EXHIBIT 10.9
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
dated as of April 15, 2003
among
APPLIED GRAPHICS TECHNOLOGIES, INC.,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS FROM
TIME TO TIME PARTIES THERETO,
as the Lenders,
and
FLEET NATIONAL BANK,
as Administrative Agent
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms......................................................................1
Section 1.02 Computation of Time Periods...............................................................25
Section 1.03 Accounting Terms..........................................................................25
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01 The Advances..............................................................................25
Section 2.02 Making the Advances.......................................................................27
Section 2.03 Issuance of and Drawings and Reimbursement Under Letters of Credit........................30
Section 2.04 Repayment of Advances.....................................................................31
Section 2.05 Termination or Reduction of the Commitments...............................................33
Section 2.06 Prepayments and Repayments................................................................34
Section 2.07 Interest..................................................................................36
Section 2.08 Fees......................................................................................37
Section 2.09 Conversion of Advances....................................................................38
Section 2.10 Increased Costs, Etc......................................................................39
Section 2.11 Payments and Computations.................................................................40
Section 2.12 Taxes.....................................................................................42
Section 2.13 Sharing of Payments, Etc..................................................................44
Section 2.14 Use of Proceeds...........................................................................44
Section 2.15 Defaulting Lenders........................................................................44
Section 2.16 Regulation U..............................................................................46
ARTICLE III
CONDITIONS PRECEDENT
Section 3.01 Conditions Precedent......................................................................47
Section 3.02 Conditions Precedent to All Credit Extensions.............................................48
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Representations and Warranties............................................................49
ARTICLE V
COVENANTS OF THE BORROWER AND THE SUBSIDIARIES
Section 5.01 Affirmative Covenants.....................................................................53
Section 5.02 Negative Covenants........................................................................57
Section 5.03 Reporting Requirements....................................................................62
Section 5.04 Financial Covenants.......................................................................65
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TABLE OF CONTENTS
(continued)
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ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events of Default.........................................................................67
Section 6.02 Actions in Respect of the Letters of Credit upon Default..................................69
ARTICLE VII
THE ADMINISTRATIVE AGENT
Section 7.01 Authorization and Action..................................................................70
Section 7.02 Agent's Reliance, Etc.....................................................................70
Section 7.03 Fleet and Affiliates......................................................................70
Section 7.04 Lender Party Credit Decision..............................................................71
Section 7.05 Indemnification...........................................................................71
Section 7.06 Successor Administrative Agents...........................................................72
Section 7.07 Administrative Agent as English Trustee...................................................73
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Amendments, Etc...........................................................................73
Section 8.02 Notices Etc...............................................................................74
Section 8.03 No Waiver; Remedies.......................................................................75
Section 8.04 Costs and Expenses........................................................................76
Section 8.05 Right of Set-off..........................................................................77
Section 8.06 Binding Effect............................................................................78
Section 8.07 Assignments and Participations............................................................78
Section 8.08 Execution in Counterparts; Severability...................................................80
Section 8.09 No Liability of the Issuing Bank..........................................................81
Section 8.10 Confidentiality...........................................................................81
Section 8.11 JURISDICTION, ETC.........................................................................81
Section 8.12 GOVERNING LAW.............................................................................82
Section 8.13 WAIVER OF JURY TRIAL......................................................................82
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TABLE OF CONTENTS
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EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Warrant
Exhibit D - Form of Notice of Borrowing
SCHEDULES
Schedule I Commitments and Applicable Lending Offices
Schedule 4.01(b) Subsidiaries
Schedule 4.01(h) Disclosed Litigation
Schedule 4.01(j) Welfare Plans
Schedule 4.01(n) Certain Agreements
Schedule 5.02(a)(iii) Liens
Schedule 5.02(e)(vi) Investments
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 15,
2003, by and among APPLIED GRAPHICS TECHNOLOGIES, INC., a Delaware corporation
(the "BORROWER"), the banks, financial institutions and other institutional
lenders listed on the signature pages hereof as the Lenders (as hereinafter
defined), FLEET NATIONAL BANK, as Issuing Bank (as hereinafter defined), FLEET
NATIONAL BANK, as Swing Line Bank (as hereinafter defined), and FLEET NATIONAL
BANK, as administrative agent (together with any successor appointed pursuant to
Article VII, the "ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS:
(1) The parties hereto are parties to the Amended and Restated Credit
Agreement, dated as of March 10, 1999, as amended by Amendment No. 1 to Credit
Agreement, dated as of June 2, 1999, Amendment No. 2 to Credit Agreement dated
as of July 28, 1999, Amendment No. 3 to Credit Agreement dated as of July 21,
2000, Amendment No. 4 to Credit Agreement dated as of August 11, 2000, the Fifth
Amendment to Amended and Restated Credit Agreement dated as of July 27, 2001
(the "FIFTH AMENDMENT") and the Sixth Amendment to Amended and Restated Credit
Agreement dated as of March 21, 2002, among the Borrower, the Lenders and the
Administrative Agent (the "EXISTING CREDIT AGREEMENT");
(2) The parties hereto desire to amend and restate the terms and
provisions of the Existing Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree to
amend and restate the Existing Credit Agreement as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 CERTAIN DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"ADDITIONAL COLLATERAL DOCUMENTS" has the meaning specified in Section
5.01(l)(iv).
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of
parties to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the
Administrative Agent maintained by the Administrative Agent at its office at
Fleet National Bank, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇, Account No. ▇▇▇▇▇▇▇,
Attention: Loan Administration.
"ADVANCE" means a Term Loan A Advance, a Term Loan B Advance, a Term
Loan C Advance, a Revolving Credit Advance, a Swing Line Advance or a Letter of
Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 50% or more of
the Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender Party,
such Lender Party's Domestic Lending Office in the case of a Prime Rate Advance
and such Lender Party's Eurodollar Lending Office in the case of a Eurodollar
Rate Advance.
"APPLICABLE MARGIN" means, at any date of determination thereof:
(i) With respect to Revolving Credit Advances (in an aggregate
amount up to the Borrowing Base as reported on the most recent Borrowing Base
Certificate) and Term Loan A Advances, 4.25% for Eurodollar Rate Advances and
3.00% for Prime Rate Advances;
(ii) With respect to Term Loan B Advances, 4.50% for
Eurodollar Rate Advances and 3.25% for Prime Rate Advances;
(iii) With respect to Term Loan C Advances, 4.75% for
Eurodollar Rate Advances and 3.50% for Prime Rate Advances; and
(iv) With respect to Revolving Credit Advances (in excess of
the Borrowing Base as reported on the most recent Borrowing Base Certificate),
4.00% for Prime Rate Advances.
"ASSET DISPOSITION" means any sale, lease, transfer or other
disposition of any property or asset of the Borrower or any of its Subsidiaries
(other than any sale, lease, transfer or other disposition of any such property
or asset as set forth in Section 5.02(d)(i) and (iii)).
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit A hereto.
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such time
(assuming compliance at such time with all conditions to drawing).
"BANK HEDGE AGREEMENT" means any Hedge Agreement required or permitted
under this Agreement that is entered into by and between the Borrower and any
Hedge Bank.
"BORROWER" has the meaning specified in the recital of parties to this
Agreement.
"BORROWER'S ACCOUNT" means an account of the Borrower maintained by the
Borrower with Fleet National Bank.
"BORROWING" means a Term Loan A Borrowing, a Term Loan B Borrowing, a
Term Loan C Borrowing, a Revolving Credit Borrowing or a Swing Line Borrowing.
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"BORROWING BASE" means, at any date of determination, (i) 80% of the
aggregate amount of Eligible Receivables on such date, less (ii) reasonable
reserves established by the Administrative Agent from time to time.
"BORROWING BASE CERTIFICATE" means a certificate of a Responsible
Officer of the Borrower, substantially in the form of Exhibit B hereto.
"BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in New York, New York and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings in U.S.
dollars are carried on in the London interbank market.
"CAPITAL EVENT" means any event or combination of events that shall
result in a permanent prepayment of the Advances (other than in respect of
regularly scheduled amortization on the Term Loan Advances and the prepayment of
amounts released from escrow accounts) in an aggregate amount not less than
$20,000,000.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum of
all expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements and including, without limitation, purchased software or for
replacements or substitutions therefor or additions thereto, that have been or
should be, in accordance with GAAP, reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person.
"CAPITALIZED LEASES" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"CAPPED REVOLVER PERIOD" has the meaning specified in Section
2.01(a)(iii).
"CASH EQUIVALENTS" means any of the following, to the extent owned by
the Borrower or any of its Subsidiaries free and clear of all Liens other than
Liens created under the Collateral Documents:
(i) readily marketable direct obligations of the government of
the United States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government of the
United States or any agency or instrumentality thereof having a maturity of not
greater than twelve (12) months from the date of issuance thereof;
(ii) insured certificates of deposit, bankers' acceptances or
time deposits (including, without limitation, Eurodollar denominated and Yankee
issues) having a maturity of not greater than twelve (12) months from the date
of issuance thereof with any commercial bank or financial institution having
combined capital and surplus of at least $1 billion and either located in the
U.S. or with respect to Foreign Subsidiaries organized under the laws of an
Approved Country (as defined in clause (ix) below) and a rating of at least
"P-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's Ratings Group, or with
respect to banks located in an Approved Country, the equivalent thereof;
(iii) corporate securities and commercial paper having a
maturity of not greater than twelve (12) months from the date of issuance and
rated at least "P-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard & Poor's
Ratings Group;
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(iv) short-term tax exempt securities including municipal
notes, commercial paper, auction rate floaters, and floating rate notes rated at
least "P-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors Service, Inc. or
"A-1" (or the then equivalent grade) by Standard & Poor's Ratings Group, and
bonds rated at least "AA" (or the then equivalent grade) by Standard & Poor's
Ratings Group;
(v) pre-refunded municipal bonds escrowed to maturity and
backed by U.S. Treasury securities;
(vi) repurchase agreements covering U.S. Treasury or U.S.
government agency securities valued at not less favorably than 102% of market
value with a term of not more than seven (7) days with major banks and dealers
that are recognized as "primary dealers" by the Federal Reserve Bank of New
York;
(vii) tax exempt preferred stock or bonds issued with a
rate-reset mechanism and a maximum term of 180 days and rated at least "AAA" (or
the then equivalent grade) by ▇▇▇▇▇'▇ Investors Service, Inc.;
(viii) money market mutual funds that offer daily purchase and
redemption, maintain a constant share price, are `no-load' funds and have a
constant $1.00 net asset value; or
(ix) with respect to Foreign Subsidiaries, government
obligations of (A) the United Kingdom, (B) any country in which a Foreign
Subsidiary conducts business, (C) any other country approved by the
Administrative Agent, or (D) any other country whose debt securities are rated
by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors Service, Inc. A-1 or
P-1, respectively, or the equivalent thereof (if a short-term debt rating is
provided by either) or at least AA or AA2, respectively, or the equivalent
thereof (if a long-term unsecured debt rating is provided by either) (each such
country, an "APPROVED COUNTRY"), in each case with maturities of less than 12
months.
"CASH ON HAND" means, at any date of determination, the aggregate
collected cash balances on deposit in the Included Accounts.
"CASH ON HAND CERTIFICATE" has the meaning specified in Section
5.03(r).
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. Section 9601 et seq., as amended from time
to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental Protection
Agency.
"CLOSING DATE" means the date on which the conditions precedent set
forth in Section 3.01 shall have been satisfied or waived in accordance
therewith.
"COLLATERAL" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Administrative Agent for the benefit of the Secured
Parties.
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"COLLATERAL DOCUMENTS" means each Security Agreement, the Mortgages any
other agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties, including the
Additional Collateral Documents delivered pursuant to Section 5.01(l)(iv).
"COMMITMENT" means a Term Loan A Commitment, a Term Loan B Commitment,
a Term Loan C Commitment, a Revolving Credit Commitment or a Letter of Credit
Commitment.
"COMPANIES ACT" means the Companies ▇▇▇ ▇▇▇▇ of Great Britain.
"CONFIDENTIAL INFORMATION" means information that the Borrower
furnishes to the Administrative Agent or any Lender Party in a writing
designated as confidential, but does not include any such information that is or
becomes generally available to the public other than as a result of a breach by
the Administrative Agent or any Lender Party of its obligations hereunder or
that is or becomes available to the Administrative Agent or such Lender Party
from a source other than the Borrower that is not, to the best of the
Administrative Agent's or such Lender Party's knowledge, acting in violation of
a confidentiality agreement with the Borrower.
"CONSOLIDATED" refers to the consolidation of accounts, in accordance
with GAAP, of the Borrower and all of its Subsidiaries.
"CONVERSION," "CONVERT" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.
"CREDIT EXTENSION" means (i) the making of any Advances hereunder, and
(ii) the issuance of any Letters of Credit hereunder.
"CURRENT ASSETS" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a company
conducting a business the same as or similar to that of such Person, after
deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.
"CURRENT LIABILITIES" of any Person means (a) Debt of such Person,
except Total Funded Debt, that by its terms is payable on demand or matures
within one year after the date of determination (excluding any Debt renewable or
extendible, at the option of such Person, to a date more than one year from such
date or arising under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date), (b) all amounts of Total Funded Debt of such Person required to be
paid or prepaid within one year after the date of determination and (c) all
other items (including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person.
"DEBT" of any Person means, without duplication,
(i) all indebtedness of such Person for borrowed money,
(ii) all Obligations of such Person for the deferred purchase
price of property or services,
(iii) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments,
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(iv) all Obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property),
(v) all Obligations of such Person as lessee under Capitalized
Leases,
(vi) all Obligations, contingent or otherwise, of such Person
in respect of letters of credit or similar facilities,
(vii) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock,
(viii) all Debt of others referred to in clauses (i) through
(vii) above or clause (ix) below guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (A) to pay or purchase such Debt or to advance or supply
funds for the payment or purchase of such Debt, (B) to purchase, sell or lease
(as lessee or lessor) property, or to purchase or sell services, primarily for
the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (C) to supply funds to or in any other manner
invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (D) otherwise to assure a creditor against loss, and
(ix) all Debt referred to in clauses (i) through (viii) above
of another Person secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including, without limitation, accounts, contract rights or inventory) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Debt.
"DEBT ISSUANCE" means any issuance or sale or other incurrence by the
Borrower or any of its Subsidiaries of any Debt; provided, however, that for
purposes of determination of Net Cash Proceeds under Section 2.06(b), the term
"Debt Issuance" shall not include the proceeds from Capitalized Lease
Transactions.
"DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.
"DEFAULTED ADVANCE" means, with respect to any Lender Party at any
time, the portion of any Advance required to be made by such Lender Party to the
Borrower pursuant to Section 2.01 or 2.02 at or prior to such time which has not
been made by such Lender Party or by the Administrative Agent for the account of
such Lender Party pursuant to Section 2.02(e) as of such time. In the event that
a portion of a Defaulted Advance shall be deemed made pursuant to Section
2.15(a), the remaining portion of such Defaulted Advance shall be considered a
Defaulted Advance originally required to be made pursuant to Section 2.01 on the
same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at any time,
any amount required to be paid by such Lender Party to the Administrative Agent
or any other Lender Party hereunder or under any other Loan Document at or prior
to such time which has not been so paid as of such time, including,
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without limitation, any amount required to be paid by such Lender Party to (i)
the Swing Line Bank pursuant to Section 2.02(b) to repay a portion of a Swing
Line Advance made by the Swing Line Bank, (ii) the Issuing Bank pursuant to
Section 2.03(c) to purchase a portion of a Letter of Credit Advance made by the
Issuing Bank, (iii) the Administrative Agent pursuant to Section 2.02(e) to
reimburse the Administrative Agent for the amount of any Advance made by the
Administrative Agent for the account of such Lender Party, (iv) any other Lender
Party pursuant to Section 2.13 to purchase any participation in Advances owing
to such other Lender Party and (v) the Administrative Agent or the Issuing Bank
pursuant to Section 7.05 to reimburse the Administrative Agent or the Issuing
Bank for such Lender Party's ratable share of any amount required to be paid by
the Lender Parties to the Administrative Agent or the Issuing Bank as provided
therein. In the event that a portion of a Defaulted Amount shall be deemed paid
pursuant to Section 2.15(b), the remaining portion of such Defaulted Amount
shall be considered a Defaulted Amount originally required to be paid hereunder
or under any other Loan Document on the same date as the Defaulted Amount so
deemed paid in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that, at such
time, (i) owes a Defaulted Advance or a Defaulted Amount or (ii) shall take any
action or be the subject of any action or proceeding of a type described in
Section 6.01(f).
"DISCLOSED LITIGATION" means the litigation disclosed on Schedule
4.01(h).
"DISPOSAL" means the discharge, deposit, injection, dumping, spilling,
leaking or placing of any solid waste or hazardous waste, as those terms are
defined by any federal, state, local or foreign law, into or on any land or
water so that such solid waste or hazardous waste or any constituents thereof
may enter the environment or be emitted into the air or discharged into any
waters, including ground waters.
"DOLLARS," "DOLLARS" and the symbol "$" each mean the lawful currency
of the United States.
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of
the United States of America or any State thereof.
"EBIT" means, for any period, determined on a Consolidated basis
without duplication, (A) EBITDA minus, (B) the sum of (i) depreciation expense
and (ii) amortization expense.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis without duplication, of (A) net income (or net loss) from continued and
discontinued operations, plus, (B) to the extent deducted (or added) in
determining net income for such period: (i) preferred dividends or charges for
minority interest, (ii) provision for taxes (or minus tax benefit), (iii) net
interest expense, (iv) losses on the disposal of assets (or minus gains on the
disposal of assets), (v) restructuring charges (including any severance or other
costs incurred for such plans that are not included as part of "restructuring
charges" in accordance with GAAP) in an aggregate amount up to $2,500,000 for
Fiscal Year 2003 and $1,000,000 for each Fiscal Year thereafter (add-backs under
this clause (v) or other add-backs made to calculate EBITDA shall not include
any allocation of departmental expenses or charges from the Borrower or its
Subsidiaries), (vi) fees and expenses associated with (1) the negotiation of
this Agreement, (2) the
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reimbursement of the expenses of third parties engaged in due diligence with
regard to a restructuring transaction and (3) a tender offer or consent
solicitation with respect to the Subordinated Notes and/or preference shares of
Wace Group Limited, (vii) fees and expenses of non-employee professionals
engaged by the Borrower, in connection with this Agreement, and the
Administrative Agent on an ongoing basis, including, without limitation, fees
and expenses associated with clauses (v) and (vi) above, (viii) non-operating
expenses (or minus non-operating income) properly excluded from "operating
income" in accordance with GAAP, and separately reported in filings under the
U.S. Securities Exchange Act of 1934 as "other income (expense) - net",(ix)
depreciation expense, (x) amortization expense, (xi) non-cash expenses related
to the granting of stock options, asset impairments and other permanent non-cash
charges, (xii) extraordinary items, including extinguishment of debt, and (xiii)
cumulative effect of change in accounting principles.
"ELIGIBLE ASSIGNEE" means with respect to any Facility (other than the
Letter of Credit Facility), (A) a Lender; (B) an Affiliate of a Lender; and (C)
subject to the prior approval of the Administrative Agent and, so long as no
Default or Event of Default shall have occurred and be continuing, the Borrower,
such approval not to be unreasonably withheld or delayed, (i) a commercial bank
organized under the laws of the United States, or any State thereof, and having
total assets in excess of $500,000,000; (ii) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $500,000,000; (iii) a commercial
bank organized under the laws of any other country that is a member of the OECD
or has concluded special lending arrangements with the International Monetary
Fund associated with its general arrangements to borrow or of the Cayman
Islands, or a political subdivision of any such country, and having total assets
in excess of $500,000,000, so long as such bank is acting through a branch or
agency located in the United States; (iv) the central bank of any country that
is a member of the OECD; and (v) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust or
other entity) located in the United States that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and having total assets in excess of $500,000,000; and, with respect to
the Letter of Credit Facility, a Person that is an Eligible Assignee under
subclause (i) or (iii) of clause (C) of this definition and is approved by the
Administrative Agent and the Borrower, such approval not to be unreasonably
withheld or delayed; provided, however, that no Loan Party or Affiliate of a
Loan Party shall qualify as an Eligible Assignee under this definition.
"ELIGIBLE RECEIVABLES" means, at any date of determination, the
aggregate amount of all Receivables payable to the Borrower or any of its
Domestic Subsidiaries, other than the following (in each case without
duplication):
(a) accounts owing from account debtors located outside of the
United States to the extent not covered by receivables insurance that is
reasonably satisfactory to the Administrative Agent;
(b) accounts that are not assignable or for which a first
priority security interest in such account in favor of the Administrative Agent
for the benefit of the Lenders has not been obtained and fully perfected;
(c) accounts subject to any Lien, other than (i) Liens in
favor of the Administrative Agent for benefit of the Lenders and (ii) such other
Liens described in clause (i) of the definition of Permitted Liens;
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(d) accounts that do not constitute a legal, valid and binding
irrevocable payment obligation of the account debtor to pay the balance thereof
in accordance with its terms or is subject to any asserted or contractual
defense, setoff, recoupment or counterclaim;
(e) accounts for which the account debtor has not been sent an
invoice;
(f) accounts more than 90 days from invoice date;
(g) accounts from any account debtor which has filed a
petition for relief under the United States Bankruptcy Code (or similar action
under any successor law or under any comparable law), made a general assignment
for the benefit of creditors, had filed against it any petition or other
application for relief under the United States Bankruptcy Code (or similar
action under any successor law or under any comparable law), called a meeting of
its creditors for the purpose of obtaining any financial concession or
accommodation, or had or suffered a receiver or a trustee to be appointed for
all or a significant portion of its assets or affairs, or, to the knowledge of
the Borrower or any of its Subsidiaries, is otherwise winding up its affairs or
has become insolvent; provided, however, that Eligible Accounts shall include
accounts from any account debtor that either (A) relate to periods following the
filing of a petition for relief under the United States Bankruptcy Code with
respect to such account debtor (except accounts from any account debtor whose
case is converted post-petition to a case under Chapter 7 of the United States
Bankruptcy Code pursuant to Section 706 thereof) or (B) the payment of which has
been approved by final order of a United States Bankruptcy Court;
(h) accounts that have been placed with an attorney or other
third party for collection;
(i) accounts from affiliates or Subsidiaries of the Borrower
or any of its Subsidiaries (except, for purposes of this clause (i) only,
accounts from U.S. News & World Report, L.P., Daily News, L.P. and Applied
Printing Technologies, L.P.; provided, however, accounts from such affiliates
shall be reduced to the extent that the Borrower or any of its Domestic
Subsidiaries are liable for goods sold or services rendered by such affiliates);
(j) accounts from employees or directors of the Borrower or
any of its Subsidiaries;
(k) accounts from any account debtor from whom 30% or more of
the account balance is past 90 days from invoice date before giving effect to
credit-related charge-offs (i.e., excluding normal documented credit memos or
discounts issued in the ordinary course of business) made during the period 60
days ending on the date of determination; and
(l) accounts with respect to which the Borrower or any of its
Subsidiaries have not complied with all material requirements of law applicable
to such account or affecting the collectability of such account.
"EMPLOYEE AND TAX-RELATED ACCOUNTS" means the Borrower's and each of
its Subsidiaries' payroll accounts, medical accounts, insurance accounts,
payroll tax accounts, and income tax accounts.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
9
Hazardous Material or arising from alleged injury or threat to public health and
safety or the environment, including, without limitation, (i) by any
governmental or regulatory authority or third party for enforcement, cleanup,
Removal, Response, Remedial or other actions or damages and (ii) by any
governmental or regulatory authority or third party for damages, contribution,
indemnification, cost recovery, compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any international or transnational law,
federal, state, local or foreign statute, law, ordinance, rule, regulation,
code, order, writ, judgment, injunction, decree or judicial or agency
interpretation, policy or guidelines relating to pollution or protection of the
environment or natural resources, including, without limitation, those relating
to the use, handling, transportation, treatment, storage, disposal, threatened
release, release or discharge of Hazardous Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.
"EQUITY ISSUANCE" means any issuance or sale by the Borrower or any of
its Subsidiaries of any of its capital stock or other equity securities or any
obligations convertible into or exchangeable for, or giving any Person a right,
option or warrant to acquire such securities or such convertible or exchangeable
obligations; provided, however, that for purposes of determination of Net Cash
Proceeds under Section 2.06(b), the term "Equity Issuance" shall not include any
issuance or sale of (a) capital stock to qualify any director of the Borrower or
any of its Subsidiaries if required by applicable law; (b) capital stock or
other equity securities to directors, management and employees and other
eligible participants of the Borrower or any of its Subsidiaries, pursuant to a
stock purchase, stock option or similar incentive plan of the Borrower or any of
its Subsidiaries, or any exercise of options issued pursuant thereto; and (c)
capital stock of any Subsidiary of the Borrower to the Borrower or any other
Domestic Subsidiary of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under common
control with any Loan Party, within the meaning of Section 414 of the Internal
Revenue Code, and, in respect of the Borrower and its Subsidiaries, the
definition "ERISA Affiliate" shall exclude Daily News, L.P.
