenders holding the relevant Term Loans or
Revolving Credit Commitments subject to such participation.
(c) Subject to paragraph (g) of this subsection 11.6, any Lender may, in
the ordinary course of its commercial banking, lending or investment business
and in accordance with applicable law, (i) at any time and from time to time
assign all or any part of its rights and obligations under this Agreement and
the Notes to any Lender or any Affiliate thereof; provided that, in the event of
a sale of less than all of such rights and obligations, such assigning Lender
after any such sale to any other Lender or any Affiliate of such Lender shall
retain Commitments and/or Loans and/or L/C Participating Interests aggregating
at least $5,000,000 (or such lesser amount as the Administrative Agent may
determine) and (ii) with the consent of the Borrower and the Administrative
Agent (which in each case shall not be unreasonably withheld or delayed) at any
time and from time to time assign to one or more additional banks, mutual funds
or financial institutions or entities (each, an "Assignee"), all or any part of
its rights and obligations under this Agreement and the Notes, pursuant to an
Assignment and Acceptance, executed by such Assignee, such transferor Lender
(and, in the case of an Assignee that is not then a Lender or an Affiliate
thereof, by the Borrower and the Administrative Agent), and delivered to the
Administrative Agent for its acceptance and recording in the Register (as
defined below); provided that (A) each such sale pursuant to clause (ii) of this
subsection 11.6(c) shall be in a principal amount of at least $5,000,000 (or
such lesser amount as the Administrative Agent and the Borrower may determine)
unless the assigning Lender is transferring all of its rights and obligations
and (B) in the event of a sale of less than all of such rights and obligations,
such Lender after any such sale shall retain Commitments and/or Loans and/or L/C
Participating Interests aggregating at least $5,000,000 (or such lesser amount
as the Administrative Agent and the Borrower may determine). Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth
81
therein, and (y) the assigning Lender thereunder shall, to the extent of the
interest transferred, as reflected in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of a transferor
Lender's rights and obligations under this Agreement, such transferor Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of the indemnification provisions set forth in subsection 11.5).
(d) The Administrative Agent, which for purposes of this subsection
11.6(d) only shall be deemed to be the agent of the Borrower, shall maintain at
the address of the Administrative Agent referred to in subsection 11.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amounts of the Loans owing to, each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders shall
treat each Person whose name is recorded in the Register as the owner of a Loan
or other obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Credit Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the 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 Borrower and the Administrative
Agent), together with payment to the Administrative Agent of a registration and
processing fee of $4,000 if the Assignee is not a Lender prior to the execution
of such supplement and $1,000 otherwise, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower (no such assignment shall become effective unless and until so
recorded); provided that, in the case of contemporaneous assignments by a Lender
to more than one fund managed by the same investment advisor or an Affiliate of
such investment advisor (which funds are not then Lenders hereunder), only a
single $4,000 fee shall be payable for all such contemporaneous assignments. On
or prior to such effective date, the Borrower at its own expense, shall execute
and deliver to the Administrative Agent (in exchange for any or all of the Term
Loan Notes or Revolving Credit Notes of the assigning Lender, if any) new Term
Loan Notes or Revolving Credit Notes, as the case may be, to the order of such
Assignee (if requested) in an amount equal to the Revolving Credit Commitment or
the Term Loans, as the case may be, assumed by it pursuant to such Assignment
and Acceptance and, if the assigning Lender has retained a Commitment or any
Term Loans hereunder, new Term Loan Notes or Revolving Credit Notes, as the case
may be, to the order of the assigning Lender in an amount equal to the
Commitment or such Term Loans, as the case may be, retained by it hereunder (if
requested). Such new Notes shall be dated the Closing Date and shall otherwise
be in the form of the Notes replaced thereby.
(f) The Administrative Agent, the Syndication Agent, the Co-Lead
Arrangers and the Lenders agree that they will use reasonable efforts to protect
the confidentiality of any confidential information concerning the Borrower and
its Subsidiaries and Affiliates. Notwithstanding the foregoing, the Borrower
authorizes each Lender to disclose (i) to its employees, officers, affiliates
and advisors, who shall be bound by the confidentiality provisions hereof, (ii)
to any regulatory authority as required by law, (iii) in connection with any
enforcement or other legal action and (iv) to any Participant or Assignee (each,
a "Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the Borrower and its Subsidiaries 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
82
Subsidiaries prior to becoming a party to this Agreement; provided that each
Lender shall cause its respective prospective Transferees to agree in writing to
protect the confidentiality of any confidential information concerning the
Borrower and its Subsidiaries and Affiliates.