"ERISA EVENT" means (i) (y) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by the
PBGC, or (z) the requirements of subsection (1) of Section 4043(b) of ERISA
(without regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (ii) the application for a minimum funding waiver with
respect to a Plan; (iii) the provision by the administrator of any Plan of a
notice of intent to terminate such Plan under ERISA Section 4041(c), pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (iv) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (v) the withdrawal by any
Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (vi) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any
10
Plan; (vii) the adoption of an amendment to a Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA; or (viii) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender Party,
the office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender Party (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify to the Borrower and the
Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, an interest rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) as determined
on the basis of the offered rates for deposits in U.S. dollars, for a period of
time comparable to such Interest Period which appears on the Telerate Page 3750
as of 11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period; provided, however, that if the rate described above does not
appear on the Telerate System on any applicable interest determination date, the
Eurodollar Rate shall be the rate (rounded upward as described above, if
necessary) for deposits in U.S. dollars for a period substantially equal to the
interest period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO page on that service for the purpose of displaying such rates), as of
11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such Interest Period which
are offered by four major banks in the London interbank market at approximately
11:00 a.m. (New York time) two Business Days before the first day of such
Interest Period as selected by the Administrative Agent. The principal London
office of each of the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least two such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as requested, the rate
for that date will be determined on the basis of the rates quoted for loans in
U.S. dollars to leading European banks for a period of time comparable to such
Interest Period offered by major banks in New York City at approximately 11:00
a.m. (New York time) two Business Days before the first day of such Interest
Period. In the event that the Administrative Agent is unable to obtain any such
quotation as provided above, it will be deemed that the Eurodollar Rate for such
Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a Eurodollar Rate Reserve Percentage with respect to Eurocurrency
Liabilities, the Eurodollar Rate for an Interest Period shall be equal to the
amount determined above for such Interest Period divided by a percentage equal
to 100% minus the Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
11
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest Period for
all Eurodollar Rate Advances comprising part of the same Borrowing, the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXCESS CASH FLOW" means for any period the sum of (a) EBITDA of the
Borrower and its Subsidiaries for such period plus (b) the aggregate amount of
all non-cash charges deducted from Consolidated net income for such period, but
not added back in arriving at EBITDA less (c) the aggregate amount of mandatory
and optional prepayments or repayments of principal made by the Borrower and its
Subsidiaries on any Total Funded Debt of the Borrower and its Subsidiaries
during such period; provided, however, that, with respect to any optional
prepayment of the Revolving Credit Advances, the amount of such prepayment shall
be expressly excluded from the determination of the amount in this clause (c) if
the Revolving Credit Facility is not, upon such repayment, permanently reduced
by the amount of such prepayment less (d) Capital Expenditures of the Borrower
and its Subsidiaries during such period less (e) the aggregate amount of all
federal, state, local and foreign taxes paid by the Borrower and its
Subsidiaries during such period less (f) the aggregate amount of interest paid
on any Debt of the Borrower and its Subsidiaries during such period less (g) the
aggregate amount of the cash portion paid in the current period in respect of
all non-recurring charges included in arriving at such EBITDA in the current and
prior periods less (h) dividends paid by the Borrower or its Subsidiaries to the
holders of its common or preferred stock during such period to the extent that
the Borrower is expressly permitted to pay such dividends under this Agreement.
"EXCESS CASH FLOW CERTIFICATE" has the meaning specified in Section
5.03(p).
"EXCLUDED ACCOUNTS" means (a) Employee and Tax-Related Accounts, but
only to the extent that (i) funds held in such accounts do not exceed the amount
of the next required payroll, medical, insurance or tax payment for the Borrower
or any of its Subsidiaries, as appropriate, (ii) funds are not held in payroll
accounts more than three days in advance of the relevant payroll date and (iii)
funds are not held in Employee and Tax-Related Accounts (other than payroll
accounts) more than one week in advance of the date that payment is required by
the relevant payee, and (b) the accounts of Applied Graphics Technologies (UK)
Limited, Wace Group Limited and any of their Subsidiaries organized under the
laws of the United Kingdom or Australia, but only to the extent that funds held
in such accounts do not exceed a collected cash balance on any calculation day
of more than GBP 1,500,000 in the United Kingdom and AUD 250,000 in Australia.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the
Preliminary Statements.
"EXISTING LETTERS OF CREDIT" means letters of credit outstanding under
the Existing Credit Agreement.
"EXISTING REVOLVING CREDIT ADVANCE" has the meaning specified in
Section 2.01(a)(i).
12
"EXISTING REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such Lender's
name on Schedule I as such Lender's Existing Credit Commitment, or, if such
Lender has entered into one or more Assignments and Acceptances, the amount set
forth for such Lender in the Register maintained by the Administrative Agent
pursuant to Section 8.07(d) as such Lender's "Existing Revolving Credit
Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.05. The aggregate amount of the Lenders' Existing Revolving Credit
Commitment is $51,000,000.
"EXTRAORDINARY RECEIPT" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business, including,
without limitation, pension plan reversions, proceeds of casualty insurance and
condemnation awards (and payments in lieu thereof), excluding proceeds of any
other insurance; provided, however, that an Extraordinary Receipt shall not
include cash receipts received from proceeds of casualty insurance, condemnation
awards (or payments in lieu thereof) or indemnity payments to the extent that
such proceeds, awards or payments (i) in respect of loss or damage to equipment,
fixed assets, inventory or real property, are applied (or in respect of which
expenditures were previously incurred) to replace or repair such equipment,
fixed assets, inventory or real property so long as such application is made or
committed to be made within one hundred twenty (120) days (or such longer time
as may be commercially reasonable in the circumstances) after such Person's
receipt of such proceeds, awards or payments; or (ii) are received by any Person
in respect of any third party claim against such Person and applied to pay (or
to reimburse such Person for its prior payment of) such claim and the costs and
expenses of such Person with respect thereto.
"FACILITY" means the Term Loan A Facility, the Term Loan B Facility,
the Term Loan C Facility, the Revolving Credit Facility, the Letter of Credit
Facility or the Swing Line Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTER" has the meaning specified in Section 2.08(d).
"FIFTH AMENDMENT" has the meaning specified in the Preliminary
Statements.
"FIFTH AMENDMENT FEE" has the meaning specified in Section 2.08(f).
"FISCAL YEAR" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on December 31 in any calendar year.
"FIXED CHARGE COVERAGE RATIO" has the meaning specified in Section
5.04(c).
"FIXED CHARGES" means, for any period, the sum, determined on a
Consolidated basis without duplication, of (i) Interest Expense of the Borrower
and its Subsidiaries on all Debt, (ii) scheduled payments of principal amounts
paid by the Borrower and its Subsidiaries on all Debt, including Capitalized
Leases, (iii) cash Capital Expenditures made by the Borrower and its
Subsidiaries, and (iv)
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇, local and foreign income taxes paid (net
of refunds received) by the Borrower and its Subsidiaries.
"FLEET" means Fleet National Bank in its capacity as a Lender or
Issuing Bank or Swing Line Bank hereunder.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of
any jurisdiction other than the United States of America or any State thereof.
"GAAP" has the meaning specified in Section 1.03.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTEED OBLIGATIONS" has the meaning specified in the Subsidiary
Guaranty.
"HAZARDOUS MATERIALS" means (i) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (ii) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements.
"HEDGE BANK" means any Lender Party in its capacity as a party to a
Bank Hedge Agreement.
"INCLUDED ACCOUNT" means any account included in "cash equivalents" on
the balance sheets of the Borrower or any of its Subsidiaries maintained at any
bank or other financial institution that is a depository account within the
Borrower's cash management system, except for Excluded Accounts.
"INDEMNIFIED PARTY" has the meaning specified in Section 8.04(b).
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTELLECTUAL PROPERTY" has the meaning specified in Section 4.01(s).
"INTEREST EXPENSE" means, with respect to any Person for any period,
interest expense on all Debt of such Person for such period net of interest
income for such period, whether paid or accrued, determined on a Consolidated
basis for such Person and its Subsidiaries and in accordance with GAAP, and
including, without limitation, (i) in the case of the Borrower, interest expense
in respect of Debt resulting from Advances, (ii) the interest component of all
obligations under Capitalized Leases, (iii) commissions, discounts and other
fees and charges payable in connection with letters of credit (including,
without limitation, Letters of Credit), (iv) the net payment, if any, payable in
connection with Hedge Agreements less the net credit, if any, receivable in
connection with Hedge Agreements (but excluding,
14
for the purposes of calculating the financial covenants contained in Sections
5.04(b) and 5.04(c) only, permanent non-cash charges and non-cash credits
associated in each case with changes, during, and as of the end of, such period,
in the fair value of such Hedge Agreements) and (v) all fees paid by the
Borrower pursuant to Section 2.08(a) (other than non-cash amortization related
thereto); provided however that for purposes of calculating the covenants under
Section 5.04(b) and 5.04(c), Interest Expense shall not include amounts related
to the amortization of deferred financing costs and without duplication the
amortization of fees incurred pursuant to Section 2.08.
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Eurodollar
Rate Advance or the date of the Conversion of any Advance into such Eurodollar
Rate Advance, and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below. The duration of each such Interest Period shall be one month,
as the Borrower may, upon notice received by the Administrative Agent not later
than 1:00 p.m. (New York time) on the third Business Day prior to the first day
of such Interest Period, select; provided, however, that:
(a) The Borrower may not select any Interest Period with
respect to any Eurodollar Rate Advance under a Facility that ends after any
principal repayment installment date for such Facility unless, after giving
effect to such selection, the aggregate principal amount of Eurodollar Rate
Advances having Interest Periods that end on or prior to such principal
repayment installment date for such Facility shall be at least equal to the
aggregate principal amount of Advances under such Facility due and payable on or
prior to such date;
(b) Whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day;
provided, however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the last day of
such Interest Period shall occur on the next preceding Business Day;
(c) Whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding calendar
month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVENTORY" of any Person means all of such Person's now owned and
hereafter acquired inventory, goods, merchandise, and other personal property,
wherever located, to be furnished under any contract of service or held for sale
or lease, all returned goods, raw materials, other materials and supplies of any
kind, nature or description which are or might be consumed in such Person's
business or used in connection with the packing, shipping, advertising, selling
or finishing of such goods, merchandise and such other personal property, and
all documents of title or other documents representing them.
"INVESTMENT" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership or
profit interest, warrants, rights, options, obligations
15
or other securities of such Person, any capital contribution to such Person or
any other investment in such Person.
"ISSUING BANK" means Fleet and each Eligible Assignee to which the
Letter of Credit Commitment hereunder has been assigned pursuant to Section
8.07.
"L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the Security
Agreement.
"L/C RELATED DOCUMENTS" has the meaning specified in Section
2.04(d)(ii)(A).
"LENDER PARTY" means any Lender, the Issuing Bank or the Swing Line
Bank.
"LENDER(S)" means the banks, financial institutions and other
institutional lenders listed on the signature pages hereof as "Lenders" and each
Person that shall become a Lender hereunder pursuant to Section 8.07.
"LETTER OF CREDIT" means any Letter of Credit issued hereunder (as
specified in Section 2.03(a)).
"LETTER OF CREDIT ADVANCE" means an advance made by the Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in Section
2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuing Bank,
the amount set forth opposite the Issuing Bank's name on Schedule I hereto under
the caption "Letter of Credit Commitment" or, if the Issuing Bank has entered
into one or more Assignments and Acceptances, set forth for the Issuing Bank in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as the Issuing Bank's "Letter of Credit Commitment," as such amount may be
reduced pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"LOAN DOCUMENTS" means (i) this Agreement, (ii) the Notes, (iii) the
Collateral Documents, (iv) each Subsidiary Guaranty, (v) each Subsidiary
Guaranty delivered pursuant to Section 5.01(k) and Section 5.01(1)(ii) hereof,
(vi) each Letter of Credit Agreement, (vii) each Bank Hedge Agreement, (viii)
the Warrants and (ix) all other agreements, instruments and documents executed
in connection with the foregoing, in each case as the same may at any time be
amended, supplemented, restated or otherwise modified and in effect.
"LOAN PARTY" means each of the Borrower and the Subsidiary Guarantors.
"MARGIN STOCK" has the meaning specified in Regulations T, U and X.
16
"MATERIAL ADVERSE EFFECT" means any fact or circumstance which (a)
materially and adversely affects the business or financial condition of the
Borrower and its Subsidiaries, taken as a whole, or (b) materially and adversely
affects the ability of the Borrower and the Subsidiary Guarantors, taken as a
whole, to perform their collective obligations under the Loan Documents.
"MATERIAL CONTRACT" means, with respect to any Person, each written
contract which would create a monetary obligation of such Person, or a right to
receive funds by such Person, and each other written contract to which such
Person is a party which is material to the business and operations of such
Person, the absence of which could reasonably be expected to result in a
Material Adverse Effect.
"MONTHLY COVENANT" has the meaning specified in Section 2.01(a)(iii).
"MORTGAGES" means, collectively, the mortgages and deeds of trust made
by any Loan Party in favor of, or for the benefit of, the Administrative Agent
for the benefit of the Lenders, as the same may be amended, supplemented or
otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (ii) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any Asset Disposition, Debt
Issuance or Equity Issuance by any Person, or any Extraordinary Receipt, the
aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration) in
connection with such transaction after deducting therefrom only (without
duplication) (i) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees and
commissions, (ii) the amount of taxes payable in connection with or as a result
of such transaction, (iii) the amount of any Debt secured by a Lien on such
asset that is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the asset that is the subject thereof and
(iv) the amount to be used to replace any such asset.
"NOTE" means, individually, a Term Loan A Note, a Term Loan B Note, a
Term Loan C Note, a Revolving Credit Note or a Swing Line Note, and
collectively, the "NOTES."
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section 2.03(a).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in Section
2.02(b).
"NOTICE OF TERMINATION" has the meaning specified in Section 2.01(d).
17
"NPL" means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 6.01(f). Without limiting the generality of the foregoing, the
Obligations of the Loan Parties under the Loan Documents include (i) the
obligation to pay principal, interest, Letter of Credit commissions, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document, and (ii) the obligation of
any Loan Party to reimburse any amount in respect of any of the foregoing that
any Lender Party, in its sole discretion, may elect to pay or advance on behalf
of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"PERMITTED LIENS" means any of the following: (i) Liens for taxes,
assessments and governmental charges or levies (x) not yet due and payable or
(y) due and payable that are being contested in good faith and by appropriate
proceedings diligently conducted, provided that in the case of Liens under this
clause (y), reserves or other appropriate provisions shall have been established
therefor in accordance with GAAP; (ii) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than sixty (60) days or which are
being contested in good faith and by appropriate proceedings diligently
conducted, provided that reserves or other appropriate provisions shall have
been established therefor in accordance with GAAP; (iii) pledges or deposits to
secure obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations; and (iv) Permitted Real Property
Encumbrances.
"PERMITTED REAL PROPERTY ENCUMBRANCES" means, with respect to any
particular real property, easements, zoning restrictions or other restrictions,
rights-of-way, encroachments, covenants or encumbrances on real property imposed
by law or arising in the ordinary course of business that do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any of its Subsidiaries or materially
impair the use thereof to the Borrower or any Subsidiary.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED COLLATERAL" means the "Pledged Shares" or "Pledged Stock" as
defined in the relevant Collateral Document.
18
"PRIME RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Fleet in
Boston, Massachusetts from time to time, as Fleet's prime rate, which is not
necessarily the lowest rate made available by Fleet; or
(b) one-half (1/2) of one percent per annum above the Federal
Funds Rate.
"PRIME RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"PRO RATA SHARE" of any amount means, with respect to any Revolving
Credit Lender at any time, the product of such amount times a fraction the
numerator of which is the amount of such Lender's Revolving Credit Commitment at
such time and the denominator of which is the Revolving Credit Facility at such
time.
"REAL PROPERTY" has the meaning specified in Section 4.01(u).
"RECEIVABLES" means all Receivables referred to in Section 1(c) of the
Security Agreement.
"REDUCTION AMOUNT" has the meaning specified in Section 2.06(d)(iii).
"REGISTER" has the meaning specified in Section 8.07(d).
"REGULATION H" means Regulation H of the Board of Governors of the
Federal Reserve System, as the same may be modified and supplemented and in
effect from time to time.
"REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System, as the same may be modified and supplemented and in
effect from time to time.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as the same may be modified and supplemented and in
effect from time to time.
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System, as the same may be modified and supplemented and in
effect from time to time.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or discarding of
barrels, containers and other closed receptacles containing any Hazardous
Materials) or into or from any property, including, without limitation, the
movement of any Hazardous Materials through the air, soil, surface waters or
ground water.
"REMEDIAL" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(24) and/or any other applicable Environmental Laws.
"REMOVAL" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(23) and/or any other applicable Environmental Laws.
"REQUIRED LENDERS" means Lenders holding greater than 66-2/3% of the
aggregate of the Term Loan Advances and the Revolving Credit Commitments;
provided, however, that if any Lender shall be a
19
Defaulting Lender at such time, there shall be excluded from the determination
of Required Lenders at such time the aggregate Term Loan Advances and Revolving
Credit Commitment of such Lender at such time.
"RESPONSE" shall have the meaning as set forth in CERCLA at 42 U.S.C.
Section 9601(25) and/or any other applicable Environmental Laws.
"RESPONSIBLE OFFICER" means, in the case of any Loan Party, the chief
executive officer, chief financial officer or the treasurer of such Loan Party.
"REVOLVING CREDIT ADVANCES" means each Existing Revolving Credit
Advance and each Supplemental Revolving Credit Advance.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of
simultaneous Revolving Credit Advances of the same Type made by the Revolving
Credit Lenders.
"REVOLVING CREDIT COMMITMENTS" means, with respect to any Revolving
Credit Lender, at any time, such Lender's Existing Revolving Credit Commitment
and Supplemental Revolving Credit Commitment.
"REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.
"REVOLVING CREDIT LENDER" means any Lender that has an Existing
Revolving Credit Commitment and a Supplemental Revolving Credit Commitment.
"REVOLVING CREDIT NOTE" means a promissory note of the Borrower payable
to the order of any Revolving Credit Lender evidencing the aggregate
indebtedness of the Borrower to such Lender resulting from the Revolving Credit
Advances made by such Lender, as each may hereafter be amended, restated,
supplemented, replaced or otherwise modified from time to time.
"SECURED OBLIGATIONS" has the meaning specified in the Security
Agreement.
"SECURED PARTIES" means the Administrative Agent, the Lender Parties,
and the Hedge Banks and the other Persons whose Obligations are or are purported
to be secured by the Collateral under the terms of the Collateral Documents.
"SECURITY AGREEMENT" means the Security Agreement dated June 3, 1999,
from the Borrower and certain of its Subsidiaries to the Administrative Agent,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (ii) was so maintained and in respect of which any Loan
Party or any ERISA Affiliate could have liability under Section 4069 of ERISA in
the event such plan has been or were to be terminated.
"STANDBY LETTER OF CREDIT" means any Letter of Credit other than a
Trade Letter of Credit.
20
"STERLING" and the symbol "L" each mean the lawful currency of the
United Kingdom.
"SUBORDINATED DEBT" means any Debt of the Borrower or any of its
Subsidiaries that is subordinated to the Obligations of the Borrower under the
Loan Documents on, and that otherwise contains, terms and conditions reasonably
satisfactory to the Administrative Agent and Required Lenders.
"SUBORDINATED NOTES" means the 10% Subordinated Notes due October 31,
2005 issued by the Borrower pursuant to the Deed of Covenant dated as of July 5,
1999.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate (a) of which (or in which)
more than 50% of (i) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency), (ii) the interest in the capital or profits of such partnership,
joint venture or limited liability company or (iii) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries; and (b) with respect to any
Person incorporated in England, a subsidiary within the meaning of Section 736
of the Companies Act or, unless the context otherwise requires, a subsidiary
undertaking within the meaning of Section 258 of the Companies Act.
"SUBSIDIARY GUARANTOR" means, collectively, (i) each Domestic
Subsidiary, (ii) Wace Overseas Investments Limited, Wace Group Limited and
Applied Graphics Technologies (UK) Limited and (iii) to the extent required
pursuant to Section 5.01(m), each Foreign Subsidiary.
"SUBSIDIARY GUARANTY" means collectively, (i) the Subsidiary Guaranty,
dated June 3, 1999, from certain Subsidiaries of the Borrower in favor of the
Secured Parties, as the same may be amended, restated, supplemented or otherwise
modified from time to time, (ii) Security Agreement and Guarantee dated February
16, 2000 between Wace Group Limited and Fleet Bank, N.A, (iii) Security
Agreement and Guarantee dated February 16, 2000 between Wace Overseas
Investments Limited and Fleet Bank, N.A., (iv) Guaranty Supplement dated July
27, 2001 between WUSARE, Inc. and Fleet National Bank, (v) Guaranty Supplement
dated July 27, 2001 between Seven Worldwide, Inc. and Fleet National Bank, (vi)
Guaranty Supplement dated July 27, 2001 between R.E. Graphics, Inc. and Fleet
National Bank and (vii) Guaranty Supplement dated July 27, 2001 between Applied
Graphics Technologies, (UK) Limited and Fleet National Bank.
"SUPPLEMENTAL REVOLVING CREDIT ADVANCE" has the meaning specified in
Section 2.01(a)(ii).
"SUPPLEMENTAL REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender at any time, the amount set forth opposite such Lender's
name on Schedule I as such Lender's Supplemental Revolving Credit Commitment,
or, if such Lender has entered into one or more Assignments and Acceptances, the
amount set forth for such Lender in the Register maintained by the
Administrative Agent pursuant to Section 8.07(d) as such Lender's "Supplemental
Revolving Credit Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05. The aggregate amount of the Lenders' Supplemental
Revolving Credit Commitment is (i) $12,500,000 during the period from the date
hereof through June 30, 2003, (ii) $11,500,000 during the period from July 1,
2003 through September 31, 2003, (iii) $9,500,000 during the period from October
1, 2003 through December 31, 2003 and (iv) $9,000,000 thereafter.
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"SWING LINE ADVANCE" means an advance made by the Swing Line Bank
pursuant to Section 2.01(c).
"SWING LINE ADVANCE OUTSTANDING" means the aggregate amount of all
Swing Line Advances outstanding as at the close of business on the day
immediately preceding each Swing Line Rollover Date.
"SWING LINE BANK" means Fleet.
"SWING LINE BORROWING" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"SWING LINE FACILITY" has the meaning specified in Section 2.01(c).
"SWING LINE NOTE" means a promissory note of the Borrower payable to
the order of the Swing Line Bank evidencing the indebtedness of the Borrower to
such Swing Line Bank resulting from the Swing Line Advances made by such Swing
Line Bank, as it may hereafter be amended, restated, supplemented, replaced or
otherwise modified from time to time.
"SWING LINE RATE" has the meaning specified in Section 2.01(c).
"SWING LINE ROLLOVER DATE" means the calendar day Wednesday or, if such
Wednesday is not a Business Day, the next succeeding Business Day.
"TAXES" has the meaning specified in Section 2.12(a).
"TAX REFUND CERTIFICATE" has the meaning specified in Section 5.03(q).
"TAX REFUNDS" means any local, state or federal income tax refunds
received by the Borrower or any of its Subsidiaries.
"TERMINATION DATE" means the earlier of (i) April 30, 2004 and (ii) the
date of termination of the Commitments or the obligation to make Advances
pursuant to Section 2.05 or 6.01.
"TERM LOAN ADVANCE" means a Term Loan A Advance, a Term Loan B Advance
or a Term Loan C Advance.
"TERM LOAN BORROWING" means a Term Loan A Borrowing, a Term Loan B
Borrowing or a Term Loan C Borrowing.
"TERM LOAN COMMITMENT" means, with respect to any Term Loan Lender at
any time, such Term Loan Lender's Term Loan A Commitment, Term Loan B Commitment
or Term Loan C Commitment, as applicable.
"TERM LOAN LENDER" means any Lender that has made a Term Loan A
Advance, Term Loan B Advance or a Term Loan C Advance.
"TERM LOAN NOTE" means a Term Loan A Note, a Term Loan B Note, or a
Term Loan C Note.
"TERM LOAN A ADVANCE" has the meaning specified in Section 2.01(b)(i).
22
"TERM LOAN A BORROWING" means a borrowing consisting of simultaneous
Term Loan A Advances of the same Type made by the Term Loan A Lenders.
"TERM LOAN A COMMITMENT" means, with respect to any Term Loan A Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption "Term Loan A Commitment" or, if such Lender has entered
into one or more Assignments and Acceptances, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Term Loan A Commitment" as such amount may be
reduced at or prior to such time pursuant to Section 2.05. The aggregate amount
of the Lenders' Term Loan A Commitments is $32,440,111.00.
"TERM LOAN A FACILITY" means, at any time, the aggregate amount of the
Term Loan A Lenders' Term Loan A Commitments at such time.
"TERM LOAN A LENDER" means any Lender that has made a Term Loan A
Advance.
"TERM LOAN A NOTE" means a promissory note of the Borrower payable to
the order of any Term Loan A Lender evidencing the indebtedness of the Borrower
to such Lender resulting from the Term Loan A Advance made by such Lender, as
each may hereafter be amended, restated, supplemented, replaced or otherwise
modified from time to time.
"TERM LOAN B ADVANCE" has the meaning specified in Section 2.01(b)(ii).
"TERM LOAN B BORROWING" means a borrowing consisting of simultaneous
Term Loan B Advances of the same Type made by the Term Loan B Lenders.
"TERM LOAN B COMMITMENT" means, with respect to any Term Loan B Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption `Term Loan B Commitment' or, if such Lender has entered
into one or more Assignments and Acceptances, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's `Term Loan B Commitment' as such amount may be
reduced at or prior to such time pursuant to Section 2.05. The aggregate amount
of the Lenders' Term Loan B Commitments is $55,354,515.00.
"TERM LOAN B FACILITY" means, at any time, the aggregate amount of the
Term Loan B Lenders' Term Loan B Commitments at such time."
"TERM LOAN B LENDER" means any Lender that has made a Term Loan B
Advance.
"TERM LOAN B NOTE" means a promissory note of the Borrower payable to
the order of any Term Loan B Lender evidencing the indebtedness of the Borrower
to such Lender resulting from the Term Loan B Advance made by such Lender, as
each may hereafter be amended, restated, supplemented, replaced or otherwise
modified from time to time.
"TERM LOAN C ADVANCE" has the meaning specified in Section
2.01(b)(iii).
"TERM LOAN C BORROWING" means a borrowing consisting of simultaneous
Term Loan C Advances of the same Type made by the Term Loan C Lenders.
23
"TERM LOAN C COMMITMENT" means, with respect to any Term Loan C Lender
at any time, the amount set forth opposite such Lender's name on Schedule I
hereto under the caption `Term Loan C Commitment' or, if such Lender has entered
into one or more Assignments and Acceptances, the amount set forth for such
Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's `Term Loan C Commitment' as such amount may be
reduced at or prior to such time pursuant to Section 2.05. The aggregate amount
of the Lenders' Term Loan C Commitments is $36,903,516.00.
"TERM LOAN C FACILITY" means, at any time, the aggregate amount of the
Term Loan C Lenders' Term Loan C Commitments at such time.
"TERM LOAN C LENDER" means any Lender that has made a Term Loan C
Advance.
"TERM LOAN C NOTE" means a promissory note of the Borrower payable to
the order of any Term Loan C Lender evidencing the indebtedness of the Borrower
to such Lender resulting from the Term Loan C Advance made by such Lender, as
each may hereafter be amended, restated, supplemented, replaced or otherwise
modified from time to time.
"TOTAL FUNDED DEBT" means, at any date of determination thereof, the
aggregate outstanding balance of all Debt of the Borrower and its Subsidiaries
(other than (x) Debt arising from Hedge Agreements, (y) guaranties of any such
Debt as described in clauses (viii) and (ix) of the definition "Debt" and (z)
Debt described in Section 5.02(b)(iii)(E)).
"TRADE LETTER OF CREDIT" means any Letter of Credit that is issued for
the benefit of a supplier of Inventory to the Borrower or any of its
Subsidiaries to effect payment for such Inventory, the conditions to drawing
under which include the presentation to the Issuing Bank of negotiable bills of
lading, invoices and related documents sufficient, in the judgment of the
Issuing Bank, to create a valid and perfected lien on or security interest in
such Inventory, bills of lading, invoices and related documents in favor of the
Issuing Bank.
"TYPE" refers to the distinction between Advances bearing interest at
the Prime Rate and Advances bearing interest at the Eurodollar Rate.
"UNUSED REVOLVING CREDIT COMMITMENT" means, with respect to any
Revolving Credit Lender, at any time, (x) such Lender's Revolving Credit
Commitment at such time minus (y) the sum of (1) the aggregate principal amount
of all Revolving Credit Advances and Letter of Credit Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time, plus (2) such
Lender's Pro Rata Share of (A) the aggregate Available Amount of all Letters of
Credit outstanding at such time and (B) the aggregate principal amount of all
Letter of Credit Advances made by the Issuing Bank pursuant to Section 2.03(c)
and outstanding at such time.
"VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, including, without limitation,
partnership interests and membership interests issued by a limited liability
company, the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended by
the happening of such a contingency.
"WARRANTS" means warrants to purchase the common stock of the Borrower,
as more fully described in Section 3.01(g), and substantially in the form of
Exhibit C hereto.
24
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of which
any Loan Party could have liability.
"WHOLLY-OWNED SUBSIDIARY" means with respect to any Person, any
Subsidiary, all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by such Person.
"WITHDRAWAL LIABILITIES" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02 COMPUTATION OF TIME PERIODS.
In this Agreement in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding".
SECTION 1.03 ACCOUNTING TERMS.
All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in
Section 4.01(f) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
SECTION 2.01 THE ADVANCES.
(a) THE REVOLVING CREDIT ADVANCES.
(i) Each Revolving Credit Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each an "EXISTING REVOLVING
CREDIT ADVANCE") to the Borrower from time to time on any Business Day prior to
the Termination Date; provided, however, that no Lender shall make any Existing
Revolving Credit Advance if, after giving effect thereto, such Lender's then
outstanding Existing Revolving Credit Advances would exceed such Lender's
Existing Revolving Credit Commitment; provided, further, that no Lender shall
make any Existing Revolving Credit Advance until such time as the aggregate
amount of outstanding Supplemental Revolving Credit Advances has been reduced to
$0. The amount of Revolving Credit Advances outstanding on the Closing Date
under the Existing Credit Agreement shall be Existing Revolving Credit Advances
hereunder.
(ii) Each Revolving Credit Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each a "SUPPLEMENTAL
REVOLVING CREDIT ADVANCE") to the Borrower from time to time on any Business Day
prior to the Termination Date; provided, however, that no Lender shall make any
Supplemental Revolving Credit Advance if, after giving effect thereto, (A) such
Lender's then outstanding Supplemental Revolving Credit Advances would exceed
such Lender's Supplemental Revolving Credit Commitment or (B) the aggregate
amount of outstanding Existing Revolving Credit Advances shall be less than the
aggregate Existing Revolving Credit Commitment.
(iii) Each Revolving Credit Borrowing shall be in an aggregate
amount of $1,000,000 or an integral multiple of $100,000 in excess thereof
(other than a Borrowing the proceeds of which shall
25
be used solely to repay or prepay in full outstanding Swing Line Advances or
outstanding Letter of Credit Advances) and shall consist of Revolving Credit
Advances made simultaneously by the Revolving Credit Lenders ratably according
to their Revolving Credit Commitments. Subject to clauses (i) and (ii) above,
the Borrower may borrow, repay and reborrow Revolving Credit Advances; provided,
however, that, notwithstanding anything to the contrary contained in this
Agreement, in the event that the Borrower fails to comply with the Minimum
Consolidated EBITDA covenant set forth in Section 5.04(d) as at the last day of
any month other than March, June, September or December (a "MONTHLY COVENANT"),
no Lender shall be required to make, and the Borrower shall not be permitted to
borrow, any Revolving Credit Advance until such time as (A) the Borrower shall
be in compliance with all financial covenants (including the most recent Monthly
Covenant) set forth in Sections 5.04 (a) through (d) and (B) all other
conditions to borrowing set forth in Section 3.02 shall have been satisfied;
provided, however, that, notwithstanding the foregoing, during any period for
which the Borrower is in breach of a Monthly Covenant but no Default or Event of
Default shall then exist (the "CAPPED REVOLVER PERIOD"), the Borrower shall be
permitted to repay and reborrow Revolving Credit Advances so long as the
aggregate amount of Revolving Credit Advances outstanding at any time during
such Capped Revolver Period shall not exceed the lesser of (x) the aggregate
amount of Revolving Credit Advances outstanding as at the time of the reporting
of the breach of such Monthly Covenant and (y) the average daily Revolving
Credit Advances outstanding during the month immediately preceding the month
during which the breach of such Monthly Covenant is reported.
(b) THE TERM LOAN ADVANCES.
(i) On the Closing Date, each Term Loan A Lender shall be deemed to
have made an advance (a "TERM LOAN A ADVANCE") to the Borrower in an amount
equal to such Lender's Term Loan A Commitment. Amounts deemed borrowed under
this Section 2.01(b)(i) and repaid or prepaid may not be reborrowed.
(ii) On the Closing Date, each Term Loan B Lender shall be deemed to
have made an advance (a "TERM LOAN B ADVANCE") to the Borrower in an amount
equal to such Lender's Term Loan B Commitment. Amounts deemed borrowed under
this Section 2.01(b)(ii) and repaid or prepaid may not be reborrowed.
(iii) On the Closing Date, each Term Loan C Lender shall be deemed
to have made an advance (a "TERM LOAN C ADVANCE") to the Borrower in an amount
equal to such Lender's Term Loan C Commitment. Amounts deemed borrowed under
this Section 2.01(b)(iii) and repaid or prepaid may not be reborrowed.
(c) THE SWING LINE ADVANCES. The Borrower may request the Swing Line
Bank to make, and the Swing Line Bank shall, so long as no Default or Event of
Default shall have occurred and be continuing, make, on the terms and conditions
hereinafter set forth, Swing Line Advances to the Borrower from time to time on
any Business Day prior to the Termination Date (i) in an aggregate amount not to
exceed at any time outstanding $10,000,000 (the "SWING LINE FACILITY") and (ii)
in an amount for each such Swing Line Borrowing not to exceed an amount equal to
(x) the aggregate of the Unused Revolving Credit Commitments of the Revolving
Credit Lenders at such time minus (y) the aggregate Swing Line Advances
outstanding at such time. Each Swing Line Advance shall be in integral multiples
of $100,000. No Swing Line Advance shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance. Each Swing Line Borrowing
shall bear interest at the rate established pursuant to the Fee Letter (the
"SWING LINE RATE"). Within the limits of the Swing Line Facility and within the
26
limits referred to in this Section 2.01(c), the Borrower may borrow and reborrow
under this Section 2.01(c) and may repay or prepay the Swing Line Advances at
such times prior to the Termination Date, and in such integral multiples, as the
Borrower may elect.
(d) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue Letters of Credit for the account of
the Borrower from time to time on any Business Day prior to the date that is
sixty (60) days before the Termination Date (A) in an aggregate Available Amount
for all Letters of Credit not to exceed at any time the Issuing Bank's Letter of
Credit Commitment at such time and (B) in an Available Amount for each such
Letter of Credit not to exceed an amount equal to (x) the Unused Revolving
Credit Commitments of the Revolving Credit Lenders at such time minus (y) the
aggregate Swing Line Advances outstanding at such time. No Letter of Credit
shall have an expiration date (excluding all rights of the Borrower or the
beneficiary to require renewal) later than the earlier of (A) sixty (60) days
before the Termination Date, (B) in the case of Standby Letters of Credit, 365
days after the date of issuance thereof and (C) in the case of a Trade Letter of
Credit, 180 days after the date of issuance thereof. The foregoing
notwithstanding, any Standby Letter of Credit may, by its terms, be
automatically renewable annually unless such Issuing Bank shall have notified
the Borrower (with a copy to the Administrative Agent) on or prior to the date
for notice of termination set forth in such Letter of Credit (but in any event
at least thirty (30) Business Days prior to the date of automatic renewal) of
its election not to renew such Standby Letter of Credit (a "NOTICE OF
TERMINATION"); provided that the terms of each Standby Letter of Credit that is
automatically renewable annually shall not permit the expiration date (after
giving effect to any renewal) of such Standby Letter of Credit in any event to
be extended to a date later than sixty (60) days before the Termination Date. If
a Notice of Termination is given by the Issuing Bank pursuant to the immediately
preceding sentence, such Standby Letter of Credit shall expire on the date on
which it otherwise would have been automatically renewed. Within the limits of
the Letter of Credit Facility, and subject to the limits referred to above, the
Borrower may request the issuance of Letters of Credit under this Section
2.01(d), repay any Letter of Credit Advances resulting from drawings under
Letters of Credit pursuant to Section 2.03(c) and request the issuance of
additional Letters of Credit under this Section 2.01(d).
SECTION 2.02 MAKING THE ADVANCES.
(a) Except as otherwise provided in Section 2.03 or, with respect to
Swing Line Advances in Section 2.02(b) below, each Borrowing shall be made on
notice, given not later than 1:00 p.m. (New York time) on the third Business Day
prior to the date of the proposed Borrowing in the case of Eurodollar Rate
Advances and on the date of the proposed Borrowing in the case of Prime Rate
Advances by the Borrower to the Administrative Agent, which shall give to each
appropriate Lender same day notice thereof by telex or telecopier. Each such
notice of a Borrowing (a "NOTICE OF BORROWING") may be by telephone, confirmed
immediately in writing, or telex or telecopier in substantially the form of
Exhibit D hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance; provided, however, that no such Notice of
Borrowing will be deemed effective until receipt by the Administrative Agent of
the most recent Borrowing Base Certificate required to be delivered pursuant to
Section 5.03(q). Each appropriate Lender shall, (x) before 1:00 p.m. (New York
time) on the date of such Borrowing in the case of Eurodollar Rate Advances and
(y) before 3:00 p.m. (New York time) on the date of such Borrowing in the case
of Prime Rate Advances, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in
27
accordance with the respective Commitments under the applicable Facility of such
Lender and the other appropriate Lenders. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower by crediting the Borrower's Account; provided, however, that in the
case of any Revolving Credit Borrowing, the Administrative Agent shall first
make a portion of such funds equal to the aggregate principal amount of any
Swing Line Advances and Letter of Credit Advances made by the Swing Line Bank,
the Issuing Bank and by any other Revolving Credit Lender and outstanding on the
date of such Revolving Credit Borrowing in accordance with the terms of this
Agreement, plus interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank, the Issuing Bank and such other Revolving
Credit Lenders for repayment of such Swing Line Advances and Letter of Credit
Advances. Notwithstanding anything to the contrary set forth in this Agreement
or any other Loan Document, (i) the Borrower shall not request, and the Lenders
shall not be required to make, Eurodollar Rate Advances unless the Borrower
shall have delivered to the Administrative Agent and the Lenders a certificate
of the chief financial officer of the Borrower certifying that cumulative EBITDA
as of the last day of the most recently ended month shall be equal to or greater
than $50,000,000 (calculated on the basis of cumulative aggregate amounts for
the immediately preceding twelve months) and (ii) the aggregate amount of
Revolving Credit Advances that are Eurodollar Rate Advances shall at no time
exceed the then-current Borrowing Base. To the extent Eurodollar Rate Advances
exist on the Closing Date, such Advances shall be automatically converted to
Prime Rate Advances upon the expiration of the relevant Interest Period.
(b) Each Swing Line Borrowing shall be made either (x) on notice, given
not later than 1:00 p.m. (New York time) on the Business Day of the proposed
Swing Line Borrowing, by the Borrower to the Swing Line Bank and the
Administrative Agent or (y) pursuant to other arrangements, including, by way of
example and not of limitation, arrangements for daily repayments and borrowings
on each Business Day, which are satisfactory in form and substance to the Swing
Line Bank, the Administrative Agent and the Borrower. Each notice of a Swing
Line Borrowing pursuant to clause (x) in the immediately preceding sentence (a
"NOTICE OF SWING LINE BORROWING") shall be by telephone, confirmed immediately
in writing, or telex or telecopier, specifying therein the requested (i) date of
such Borrowing and (ii) amount of such Borrowing. The Swing Line Bank shall make
the amount of the Swing Line Advance available to the Administrative Agent at
the Administrative Agent's Account, in same day funds. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrower by crediting the Borrower's Account. If, and to the
extent, any Swing Line Advance shall be outstanding on the date of any Revolving
Credit Borrowing, such Swing Line Advance shall first be repaid from the
proceeds of such Revolving Credit Borrowing prior to disbursement to the
Borrower pursuant to the proviso in Section 2.02(a) above. In addition, (x) the
Swing Line Bank may, at any time, in its sole discretion by written notice to
the Borrower and the Administrative Agent, demand repayment of its Swing Line
Advances or, (y) in the event the Swing Line Advance Outstanding exceeds
$1,000,000, on each Swing Line Rollover Date such Swing Line Advance Outstanding
shall be automatically rolled over into the Revolving Credit Facility, and in
either case the Borrower shall be deemed to have requested a Revolving Credit
Advance hereunder comprised entirely of a Prime Rate Advance in the amount of
such Swing Line Advances from all the Revolving Credit Lenders based on each
such Lender's Pro Rata Share and the Revolving Credit Lenders shall make a
Revolving Credit Advance (comprised entirely of a Prime Rate Advance and based
on each such Lender's Pro Rata Share) in an amount equal to (i) all outstanding
Swing Line Advances as of the date of such demand in the case of clause (x)
above or (ii) the Swing Line Advance Outstanding in the case of clause (y)
above, by deposit to the Administrative Agent's Account, in same day funds, an
amount equal to such Lender's Pro Rata Share thereof, without
28
regard to whether or not the conditions set forth in Section 3.02 have otherwise
been satisfied. The proceeds from such Revolving Credit Advance shall be applied
directly to the Swing Line Bank to repay the Swing Line Bank for such
outstanding Swing Line Advances. The Borrower hereby agrees to each such
automatic rollover into the Revolving Credit Facility and to each such Revolving
Credit Advance. Each Revolving Credit Lender agrees to each such automatic
rollover into the Revolving Credit Facility and to make each such Revolving
Credit Advance based on its Pro Rata Share on (i) the Swing Line Rollover Date
or such other Business Day on which demand therefor is made by the Swing Line
Bank; provided that notice of such demand is given not later than 3:00 P.M. (New
York time) on such Business Day, or (ii) the first Business Day next succeeding
such demand if notice of such demand is given after such time. If and to the
extent that any Revolving Credit Lender shall not have so made the amount of
such Lender's Pro Rata Share of such Revolving Credit Advance available to the
Administrative Agent, such Revolving Credit Lender agrees to pay to the
Administrative Agent, for the account of the Swing Line Bank, forthwith on
demand such amount together with interest thereon, for each day from the date of
demand by the Swing Line Bank until the date such amount is paid to the
Administrative Agent, at the Federal Funds Rate. If such Lender shall pay to the
Administrative Agent such amount for the account of the Swing Line Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Revolving Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Swing Line
Advance made by the Swing Line Bank shall be reduced by such amount on such
Business Day.
(c) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances if the obligation of
the appropriate Lenders to make Eurodollar Rate Advances shall then be suspended
pursuant to Section 2.09 or Section 2.10, and (ii) Eurodollar Rate Advances may
not be outstanding as part of more than ten (10) separate Borrowings.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall
be irrevocable and binding on the Borrower. In the case of any Borrowing that
the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower shall indemnify each appropriate Lender against any loss,
cost or expense incurred by such Lender as a result of any failure to fulfill on
or before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss (including loss of anticipated profits as reasonably determined by such
Lender), cost or expense incurred by reason of the liquidation or redeployment
of deposits or other funds acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from an
appropriate Lender prior to the date of any Borrowing under a Facility under
which such Lender has a Commitment that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) or (b) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrower until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrower, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
29
such corresponding amount, such amount so paid shall constitute such Lender's
Advance as part of such Borrowing for all purposes.
(f) The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.
SECTION 2.03 ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF CREDIT.
(a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon
notice, given not later than 1:00 p.m. (New York time) on the fifth Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
Borrower to the Issuing Bank, which shall give to the Administrative Agent and
each Revolving Credit Lender prompt notice thereof by telex or telecopier. Each
such notice of issuance of a Letter of Credit (a "NOTICE OF ISSUANCE") may be by
telephone, confirmed immediately in writing, or telex or telecopier, specifying
therein the requested (i) date of such issuance (which shall be a Business Day),
(ii) Available Amount of such Letter of Credit, (iii) expiration date of such
Letter of Credit, (iv) name and address of the beneficiary of such Letter of
Credit and (v) form of such Letter of Credit, and shall be accompanied by such
customary application and agreement for letter of credit as the Issuing Bank may
specify to the Borrower for use in connection with such requested Letter of
Credit (a "LETTER OF CREDIT AGREEMENT"). If the requested form of such Letter of
Credit is acceptable to the Issuing Bank, in its reasonable discretion, the
Issuing Bank will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower or as
otherwise directed by the Borrower in connection with such issuance. In the
event and to the extent that the provisions of any such Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern. As of the Closing Date, the Existing Letters of Credit shall be
deemed to be Letters of Credit hereunder.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
the Administrative Agent, the Borrower and each Revolving Credit Lender on the
first Business Day of each month a written report summarizing issuance and
expiration dates of Letters of Credit issued during the preceding month and
drawings during such month under all Letters of Credit and (iii) to the
Administrative Agent, the Borrower and each Revolving Credit Lender on the first
Business Day of each calendar quarter a written report setting forth the average
daily aggregate Available Amount during the preceding calendar quarter of all
Letters of Credit.
(c) DRAWING AND REIMBURSEMENT. The Borrower shall be obligated pursuant
to each Letter of Credit Agreement to reimburse the Issuing Bank within two (2)
Business Days after demand in immediately available funds for drafts drawn under
any Letter of Credit. If any drawing is not so reimbursed, then the payment by
the Issuing Bank of a draft drawn under any Letter of Credit shall constitute
for all purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance which shall be a Prime Rate Advance, in the amount of such draft.
The Borrower, the Administrative Agent and each Revolving Credit Lender hereby
acknowledge and agree that Letter of Credit Advances may be made, or deemed
made, by the Issuing Bank in respect of any Letter of Credit and to participate
in all Letter of Credit Advances made hereunder as provided herein. Upon written
demand by the Issuing Bank, with a copy of such demand to the Administrative
Agent, each Revolving
30
Credit Lender shall purchase from the Issuing Bank, and the Issuing Bank shall
sell and assign to each such Revolving Credit Lender, such Lender's Pro Rata
Share of such outstanding Letter of Credit Advance as of the date of such
purchase, by making available (for the account of its Applicable Lending Office)
to the Administrative Agent (for the account of the Issuing Bank), by deposit to
the Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Letter of Credit Advance to
be purchased by such Lender. Promptly after receipt thereof, the Administrative
Agent shall transfer such funds to the Issuing Bank. The Borrower hereby agrees
to each such sale and assignment. Each Revolving Credit Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which demand therefor is made by the Issuing Bank; provided
that notice of such demand is given not later than 1:00 p.m. (New York time) on
such Business Day or (ii) the first Business Day next succeeding such demand if
notice of such demand is given after such time. Upon any such assignment by the
Issuing Bank to any other Revolving Credit Lender of a portion of a Letter of
Credit Advance, the Issuing Bank represents and warrants to such other Lender
that the Issuing Bank is the legal and beneficial owner of such interest being
assigned by it, free and clear of any liens, but makes no other representation
or warranty and assumes no responsibility with respect to such Letter of Credit
Advance, the Loan Documents or any Loan Party. If and to the extent that any
Revolving Credit Lender shall not have so made the amount of such Letter of
Credit Advance available to the Administrative Agent, such Revolving Credit
Lender agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable. If such Lender shall pay to the Administrative Agent such amount for
the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of any
Lender to make any Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.
SECTION 2.04 REPAYMENT OF ADVANCES.
(a) REVOLVING CREDIT ADVANCES. The Borrower shall repay to the
Administrative Agent for the ratable account of the Revolving Credit Lenders on
the Termination Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.
(b) TERM LOAN ADVANCES.
(i) TERM LOAN A ADVANCES. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Loan A Lenders the
aggregate outstanding principal amount of the Term Loan A Advances as follows
(which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):
31
DATE AMOUNT
---- ------
January 1, 2004 $1,428,570
April 1, 2004 $1,904,760
April 30, 2004 $29,106,781
provided, however, that notwithstanding the foregoing, the final principal
installment shall occur no later than the Termination Date and shall be in an
amount equal to the aggregate principal amount of the Term Loan A Advances
outstanding on such date.
(ii) TERM LOAN B ADVANCES. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Loan B Lenders the
aggregate outstanding principal amount of the Term Loan B Advances as follows
(which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):
DATE AMOUNT
---- ------
January 1, 2004 $42,855
April 1, 2004 $57,140
April 30, 2004 $55,254,520
provided, however, that notwithstanding the foregoing, the final principal
installment shall occur no later than the Termination Date and shall be in an
amount equal to the aggregate principal amount of the Term Loan B Advances
outstanding on such date.
(iii) TERM LOAN C ADVANCES. The Borrower shall repay to the
Administrative Agent for the ratable account of the Term Loan C Lenders the
aggregate outstanding principal amount of the Term Loan C Advances as follows
(which amounts shall be reduced as a result of the application of prepayments in
accordance with the order of priority set forth in Section 2.06):
DATE AMOUNT
---- ------
January 1, 2004 $28,575
April 1, 2004 $38,100
April 30, 2004 $36,836,841
provided, however, that notwithstanding the foregoing, the final principal
installment shall occur no later than the Termination Date and shall be in an
amount equal to the aggregate principal amount of the Term Loan C Advances
outstanding on such date.
(c) SWING LINE ADVANCES. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank that has made a Swing Line Advance
the outstanding principal amount of each Swing Line Advance made by such Swing
Line Bank in accordance with Section 2.02(b), but in any event no later than the
Termination Date.
(d) LETTER OF CREDIT ADVANCES.
32
(i) The Borrower shall repay to the Administrative Agent for the
account of the Issuing Bank and each other Revolving Credit Lender that has made
a Letter of Credit Advance on the earlier of demand and the Termination Date the
outstanding principal amount of each Letter of Credit Advance made by each of
them.
(ii) The Obligations of the Borrower under this Agreement, any
Letter of Credit Agreement and any other agreement or instrument relating to any
Letter of Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement, such Letter of Credit
Agreement and such other agreement or instrument under all circumstances,
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan
Document, any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating to any of the foregoing (all of the foregoing
being, collectively, the "L/C RELATED DOCUMENTS");
(B) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the Borrower in respect
of any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for whom any such beneficiary
or any such transferee may be acting), the Issuing Bank, or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement or any other document presented under a
Letter of Credit should prove to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or
(E) any exchange, release or non-perfection of any Collateral
or other collateral, or any release or amendment or waiver of or consent to
departure from any Subsidiary Guaranty or any other guarantee, for all or any of
the Obligations of the Borrower in respect of the L/C Related Documents.
SECTION 2.05 TERMINATION OR REDUCTION OF THE COMMITMENTS.
(a) OPTIONAL. The Borrower may, upon at least three (3) Business Days'
notice to the Administrative Agent, terminate in whole or reduce in part the
unused portions of the Unused Revolving Credit Commitments, the Swing Line
Facility and/or the Letter of Credit Facility; provided, however, that each
partial reduction of a Facility (i) shall be in an aggregate amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof, and (ii) shall
be made ratably among the appropriate Lenders in accordance with their
Commitments with respect to such Facility.
(b) MANDATORY.
(i) Any prepayments or repayments of Supplemental Revolving Credit
Advances or Existing Revolving Credit Advances required to be made pursuant to
Section 2.06(b), except with respect to (A) Tax Refunds in an aggregate amount
up to $1,200,000 during any fiscal year or (B) Cash on Hand,
33
shall automatically and permanently reduce the Supplemental Revolving Credit
Facility or Existing Revolving Credit Facility, as applicable, in an amount
equal to the applicable Reduction Amount, provided that each such reduction of
the Revolving Credit Facility shall be made ratably among the Revolving Credit
Lenders in accordance with their Revolving Credit Commitments.