(g) If, pursuant to this subsection 11.6, any interest in this Agreement
or any Note is transferred to any Transferee which is organized under the laws
of any jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the terms of this Agreement
including without limitation subsection 4.11(d).
(h) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
11.7 Adjustments; Set-off.. (a) If any relevant Lender (a "benefitted
Lender") shall at any time receive any payment of all or part of any of its
Loans or L/C Participating Interests, as the case may be, or interest thereon,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in clause (f) of Section 9, or otherwise) in a greater proportion
than any such payment to and collateral received by any other relevant Lender,
if any, in respect of such other relevant Lender's Loans or L/C Participating
Interests, as the case may be, or interest thereon, such benefitted Lender shall
purchase for cash from the other relevant Lenders such portion of each such
other relevant Lender's Loans or L/C Participating Interests, as the case may
be, or shall provide such other relevant Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the relevant Lenders; provided that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Loans and/or L/C Participating Interests may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion. The
Administrative Agent shall promptly give the Borrower notice of any set-off;
provided that the failure to give such notice shall not affect the validity of
such set-off.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon the filing of a petition under any of the provisions of the
federal bankruptcy code or amendments thereto, by or against; the making of an
assignment for the benefit of creditors by; the application for the appointment,
or the appointment, of any receiver of, or of any substantial portion of the
property of; the issuance of any execution against any substantial portion of
the property of; the issuance of a subpoena or order, in supplementary
proceedings, against or with respect to any substantial portion of the property
of; or the issuance of a warrant of attachment against any substantial portion
of the property of; the Borrower to set off and apply against any indebtedness,
whether matured or unmatured, of the Borrower to such Lender, any amount owing
from such Lender to the Borrower, at or at any time after, the happening of any
of the above mentioned events, and as security for such indebtedness, the
Borrower hereby grants to each Lender a continuing security interest in any and
all deposits, accounts or moneys of Borrower then or thereafter maintained
83
with such Lender, subject in each case to subsection 11.7(a) of this Agreement.
The aforesaid right of set-off may be exercised by such Lender against the
Borrower or against any trustee in bankruptcy, debtor in possession, assignee
for the benefit of creditors, receiver or execution, judgment or attachment
creditor of the Borrower, or against anyone else claiming through or against the
Borrower or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition; assignment for the
benefit of creditors; appointment or application for the appointment of a
receiver; or issuance of execution, subpoena, order or warrant. Each Lender
agrees promptly to notify the 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.
11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent. This Agreement
shall become effective with respect to the Borrower, the Administrative Agent,
the Syndication Agent and the Lenders when the Administrative Agent shall have
received copies of this Agreement executed by the Borrower, the Administrative
Agent, the Syndication Agent and the Lenders, or, in the case of any Lender,
shall have received telephonic confirmation from such Lender stating that such
Lender has executed counterparts of this Agreement or the signature pages hereto
and sent the same to the Administrative Agent.
11.9 Governing Law; No Third Party Rights. This Agreement and the Notes
and the rights and obligations of the parties under this Agreement and the Notes
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York. This Agreement is solely for the benefit of the
parties hereto and their respective successors and assigns, and, except as set
forth in subsection 11.6, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
11.10 Submission to Jurisdiction; Waivers. (a) Each party to this
Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in subsection 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
84
(b) Each party hereto unconditionally waives trial by jury in any
legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
11.11 Releases. The Administrative Agent and the Lenders agree to
cooperate with the Borrower and its Subsidiaries with respect to any sale or
other disposition permitted by subsection 8.5 and promptly take such action and
execute and deliver such instruments and documents necessary to release the
liens and security interests created by the Security Documents relating to any
of the assets or property affected by any such sale permitted by subsection 8.5,
including, without limitation, any Uniform Commercial Code amendment, release or
termination or partial release or termination statements.
11.12 Interest. Each provision in this Agreement and each other Credit
Document is expressly limited so that in no event whatsoever shall the amount
paid, or otherwise agreed to be paid, by the Borrower for the use, forbearance
or detention of the money to be loaned under this Agreement or any other Credit
Document or otherwise (including any sums paid as required by any covenant or
obligation contained herein or in any other Credit Document which is for the
use, forbearance or detention of such money), exceed that amount of money which
would cause the effective rate of interest to exceed the highest lawful rate
permitted by applicable law (the "Highest Lawful Rate"), and all amounts owed
under this Agreement and each other Credit Document shall be held to be subject
to reduction to the effect that such amounts so paid or agreed to be paid which
are for the use, forbearance or detention of money under this Agreement or such
other Credit Document shall in no event exceed that amount of money which would
cause the effective rate of interest to exceed the Highest Lawful Rate.