(ii) The Letter of Credit Facility shall be permanently reduced from
time to time on the date of each reduction in the Revolving Credit Facility by
the amount, if any, by which the amount of the Letter of Credit Facility exceeds
the Revolving Credit Facility after giving effect to such reduction of the
Revolving Credit Facility.
SECTION 2.06 PREPAYMENTS AND REPAYMENTS.
(a) OPTIONAL. The Borrower may, upon at least three (3) Business Days'
notice in the case of Eurodollar Advances and same day notice in the case of
Prime Rate Advances to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment or repayment, as the case may be,
and if such notice is given, the Borrower shall, without premium or penalty,
prepay or repay, as the case may be, the outstanding aggregate principal amount
of the Advances, in whole or ratably in part, together with accrued interest to
the date of such prepayment on the aggregate principal amount prepaid or repaid,
as the case may be; provided, however, that (i) each partial prepayment or
repayment, as the case may be, shall be in an aggregate principal amount of
$1,000,000 or an integral multiple of $500,000 in excess thereof and (ii) if any
prepayment or repayment, as the case may be, of a Eurodollar Rate Advance shall
be made on a day other than on the last day of an Interest Period therefor, the
Borrower shall, together with such prepayment or repayment, as the case may be,
pay any Eurodollar Rate breakage costs as provided in Section 8.04(c). Each
prepayment or repayment, as the case may be, made pursuant to this Section
2.06(a) shall be applied in accordance with the Borrower's direction.
(b) MANDATORY. With respect to (i) any Asset Disposition, (ii) any
Equity Issuance, (iii) any Debt Issuance, (iv) any Extraordinary Receipt, (v)
any Tax Refunds, (vi) any Cash on Hand in excess of $5,000,000 or (vii) any
Excess Cash Flow, the Borrower shall, (w) within fifteen (15) days after receipt
by the Borrower or any of its Subsidiaries of the Net Cash Proceeds from such
Asset Disposition, Extraordinary Receipt or Tax Refunds, as the case may be, or,
(x) with respect to an Equity Issuance or any Debt Issuance, within two (2)
Business Days of receipt by the Borrower of the Net Cash Proceeds therefrom, or
(y) with respect to Cash on Hand, on the first Business Day following the
delivery of a Cash on Hand certificate showing Cash on Hand in excess of
$5,000,000, or (z) with respect to any Excess Cash Flow, within one (1) Business
Day of the delivery of an Excess Cash Flow Certificate (but not later than the
45th day after June 30 of each year and the 90th day after December 31 of each
year), in any case prepay or repay, as the case may be (without premium or
penalty), the then outstanding Advances in an amount equal to (w) such Net Cash
Proceeds resulting from such Asset Disposition, Extraordinary Receipt, Equity
Issuance, Debt Issuance, and (x) such Tax Refunds, Cash on Hand in excess of
$5,000,000, or Excess Cash Flow; provided, however, that in the event the Net
Cash Proceeds from any Asset Disposition are less than $1,000,000, the
provisions of this Section 2.06(b) shall not be applicable thereto. Each
prepayment or repayment, as the case may be, made pursuant to this Section
2.06(b) shall be subject to the provisions of Section 8.04(c) and shall be
applied as set forth in clause (c) below.
(c) APPLICATION OF PREPAYMENTS AND REPAYMENTS. All prepayments or
repayments, as the case may be, made pursuant to clause (b) of this Section 2.06
shall be applied to the outstanding Advances as follows:
34
(i) All mandatory prepayments and repayments relating to Asset
Dispositions (except with respect to Receivables), Equity Issuances, Debt
Issuances, Tax Refunds in an aggregate amount in excess of $1,200,000 during any
fiscal year, and Excess Cash Flow shall be applied:
(A) first, to prepay or reduce any Term Loan Advances then
outstanding on a pro rata basis in the inverse order of the maturity of the
principal payments due in respect thereof until such Term Loan Advances are paid
in full;
(B) second, to prepay Letter of Credit Advances then
outstanding under the Supplemental Revolving Credit Commitment until all such
Letter of Credit Advances are paid in full;
(C) third, to prepay Supplemental Revolving Credit Advances
then outstanding until such Supplemental Revolving Credit Advances are paid in
full;
(D) fourth, to prepay Letter of Credit Advances then
outstanding under the Existing Revolving Credit Commitment until all such Letter
of Credit Advances are paid in full;
(E) fifth, to prepay Existing Revolving Credit Advances then
outstanding until such Existing Revolving Credit Advances are paid in full; and
(F) sixth, deposited in the L/C Cash Collateral Account to
cash collateralize 100% of the Available Amount of the Letters of Credit then
outstanding.
(ii) All mandatory prepayments and repayments relating to Asset
Dispositions with respect to Receivables only, Cash on Hand and Tax Refunds in
an aggregate amount up to $1,200,000 during any fiscal year shall be applied:
(A) first, to prepay Letter of Credit Advances then
outstanding under the Supplemental Revolving Credit Commitment until all such
Letter of Credit Advances are paid in full;
(B) second, to prepay Supplemental Revolving Credit Advances
then outstanding until such Supplemental Revolving Credit Advances are paid in
full;
(C) third, to prepay Letter of Credit Advances then
outstanding under the Existing Revolving Credit Commitment until all such Letter
of Credit Advances are paid in full;
(D) fourth, to prepay Existing Revolving Credit Advances then
outstanding until such Existing Revolving Credit Advances are paid in full;
(E) fifth, deposited in the L/C Cash Collateral Account to
cash collateralize 100% of the Available Amount of the Letters of Credit then
outstanding; and
(F) sixth, to prepay or reduce any Term Loan Advances then
outstanding on a pro rata basis in the inverse order of maturity of the
principal payments due in respect thereof until such Term Loan Advances are paid
in full.
(d) MISCELLANEOUS PROVISIONS RELATING TO PREPAYMENTS AND MAINTENANCE OF
L/C CASH COLLATERAL ACCOUNT.
35
(i) To the extent that any application provided for in clause (c) of
this Section 2.06 allocable to Eurodollar Rate Advances shall occur on other
than the last day of an applicable Interest Period, the Borrower shall be
required to pay the amounts provided for in Section 8.04(c) hereof.
(ii) Upon the drawing of any Letter of Credit for which funds are on
deposit in the L/C Cash Collateral Account, such funds shall be applied to
reimburse the Issuing Bank or the Revolving Credit Lenders, as applicable. Upon
the termination of all of the Commitments and the payment in full of all
Obligations, the termination or expiration of all Letters of Credit and the
payment in full of all Obligations in respect of all Letters of Credit, then all
amounts remaining on deposit in the L/C Cash Collateral Account shall be
returned to the Borrower.
(iii) The amount remaining (if any) after the required prepayment of
the Advances then outstanding and the 100% cash collateralization of the
aggregate Available Amount of Letters of Credit then outstanding in accordance
with clause (c) of this Section 2.06 (the sum of such prepayment amounts, and
cash collateralization amounts being referred to herein as the "REDUCTION
AMOUNT") may be retained by the Borrower.
(iv) The Borrower shall, within fifteen (15) days following the end
of each month in each Fiscal Year, pay to the Administrative Agent for deposit
in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount by which the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the Letter of
Credit Facility on such day.
(v) At any time that the aggregate amount of Revolving Credit
Advances and Letters of Credit outstanding exceeds the Revolving Credit
Availability, the Borrower shall immediately repay Revolving Credit Advances to
the extent necessary to reduce the aggregate amount of Revolving Credit Advances
and Letters of Credit outstanding to an amount equal to or less than the
Revolving Credit Availability.
(vi) The provisions of this Section 2.06 shall not be construed to
permit any Equity Issuance, Debt Issuance or Asset Disposition otherwise
prohibited under the terms of this Agreement.
(e) REALIZATION UPON COLLATERAL FOLLOWING EVENT OF DEFAULT.
Notwithstanding anything to the contrary set forth in Section 20(b) of the
Security Agreement, all cash proceeds received in respect of any realization
upon the Collateral, after an Event of Default and upon an acceleration of the
indebtedness as a result therefrom, shall be applied, first, to the payment in
full of all Supplemental Revolving Credit Advances then outstanding, second, on
a pro rata basis to the prepayment in full of the Term Loan Advances and the
Existing Revolving Credit Advances then outstanding until such Advances are paid
in full, and third, by depositing such amount in the L/C Cash Collateral
Account, to cash collateralize 100% of the Available Amount of the Letters of
Credit then outstanding.
SECTION 2.07 INTEREST.
(a) SCHEDULED INTEREST. The Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, interest on the unpaid principal amount
of each Advance owing to each Lender from the date of such Advance until such
principal amount shall be paid in full, at the following rates per annum:
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(i) PRIME RATE ADVANCES. During such periods as such Advance is a
Prime Rate Advance, a rate per annum equal at all times to the sum of (x) the
Prime Rate in effect from time to time plus (y) the Applicable Margin for such
Advance in effect from time to time, payable in arrears monthly on the last day
of each month during such periods and on the date such Prime Rate Advance shall
be Converted or paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (x) the Eurodollar Rate for such
Interest Period for such Advance plus (y) the Applicable Margin for such Advance
in effect on the first day of such Interest Period, payable in arrears on the
last day of such Interest Period.
(iii) SWING LINE ADVANCES. During such periods as such Advance is a
Swing Line Advance, a rate per annum equal at all times to the Swing Line Rate
in effect from time to time, payable in arrears monthly on the last day of each
month during such periods and on the date such Swing Line Advance shall be
rolled over into the Revolving Credit Facility as provided in Section 2.02(b) or
paid in full.
(b) DEFAULT INTEREST. (i) With respect to any principal amount of any
Advance not paid when due by the Borrower (whether at the stated maturity, by
acceleration or otherwise), the Borrower shall pay interest on such unpaid
principal amount, in arrears on the dates referred to in clause (a)(i) or
(a)(ii) above and on demand, at a rate per annum equal at all times to two
percent (2%) per annum above the rate per annum required to be paid on such
Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) with respect to the
amount of any interest, fee or other amount payable hereunder not paid when due
(whether at the stated maturity, by acceleration or otherwise) the Borrower
shall pay interest on such amount to the fullest extent permitted by law from
the date such amount shall be due until such amount shall be paid in full, in
arrears on the date such amount shall be paid in full and on demand, at a rate
per annum equal at all times to two percent (2%) per annum above the rate per
annum required to be paid, in the case of interest, on the Type of Advance on
which such interest has accrued pursuant to clause (a)(i) or (a)(ii) above, and,
in all other cases, on Prime Rate Advances pursuant to clause (a)(i) above.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Administrative Agent shall give
notice to the Borrower and each appropriate Lender of the applicable interest
rate determined by the Administrative Agent for purposes of clause (a)(i) or
(ii).
SECTION 2.08 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders, commitment fees on the Unused Revolving
Credit Commitment, payable in arrears quarterly on the last Business Day of each
March, June, September, and December, and on the Termination Date at a rate per
annum equal to .500%. For purposes of this clause (a), Swing Line Advances shall
not constitute utilization of the Revolving Credit Commitments of the Revolving
Credit Lenders.
(b) LETTER OF CREDIT FEES.
(i) The Borrower shall pay to the Administrative Agent for the
account of each Revolving Credit Lender a commission, payable in arrears
quarterly on the last Business Day of each
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March, June, September and December, commencing on the first of such dates after
the Closing Date, and on the Termination Date, on such Lender's Pro Rata Share
of the average daily aggregate Available Amount during such quarter of all
Letters of Credit outstanding from time to time at a rate per annum equal to
3.00%.
(ii) In addition to the foregoing fees described in Section
2.08(b)(i) above, the Borrower shall pay to the Issuing Bank, for its own
account, (x) on the Available Amount of each Letter of Credit, a fronting fee,
for the period from the date of issuance of such Letter of Credit to and
including the termination thereof, computed at the rate of one quarter of one
percent (-1/4%) per annum, payable in arrears quarterly on the last Business Day
of each March, June, September and December of each year and on the date of
termination thereof and (y) transfer fees and other customary fees and charges
in connection with the issuance or administration of each Letter of Credit as
the Borrower and the Issuing Bank shall agree.
(c) RESTRUCTURING FEE. The Borrower shall pay to the Administrative
Agent for the pro rata account of each Lender a restructuring fee in an
aggregate amount equal to $2,000,000 (the "RESTRUCTURING FEE"). The
Restructuring Fee shall be payable in equal quarterly installments on each of
(i) the Closing Date, (ii) July 1, 2003, (iii) October 1, 2003 and (iv) January
1, 2004. The Restructuring Fee shall be deemed to be earned in full on the
Closing Date.
(d) ADMINISTRATIVE AGENT'S FEES. The Borrower shall pay to the
Administrative Agent for its own account such fees as may from time to time be
agreed between the Borrower and the Administrative Agent, including, without
limitation, the fees specified in that certain letter agreement dated February
16, 1999, between Borrower and Fleet (as such letter agreement may be amended,
supplemented or otherwise modified from time to time, the "FEE LETTER") and due
under and pursuant to such Fee Letter.
(e) CAPITAL EVENT FEE. In the event that the Borrower shall have failed
to consummate a Capital Event on or before December 31, 2003, the Borrower
shall, on the Termination Date, pay to the Administrative Agent for the pro rata
account of each Lender a fee in an aggregate amount equal to $2,000,000.
(f) FIFTH AMENDMENT FEE. The Borrower shall pay to the Administrative
Agent for the pro rata account of each Lender a fee in an aggregate amount equal
to $1,000,000 (the "FIFTH AMENDMENT FEE") on or before the Termination Date.
SECTION 2.09 CONVERSION OF ADVANCES.
(a) OPTIONAL. The Borrower may on any Business Day, upon notice given
to the Administrative Agent not later than 1:00 p.m. (New York time) on the
third Business Day prior to the date of the proposed Conversion to Eurodollar
Rate Advances and by 1:00 p.m. on the Business Day of the proposed Conversion to
Prime Rate Advances and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Prime Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances, no
Conversion of any Advances shall be less than the minimum amount applicable
under Section 2.01(a) or (b) or result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising part
of the same Borrowing under any Facility shall be made ratably among the
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appropriate Lenders in accordance with their Commitments under such Facility.
Each such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Advances to be Converted and
(iii) if such Conversion is into Eurodollar Rate Advances, the duration of the
initial Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrower.
(b) MANDATORY.
(i) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $500,000, such Advances shall
automatically Convert into Prime Rate Advances on the last day of the Interest
Period relating thereto.
(ii) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the appropriate
Lenders, whereupon each such Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance.
(iii) Upon the occurrence and during the continuance of any Default
or Event of Default, (x) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Prime
Rate Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.
SECTION 2.10 INCREASED COSTS, ETC.
(a) If, after the date hereof, due to (i) the introduction of any
change in reserve requirements included in the Eurodollar Rate Reserve
Percentage, any change in the interpretation of, or any change in, any law or
regulation, or (ii) the compliance with any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law made after the date hereof), there shall be any increase in the cost to any
Lender Party of agreeing to make or of making, funding or maintaining Eurodollar
Rate Advances or of agreeing to issue or of issuing or maintaining Letters of
Credit or of agreeing to make or of making or maintaining Letter of Credit
Advances (excluding for purposes of this Section 2.10 any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrower shall from time
to time, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender Party additional amounts sufficient to compensate such Lender Party for
such increased cost; provided, however, that a Lender Party claiming additional
amounts under this Section 2.10(a) agrees to use reasonable efforts (consistent
with legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
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(b) If, after the date hereof, due to (i) the introduction of any
change in the interpretation of, or any change in, any law or regulation, or
(ii) the compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law made after the
date hereof), there shall be any increase in the amount of capital required or
reasonably expected to be maintained by any Lender Party or any corporation
controlling such Lender Party as a result of or based upon the existence of such
Lender Party's commitment to lend or to issue Letters of Credit hereunder or the
issuance or maintenance of the Letters of Credit, then, upon demand by such
Lender Party (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender
Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party or such corporation in the light of
such circumstances, to the extent that such Lender Party reasonably determines
such increase in capital to be allocable to the existence of such Lender Party's
commitment to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts submitted
to the Borrower by such Lender Party shall be conclusive and binding for all
purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any
Facility, Lenders owed greater than 50% of the then aggregate unpaid principal
amount thereof notify the Administrative Agent that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under any Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Prime Rate Advance and (ii)
the obligation of the appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if, after
the date hereof, the introduction of any change in, or any change in the
interpretation of, any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) that portion of each
Eurodollar Rate Advance made by such Lender under each Facility under which such
Lender has a Commitment will automatically, upon such demand, Convert into a
Prime Rate Advance and (ii) the obligation of such Lender to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrower that such Lender has determined
that the circumstances causing such suspension no longer exist; provided,
however, that before making any such demand, such Lender agrees to use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Eurodollar Lending Office if the making
of such a designation would allow such Lender or its Eurodollar Lending Office
to continue to perform its obligations to make Eurodollar Rate Advances or to
continue to fund or maintain Eurodollar Rate Advances and would not, in the
judgment of such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.11 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the Notes,
irrespective of any right of counterclaim or set-off (except as otherwise
provided in Section 2.15), not later than 1:00 p.m.
40
(New York time) on the day when due in U.S. dollars to the Administrative Agent
at the Administrative Agent's Account in same day funds. The Administrative
Agent will promptly thereafter cause like funds to be distributed (i) if such
payment by the Borrower is in respect of principal, interest, commitment fees or
any other Obligation then payable hereunder and under the Notes to more than one
Lender Party, to such Lender Parties for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective Obligations then payable to such Lender Parties and (ii) if such
payment by the Borrower is in respect of any Obligation then payable hereunder
to one Lender Party, to such Lender Party for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement. Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 8.07(d),
from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the Notes in
respect of the interest assigned thereby to the Lender Party assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) If the Administrative Agent receives funds for application to the
Obligations under the Loan Documents under circumstances for which the Loan
Documents do not specify the Advances or the Facility to which, or the manner in
which, such funds are to be applied, the Administrative Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender Party ratably in
accordance with such Lender Party's proportionate share of the principal amount
of all outstanding Advances and the Available Amount of all Letters of Credit
then outstanding in repayment or prepayment of such of the outstanding Advances
or other Obligations owed to such Lender Party, and for application to such
principal installments, as the Administrative Agent shall direct.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder or, in
the case of a Lender, under the Note held by such Lender, to charge from time to
time against any or all of the Borrower's accounts with such Lender Party any
amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(e) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(f) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the
41
amount then due such Lender Party. If and to the extent the Borrower shall not
have so made such payment in full to the Administrative Agent, each such Lender
Party shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender Party together with interest thereon, for each day
from the date such amount is distributed to such Lender Party until the date
such Lender Party repays such amount to the Administrative Agent, at the Federal
Funds Rate.
SECTION 2.12 TAXES.
(a) Any and all payments by the Borrower hereunder or under the Notes
shall be made in accordance with Section 2.11, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender Party and the Administrative Agent, net income taxes
that are imposed by the United States and net income taxes (or franchise taxes
imposed in lieu thereof) that are imposed on such Lender Party or the
Administrative Agent by the local, state or foreign jurisdiction under the laws
of which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, net income taxes (or franchise taxes imposed in lieu thereof) that are
imposed on such Lender Party by the local, state or foreign jurisdiction of such
Lender Party's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities in respect of payments hereunder or under the Notes being
hereinafter referred to as "TAXES"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Eligible Assignee, any Lender Party or the Administrative Agent, (i)
the sum payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.12) such Lender Party or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "OTHER TAXES").
(c) The Borrower shall indemnify each Lender Party and the
Administrative Agent for the full amount of Taxes and Other Taxes, and for the
full amount of taxes imposed by any jurisdiction on amounts payable under this
Section 2.12, imposed on or paid by such Lender Party or the Administrative
Agent (as the case may be) and any liability (including penalties, additions to
tax, interest and expenses) arising therefrom or with respect thereto, except
with respect to any Lender Party or the Administrative Agent, as the case may
be, for such a liability arising from such Lender Party's or the Administrative
Agent's, as the case may be, willful misconduct or gross negligence. This
indemnification shall be made within thirty (30) days from the date such Lender
Party or the Administrative Agent, as the case may be, makes written demand
specifying in reasonable detail the basis therefor.
(d) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Administrative Agent, at its address referred to
in Section 8.02, the original receipt of payment thereof or a certified copy of
such receipt. In the case of any payment hereunder or under the Notes by or on
behalf of the Borrower through an account or branch outside the United States or
by or on behalf of the
42
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes. For purposes of this subsection
(d) and subsection (e), the terms "United States" and "United States person"
shall have the meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, (i) on or prior to the date of its execution
and delivery of this Agreement in the case of each Initial Lender or Initial
Issuing Bank, as the case may be, and on the date of the Assignment and
Acceptance pursuant to which it became a Lender Party in the case of each other
Lender Party, and (ii) from time to time thereafter as requested in writing by
the Borrower or the Administrative Agent (except to the extent such Lender Party
is unable to do so by reason of a change in the Code, any applicable tax treaty,
or any official interpretation of either occurring after the Lender Party became
such under this Agreement (a "CHANGE IN LAW"), provide each of the
Administrative Agent and the Borrower with two (2) original Internal Revenue
Service Form 1001 or 4224, as appropriate, and two (2) original Forms W or any
successor or other form prescribed by the Internal Revenue Service, certifying
that such Lender is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Agreement or the Notes. If the
forms provided by a Lender Party at the time such Lender Party first becomes a
party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender Party provides the appropriate form
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender Party becomes a party to this Agreement, the Lender
Party assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender Party assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service Form 1001 or 4224, that a Lender Party reasonably
considers to be confidential, such Lender Party shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender Party described in
Section (e) has failed to provide the Borrower with the appropriate form
described in subsection (e) (other than if such failure is due to a Change in
Law occurring after the date on which a form originally was required to be
provided), such Lender Party shall not be entitled to indemnification under
subsection (a) or (c) with respect to Taxes imposed by the United States by
reason of such failure.
(g) Any Lender Party claiming any additional amounts payable pursuant
to this Section 2.12 agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of such
Lender Party, be otherwise disadvantageous to such Lender Party.
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SECTION 2.13 SHARING OF PAYMENTS, ETC.
If any Lender Party shall obtain at any time any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) (i) on account of Obligations due and payable to such Lender Party
hereunder or under the Notes at such time in excess of its ratable share
(according to the proportion of (x) the amount of such Obligations due and
payable to such Lender Party at such time to (y) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder or under the Notes at such time obtained by all the
Lender Parties at such time or (ii) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (x) the amount of
such Obligations owing to such Lender Party at such time to (y) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
participations in the Obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender Party, such purchase from each other Lender Party shall be rescinded and
each such other Lender Party shall repay to the purchasing Lender Party the
purchase price to the extent of such Lender Party's ratable share (according to
the proportion of (x) the purchase price paid to such Lender Party to (y) the
aggregate purchase price paid to all Lender Parties) of such recovery together
with an amount equal to such Lender Party's ratable share (according to the
proportion of (x) the amount of such other Lender Party's required repayment to
(y) the total amount of such required repayments to the purchasing Lender Party)
of any interest or other amount paid or payable by the purchasing Lender Party
in respect of the total amount so recovered. The Borrower agrees that any Lender
Party so purchasing a participation from another Lender Party pursuant to this
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender Party were the direct creditor of the Borrower in the amount of
such participation.
SECTION 2.14 USE OF PROCEEDS.
The proceeds of the Advances and issuances of Letters of Credit shall
be available, and the Borrower shall use such proceeds and Letters of Credit
solely to provide for working capital and other general corporate purposes of
the Borrower and its Subsidiaries.
SECTION 2.15 DEFAULTING LENDERS.
(a) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Advance to
the Borrower and (iii) the Borrower shall be required to make any payment
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then the Borrower may, so long as no Default shall occur or
be continuing at such time and to the fullest extent permitted by applicable
law, set off and otherwise apply the obligation of the Borrower to make such
payment to or for the account of such Defaulting Lender against the obligation
of such Defaulting Lender to make such Defaulted Advance. In the event that, on
any date, the Borrower shall so set off and otherwise apply its obligation to
make any such payment against the obligation of such Defaulting Lender to make
any such Defaulted Advance on or prior to such date, the amount so set
44
off and otherwise applied by the Borrower shall constitute for all purposes of
this Agreement and the other Loan Documents an Advance by such Defaulting Lender
made on the date under the Facility pursuant to which such Defaulted Advance was
originally required to have been made pursuant to Section 2.01. Such Advance
shall be a Prime Rate Advance and shall be considered, for all purposes of this
Agreement, to comprise part of the Borrowing in connection with which such
Defaulted Advance was originally required to have been made pursuant to Section
2.01, even if the other Advances comprising such Borrowing shall be Eurodollar
Rate Advances on the date such Advance is deemed to be made pursuant to this
subsection (a). The Borrower shall notify the Administrative Agent at any time
the Borrower exercises its right of set-off pursuant to this subsection (a) and
shall set forth in such notice (i) the name of the Defaulting Lender and the
Defaulted Advance required to be made by such Defaulting Lender and (ii) the
amount set off and otherwise applied in respect of such Defaulted Advance
pursuant to this subsection (a). Any portion of such payment otherwise required
to be made by the Borrower to or for the account of such Defaulting Lender which
is paid by the Borrower, after giving effect to the amount set off and otherwise
applied by the Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
the Administrative Agent or any of the other Lender Parties and (iii) the
Borrower shall make any payment hereunder or under any other Loan Document to
the Administrative Agent for the account of such Defaulting Lender, then the
Administrative Agent may, on its behalf or on behalf of such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrower to or for the account of such Defaulting
Lender to the payment of each such Defaulted Amount to the extent required to
pay such Defaulted Amount. In the event that the Administrative Agent shall so
apply any such amount to the payment of any such Defaulted Amount on any date,
the amount so applied by the Administrative Agent shall constitute for all
purposes of this Agreement and the other Loan Documents, payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Lender Parties, ratably in
accordance with the respective portions of such Defaulted Amounts payable at
such time to the Administrative Agent and such other Lender Parties and, if the
amount of such payment made by the Borrower shall at such time be insufficient
to pay all Defaulted Amounts owing at such time to the Administrative Agent and
the other Lender Parties, in the following order of priority:
(i) first, to the Administrative Agent for any Defaulted Amount then
owing to the Administrative Agent; and
(ii) second, to the Lender Parties for any Defaulted Amounts then
owing to such Lender Parties, ratably in accordance with such respective
Defaulted Amounts then owing to such Lender Parties.
Any portion of such amount paid by the Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrower, the Administrative Agent or any
other Lender Party shall be required to pay or distribute any amount hereunder
or under any other Loan Document to or for the account of such Defaulting
Lender, then the
45
Borrower or such other Lender Party shall pay such amount to the Administrative
Agent to be held by the Administrative Agent, to the fullest extent permitted by
applicable law, in escrow or the Administrative Agent shall, to the fullest
extent permitted by applicable law, hold in escrow such amount otherwise held by
it. Any funds held by the Administrative Agent in escrow under this subsection
(c) shall be deposited by the Administrative Agent in an account with Fleet, in
the name and under the control of the Administrative Agent, but subject to the
provisions of this subsection (c). The terms applicable to such account,
including the rate of interest payable with respect to the credit balance of
such account from time to time, shall be Fleet's standard terms applicable to
escrow accounts maintained with it. Any interest credited to such account from
time to time shall be held by the Administrative Agent in escrow under, and
applied by the Administrative Agent from time to time in accordance with the
provisions of, this subsection (c). The Administrative Agent shall, to the
fullest extent permitted by applicable law, apply all funds so held in escrow
from time to time to the extent necessary to make any Advances required to be
made by such Defaulting Lender and to pay any amount payable by such Defaulting
Lender hereunder and under the other Loan Documents to the Administrative Agent
or any other Lender Party, as and when such Advances or amounts are required to
be made or paid and, if the amount so held in escrow shall at any time be
insufficient to make and pay all such Advances and amounts required to be made
or paid at such time, in the following order of priority:
(i) first, to the Administrative Agent for any amount then due and
payable by such Defaulting Lender to the Administrative Agent hereunder;
(ii) second, to the Lender Parties for any amount then due and
payable by such Defaulting Lender to such Lender Parties hereunder, ratably in
accordance with such respective amounts then due and payable to such Lender
Parties; and
(iii) third, to the Borrower for any Advance then required to be
made by such Defaulting Lender pursuant to a Commitment of such Defaulting
Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such time under
this Agreement and the other Loan Documents in such manner as the Administrative
Agent shall reasonably direct.
(d) The rights and remedies against a Defaulting Lender under this
Section 2.15 are in addition to other rights and remedies that the Borrower may
have against such Defaulting Lender with respect to any Defaulted Advance and
that the Administrative Agent or any Lender Party may have against such
Defaulting Lender with respect to any Defaulted Amount.
SECTION 2.16 REGULATION U.
Each Lender Party shall be responsible for its compliance hereunder
with Regulation U, if and as applicable, and the Administrative Agent shall have
no responsibility with respect to any such compliance by any Lender Party.
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ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT.
The effectiveness of this Agreement is subject to the condition that
the Administrative Agent shall have received, each of the following, each in
form and substance satisfactory to the Administrative Agent, and in sufficient
copies for each Lender:
(a) CREDIT AGREEMENT. This Agreement, which shall have been executed by
each party hereto.
(b) RESOLUTIONS; INCUMBENCY. With respect to the Borrower and each of
its domestic subsidiaries:
(i) copies of the resolutions of the board of directors of
such Person authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, certified by the Secretary
or an Assistant Secretary of such Person; and
(ii) a certificate of the Secretary or Assistant Secretary of
such Person, certifying the names and true signatures of the officers of such
Person authorized to execute, deliver and perform, as applicable, this Agreement
and all other Loan Documents to be delivered by it hereunder.
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. With respect to the Borrower
and each of its Domestic Subsidiaries:
(i) the articles or certificate of incorporation, memorandum
and articles of association, and bylaws of such Person as then in effect,
certified by the Secretary or Assistant Secretary of such Person; and
(ii) a good standing certificate for such Person from the
Secretary of State (or similar, applicable Governmental Authority) of its state
of incorporation and each state where such Person is qualified to do business as
a foreign corporation as of a recent date.
(d) PAYMENT OF FEES. Evidence of payment by the Borrower of that
portion of the Restructuring Fee due on the Closing Date and all other accrued
and unpaid fees, costs and expenses to the extent then due and payable including
any such costs, fees and expenses arising under or referenced in Section 8.04,
and the fees and expenses of counsel for the Administrative Agent.
(e) CERTIFICATE. A certificate signed by a Responsible Officer of the
Borrower, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article IV
are true and correct in all material respects on and as of such date, as though
made on and as of such date;
(ii) no Default or Event of Default exists; and
47
(iii) there has not occurred since September 30, 2002, with
respect to the Borrower and its Subsidiaries, any event or circumstance that has
resulted or could reasonably be expected to result in a Material Adverse Effect.
(f) OTHER DOCUMENTS. Such other customary approvals, opinions,
documents or materials as the Administrative Agent may reasonably request.
(g) WARRANTS. The Borrower shall have issued to the Lenders detachable
and freely transferable (subject to applicable securities laws) five-year
Warrants for the purchase of common stock of the Borrower representing an
aggregate amount equal to five (5) percent of the outstanding common stock of
the Borrower as of the Closing Date (i.e., 453,378 shares). All such Warrants
shall be exercisable at any time prior to their expiration date at a nominal
strike price.
SECTION 3.02 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS.
The obligation of each Lender to make an Advance (including its initial
Advance) and the obligation of the Issuing Bank to issue a Letter of Credit
(including the initial issuance thereof) or renew a Letter of Credit and the
right of the Borrower to request the issuance or renewal of a Letter of Credit,
shall each be subject to the further conditions precedent that on the date of
each such Borrowing or issuance or renewal:
(a) NOTICE, APPLICATION; CONTINUATION OF REPRESENTATIONS AND
WARRANTIES. The following statements shall be true and the Administrative Agent
shall have received (except in the case of the Letter of Credit Advance made by
the Issuing Bank or a Revolving Credit Lender pursuant to Section 2.03(c) and a
Swing Line Advance made by a Swing Line Bank pursuant to Section 2.02(b)) a
certificate signed by a duly authorized officer of the Borrower, dated the date
of such Borrowing or issuance or renewal, stating that (and each of the giving
of the applicable Notice of Borrowing, Notice of Swing Line Borrowing or Notice
of Issuance and the acceptance by the Borrower of the proceeds of a Borrowing or
of a Letter of Credit or the renewal of a Letter of Credit, shall constitute a
representation and warranty by the Borrower that both on the date of such notice
and on the date of such Borrowing or issuance or renewal such statements are
true):
(i) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of such date (or, if any
such representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date), before and after giving effect to such
Borrowing or issuance or renewal and to the application of the proceeds
therefrom, as though made on and as of such date; and
(ii) no event has occurred and is continuing, or would result
from such Borrowing or issuance or renewal or from the application of the
proceeds therefrom, that constitutes a Default or an Event of Default.
(b) OTHER APPROVALS. The Administrative Agent shall have received such
other approvals, opinions or documents as any appropriate Lender through the
Administrative Agent may reasonably request, and all legal matters incident to
such Borrowing or issuance of such Letter of Credit shall be reasonably
satisfactory to counsel for the Administrative Agent.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants as follows:
(a) Each Loan Party (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified and in good standing in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be licensed
could not reasonably be expected to have a Material Adverse Effect and (iii) has
all requisite power and authority, corporate or otherwise (including, without
limitation, all governmental licenses, permits and other approvals), to own or
lease and operate its properties and to carry on its business as now conducted
and as proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of the Borrower as of the date hereof, showing as of
the date hereof (as to each such Subsidiary) the jurisdiction of its
organization, the number of shares of each class of capital stock, authorized,
and the number outstanding, on the date hereof and the percentage of the
outstanding shares of each such class owned (directly or indirectly) by such
Loan Party and the number of shares covered by all outstanding options,
warrants, rights of conversion or purchase and similar rights at the date
hereof. All of the outstanding capital stock of all of such Subsidiaries has
been validly issued, is fully paid and non-assessable and is owned by such Loan
Party or one or more of their respective Subsidiaries free and clear of all
Liens, except those created under the Collateral Documents.
(c) The execution, delivery and performance by each Loan Party of this
Agreement, the Notes and each other Loan Document to which it is or is to be a
party, are within such Loan Party's governing powers, have been duly authorized
by all necessary action, corporate or otherwise, and do not (i) contravene such
Loan Party's organization documents, (ii) violate any law (including, without
limitation, the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended), rule, regulation (including, without limitation,
Regulation T, U or X), order, writ, judgment, injunction, decree, determination
or award, (iii) conflict with or result in the breach of, or constitute a
default under, any Material Contract, loan agreement, indenture, mortgage, deed
of trust, lease or other material instrument binding on or affecting any Loan
Party or any of their respective properties or (iv) except for the Liens created
pursuant to the Collateral Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any Loan
Party. No Loan Party or any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument or agreement, the violation or breach
of which could reasonably be expected to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing (other than pursuant to the Collateral Documents) with, any
governmental authority or regulatory body or any other third party is required
for (i) the due execution, delivery, recordation, filing or performance by any
Loan Party of this Agreement, the Notes or any other Loan Document, (ii) the
grant by any Loan Party of the Liens to be granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens created
by the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by the Administrative Agent or any Lender Party of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents.
49
(e) This Agreement, and each of the Notes and each other Loan Document
has been duly executed and delivered by each Loan Party thereto, as applicable.
This Agreement and each of the Notes and each other Loan Document is, the legal,
valid and binding obligation of each Loan Party thereto, as applicable,
enforceable against such Loan Party in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors' rights and (ii) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
(f) The Consolidated balance sheet of the Borrower and its Subsidiaries
as at December 31, 2001, and the related Consolidated statement of income and
Consolidated statement of cash flows of the Borrower and its Subsidiaries for
the fiscal year then ended, accompanied by an opinion of Deloitte and Touche
LLP, independent public accountants, and the Consolidated balance sheet of the
Borrower and its Subsidiaries as at September 30, 2002, and the related
Consolidated statement of income and Consolidated statement of cash flows of the
Borrower and its Subsidiaries for the three months then ended, duly certified by
the chief financial officer of the Borrower, copies of which have been furnished
to the Administrative Agent, fairly present in all material respects, subject,
in the case of said balance sheet as at September 30, 2002, and said statement
of income and cash flows for the three months then ended, to normal year-end
audit adjustments and the absence of footnotes, the Consolidated financial
condition of the Borrower and its Subsidiaries as at such dates and the
Consolidated results of the operations of the Borrower and its Subsidiaries for
the period ended on such date, all in accordance with GAAP applied on a
consistent basis, and, since September 30, 2002 there has been no change which
could reasonably be expected to result in a Material Adverse Effect.
(g) No information, exhibit or report furnished by Borrower or any
Person on behalf of Borrower to the Administrative Agent or any Lender Party in
connection with the Loan Documents or pursuant to the terms of the Loan
Documents contained any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements made therein not misleading.
(h) As of the date hereof, other than the Disclosed Litigation, there
is no action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries including, without limitation, any
Environmental Action, pending or, to their knowledge, threatened before or by
any court, governmental agency or arbitrator that could reasonably be expected
to have a Material Adverse Effect, and there has been no change in the status,
or financial effect on any Loan Party or any of their respective Subsidiaries of
the Disclosed Litigation from that described on Schedule 4.01(h) hereto which
could reasonably be expected to result in a Material Adverse Effect.
(i) Neither the Borrower nor any of its Subsidiaries is engaged in the
business of extending credit for the purpose of purchasing or carrying Margin
Stock. No part of the proceeds received by the Borrower or any of its
Subsidiaries from the Advances and Letter of Credit will be used directly or
indirectly (i) for any purpose other than as set forth in Section 2.14, or (ii)
for the purpose of purchasing or carrying, or for payment in full or in part of
Debt that was incurred for the purpose of carrying, any Margin Stock.
(j) As of the date hereof, except as set forth on Schedule 4.01(j)
hereto, neither the Borrower nor any of its Subsidiaries nor any of their
respective ERISA Affiliates maintains or has maintained any Plans or
Multiemployer Plans. Set forth on Schedule 4.01(j) is a complete and accurate
list of all Welfare Plans and all defined contribution plans in respect of which
any Loan Party could have liability.
50
(k) Except as set forth in the financial statements referred to in this
Section 4.01 and in Section 5.03, neither the Borrower nor any of its
Subsidiaries has any liability with respect to "expected post retirement benefit
obligations" within the meaning of Statement of Financial Accounting Standards
No. 106 which could reasonably be expected to have a Material Adverse Effect.
(l) Neither the business nor the properties of any Loan Party have been
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that could
reasonably be expected to have a Material Adverse Effect.
(m) The operations and properties of each Loan Party and each of its
respective Subsidiaries comply in all respects with all applicable Environmental
Laws and Environmental Permits, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect, and no circumstances
exist that could reasonably be expected to form the basis of an Environmental
Action against any Loan Party or any of its Subsidiaries or any of their
properties that could reasonably be expected to have a Material Adverse Effect.
(n) Except as set forth on Schedule 4.01(n), neither any Loan Party nor
any of its Subsidiaries is a party to any indenture, loan or credit agreement or
any lease or other agreement or instrument or subject to any charter or
corporate restriction that could reasonably be expected to have a Material
Adverse Effect.
(o) Each Loan Party has filed, has caused to be filed or has been
included in all income and other material tax returns (Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to be due,
together with applicable interest and penalties or is contesting such taxes in
good faith and by appropriate proceedings diligently conducted and reserves or
other appropriate provisions therefor have been established in accordance with
GAAP.
(p) No "ownership change" as defined in Section 382(g) of the Internal
Revenue Code, and no event that would result in the application of the "separate
return limitation year" or "consolidated return change of ownership" limitations
under the Federal income tax consolidated return regulations, has occurred with
respect to any Loan Party.
(q) Neither the Borrower nor any of its Subsidiaries is an "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrower, will violate any provision of such Act or any
rule, regulation or order of the Securities and Exchange Commission thereunder
or any takeover, disclosure or other federal, state or foreign securities law or
Regulations T, U or X. The Borrower is not subject to regulation under any
federal, state or foreign statute or regulation which limits its ability to
incur Debt.
(r) Except as could not reasonably be expected to have a Material
Adverse Effect, each Material Contract has been duly authorized, executed and
delivered by all parties thereto, has not been amended or otherwise modified, is
in full force and effect, and to the best of Borrower's knowledge, is binding
upon and enforceable against all parties thereto in accordance with its terms,
except as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights and (ii) the application of general
51
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). There exists no default under any Material
Contract by the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower, there exists no default under any Material Contract by any
other party thereto, in each case which could reasonably be expected to have a
Material Adverse Effect.
(s) Neither the Borrower nor any of its Subsidiaries owns any
intellectual property material to its business other than as set forth in
Schedule 2 of the Fifth Amendment (the "INTELLECTUAL PROPERTY"). With respect to
any Intellectual Property, the loss, impairment or infringement of which might
have a Material Adverse Effect:
(i) such Intellectual Property is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(ii) to the best of the Borrower's knowledge, such
Intellectual Property is valid and enforceable;
(iii) the Borrower and its Subsidiaries have made all
necessary filings and recordations with the appropriate recordation office to
protect their respective interests in such Intellectual Property, including
without limitation, recordations of all such interests in the intellectual
property in the United States Patent and Trademark Office; and
(iv) to the best of the Borrower's knowledge, the Borrower and
its Subsidiaries are the exclusive owners of the entire and unencumbered right,
title and interest in and to such Intellectual Property (except for Liens
created under the Loan Documents) and, to the best of the Borrower's knowledge,
no claim has been made that the use of such intellectual property does or may
violate the asserted rights of any third party, except as set forth on Schedule
2 of the Fifth Amendment.
(t) The Collateral Documents create in favor of the Administrative
Agent, for the ratable benefit of the Lenders, a valid and perfected first
priority security interest in the Collateral (other than Permitted Liens)
securing the payment of the Obligations. The Loan Parties are the legal and
beneficial owners of the Collateral free and clear of any Lien, except for the
Liens and security interests created or expressly permitted under the Loan
Documents.
(u) Neither the Borrower nor any of its Subsidiaries owns any real
property in fee other than as set forth on Schedule 1 of the Fifth Amendment
(the "REAL PROPERTY"). Each of the Mortgages is effective to create in favor of
the Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Real Property described therein and proceeds thereof and
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in the Real Property described therein
and the proceeds thereof, as security for the Obligations (as defined in the
relevant Mortgage), in each case prior and superior in right to any other Person
(other than Persons holding Liens or other encumbrances or rights permitted by
the relevant Mortgage).
(v) None of Gallions Estates Ltd., Wace UK Holdings Limited, Wace
Corporate Packaging Limited, Wace (Wiltshire) Ltd. or Wace Group Services
Limited owns, directly or indirectly, any assets or other property or conduct
any business, and shall not own, directly or indirectly, any assets or other
property or conduct any business.
52
(w) Neither the Borrower nor any of its Subsidiaries owns or will own
any depository accounts other than the Included Accounts and the Excluded
Accounts.
(x) No Mortgage encumbers improved real property which is located in an
area that has been identified by the Secretary of Housing and Urban Development
as an area having special flood hazards and in which flood insurance has been
made available under the National Flood Insurance Act of 1968 (except any Real
Property as to which such flood insurance as required by Regulation H has been
obtained and is in full force and effect as required by this Agreement).
ARTICLE V
COVENANTS OF THE BORROWER AND THE SUBSIDIARIES
SECTION 5.01 AFFIRMATIVE COVENANTS.
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
(a) COMPLIANCE WITH LAW. Comply, and cause each of its Subsidiaries to
comply, in all respects, with all applicable laws, rules, regulations and
orders, except to the extent that the failure to comply therewith could not
reasonably be expected to have a Material Adverse Effect.
(b) PAYMENT OF TAXES, ETC. Timely pay and discharge, and cause each of
its Subsidiaries to timely pay and discharge, (i) all income and other material
taxes, assessments and governmental charges or levies imposed upon its property
and (ii) all lawful claims that, if unpaid, might by law become a Lien upon its
property; provided, however, that the Borrower and its Subsidiaries shall not be
required to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by appropriate proceedings diligently
conducted and as to which reserves or other appropriate provisions therefor have
been established in accordance with GAAP.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. (i) Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; (ii) obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
reasonably necessary for its operations and properties; and (iii) conduct, and
cause each of its Subsidiaries to conduct, any investigation, study, sampling
and testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws;
except in the case of each of clauses (i), (ii) and (iii) above, to the extent
that the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect; provided, however, that the Borrower and its
Subsidiaries shall not be required to undertake any such cleanup, Removal,
Remedial or Response action to the extent that its obligation to do so is being
contested in good faith and by proper proceedings and adequate reserves are
being maintained with respect to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which the Borrower or such Subsidiary operates.
53
(e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises, in each case where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
(f) VISITATION RIGHTS. At any reasonable time and from time to time,
upon reasonable notice, permit the Administrative Agent or any agents or
representatives thereof, (i) to examine and make copies of and abstracts from
the records and books of account of and visit the properties of the Borrower and
its Subsidiaries and to discuss the affairs, finances and accounts of the
Borrower and any such Subsidiaries with any of their officers or directors, and
(ii) to conduct such commercial finance examinations and/or Collateral audits of
the Borrower and its Subsidiaries as the Administrative Agent may reasonably
request and at the expense of the Borrower.
(g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
and each such Subsidiary in accordance with GAAP.
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties that
are reasonably necessary in the conduct of its business in good working order
and condition, ordinary wear and tear excepted.
(i) PERFORMANCE OF MATERIAL CONTRACTS. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and provisions
of each Material Contract to be performed or observed by it, maintain, and cause
each of its Subsidiaries to maintain, each such Material Contract in full force
and effect, and enforce, and cause each of its Subsidiaries to enforce, each
such Material Contract in accordance with its terms, except in each case where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(j) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of its Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.
(k) AGREEMENT TO EXECUTE GUARANTY. Contemporaneously with the formation
of any new Subsidiary, cause such Subsidiary to become party to, or to execute
and deliver, a Subsidiary Guaranty.
(l) AGREEMENT TO GRANT ADDITIONAL SECURITY.
(i) Subject to subsection 5.01(m) below, promptly, and in any
event within thirty (30) days after the acquisition of assets of the type that
would constitute Collateral and investments of the type that would constitute
Collateral (other than assets with a fair market value of less than $50,000),
notify the Administrative Agent of the acquisition of such assets or investments
and, to the extent not already Collateral in which the Administrative Agent has
a perfected security interest pursuant to the Collateral Documents, such assets
and investments will become additional Collateral hereunder to the extent the
Administrative Agent deems the pledge of such assets practicable (the
"ADDITIONAL COLLATERAL"), and the Borrower will, and will cause each applicable
Loan Party, to take all necessary action, including the filing of appropriate
financing statements under the provisions of the UCC, applicable foreign,
domestic or local laws, rules or regulations in each of the offices where such
filing is
54
necessary or appropriate to grant the Administrative Agent a perfected Lien in
such Collateral (or comparable interest under foreign law in the case of foreign
Collateral) pursuant to and to the full extent required by the Collateral
Documents and this Agreement.
(ii) Subject to subsection 5.01(m) below, promptly, and in any
event no later than thirty (30) days after a request with respect thereto, cause
each Subsidiary Guarantor created or established after the date hereof to grant
to the Administrative Agent, for the ratable benefit of the Lenders, a first
priority Lien on all property (tangible and intangible) of such Subsidiary
Guarantor which constitutes Collateral under the Security Agreement, including,
without limitation, all of the capital stock of any of its Domestic Subsidiaries
and 65% of the stock of any Foreign Subsidiaries organized under the laws of the
United Kingdom and owned directly by it, upon terms similar to those set forth
in the Collateral Documents and otherwise satisfactory in form and substance to
the Administrative Agent. The Borrower shall cause each Subsidiary Guarantor, at
its own expense, to become a party to a Security Agreement and any other
Collateral Document and to execute, acknowledge and deliver, or cause the
execution, acknowledgment and delivery of, and thereafter register, file or
record in any appropriate governmental office, any document or instrument
reasonably deemed by the Administrative Agent to be necessary or desirable for
the creation and perfection of the foregoing Liens. The Borrower will cause each
such Subsidiary Guarantor to take all actions requested by the Administrative
Agent (including, without limitation, the filing of UCC-1's) in connection with
the granting of such security interests.
(iii) Subject to subsection 5.01(m) below, promptly, and in
any event not later than thirty (30) days after a request with respect thereto
(other than with respect to clause (ii) below), (i) deliver to the
Administrative Agent the original of all instruments, documents and chattel
paper, and all other Collateral of which the Administrative Agent determines it
should have physical possession in order to perfect and protect its security
interest therein, duly pledged, endorsed or assigned to the Administrative Agent
without restriction; (ii) use commercially reasonable efforts to obtain landlord
waivers, in form and substance satisfactory to the Administrative Agent, with
respect to any Inventory or other Collateral located at a location that is not
owned by the Borrower or a Subsidiary; (iii) deliver to the Administrative Agent
warehouse receipts covering any portion of the Inventory or other Collateral
located in warehouses and for which warehouse receipts are issued; (iv) when an
Event of Default exists, transfer Inventory to locations designated by the
Administrative Agent; (v) if any Collateral is at any time in the possession or
control of any warehousemen, bailee or the Borrower's agents or processors,
notify the Administrative Agent thereof and notify such person of the
Administrative Agent's security interest in such Collateral and obtain a
landlord waiver or bailee letter, in form and substance satisfactory to the
Administrative Agent, from such person and instruct such person to hold all such
Collateral for the Administrative Agent's account subject to the Administrative
Agent's instructions; (vi) if at any time any Inventory or other Collateral is
located on any real property of the Borrower which is subject to a mortgage or
other Lien, obtain a mortgagee waiver, in form and substance satisfactory to the
Administrative Agent, from the holder of each mortgage or other Lien on such
real property; and (vii) take all such other actions and obtain all such other
agreements as the Administrative Agent may reasonably deem necessary or
desirable in respect of any Collateral.
(iv) Subject to subsection 5.01(m) below, the security
interests required to be granted pursuant to this Section shall be granted
pursuant to the Collateral Documents or, in the Administrative Agent's
discretion, such other security documentation (which shall be substantially
similar to the Collateral Documents already executed and delivered by the
Borrower and the Subsidiary Guarantors) as is satisfactory in form and substance
to the Administrative Agent (the "ADDITIONAL COLLATERAL DOCUMENTS") and shall
constitute valid and enforceable perfected security interests prior to the
rights of
55
all third Persons and subject to no other Liens except Liens permitted under
Section 5.02(a). The Additional Collateral Documents and other instruments
related thereto shall be duly recorded or filed in such manner and in such
places and at such times as are required by law to establish, perfect, preserve
and protect the Liens, in favor of the Administrative Agent, for the benefit of
the Lender Parties, granted pursuant to the Additional Collateral Documents and,
all taxes, fees and other charges payable in connection therewith shall be paid
in full by the Borrower. At the time of the execution and delivery of Additional
Collateral Documents, the Borrower shall cause to be delivered to the
Administrative Agent such agreements, opinions of counsel, and other related
documents as may be reasonably requested by the Administrative Agent or the
Required Lenders to assure themselves that this Section has been complied with.