Notwithstanding any provision in this Agreement or any other Credit Document to
the contrary, if the maturity of the Loans or the obligations in respect of the
other Credit Documents are accelerated for any reason, or in the event of any
prepayment of all or any portion of the Loans or the obligations in respect of
the other Credit Documents by the Borrower or in any other event, earned
interest on the Loans and such other obligations of the Borrower may never
exceed the Highest Lawful Rate, and any unearned interest otherwise payable on
the Loans or the obligations in respect of the other Credit Documents that is in
excess of the Highest Lawful Rate shall be canceled automatically as of the date
of such acceleration or prepayment or other such event and (if theretofore paid)
shall, at the option of the holder of the Loans or such other obligations, be
either refunded to the Borrower or credited on the principal of the Loans. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Borrower and the Lenders
shall, to the maximum extent permitted by applicable law, amortize, prorate,
allocate and spread, in equal parts during the period of the actual term of this
Agreement, all interest at any time contracted for, charged, received or
reserved in connection with this Agreement.
11.13 Special Indemnification. Notwithstanding any provision in this
Agreement to the contrary, (A) each Lender, or Transferee of any Lender pursuant
to subsection 11.6(g) of this Agreement, shall indemnify the Borrower and the
Administrative Agent, and hold each of them harmless against any and all
payments, expenses or taxes which the Borrower or the Administrative Agent may
become subject to or obligated to pay if and to the extent that, (i) on the
Closing Date, the Restatement Effective Date or the effective date of transfer,
as the case may be, such Lender, or such Transferee of a Lender pursuant to
subsection 11.6(g) of this Agreement, (a) makes the representation and covenants
set forth in subsection 4.11(d) of this Agreement and the Assignment and
Acceptance, and (b) is not in fact also qualified to make the representation and
covenants set forth in subsection 4.11(d) of this Agreement and the Assignment
and Acceptance, and (ii) as a result of any Change in Law or compliance by such
Lender, or Transferee, with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority the Borrower
or the Administrative Agent is required to make any additional payments on
account of U.S. withholding taxes and amounts related thereto with respect to
any payments under this Agreement, any Note, or a Eurodollar Loan, made prior to
such Change in Law or request or directive, none of which payments would have
been required if such Lender, or Transferee, was qualified on the Closing Date,
the Restatement Effective Date or the date of the transfer, as the case
85
may be, to make the representation and covenants set forth in subsection 4.11(d)
of this Agreement and the Assignment and Acceptance, as the case may be, and (B)
each Lender, or Transferee of any Lender pursuant to subsection 11.6(g) of this
Agreement, agrees that to the extent any amount payable by such Lender or
Transferee pursuant to this subsection 11.13 remains unpaid on any Interest
Payment Date or the date on which any prepayment is made, the Borrower shall
have the right to set-off against any payment due to such Lender or Transferee
on such date any amounts owing to the Borrower pursuant to this subsection
11.13.
11.14 Permitted Payments and Transactions. Notwithstanding any
provision to the contrary contained in this Agreement, the Borrower and its
Subsidiaries shall be permitted to make payments (including fees and expenses)
pursuant to or in respect of, the following agreements, and, in the case of
clauses (a) and (d) below, to engage in the following transactions: (a) (i) the
Agreement for Management and Advisory Services, between Investcorp
International, Inc. ("III") and the Borrower dated as of May 10, 2000, (ii) the
Loan Financing Advisory Agreement between III and the Borrower dated as of
December 28, 1999 and (iii) the Merger Agreement; (b) agreements with any Person
or Persons providing for the payment of customary fees in connection with
serving as a director of the Borrower or any of its Subsidiaries; (c) agreements
providing for the payment of commercially reasonable fees in connection with any
permitted financing, refinancing, sale, transfer, sale and leaseback or other
permitted disposition of any assets of the Borrower of any of its Subsidiaries;
(d) the borrowing of any Indebtedness to the extent, and upon the terms and
conditions, the same is expressly permitted under subsection 8.1; (e) agreements
providing for commercially reasonable fees in connection with any permitted
purchase or acquisition of stock or assets by the Borrower or any of its
Subsidiaries; and (f) agreements relating to the payment of $2,500,000 in fees
to certain members of the Borrower's management in connection with the provision
of transition services to the Borrower subsequent to the Merger, as more fully
described in the Offering Memorandum.
[Remainder of Page Left Blank Intentionally]
86
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
JOSTENS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Treasurer
JPMORGAN CHASE BANK, as Administrative
Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
DEUTSCHE BANK SECURITIES INC., as
Syndication Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President