(m) FOREIGN SUBSIDIARIES SECURITY. The Administrative Agent may (or
upon the reasonable request of the Required Lenders, shall) request that counsel
for the Borrower reasonably acceptable to the Administrative Agent within 30
days after such request deliver evidence satisfactory to the Administrative
Agent, with respect to any Foreign Subsidiary of the Borrower, that (i) a pledge
of more than 65% of the total Voting Stock of such Foreign Subsidiary, (ii) the
entering into by such Foreign Subsidiary of a guaranty in substantially the form
of the Subsidiary Guaranty or (iii) the entering into by such Foreign Subsidiary
of a pledge agreement in form and substance reasonably satisfactory to the
Administrative Agent, in either case would cause the earnings of such Foreign
Subsidiary to be treated as a deemed dividend to such Foreign Subsidiary's
United States parent or would otherwise violate a material applicable law or
governmental or regulatory restriction or rule (including laws, rules, or
restrictions of, or issued by, a government or regulatory authorities of a
foreign jurisdiction) or would otherwise cause a material adverse monetary tax
consequence to the Borrower, and in the case of a failure to deliver the
evidence described in clause (i) above, (A) that portion of such Foreign
Subsidiary's outstanding capital stock and intercompany notes, if any, not
theretofore pledged shall be pledged to the Administrative Agent, for the
benefit of itself, the Issuing Bank and the Lenders pursuant to the Security
Agreement (or another pledge agreement in substantially similar form, if
needed), as applicable, (B) such Foreign Subsidiary shall execute and deliver a
guaranty of the Obligations of the Borrower under the Loan Documents, and (C)
such Foreign Subsidiary shall execute and deliver a pledge agreement granting
the Administrative Agent for the benefit of the Lenders a security interest in
all of the capital stock of each Subsidiary of such Foreign Subsidiary and
intercompany notes, if any, payable to such Foreign Subsidiary, in each case
with all documents delivered pursuant to this Section 5.01(m) to be in form and
substance satisfactory to the Administrative Agent.
(n) OBSERVATION RIGHTS. Provide the Administrative Agent reasonable
notice of, and permit the Administrative Agent and/or its representative (who
shall be reasonably acceptable to the Borrower) to attend, all meetings of the
Board of Directors of the Borrower; provided, that the Administrative Agent
and/or its representative shall not be entitled to attend those portions of such
meetings that relate directly to the Credit Agreement or are, in the reasonable
discretion of the Board of Directors, otherwise inappropriate.
(o) RETENTION OF EXECUTIVE. Retain on or before the date that is 45
days after the Administrative Agent has delivered to the Borrower a list of
acceptable candidates an executive whose title and scope of employment shall be
set forth in a letter between the Borrower and the Administrative Agent. In the
event said executive shall resign or shall be terminated for good reasons as
determined by the board of directors of the Borrower, the Borrower shall retain
a replacement within 30 days following the date of such resignation or
termination. The identity and scope of employment of the executive shall
56
at all times be reasonably acceptable to the Administrative Agent and the
Required Lenders and said executive shall report directly to the Board of
Directors of the Borrower.
(p) REAL ESTATE CONSULTANT. Retain on or before April 30, 2003 a
consultant to assist the Borrower formulate and execute strategies for the
monetization of certain of its real properties. In the event such consultant
shall resign or shall be terminated for good reasons as determined by the board
of directors of the Borrower, the Borrower shall retain a replacement within 30
days following the date of such resignation or termination. The identity of the
consultant and the scope of the consultant's engagement shall be reasonably
acceptable to the Administrative Agent and the Required Lenders.
(q) CASH MANAGEMENT SYSTEM. Maintain its cash management system at the
Administrative Agent or otherwise pursuant to depositary agreements in form and
substance satisfactory to the Administrative Agent.
SECTION 5.02 NEGATIVE COVENANTS.
So long as any Advance shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will not, at any time, without the prior consent of the Required
Lenders:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its assets and properties of any character (including,
without limitation, the Collateral) whether now owned or hereafter acquired, or
sign or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, excluding, however, from
the operation of the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on
Schedule 5.02(a)(iii);
(iv) purchase money Liens securing Debt permitted under
Section 5.02(b)(iii)(A) upon real property or equipment acquired or held by the
Borrower or any of its Subsidiaries in the ordinary course of business to secure
the purchase price of such real property or equipment or to secure Debt incurred
solely for the purpose of financing the acquisition, construction or improvement
of any such real property or equipment to be subject to such Liens, or Liens
existing on any such real property or equipment at the time of acquisition
(other than any such Liens created in contemplation of such acquisition that do
not secure the purchase price), or extensions, renewals or replacements of any
of the foregoing for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the real property or
equipment being acquired, constructed or improved;
(v) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii)(B); provided that no such Lien shall extend
to or cover any Collateral or any assets or properties other than the assets or
properties subject to such Capitalized Leases;
57
(vi) the replacement, extension or renewal of any Lien
permitted by clauses (iii) through (v) above upon or in the same property
theretofore subject thereto in connection with the replacement, extension or
renewal of the Debt secured thereby.
(b) DEBT. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt other
than:
(i) in the case of the Borrower and the other Loan Parties,
Debt incurred pursuant to the Loan Documents;
(ii) unsecured Debt (w) of the Borrower to any of its
Subsidiaries, (x) of any Domestic Subsidiary of the Borrower to the Borrower or
any other Domestic Subsidiary of the Borrower, (y) of any Foreign Subsidiary of
the Borrower to the Borrower or any Domestic Subsidiary of the Borrower;
provided, however, that the aggregate of all outstanding unsecured Debt of a
Foreign Subsidiary of the Borrower to the Borrower or any Domestic Subsidiary of
the Borrower and Investments by the Borrower or any Domestic Subsidiary of the
Borrower in any Person organized under the laws of any jurisdiction other than
the United States of America or any state thereof as permitted pursuant to
Section 5.02(e)(i) herein shall not exceed (1) $7,500,000 in any Fiscal Year, or
(2) in any event, $25,000,000 in the aggregate outstanding at any time and (z)
of any Foreign Subsidiary of the Borrower to any other Foreign Subsidiary;
(iii) in the case of the Borrower and any of its Subsidiaries:
(A) Debt secured by Liens permitted by Section
5.02(a)(iv), in each case incurred only if, immediately after giving effect to
the incurrence thereof, the limit on Capital Expenditures set forth in Section
5.02(o) hereof would not be breached;
(B) Debt incurred with respect to Capitalized Leases,
in each case incurred only if, immediately after giving effect to the incurrence
thereof, the limit on Capital Expenditures set forth in Section 5.02(o) hereof
would not be breached;
(C) endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of business;
(D) Subordinated Debt outstanding on the Closing
Date; provided, that no principal shall be payable or paid by the Borrower or
any of its Subsidiaries, as the case may be, on the Subordinated Debt until the
Obligations under the Loan Documents shall have been repaid in full in cash, but
interest on such Subordinated Debt may accrue and, so long as no Default exists,
be payable or be paid by the Borrower or its applicable Subsidiary;
(E) unsecured Debt incurred in the ordinary course of
business in the form of accounts payable arising from the purchase of property
or services, including, without limitation, Inventory acquired for resale; and
(F) Debt in respect of Bank Hedge Agreements.
(c) FUNDAMENTAL CHANGES.
58
(i) Merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except that
any Subsidiary of Borrower may merge or consolidate with and into the Borrower
(provided, the Borrower is the surviving entity) or another of the Borrower's
Domestic Subsidiaries (provided, that, a Domestic Subsidiary is the surviving
entity).
(ii) Liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), convey, sell, assign, lease, transfer or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or
substantially all of its property, business or assets, or permit any of its
Subsidiaries to do any of the foregoing, except to the extent such Subsidiary
liquidates, winds-up or dissolves into or is otherwise sold, leased, transferred
or disposed of to the Borrower or any other wholly-owned Subsidiary of the
Borrower, or as otherwise permitted under Section 5.02(d).
(iii) Acquire or permit any Subsidiary to acquire all or
substantially all of the assets of any other Person (including capital stock).
(d) SALES, ETC. OF ASSETS. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:
(i) sales of Inventory in the ordinary course of business;
(ii) sales, leases, transfers or other dispositions of
obsolete or redundant equipment in the ordinary course of business;
(iii) sales, leases, transfers or other dispositions of assets
of the Borrower or any of its Subsidiaries structured as sale-leaseback
arrangements in the ordinary course of business, but only as and to the extent
permitted under Section 1(a) of the Security Agreement;
(iv) leases or licenses of intellectual property in the
ordinary course of business; provided, that such leases or licenses could not be
reasonably expected to have a Material Adverse Effect; and
(v) any individual sale or series of related sales of real
property to a bona fide third party in an amount up to $2,000,000; provided,
however, (A) each such sale shall be for not less than fair market value as
evidenced by a broker's letter as to value and (B) the aggregate amount of such
sales shall not exceed $10,000,000;
provided that, in the case of sales of assets pursuant to Section 5.02(d)(v)
above, the Borrower shall, on the date of receipt thereof, apply the Net Cash
Proceeds from such sale in accordance with Section 2.06(b).
(e) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrower or any of its Subsidiaries in
their respective Subsidiaries; provided, however, that the aggregate of all
outstanding unsecured Debt permitted pursuant to Section 5.02(b)(ii)(y) and
Investments from the Closing Date by the Borrower or any Domestic Subsidiary of
the Borrower in any Person organized under the laws of any jurisdiction other
than the
59
United States of America or any state thereof shall not exceed (A) $7,500,000 in
any Fiscal Year or (B) in any event, $25,000,000 in the aggregate outstanding at
any time; and provided, further, that, with respect to Investments by the
Borrower or any of its Subsidiaries in any newly acquired or created
wholly-owned Subsidiary of the Borrower or such Subsidiary that is a Domestic
Subsidiary of the Borrower, any such Subsidiary shall become a Subsidiary
Guarantor pursuant to the provisions of Section 5.01(k);
(ii) Loans and advances to directors, officers and other
employees in the ordinary course of the business of the Borrower and its
Subsidiaries in an aggregate principal amount not to exceed $500,000 at any time
outstanding;
(iii) Investments by the Borrower and its Subsidiaries in Cash
Equivalents;
(iv) Investments by the Borrower and its Subsidiaries in Bank
Hedge Agreements;
(v) Investments consisting of intercompany Debt permitted
under Section 5.02(b)(ii);
(vi) Investments (other than Cash Equivalents) existing on the
date hereof and, in respect of all such Investments which exceed $1,000,000,
described on Schedule 5.02(e)(vi) hereto; and
(vii) Investments consisting of accounts receivable arising in
the ordinary course of business.
(f) DIVIDENDS, ETC. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its capital stock or any
warrants, rights or options to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders as such or make any
distribution to its stockholders, or permit any of its Subsidiaries to do the
same, except:
(i) the Borrower may declare and pay dividends and make
distributions payable solely in common stock or preferred stock of the Borrower;
(ii) a Subsidiary of the Borrower may declare and pay
dividends and make distributions to the Borrower or to another Loan Party;
(iii) for issuances of stock or other equity interests
expressly permitted by Section 5.02(p); and
(iv) Wace Group Limited may declare and pay dividends in
respect of the 8% Cumulative Convertible Redeemable Preference Shares due July
31, 2005 to the extent not prohibited under Section 263 of the Companies Act.
(g) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(h) CHARTER AMENDMENTS. Amend, or permit any of its Subsidiaries to
amend, its certificate or articles of incorporation or by-laws, in a manner
which would have a Material Adverse Effect.
(i) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change (i) in accounting policies or
reporting practices, except as mandated by GAAP or
60
approved by its independent auditors for purposes of consistency or improved
presentation or (ii) in its Fiscal Year.
(j) PREPAYMENTS, ETC. OF DEBT. (i) Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Debt, other than the
prepayment of the Advances in accordance with the terms of this Agreement, or
permit any of its Subsidiaries to do any of the foregoing other than to repay
any Debt payable to the Borrower or any Subsidiary Guarantor.
(k) AMENDMENT, ETC. OF MATERIAL CONTRACTS. Except in the ordinary
course of business or to the extent such would not result in a Material Adverse
Effect, either cancel or terminate any Material Contract, consent to or accept
any cancellation or termination thereof, amend or otherwise modify any Material
Contract, give any consent, waiver or approval thereunder, waive any default
under or breach of any Material Contract, or take any other action in connection
with any Material Contract or permit any of its Subsidiaries to do any of the
foregoing.
(l) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its properties
or assets (including, without limitation the Collateral) other than as permitted
in the Loan Documents.
(m) PARTNERSHIPS, NEW SUBSIDIARIES. Except as otherwise permitted under
this Agreement, (i) become a general partner in any general or limited
partnership or joint venture with any unaffiliated third Person, or permit any
of its Subsidiaries to do so, or (ii) create any new Subsidiary, unless such
newly created Subsidiary is a Domestic Subsidiary, which shall become a
Subsidiary Guarantor (by executing and delivering to the Administrative Agent a
Subsidiary Guaranty) and an additional grantor pursuant to the terms of the
Security Agreement, and all shares of the capital stock of such Domestic
Subsidiary are pledged to the Administrative Agent in accordance with Section
5.01(l) and pursuant to the Security Agreement.
(n) SPECULATIVE TRANSACTIONS. Engage, or permit any of its Subsidiaries
to engage, in any transaction involving commodity options or futures contracts
or derivatives or any similar speculative transactions, except for Bank Hedge
Agreements.
(o) CAPITAL EXPENDITURES. Make or commit to make, or permit any of its
Subsidiaries to make or commit to make, any Capital Expenditures except that the
Borrower and its Subsidiaries shall be permitted to make or commit to make
Capital Expenditures during any fiscal year in an aggregate amount up to
$12,000,000.
(p) ISSUANCE OF STOCK. Except as otherwise specifically permitted in
this Agreement, the Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, issue, sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock of the Borrower or
any Subsidiary of the Borrower, except:
(A) to the Borrower or any of its Subsidiaries;
(B) to qualify any director of the Borrower or any of
its Subsidiaries if required by applicable law;
61
(C) in connection with the Borrower's or any of its
Subsidiaries' stock purchase, stock option or similar incentive plans, or any
exercise pursuant thereto, for the benefit of the Borrower's or any of its
Subsidiaries' directors, management, employees and other eligible participants;
and
(D) the Warrants, the warrants previously issued to
the Lenders, and any stock issued pursuant thereto.
SECTION 5.03 REPORTING REQUIREMENTS.
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will furnish to the Administrative Agent for itself or on behalf of the
Lender Parties (references in this Section 5.03 to any reports or statements
being Consolidated or consolidating shall be applicable at any time the Borrower
has any Subsidiaries):
(a) DEFAULT NOTICE. As soon as possible and in any event within two (2)
Business Days after obtaining knowledge of the occurrence of any Default or
Event of Default or any event, development or occurrence reasonably likely to
have a Material Adverse Effect, a statement of the Responsible Officer of the
Borrower setting forth details of such Default or Event of Default or event,
development or occurrence and the action that the Borrower has taken and
proposes to take with respect thereto.
(b) PERIODIC REPORTING. On or before:
(i) the first and third Tuesday of each month, a sixteen week
rolling cash flow forecast which shall detail all sources and uses of cash on a
weekly basis and shall report any variances from the prior report, and which, to
the extent necessary, shall be reforecast in its entirety as of the end of each
month (including a variance analysis with respect to such reforecast);
(ii) the tenth Business Day of each month, a "Financial
Statement Highlights" indicating revenue, gross profit and operating income for
each operating division and on a consolidated basis for the preceding month, and
year to date; and
(iii) the last Business Day of each month, (A) consolidating
and consolidated financial statements of the Borrower for the preceding month
and year to date, (B) an accounts receivable aging summary of the Borrower and
its major Subsidiaries reconciled to the consolidated balance sheet, and (C) an
accounts payable summary of the Borrower and its major Subsidiaries reconciled
to the consolidated balance sheet, in each case, in form and substance
satisfactory to the Administrative Agent and the Lenders;
all of the foregoing to be in reasonable detail and, with respect to clause
(iii) above, duly certified by a Responsible Officer of the Borrower as having
been prepared in accordance with GAAP (subject to normal year-end audit
adjustments and quarter-end review adjustments and the absence of footnotes).
(c) QUARTERLY FINANCIALS. As soon as available and in any event within
forty-five (45) days after the end of each fiscal quarter of each Fiscal Year:
62
(i) a Consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and a Consolidated statement of
income of the Borrower and its Subsidiaries for the period commencing at the end
of the previous fiscal quarter and ending with the end of such fiscal quarter;
and
(ii) a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such fiscal quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal Year;
all of the foregoing to be in reasonable detail and duly
certified by a Responsible Officer of the Borrower as having been prepared in
accordance with GAAP (subject to normal year-end audit adjustments and the
absence of footnotes), together with (x) a certificate of said officer stating
that no Default or Event of Default has occurred and is continuing or, if a
Default or an Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action that the Borrower has taken and proposes to
take with respect thereto, and (y) a schedule in form reasonably satisfactory to
the Administrative Agent of the computations used by the Borrower in determining
compliance with the financial covenants contained in Sections 5.04(a) through
(d), provided, that in the event of any change in GAAP used in the preparation
of such financial statements, the Borrower shall also provide, if necessary for
the determination of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP.
(d) ANNUAL FINANCIALS. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year (beginning with the Fiscal
Year ending December 31, 2003), a copy of the annual audit report for such year
for the Borrower and its Subsidiaries including therein a Consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such Fiscal Year and
a Consolidated statement of income and a Consolidated statement of cash flows of
the Borrower and its Subsidiaries for such Fiscal Year, in each case setting
forth in comparative form the corresponding figures as of the end of and for the
prior Fiscal Year and in each case accompanied by an opinion (unqualified as to
scope and without a "going concern" or like qualification or exception) of
Deloitte and Touche LLP or other independent certified public accountants of
recognized national standing reasonably acceptable to the Administrative Agent,
together with (i) a letter of such accounting firm to the Administrative Agent
and Lender Parties stating that in the course of the regular audit of the
business of the Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that a Default has occurred and is
continuing, or if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature thereof, (ii) a
schedule in form satisfactory to the Administrative Agent of the computations
used by such accountants in determining, as of the end of such Fiscal Year,
compliance with the covenants contained in Sections 5.04, provided, that in the
event of any change in GAAP used in the preparation of such financial
statements, the Borrower shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation conforming such
financial statements to GAAP and (iii) a certificate of the Responsible Officer
of the Borrower stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto.
(e) ANNUAL FORECASTS. As soon as available and in any event no later
than sixty (60) days after the end of each Fiscal Year, an annual operating
budget prepared by management of the Borrower, in form prepared by the Borrower
in the ordinary course of its business, including projected consolidated
63
and consolidating balance sheets, income statements and cash flow statements on
a quarterly basis for the Fiscal Year following such Fiscal Year then ended.
(f) ERISA EVENTS AND ERISA REPORTS. (i) Promptly and in any event
within twenty (20) days after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, which could reasonably be
expected to have a Material Adverse Effect, a statement of the chief financial
officer of the Borrower describing such ERISA Event and the action, if any, that
the Borrower or such ERISA Affiliate has taken and proposes to take with respect
thereto and (ii) on the date any records, documents or other information must be
furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA, a copy of such records, documents and information.
(g) PLAN TERMINATIONS. Promptly and in any event within five (5)
Business Days after receipt thereof by the Borrower or any ERISA Affiliate,
copies of each notice from the PBGC stating its intention to terminate any Plan
or to have a trustee appointed to administer any Plan or correspondence from the
PBGC indicating it is considering termination of any Plan.
(h) LITIGATION. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before or by any
court or governmental department, commission, board, bureau, agency or
instrumentality, Federal, state, local or foreign, that reasonably could be
expected to have a Material Adverse Effect and, promptly after the occurrence
thereof, notice of any change in either the status of the Disclosed Litigation
or the financial effect on such Loan Party or any of its Subsidiaries in
connection therewith from that described on Schedule 4.01(h) which could
reasonably be expected to result in a Material Adverse Effect.
(i) SECURITIES REPORTS. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any Loan
Party or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any other governmental authority or with any national securities
exchange.
(j) AGREEMENT NOTICES. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Material Contract or indenture, loan or
credit agreement or similar agreement or instrument regarding or related to any
breach or default by any party thereto or any event that could materially impair
the value of the interests or the rights of any Loan Party or any of its
Subsidiaries or otherwise have a Material Adverse Effect and copies of any
amendment, modification or waiver of any provision of any Material Contract or
indenture, loan or credit agreement or similar agreement or indenture and, from
time to time upon request by the Administrative Agent, such information and
reports regarding the foregoing as the Administrative Agent may reasonably
request.
(k) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected to
have a Material Adverse Effect.
(l) INSURANCE. Upon the request, from time to time, of the
Administrative Agent, promptly and in any event within thirty (30) days after
any such request, a report summarizing the insurance
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coverage (specifying type, amount and carrier) in effect for each Loan Party and
its Subsidiaries and containing such additional information as the
Administrative Agent may reasonably request.
(m) MANAGEMENT LETTERS. As soon as available and in any event within
five (5) Business Days after the receipt thereof, copies of any "management
letter" or similar letter received by the Borrower or its Board of Directors (or
any Committee thereof) from its independent public accountants.
(n) OTHER INFORMATION. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries or the Collateral as the
Administrative Agent or any Lender Party (through the Administrative Agent) may
from time to time reasonably request.
(o) BORROWING BASE CERTIFICATE. On or before Wednesday of each week, a
Borrowing Base Certificate detailing the Borrowing Base as of Friday of the
preceding week.
(p) EXCESS CASH FLOW CERTIFICATE. On or before the 45th day after June
30 of each year and on or before the 90th day after December 31 of each year, a
certificate of a Responsible Officer, certifying in reasonable detail as to
Excess Cash Flow measured as of the end of such fiscal half year (an "EXCESS
CASH FLOW CERTIFICATE").
(q) TAX REFUND CERTIFICATE. On or before January 15 of each year, a
certificate of a Responsible Officer, certifying in reasonable detail as to Tax
Refunds received by the Borrower and its Subsidiaries during the prior fiscal
year (a "TAX REFUND CERTIFICATE").
(r) CASH ON HAND CERTIFICATE. No later than 12:00 p.m. (New York time)
on each Business Day, a certificate of a Responsible Officer of the Borrower
certifying in reasonable detail as to Cash on Hand measured as of the end of the
preceding Business Day (a "CASH ON HAND CERTIFICATE").
(s) MONTHLY COVENANT REPORTING. On or before the 30th day of each
month, a certificate of a Responsible Officer of the Borrower stating that the
Borrower is in compliance with the Monthly Covenant with respect to the
immediately preceding month together with a schedule in form reasonably
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with said Monthly Covenant.
SECTION 5.04 FINANCIAL COVENANTS.
So long as any Advance shall remain unpaid, any Letter of Credit shall
be outstanding or any Lender Party shall have any Commitment hereunder, the
Borrower will:
(a) CONSOLIDATED TOTAL FUNDED DEBT TO EBITDA RATIO. Maintain a ratio of
(i) Total Funded Debt to (ii) EBITDA as at the last day of each fiscal quarter
of the Borrower of not more than the ratios set forth below (calculated on the
basis of the cumulative aggregate amounts for the immediately preceding four
full fiscal quarters):
Period Ending In: Ratio:
----------------- ------
June 2003 5.03:1.00
September 2003 4.95:1.00
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December 2003 5.17:1.00
March 2004 5.52:1.00
(b) INTEREST COVERAGE RATIO. Maintain a ratio of (A) EBIT to (B)
Interest Expense as at the last day of each fiscal quarter of the Borrower of
not less than the ratios set forth below (calculated on the basis of cumulative
aggregate amounts for the immediately preceding four full fiscal quarters):
Period Ending In: Ratio:
----------------- ------
June 2003 1.39:1.00
September 2003 1.36:1.00
December 2003 1.25:1.00
March 2004 1.20:1.00
(c) FIXED CHARGE COVERAGE RATIO. Maintain a ratio of (i) EBITDA to (ii)
Fixed Charges, as at the last day of each fiscal quarter of the Borrower of not
less than the ratios set forth below (calculated on the basis of cumulative
aggregate amounts for the immediately preceding four full fiscal quarters):
Period Ending In: Ratio:
----------------- ------
June 2003 0.77:1.00
September 2003 0.84:1.00
December 2003 0.81:1.00
March 2004 0.88:1.00
(d) MINIMUM CONSOLIDATED EBITDA. Maintain cumulative EBITDA as at the
last day of each month of not less than the amounts set forth below for each
such period (calculated on the basis of cumulative aggregate amounts for the
immediately preceding twelve months):
Period Ending In: Minimum Consolidated EBITDA
----------------- ---------------------------
April 2003 $41,900,000
May 2003 $42,400,000
June 2003 $42,300,000
July 2003 $42,200,000
August 2003 $42,200,000
September 2003 $41,600,000
October 2003 $40,900,000
November 2003 $41,300,000
December 2003 $38,900,000
January 2004 $39,000,000
February 2004 $38,800,000
March 2004 $38,600,000
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01 EVENTS OF DEFAULT.
If any of the following ("EVENTS OF DEFAULT") shall occur and be continuing:
(a) (i) The Borrower shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrower shall fail to
pay any interest on any Advance, or any Loan Party shall fail to make any other
payment under any Loan Document, in each case under this clause (ii) within five
(5) days after the same becomes due and payable; or
(b) Any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made or confirmed; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement, but excluding any Monthly Covenant, contained in Section
2.14, 5.01(k), 5.02 or 5.04 (a) through (d) and (ii) the Borrower shall fail to
perform or observe the covenant contained in Section 5.04(d) for two consecutive
months; or
(d) Any Loan Party shall fail to perform any other term, covenant or
agreement, but excluding any Monthly Covenant, contained in any Loan Document on
its part to be performed or observed if such failure shall remain unremedied for
thirty (30) days after written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender Party; or
(e) Any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal or notional amount of at least
$15,000,000 either individually or in the aggregate (but excluding Debt
outstanding hereunder) of such Loan Party or such Subsidiary (as the case may
be), when the same becomes due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise); or any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Debt, in each case if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required prepayment
or redemption), purchased or defeased, or an offer to prepay, redeem, purchase
or defease such Debt shall be required to be made, in each case prior to the
stated maturity thereof; or
(f) Any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against any Loan Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, administrative receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a
67
period of sixty (60) days or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or other similar official for, it
or any substantial part of its property) shall occur, or any Loan Party shall
take any corporate action to authorize any of the actions set forth above in
this subsection (f); or
(g) Any judgment or order for the payment of money in excess of
$15,000,000 (other than such a judgment or order which is fully covered by
insurance for which the appropriate insurer has acknowledged responsibility in
writing) shall be rendered against any Loan Party or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be a period of thirty (30)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(h) Any material provision of any Loan Document after delivery thereof
shall for any reason cease to be valid and binding on or enforceable against any
Loan Party which is party to it, or any such Loan Party shall so state in
writing; or
(i) (i) Any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended), directly or indirectly, of Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 50% or more of the
combined voting power of all Voting Stock of the Borrower; or (ii) the
individuals who at the date hereof were directors of the Borrower (together with
any other director whose election to the board of directors of the Borrower or
whose nomination by the board of directors for election by the stockholders of
the Borrower was approved by a vote of at least a majority of the directors then
in office who either were directors at the date hereof or whose election was
previously so approved) shall cease for any reason to constitute a majority of
the board of directors of the Borrower; or
(j) Any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of the last such ERISA Event) of
the Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Events) exceeds $10,000,000; or
(k) Any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $10,000,000, unless contested in good faith and by
appropriate proceedings diligently conducted and reserves or other appropriate
provisions shall have been established therefor in accordance with GAAP, or
requires payments exceeding $2,000,000 per annum; or
(l) Any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such
68
Multiemployer Plans for the plan years of such Multiemployer Plans immediately
preceding the plan year in which such reorganization or termination occurs by an
amount exceeding $10,000,000; or
(m) The Administrative Agent or the Required Lenders shall have
provided notice to the Borrower that, in the reasonable judgment of the Required
Lenders, a Material Adverse Effect shall have occurred; or
(n) Any Collateral Document after delivery thereof shall for any reason
cease to or otherwise not create a valid and perfected first priority Lien on
and security interest in the Collateral (subject to Permitted Liens) purported
to be covered thereby; or
(o) The Borrower and the Lenders shall have failed to consummate a
restructuring and/or recapitalization of the Borrower (which shall have been
acceptable to each Lender) on or before July 15, 2003;
then, and in any such event, the Administrative Agent (i) shall at the request,
or with the consent, of the Required Lenders, by notice to the Borrower, declare
the Commitments of each appropriate Lender and of the Issuing Bank to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or with the consent, of the Required
Lenders, (A) by notice to the Borrower, declare the Notes, all interest thereon
and all other amounts payable under this Agreement and the other Loan Documents
to be forthwith due and payable, whereupon the Notes, all such interest and all
such other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrower and (B) by notice to each party required
under the terms of any agreement in support of which a Standby Letter of Credit
is issued, request that all Obligations under such agreement be declared to be
due and payable; provided, however, that in the event of (1) an actual or deemed
entry of an order for relief with respect to any Loan Party or any of its
Subsidiaries under the Federal Bankruptcy Code or (2) the occurrence of an Event
of Default under Section 6.01(o), then (x) the obligation of each Lender to make
Advances and of the Issuing Bank to issue Letters of Credit shall automatically
be terminated and (y) the Notes, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 6.02 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Administrative Agent on behalf of the
Lender Parties in same day funds at the Administrative Agent's office designated
in such demand, for deposit in the L/C Cash Collateral Account, an amount equal
to the aggregate Available Amount of all Letters of Credit then outstanding. If
at any time the Administrative Agent determines that any funds held in the L/C
Cash Collateral Account are subject to any right or claim of any Person other
than the Administrative Agent and the Lender Parties or that the total amount of
such funds is less than the aggregate Available Amount of all Letters of Credit,
the Borrower will, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in the L/C
Cash Collateral Account, an amount equal to the excess of (a) such aggregate
Available Amount over (b) the total amount of funds, if any, then held in the
L/C Cash Collateral Account that the Administrative Agent determines to be free
and clear of any such right and claim.
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ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01 AUTHORIZATION AND ACTION.
Each Lender Party (in its capacity as a Lender, the Issuing Bank, the
Swing Line Bank and/or any Hedge Bank) hereby appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers and discretion as are reasonably incidental thereto.
As to any matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding upon all Lender Parties and all
holders of Notes; provided, however, that the Administrative Agent shall not be
required to take any action that exposes the Administrative Agent to personal
liability or that is contrary to this Agreement, any other Loan Document or
applicable law. The Administrative Agent agrees to give to each Lender Party
prompt notice of each notice given to it by the Borrower pursuant to the terms
of this Agreement. The Administrative Agent shall not be a trustee or fiduciary
for any Lender.
SECTION 7.02 AGENT'S RELIANCE, ETC.
Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Administrative Agent: (a) may treat the payee
of any Note as the holder thereof until the Administrative Agent receives and
accepts an Assignment and Acceptance entered into by the Lender that is the
payee of such Note, as assignor, and an Eligible Assignee, as assignee, as
provided in Section 8.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any
Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03 FLEET AND AFFILIATES.
With respect to its Commitments, the Advances made by it and the Notes
issued to it, Fleet shall have the same rights and powers under the Loan
Documents as any other Lender Party and may exercise the same as though it were
not the Administrative Agent; and the term "Lender Party" or "Lender Parties"
70
shall, unless otherwise expressly indicated, include Fleet in its individual
capacity. Fleet and its affiliates may accept deposits from, lend money to, act
as trustee under indentures of, accept investment banking engagements from, and
generally engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person who may do business with or own securities of any
Loan Party or any such Subsidiary, all as if Fleet were not the Administrative
Agent and without any duty to account therefor to the Lender Parties.
SECTION 7.04 LENDER PARTY CREDIT DECISION.
Each Lender Party acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender Party and based on
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges that
it will, independently and without reliance upon the Administrative Agent or any
other Lender Party and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05 INDEMNIFICATION.
(a) Each Lender Party severally agrees to indemnify the Administrative
Agent (to the extent not promptly reimbursed by the Borrower) from and against
such Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Administrative Agent under any of the Loan Documents; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender Party agrees to reimburse the Administrative Agent promptly upon written
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that the Administrative Agent is not promptly reimbursed for
such costs and expenses by the Borrower.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrower) from and against such
Lender Party's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of any of the Loan Documents or any action taken or
omitted by the Issuing Bank under any of the Loan Documents; provided, however,
that no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Issuing Bank's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender Party
agrees to reimburse the Issuing Bank promptly upon written demand for its
ratable share of any costs and expenses (including, without limitation, fees and
expenses of counsel) payable by the Borrower under Section 8.04, to the extent
that the Issuing Bank is not promptly reimbursed for such costs and expenses by
the Borrower.
71
(c) For purposes of Sections 7.05(a) and 7.05(b), the Lender Parties'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters of
Credit outstanding at such time, and (iii) their respective Unused Revolving
Credit Commitments at such time; provided, that the aggregate principal amount
of Swing Line Advances owing to the Swing Line Bank and Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the
Revolving Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments. In the event that any Defaulted Advance shall be owing by
any Defaulting Lender at any time, such Defaulting Lender Party's Commitment
with respect to the Facility under which such Defaulted Advance was required to
have been made shall be considered to be unused for purposes of this Section
7.05 to the extent of the amount of such Defaulted Advance. The failure of any
Lender Party to reimburse the Administrative Agent or the Issuing Bank, as the
case may be, promptly upon written demand for its ratable share of any amount
required to be paid by the Lender Parties to the Administrative Agent or the
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse the Administrative Agent
or the Issuing Bank, as the case may be, for its ratable share of such amount,
but no Lender Party shall be responsible for the failure of any other Lender
Party to reimburse the Administrative Agent or the Issuing Bank, as the case may
be, for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreements of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
7.05 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
SECTION 7.06 SUCCESSOR ADMINISTRATIVE AGENTS.
The Administrative Agent may resign at any time by giving written
notice thereof to the Lender Parties and the Borrower and may be removed as to
all of the Facilities at any time with or without cause by the Required Lenders.
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint a successor Administrative Agent as to such of the Facilities as to
which the Administrative Agent has resigned or been removed, which successor
shall have been approved by the Borrower, which approval shall not be
unreasonably withheld or delayed. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lender Parties, appoint a successor Administrative Agent, which shall be a
Lender which is a commercial bank organized under the laws of the United States
or of any State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent as to all of the Facilities and
upon the execution and filing or recording of such financing statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from all of its duties and obligations under this Agreement and the
other Loan Documents. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent as to less than all of the
Facilities and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Required Lenders may request, in order to
continue the
72
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent as to such Facilities, other than with respect to
funds transfers and other similar aspects of the administration of Borrowings
under such Facilities, issuances of Letters of Credit (notwithstanding any
resignation as Administrative Agent with respect to the Letter of Credit
Facility) and payments by the Borrower in respect of such Facilities, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement as to such Facilities, other than as aforesaid.
After any retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent as to all of the Facilities, the provisions of this Article
VII shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent as to any Facilities under this Agreement.
SECTION 7.07 ADMINISTRATIVE AGENT AS ENGLISH TRUSTEE.
(a) The Administrative Agent in its capacity as agent and trustee or
otherwise under the Loan Documents governed by English law:
(i) is not liable for any failure, omission, or defect in
perfecting or registering the security constituted or created by any Loan
Document;
(ii) may accept without inquiry such title as the Borrower or
any of its Subsidiaries may have to any asset secured by any Loan Document; and
(iii) is not under any obligation to hold any Loan Document or
any other document in connection with the Loan Documents or the assets secured
by any Loan Document in its own possession or take any steps to protect or
preserve the same. The Administrative Agent may permit the Borrower or any of
its Subsidiaries to retain any Loan Document or other document in such Loan
Party's possession.
(b) Except as otherwise provided in the Loan Documents governed by
English law, all moneys which under the trusts contained in such Loan Documents
are received by the Administrative Agent in its capacity as trustee or otherwise
may be invested in the name of or under the control of the Administrative Agent
in any investment authorized by English law for the investment by a trustee of
trust money or in any other investments which may be selected by the
Administrative Agent. Additionally, the same may be placed on deposit in the
name or under the control of the Administrative Agent with such Lender or
institution (including the Administrative Agent itself) and upon such terms as
the Administrative Agent may think fit.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or the Notes
or any other Loan Document, nor consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed (or, in the case of the Collateral Documents, consented to) by the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that (a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lender Parties (other than any Lender Party that
73
is, at such time, a Defaulting Lender), do any of the following at any time: (i)
change the percentage of (x) the Commitments, (y) the aggregate unpaid principal
amount of the Advances or (z) the aggregate Available Amount of outstanding
Letters of Credit that, in each case, shall be required for the Lenders or any
of them to take any action hereunder; (ii) release all or substantially all of
the Collateral in any transaction or series of related transactions or permit
the creation, incurrence, assumption or existence of any Lien on any material
portion of the Collateral in any transaction or series of related transactions
to secure any liabilities or obligations other than Obligations owing to the
Secured Parties under the Loan Documents; (iii) release any of the Subsidiary
Guarantors from their Subsidiary Guaranty, except as permitted under this
Agreement or the Subsidiary Guaranty; (iv) amend this Section 8.01 or change the
definition of "REQUIRED LENDERS"; (v) limit the liability of any Loan Party
under any of the Loan Documents, except as permitted under this Agreement or
(vi) amend Section 6.01 or waive the Event of Default contained in Section
6.01(o); and (b) no amendment, waiver or consent shall, unless in writing and
signed by the Required Lenders and each Lender Party adversely affected by such
amendment, waiver or consent, (i) change the amounts of the Commitments of such
Lender Party or subject such Lender Party to any additional obligations, (ii)
reduce the principal of, or interest on, the Notes held by such Lender Party or
any fees or other amounts payable hereunder to such Lender Party, (iii) postpone
any date fixed for any scheduled payment of principal of, or interest on, the
Notes held by such Lender Party or any fees or other amounts payable hereunder
to such Lender Party or (iv) change the order of application of any prepayment
set forth in Section 2.06 in any manner that materially and adversely affects
such Lender Party; provided, further, that no amendment, waiver or consent
shall, unless in writing and signed by the Swing Line Bank or the Issuing Bank,
as the case may be, in addition to the Lenders required above to take such
action, affect the rights or obligations of the Swing Line Bank or the Issuing
Bank, as the case may be, under this Agreement or any other Loan Document; and
provided, further, that no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement or any other Loan Document.
SECTION 8.02 NOTICES ETC.
All notices and other communications provided for hereunder shall be in
writing (including telegraphic, telecopy or telex communication) and mailed,
telegraphed, telecopied, telexed, delivered by overnight courier service or
personally served,
if to the Borrower:
Applied Graphics Technologies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Applied Graphics Technologies, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
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New York, New York 10001
Attention: Chief Legal Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Administrative Agent:
Fleet National Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ & Maw
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Trust, Esq.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
if to any Lender or the Issuing Bank, at its Domestic Lending
Office specified opposite its name on Schedule I attached hereto or, if
applicable, as otherwise specified in the Assignment and Acceptance pursuant to
which it became a Lender Party;
or, as to the Borrower or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, (w) when mailed
by certified mail, return receipt requested, be effective three (3) days after
mailing, (x) when telegraphed, telecopied or telexed, be effective upon delivery
to the telegraph company, upon transmission by telecopier or upon confirmation
by telex answerback, (y) when delivered in person, be effective when delivered
and (z) when delivered by overnight courier, be effective two (2) Business Days
after delivery to the courier properly addressed, except that notices and
communications to the Administrative Agent pursuant to Article II, III or VII
shall not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of this Agreement, the Notes or any other
Loan Document or of any Exhibit hereto or thereto or of any amendment or waiver
of any provision hereof or thereof shall be as effective as delivery of a
manually executed counterpart thereof.
SECTION 8.03 NO WAIVER; REMEDIES.
No failure on the part of any Lender Party or the Administrative Agent
to exercise, and no delay in exercising, any right hereunder or under any Note
or under any other Loan Document shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right preclude any other or further
75
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law or in
equity.
SECTION 8.04 COSTS AND EXPENSES.
(a) The Borrower agrees to pay on demand (i) all reasonable costs and
expenses of the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of the Loan
Documents (including, without limitation, (A) all due diligence, collateral
review, syndication (including printing, distribution and bank meetings),
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing, registration and recording fees and expenses, and (B) the
reasonable fees and expenses of counsel for the Administrative Agent with
respect thereto, including advising the Administrative Agent as to its rights
and responsibilities, or the perfection, protection or preservation of rights or
interests under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto) and (ii) all
reasonable costs and expenses of the Administrative Agent and the Lender Parties
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation or any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally or otherwise (including, without
limitation, the fees and expenses of counsel for the Administrative Agent and
each Lender Party with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender Party and each of their respective Affiliates
and their respective officers, directors, employees, agents and advisors (each,
an "INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of, or in connection with the preparation for a defense of, any
investigation, litigation or proceeding arising out of, related to or in
connection with (i) any of the transactions contemplated by the Loan Documents,
(ii) any acquisition or proposed acquisition or similar business combination or
proposed business combination by the Borrower or any of its Subsidiaries or
other Affiliates of all or any portion of the shares of capital stock or all or
substantially all of the property and assets of any other Person, (iii) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit by the Borrower or any of its Subsidiaries or other Affiliates
and any of the other transactions contemplated by the Loan Documents, (iv) the
actual or alleged presence of Hazardous Materials on any property of or any Loan
Party or any of its Subsidiaries or any Environmental Action relating in any way
to any Loan Party or any of its Subsidiaries or (v) any broker's or finder's
fees or commissions or any similar fees or commissions which are or will be owed
or payable by any Loan Party or any of their Subsidiaries in connection with the
incurrence and maintenance of the Obligations, any other transactions
contemplated by the Loan Documents or any services rendered in connection with
such transactions, in the case of each of clauses (i) through (v) above whether
or not such investigation, litigation or proceeding is brought by any Loan
Party, its directors, officers, managers, employees, stockholders, or creditors
or an Indemnified Party or any Indemnified Party is otherwise a party thereto
and whether or not the transactions contemplated hereby are consummated, except
to the extent such claim, damage, loss, liability or expense is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.
The Borrower also agrees not to assert any claim against the Administrative
Agent, any
76
Lender Party or any of their respective Affiliates, or any of their respective
officers, directors, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of
the transactions contemplated thereby, other than claims for direct, as opposed
to consequential, damages which shall have been determined in a final
nonappealable judgment by a court of competent jurisdiction to have resulted
from such Person's gross negligence or willful misconduct.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender Party
other than on the last day of the Interest Period for such Advance, as a result
of a payment or Conversion pursuant to Section 2.09(b)(i) or 2.10(d) or a
prepayment pursuant to Section 2.06, acceleration of the maturity of the Notes
pursuant to Section 6.01 or for any other reason, the Borrower shall, upon
demand by such Lender Party (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender Party any
amounts required to compensate such Lender Party for any additional losses,
costs or expenses that it may reasonably incur as a result of such payment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or re-employment of deposits or other funds required by any
Lender Party to fund or maintain such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of such Loan Party by the Administrative Agent, in its sole
discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrower contained in Sections 2.10 and 2.12 and this Section
8.04 shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under any of the other Loan Documents.
SECTION 8.05 RIGHT OF SET-OFF.
Upon (a) the occurrence and during the continuance of any Default and
(b) the making of the request or the granting of the consent specified by
Section 6.01 to authorize the Administrative Agent to declare the Notes due and
payable pursuant to the provisions of Section 6.01, each Lender Party and each
of its respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and otherwise apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender Party or
such Affiliate to or for the credit or the account of the Borrower or any of its
Subsidiaries against any and all of the Obligations of the Borrower now or
hereafter existing under this Agreement and the Note or Notes (if any) held by
such Lender Party, irrespective of whether such Lender Party shall have made any
demand under this Agreement or such Note or Notes and although such obligations
may be unmatured. Each Lender Party agrees promptly to notify the Borrower and
the Administrative Agent after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender Party and its respective
Affiliates under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Lender Party
and its respective Affiliates may have at law, in equity or otherwise.
77
SECTION 8.06 BINDING EFFECT.
This Agreement shall become effective when it shall have been executed
by the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and the Issuing Bank that each such
Lender and the Issuing Bank has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, the Administrative Agent and each
Lender Party and their respective successors and assigns, except that the
Borrower shall not have the right to assign any of its rights hereunder or any
interest herein without the prior written consent of the Lender Parties.
SECTION 8.07 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender Party may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment or Commitments, the
Advances owing to it and the Note or Notes held by it); provided, however, that
(i) with respect to the Term Loan A Facility and the Revolving Credit Facility,
each such assignment shall be of a uniform, and not a varying, percentage of all
rights and obligations under and in respect of such Facilities on a pro rata
basis with respect to such Facilities, (ii) except in the case of an assignment
to a Person that, immediately prior to such assignment, was a Lender or an
assignment of all of a Lender Party's rights and obligations under this
Agreement, the amount of the Commitment of the assigning Lender Party being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000, (iii) no such assignments shall be permitted without the
prior consent of the Administrative Agent (which may not be unreasonably
withheld), (iv) no such assignment shall be permitted if, immediately after
giving effect thereto, the Borrower would be required to make payments to or on
behalf of the assignee Lender Party pursuant to Section 2.10(a) or (b) or
Section 2.12 and the assignor Lender Party was not, at the time of such
assignment, entitled to receive any payment pursuant to Section 2.10(a) or (b)
or Section 2.12, and (v) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note or Notes subject
to such assignment and a processing and recordation fee of $3,000.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or Issuing Bank, as the
case may be, hereunder and (y) the Lender or Issuing Bank assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's or Issuing Bank's rights and obligations under this Agreement, such
Lender or Issuing Bank shall cease to be a party hereto), except as to Sections
2.10, 2.12 and 8.04 for the period prior to the effective date of such
assignments.
(c) By executing and delivering an Assignment and Acceptance, the
Lender Party assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with
78
this Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender Party or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under this
Agreement and the other Loan Documents as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers and discretion
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and the Commitment under each Facility of, and principal
amount of the Advances owing under each Facility to, each Lender Party from time
to time (the "REGISTER"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender Party hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender Party 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 Party and an assignee, together with any Note or Notes subject
to such assignment and the appropriate processing and recordation fee, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit A hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Borrower. In the case of any
assignment by a Lender, within five (5) Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes a new Note to
the order of such Eligible Assignee in an amount equal to the Commitment assumed
by it under a Facility pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder under such Facility, a new
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Note or Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the applicable
Notes.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; provided, however, that (i) each such assignment shall
be to an Eligible Assignee and (ii) the parties to each such assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $3,000.
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(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes, if any, held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Lender Party shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender Party shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Administrative Agent and the
other Lender Parties shall continue to deal solely and directly with such Lender
Party in connection with such Lender Party's rights and obligations under this
Agreement and (v) no participant under any such participation shall have any
right (x) to any payments under Sections 2.10 or 2.12 (other than to the extent
the Lender Party is entitled thereto) and (y) to approve any amendment, waiver
or other modification of any provision of this Agreement or any other Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver, modification or consent would reduce the
principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation, or postpone
any date fixed for any payment of principal of, or interest on, the Notes or any
fees or other amounts payable hereunder, in each case to the extent subject to
such participation, or release all or substantially all of the Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
SECTION 8.08 EXECUTION IN COUNTERPARTS; SEVERABILITY.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be as effective as delivery
of a manually executed counterpart of this Agreement. The illegality or
unenforceability of any provision of this Agreement or any instrument or
agreement required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
SECTION 8.09 NO LIABILITY OF THE ISSUING BANK.
The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Issuing Bank nor any of its officers,
directors, employees or agents nor any Lender Party shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in
80
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; or (c) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower shall have a claim against the Issuing Bank,
and the Issuing Bank shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower that the
Borrower proves were caused by (i) the Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) the Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying with the terms
and conditions of the Letter of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary.
SECTION 8.10 CONFIDENTIALITY.
Neither the Administrative Agent nor any Lender Party shall disclose
any Confidential Information to any Person without the consent of the Borrower,
other than (a) to the Administrative Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process, (c)
as required by the National Association of Insurance Commissioners, and (d) as
requested or required by any state, federal or foreign authority or examiner
regulating banks or banking or insurance companies.
SECTION 8.11 JURISDICTION, ETC.
(a) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY
NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES OF AMERICA SITTING IN
NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY
LENDER PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY
JURISDICTION.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF, OR
81
RELATING TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
SECTION 8.12 GOVERNING LAW.
THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW PRINCIPLES).
SECTION 8.13 WAIVER OF JURY TRIAL.
EACH OF THE BORROWER, THE OTHER LOAN PARTIES, THE ADMINISTRATIVE AGENT
AND THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE
IN EQUITY OR AT LAW) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS, THE ADVANCES, THE LETTERS OF CREDIT OR THE ACTIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
SECTION 8.14 ACKNOWLEDGEMENT.
The Borrower hereby acknowledges that a Material Adverse Effect shall
include, but shall not be limited to, (a) the loss or substantial reduction in
scale of volume from a Major Customer or (b) a material breach under a Major
Contract; provided, that the Required Lenders shall determine in their
reasonable judgment that such event shall constitute a Material Adverse Effect.
For the purposes of this Section 8.14, (i) a "Major Contract" means any master
contract or agreement governing the respective obligations of the Borrower
and/or any Subsidiary and a Major Customer and (ii) "Major Customer" means, at
any date of determination, a customer representing 10% of the revenues generated
by the Borrower and its Subsidiaries on a consolidated basis during the
preceding 12-month period.
SECTION 8.15 RELEASE.
The Loan Parties hereby release, waive, and forever relinquish all
claims, demands, obligations, liabilities and causes of action of whatever kind
or nature, whether known or unknown, which any of them has, may have, or might
assert at the time of execution of this Agreement or in the future against the
Administrative Agent, the Lenders and/or their respective parents, affiliates,
participants, officers, directors, employees, agents, attorneys, accountants,
consultants, successors and assigns, directly or indirectly, which occurred,
existed, was taken, permitted or begun prior to the execution of this Agreement,
arising out of, based upon, or in any manner connected with (i) any transaction,
event, circumstance, action, failure to act or occurrence of any sort or type,
whether known or unknown, with respect to this Agreement, any other Loan
Document and/or the administration thereof or the obligations created thereby,
(ii) any discussions, commitments, negotiations, conversations or communications
with respect to the refinancing, restructuring or collection of any obligations
related to this Agreement, any other Loan Document and/or the administration
thereof or the obligations created thereby, or (iii) any matter related to the
foregoing.
[Signature Pages Follow]
82
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:
Name:
Title:
MIRAMAR EQUIPMENT, INC.
DEVON GROUP, INC.
BLACK DOT GRAPHICS, INC.
▇▇▇▇▇ GRAPHICARTS, INC.
TYPO-GRAPHICS, INC.
▇▇▇▇▇▇▇ & ASSOCIATES, INC.
WEST COAST CREATIVE, INC.
ABD GROUP, INC.
MERIDIAN RETAIL, INC.
TAPROOT INTERACTIVE, INC.
PROOF POSITIVE/FARROWLYNE
ASSOCIATES, INC.
ONE 2 ONE, INC.
COLOR CONTROL, INC.
AGILE ENTERPRISE, INC.
AGT SYSTEM SERVICES, INC.
RETAIL PROFIT SOLUTIONS, INC.
R.E. GRAPHICS, INC.
SEVEN WORLDWIDE, INC.
WUSA RE, INC.
By:
Title:
FLEET NATIONAL BANK, AS ADMINISTRATIVE
AGENT, ISSUING BANK AND SWING LINE BANK
By:
Name:
Title:
FLEET NATIONAL BANK, as Lender
By:
Name:
Title:
BANK OF AMERICA, N.A., as Lender
By:
Name:
Title:
WACHOVIA BANK, N.A., as Lender
By:
Name:
Title:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ BANK (formerly known as
The Chase Manhattan Bank), as Lender
By:
Name:
Title:
THE BANK OF NEW YORK, as Lender
By:
Name:
Title:
SOVEREIGN BANK, as Lender
By:
Name:
Title:
GE CAPITAL CFE, INC., as Lender
By:
Name:
Title:
SUNTRUST BANK, N.A., as Lender
By:
Name:
Title:
CITIZENS BANK OF MASSACHUSETTS, as Lender
By:
Name:
Title:
THE BANK OF NOVA SCOTIA, as Lender
By:
Name:
Title:
PB CAPITAL CORPORATION, as Lender
By:
Name:
Title:
By:
Name:
Title:
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Second Amended and Restated Credit Agreement,
dated as of April 15, 2003 (as amended, supplemented, restated or otherwise
modified from time to time, the "CREDIT AGREEMENT") among Applied Graphics
Technologies, Inc., a Delaware corporation (the "BORROWER"), the Lenders from
time to time party thereto, and Fleet National Bank, as Administrative Agent
(the "ADMINISTRATIVE AGENT"). Capitalized terms used herein and not defined
herein have the meanings assigned to them in the Credit Agreement.
The "ASSIGNOR" and the "ASSIGNEE" referred to on Schedule I hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse,
and the Assignee hereby purchases and assumes from the Assignor, an
interest in and to the Assignor's rights and obligations under the
Credit Agreement as of the date hereof equal to the percentage interest
specified on Schedule I hereto of all outstanding rights and
obligations under the Facility or Facilities as specified on Schedule I
hereto. After giving effect to such sale and assignment, the Assignee's
_________(1) Commitments and the amount of the ____________(2) Advances
owing to the Assignee shall be as set forth on Schedule I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Documents or any other instrument, agreement
or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument, agreement or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Loan
Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument, agreement
or document furnished pursuant thereto; and (iv) attaches the
_____________(3) Note or Notes held by the Assignor and requests that
the Administrative Agent exchange such Note or Notes for a new Note or
Notes payable to the order of the Assignee in an amount equal to the
_____________(3) Commitments assumed by the Assignee pursuant hereto
and to the order of the Assignor in an amount equal to the
___________(1) Commitments retained by the Assignor under the Credit
Agreement, respectively, as specified on Schedule I hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to
therein, including, without limitation, those referred to in Section
4.01(f) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (ii) agrees that it shall,
independently and without reliance upon the Administrative Agent, the
Assignor or any other Lender Party and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the
Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Administrative Agent to take such action
------------------
(1) Specify Revolving Credit Commitments and/or Term Loan Commitments here.
(2) Specify Revolving Credit Advances and/or Term Loan Advances here.
(3) Specify Revolving Credit Note or Notes and/or Term Loan Note or Notes
here.
as agent on its behalf and to exercise such powers and discretion under
the Loan Documents as are delegated to the Administrative Agent by the
terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it shall perform in
accordance with their terms all of the obligations that by the terms of
the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender Party; and (vi) attaches any forms required
under Section 2.12 of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it shall be
delivered to the Administrative Agent, together with the processing and
recordation fee specified in the Credit Agreement, for acceptance and
recording by the Administrative Agent. The effective date for this
Assignment and Acceptance (the "EFFECTIVE DATE") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise
specified on Schedule I hereto.
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender Party
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Credit Agreement, except as to Sections 2.10,
2.12 and 8.04 for the period prior to the Effective Date.
6. Upon such acceptance and recording by the Administrative Agent, from
and after the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement and the ______________(3) Notes in
respect of the interest assigned hereby (including, without limitation,
all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the
____________(3) Notes for periods prior to the Effective Date directly
between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving
effect to its conflicts of law principles).
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Assignment and
Acceptance by telecopier shall be as effective as delivery of a
manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
[Signature Pages Follow Schedule 1]
-2-
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
As to the __________(4) Facility in respect of which an interest is being
assigned:
Percentage interest assigned: _____________%
Assignee's _________(5) Commitment: $_____________
Aggregate outstanding principal amount of ___________(6) $_____________
Advances assigned:
Principal amount of __________(7) Note payable to Assignee: $_____________
Principal amount of ________________(4) Note payable to $_____________
Assignor:
Effective Date (if other than date of acceptance by _____________, ________
Administrative Agent):
[Signature Page to Follow]
(4) Specify Revolving Credit Facility and/or Term Loan Facility here.
(5) Specify Revolving Credit Commitments and/or Term Commitments here.
(6) Specify Revolving Credit Advances and/or Term Advances here.
(7) Specify Revolving Credit Note or Notes and/or Term Note or Notes here.
Dated: [NAME OF ASSIGNOR], as Assignor
By:
Name:
Title:
Dated: [NAME OF ASSIGNEE], as Assignee
By:
Name:
Title:
Domestic Lending Office:
Eurodollar Lending Office
Accepted this _____ day of
______________, __________
FLEET NATIONAL BANK, as Administrative Agent
By:__________________________________
Name:________________________________
Title:_________________________________
-2-
EXHIBIT B
FORM OF BORROWING BASE CERTIFICATE
________ __, _____
Fleet National Bank,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
This Certificate is delivered pursuant to the provisions of the Second
Amended and Restated Credit Agreement, dated as of April 15, 2003 (as amended,
supplemented or otherwise modified, the "CREDIT AGREEMENT") among Applied
Graphics Technologies, Inc. (the "BORROWER"), the several banks and other
financial institutions from time to time party to the Credit Agreement (the
"LENDERS") and Fleet National Bank (the "ADMINISTRATIVE Agent"). Capitalized
terms used herein and not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The undersigned hereby certifies that [s]he is an officer of the
Borrower and that, as such, is authorized to execute this Certificate on behalf
of the Borrower and further certifies that:
(a) for purposes of this Certificate, the date of
determination of the Borrowing Base is ______ __,
_____ and
(b) the amounts set forth below are a true and correct
statement of the calculation of the Borrowing Base in
accordance with the provisions of the Credit
Agreement.
Gross Receivables _______________
Accounts excluded from Eligible Receivables:
1. accounts owing from account _______________
debtors located outside of the United
States to the extent not covered by
receivables insurance that is reasonably
satisfactory to the Administrative Agent
2. accounts that are not _______________
assignable or for which a first priority
security interest in such account in favor
of the Administrative Agent for the
benefit of the Lenders has not been
obtained and fully perfected
3. accounts subject to any Lien, _______________
other than (i) Liens in favor of the
Administrative Agent for benefit of the
Lenders and (ii) such other Liens
described in clause (i) of the definition
of Permitted Liens
4. accounts that do not _______________
constitute a legal, valid and binding
irrevocable payment obligation of the
account debtor to pay the balance thereof
in accordance with its terms or is subject
to any asserted or contractual defense,
setoff, recoupment or counterclaim
5. accounts for which the account _______________
debtor has not been sent an invoice
6. accounts more than 90 days _______________
from invoice date
7. accounts from any account _______________
debtor which has filed a petition for
relief under the United States Bankruptcy
Code (or similar action under any
successor law or under any comparable
law), made a general assignment for the
benefit of creditors, had filed against it
any petition or other application for
relief under the United States Bankruptcy
Code (or similar action under any
successor law or under any comparable
law), called a meeting of its creditors
for the purpose of obtaining any financial
concession or accommodation, or had or
suffered a receiver or a trustee to be
appointed for all or a significant portion
of its assets or affairs, or, to the
knowledge of the Borrower or any of its
Subsidiaries, is otherwise winding up its
affairs or has become insolvent; provided,
however, that Eligible Accounts shall
include accounts from any account debtor
that either (A) relate to periods
following the filing of a petition for
relief under the United States Bankruptcy
Code with respect to such account debtor
(except accounts from any account debtor
whose case is converted post-petition to a
case under Chapter 7 of the United States
Bankruptcy Code pursuant to Section 706
thereof) or (B) the payment of which has
been approved by final order of a United
States Bankruptcy Court
8. accounts that have been placed _______________
with an attorney or other third party for
collection
9. accounts from affiliates or _______________
Subsidiaries of the Borrower or any of its
Subsidiaries (except, for purposes of this
item 9 only, accounts from U.S. News &
World Report, L.P., Daily News, L.P. and
Applied Printing Technologies, L.P.;
provided, however, accounts from such
affiliates shall be reduced to the extent
that the Borrower or any of its Domestic
Subsidiaries are liable for goods sold or
services rendered by such affiliates)
10. accounts from employees or _______________
directors of the Borrower or any of its
Subsidiaries
-2-
11. accounts from any account _______________
debtor from whom 30% or more of the
account balance is past 90 days from
invoice date before giving effect to
credit-related charge-offs (i.e.,
excluding normal documented credit memos
or discounts issued in the ordinary course
of business) made during the period 60
days ending on the date of determination
12. accounts with respect to _______________
which the Borrower or any of its
Subsidiaries have not complied with all
material requirements of law applicable to
such account or affecting the
collectability of such account
Eligible Receivables: _______________
Less any reasonable reserves _______________
established by the Administrative Agent
from time to time:
Borrowing Base for such date: 80% _______________
of Eligible Receivables, less any
reasonable reserves established by the
Administrative Agent from time to time:
Aggregate Outstanding Amount of _______________
Revolving Credit Advances:
Excess (Deficit): _______________
-3-
IN WITNESS WHEREOF, I have hereto executed this certificate on behalf
of the Borrower:
Name:
Title:
-4-
EXHIBIT C
FORM OF WARRANT
THIS WARRANT AND THE SHARES OF COMPANY COMMON STOCK ISSUABLE UPON THE EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED UNDER ANY STATE
SECURITIES LAW, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
THEY HAVE BEEN REGISTERED UNDER SUCH LAWS OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AND IF AN EXEMPTION SHALL BE APPLICABLE, THE WARRANT HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH
REGISTRATION IS NOT NECESSARY.
Date of Issuance: ___________, 2003 Number of Shares: _____
(subject to adjustment)
WARRANT CERTIFICATE TO PURCHASE
COMMON STOCK OF
APPLIED GRAPHICS TECHNOLOGIES, INC.
This Warrant Certificate (the "WARRANT CERTIFICATE") is to certify that
[NAME OF LENDER] or its registered assigns (the "WARRANTHOLDER") is entitled, at
any time from the date hereof through the date that is five (5) years from the
date hereof (the "EXPIRATION DATE"), to purchase, at the Exercise Price (as
hereinafter defined), _____ shares (as may be modified pursuant to Section 5,
the "INITIAL EXERCISE AMOUNT") of common stock ("COMPANY COMMON STOCK") of
Applied Graphics Technologies, Inc., a Delaware corporation (the "COMPANY").
Capitalized terms used but not otherwise defined herein shall have the meanings
given to them in the Second Amended and Restated Credit Agreement dated as of
March __, 2003 among the Company, the lenders party thereto, and Fleet National
Bank, as Administrative Agent (as amended, the "CREDIT AGREEMENT").
1. Exercise of Warrant.
1.1 This Warrant Certificate is exercisable by the
Warrantholder at the Exercise Price per share of Company Common Stock issuable
hereunder, payable in cash, by certified or official bank check or by surrender
of (a) other Securities of the Company whose aggregate principal amount or
stated liquidation value, together with any accrued but unpaid interest or
principal due thereon, is equal to the Exercise Price or (b) shares of Common
Stock with an aggregate Fair Market Value, as of the business day on which the
Warrantholder surrenders this Warrant to the Company, equal to the Exercise
Price. In lieu of payment of the Exercise Price as provided above, the
Warrantholder may elect a cashless net exercise. In the case of such cashless
net exercise, the Warrantholder shall surrender this Warrant for cancellation
and receive in exchange therefor the full number of duly authorized, validly
issued, fully paid
and nonassessable shares of Common Stock specified, subject to adjustment in
accordance with Section 5, less the number of shares of Common Stock with an
aggregate Fair Market Value as of the business day on which the Warrantholder
surrenders this Warrant to the Company (the "EXERCISE Date") equal to the
aggregate Exercise Price. Upon surrender of this Warrant Certificate with the
attached Subscription Form duly completed and executed, together with any
required payment of the Exercise Price for the shares of Company Common Stock
being purchased, at the Company's principal executive offices presently located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the Warrantholder shall be
entitled to receive a certificate or certificates for the shares of Company
Common Stock so purchased.
1.2 The purchase rights represented by this Warrant
Certificate are exercisable at the option of the Warrantholder, in whole or in
part (but not as to fractional shares of Company Common Stock), at any time and
from time to time from the date hereof to the Expiration Date.
1.3 In the case of the purchase of less than all the shares of
Company Common Stock purchasable under this Warrant Certificate, the Company
shall cancel this Warrant Certificate upon the surrender hereof and shall
execute and deliver a new Warrant Certificate as soon as practicable to the
Warrantholder of like tenor for the balance of the shares of Company Common
Stock purchasable hereunder.
2. Issuance of Stock Certificates.
2.1 The issuance of certificates for shares of Company Common
Stock upon the exercise of this Warrant Certificate shall be made as soon as
practicable thereafter or in any event within twenty (20) days of such exercise
without charge to the Warrantholder, including, without limitation, any tax that
may be payable in respect thereof, and such certificates shall (subject to the
provisions of this Section 2) be issued in the name of, or in such names as may
be directed by, the Warrantholder; provided, however, that the Company shall not
be required to pay any income tax to which the Warrantholder may be subject in
connection with the issuance of this Warrant Certificate or of shares of Company
Common Stock upon the exercise of this Warrant Certificate; provided, further,
that the Company shall not be required to pay any tax that may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificate in a name other than that of the Warrantholder and the Company shall
not be required to issue or deliver such certificates unless or until the person
or persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
2.2 All shares of Company Common Stock issued upon the
exercise of this Warrant Certificate shall be validly issued, fully paid and
nonassessable.
2.3 Each person in whose name any such certificate for shares
of Company Common Stock is issued shall for all purposes be deemed to have
become the holder of record of such shares on the date on which the Warrant
Certificate was surrendered and payment of the Exercise Price and any applicable
taxes was made, irrespective of the date of delivery of such certificate, except
that, if the date of such surrender and payment is a date when the stock
transfer books of the Company are closed, such person shall be deemed to have
become the holder of such shares at the close of business on the next succeeding
date on which the stock transfer books are open.
-2-
3. Restrictions on Transfer.
3.1 Investment Representation and Transfer Restriction Legend.
The Warrantholder, by acceptance of this Warrant Certificate, represents and
warrants to the Company that it is acquiring this Warrant Certificate and the
shares of Company Common Stock issued or issuable upon exercise hereof (the
"WARRANT SHARES") for its own account, for investment purposes only and not with
a view towards the resale or other distribution thereof. Each certificate
representing Warrant Shares, unless at the same time of exercise such Warrant
Shares are registered under the Act, shall bear a legend in substantially the
following form on the face thereof:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER ANY STATE
SECURITIES LAW, AND MAY NOT BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED UNLESS THEY HAVE BEEN REGISTERED UNDER SUCH LAWS
OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND IF AN
EXEMPTION SHALL BE APPLICABLE, THE WARRANT HOLDER SHALL HAVE
DELIVERED AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT NECESSARY.
Any certificate issued at any time in exchange or substitution
for any certificate bearing such legend (except a new certificate issued upon
completion of a distribution under a registration statement covering the
securities represented thereby) shall also bear such legend unless, in the
opinion of counsel to the Company, the securities represented thereby may be
transferred as contemplated by such Warrantholder without violation of the
registration requirements of the Securities Act.
4. Exercise Price and Exercise Amount.
4.1 Exercise Price. The exercise price of this Warrant
Certificate shall be $0.01 per share of Company Common Stock (the "EXERCISE
PRICE").
4.2 Exercise Amount. The term "EXERCISE AMOUNT" shall mean the
Initial Exercise Amount or the adjusted Exercise Amount determined pursuant to
Section 5 depending upon the context.
5. Adjustment of Exercise Amount and Number of Shares.
5.1 For purposes of this Warrant, the following definitions
shall apply:
(a) "FAIR MARKET VALUE" shall mean (i) with respect to any
Security, (A) if such Security is traded on a national securities
exchange, the Nasdaq Stock Market or the domestic over-the-counter
market, the average of the closing prices of such Security's sales on
all national securities exchanges or markets on which such Security may
at the time be listed, or, if there have been no sales on any such
national securities exchange or market on any day, the average of the
highest bid and lowest asked prices on all such national securities
exchanges or markets at the end of such day, or, if on any day such
Security is not so listed, the average of the representative bid and
asked prices quoted on the Nasdaq Stock Market as of 4:00 p.m., New
York time, or, if on any day such Security is not quoted on the Nasdaq
Stock Market, the average of the highest bid and lowest asked prices on
such day in the domestic over-the-counter market as reported by the
-3-
National Quotation Bureau, Incorporated, or any similar successor
organization, in each such case averaged over a period of twenty
consecutive trading days prior to the date upon which "Fair Market
Value" is sought to be determined, or (B) if such Security is not so
traded, the market price of such Security as determined in good faith
by the Company's board of directors, and (ii) with respect to any
property or assets other than cash or Securities, the fair value
thereof determined in good faith by the Company's board of directors.
(b) "PERSON" shall mean an individual, partnership,
corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.
(c) "SECURITIES" shall mean, with respect to any Person, such
Person's "securities" as defined in Section 2(1) of the Securities Act,
or any other debt or equity securities, and includes such Person's
capital stock or other equity interests or any options, warrants or
other securities or rights that are directly or indirectly convertible
into, or exercisable or exchangeable for, such Person's capital stock
or other equity interests.
5.2 The Exercise Amount specified in Section 4.2 shall be
subject to adjustment from time to time as follows:
(a) Adjustment for Stock Splits and Combinations. If the
Company shall at any time or from time to time after the date this
Warrant Certificate was granted (the "ORIGINAL ISSUE DATE") effect a
subdivision of the outstanding Company Common Stock into a greater
number of shares, the Exercise Amount then in effect immediately before
the subdivision shall be proportionately increased and the Exercise
Price then in effect immediately before the subdivision shall, subject
to Section 8.2(b), be proportionately reduced. If the Company shall at
any time or from time to time after the Original Issue Date combine the
outstanding shares of Company Common Stock into a smaller number of
shares, the Exercise Amount then in effect immediately before the
combination shall be proportionately decreased and the Exercise Price
then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall
become effective at the close of business on the date the subdivision
or combination becomes effective.
(b) Adjustment for Certain Dividends and Distributions. In the
event the Company at any time, or from time to time, after the Original
Issue Date shall make or issue, or fix a record date for the
determination of holders of Company Common Stock entitled to receive, a
dividend or other distribution payable in additional shares of Company
Common Stock, then in each such event the Exercise Amount then in
effect shall be increased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close of
business on such record date, to an amount equal to the amount
determined by multiplying the Exercise Amount then in effect by a
fraction:
(i) the numerator of which shall be the total number
of shares of Company Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of
Company Common Stock issuable in payment of such dividend or
distribution; and
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(ii) the denominator of which shall be the total
number of shares of Company Common Stock issued and
outstanding immediately prior to the time of such issuance or
the close of business on such record date;
provided, however, if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on
the date fixed therefor, the Exercise Amount shall be recomputed
accordingly as of the close of business on such record date and
thereafter the Exercise Amount shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or
distributions.
(c) Adjustments for Other Dividends and Distributions. In the
event the Company at any time or from time to time after the Original
Issue Date shall make or issue, or fix a record date for the
determination of holders of Company Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Company or
any Subsidiary or Affiliate thereof other than shares of Company Common
Stock, then and in each such event provision shall be made so that the
Warrantholder shall receive upon exercise thereof, in addition to the
number of shares of Company Common Stock receivable thereupon, the
amount and type of securities that it would have received had its
Warrant Certificate been exercised for shares of Company Common Stock
on the date of such event and had it thereafter, during the period from
the date of such event to and including the actual exercise date,
retained such securities receivable by it as aforesaid during such
period giving application to all adjustments called for during such
period. In the event of the spinoff or other creation of a subsidiary
or affiliate of the Company whose assets consist in whole or in part of
a significant component of the Company's business (a "SPINOFF
TRANSACTION"), the Warrantholder shall be entitled to receive, without
any requirement that this Warrant be exercised, Warrants (the "NEW
WARRANTS") with terms substantially equivalent to the terms of this
Warrant Certificate, to purchase the amount and type of securities (the
"SPINOFF SECURITIES") that it would have received in such Spinoff
Transaction had this Warrant been exercised immediately prior to such
Spinoff Transaction. The exercise price of the New Warrants (the "NEW
WARRANT EXERCISE PRICE") shall be equal to the Exercise Price in effect
immediately prior to the Spinoff Transaction multiplied by the product
of (A) the relative value per share of the business or assets subject
to the Spinoff Transaction as compared to the total value per share of
the Company at the time of the Spinoff Transaction (as determined in
good faith by the Board) times (B) one (1) minus the percentage of such
business or assets retained by the Company, if any. The Exercise Price
shall thereafter be reduced by the amount of the New Warrant Exercise
Price such that the sum of the New Warrant Exercise Price plus the
Exercise Price shall not exceed the Exercise Price as in effect
immediately prior to the Spinoff Transaction. In the event a Spinoff
Transaction involves a third party whose contribution to the entity or
business subject to the Spinoff Transaction is other than cash or other
consideration to the Company, the Board, in good faith, shall determine
the appropriate adjustment in the application of the provisions in this
Section 5 with respect to the rights and interest thereafter of the
Warrantholder.
(d) Adjustment for Reclassification, Exchange, or
Substitution. If the Company Common Stock issuable upon exercise of
this Warrant Certificate shall be changed into the same or a different
number of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets
provided for below), then and in each such event the Warrantholder
shall have the right thereafter to exercise this Warrant Certificate
for the kind and amount of shares of stock and other securities and
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property receivable upon such reorganization, reclassification, or
other change, by holders of the number of shares of Company Common
Stock into which this Warrant Certificate was exercisable immediately
prior to such reorganization, reclassification, or change, all subject
to further adjustment as provided herein.
(e) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Company with or into another Person
or the sale of all or substantially all of the assets of the Company to
another Person, this Warrant Certificate shall thereafter be
exercisable for the kind and amount of shares of stock or other
securities or property to which a holder of the number of shares of
Company Common Stock of the Company deliverable upon exercise of this
Warrant Certificate would have been entitled upon such consolidation,
merger or sale; and, in such case, appropriate adjustment (as
determined in good faith by the Board) shall be made in the application
of the provisions in this Section 5 with respect to the rights and
interest thereafter of the Warrantholder, to the end that the
provisions set forth in this Section 5 (including provisions with
respect to changes in and other adjustments of the Exercise Amount)
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon exercise of this Warrant Certificate.
(f) No Impairment. The Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder
by the Company but will at all times in good faith assist in the
carrying out of all the provisions of this Section 5 and in the taking
of all such action as may be necessary or appropriate in order to
protect the exercise rights of the Warrantholder against impairment.
(g) Certificate as to Amendments. Upon the occurrence of each
adjustment or readjustment of the Exercise Price pursuant to this
Section 5, the Company at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms thereof and
furnish to each Warrantholder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the
written request at any time of any Warrantholder, furnish or cause to
be furnished to such holder a similar certificate setting forth (i)
such adjustments and readjustments, (ii) the Exercise Amount then in
effect, and (iii) the number of shares of Company Common Stock and the
amount, if any, of other property which then would be received upon
exercise of this Warrant Certificate.
(h) Notice of Record Date. In the event:
(i) that the Company declares a dividend (or any
other distribution) on its Company Common Stock payable in
Company Common Stock or other securities of the Company;
(ii) that the Company subdivides or combines its
outstanding shares of Company Common Stock;
(iii) of any reclassification of the Company Common
Stock (other than a subdivision or combination of its
outstanding shares of Company Common Stock or a stock dividend
or stock distribution thereon), or of any consolidation or
merger of the
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Company into or with another corporation, or of the sale of
all or substantially all of the assets of the Company; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Company;
then the Company shall cause to be filed at its principal
office or at the office of the transfer agent of the Company
Common Stock, and shall cause to be mailed to the
Warrantholders at their last addresses as shown on the records
of the Company or such transfer agent, at least 15 days prior
to the record date specified in (A) below or 30 days before
the date specified in (B) below, a notice stating
(A) the date as of which the holders of Company
Common Stock of record to be entitled to
such dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution,
liquidation or winding up is expected to
become effective, and the date as of which
it is expected that holders of Company
Common Stock of record shall be entitled to
exchange their shares of Company Common
Stock for securities or other property
deliverable upon such reclassification,
consolidation, merger, sale, dissolution or
winding up.
6. Exchange and Replacement of Warrant Certificate.
6.1 On surrender for exchange of this Warrant Certificate, or
any Warrant Certificate or Warrant Certificates issued upon subdivision,
exercise, or transfer in whole or in part of this Warrant Certificate, properly
endorsed, to the Company, the Company at its expense will issue and deliver to
or on the order of the holder thereof a new Warrant Certificate or Warrant
Certificates of like tenor, in the name of such holder or as such holder (on
payment by such holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Company
Common Stock called for on the face or faces of the Warrant Certificate or
Warrant Certificates so surrendered.
6.2 In the event this or any subsequently issued Warrant
Certificate is lost, stolen, mutilated or destroyed, the Company may, upon
receipt of a proper affidavit (and surrender of any mutilated Warrant
Certificate) and an indemnity agreement or security reasonably satisfactory in
form and amount to the Company, in each instance protecting the Company, issue a
new Warrant Certificate of like denomination, tenor and date as the Warrant
Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant
Certificate shall constitute an original contractual obligation of the Company,
whether or not the allegedly lost, stolen, mutilated or destroyed Warrant
Certificate shall be at any time enforceable by anyone.
7. Elimination of Fractional Interests.
7.1 The Company shall not issue any fraction of a share in
connection with the exercise of this Warrant Certificate, but in any case where
the Warrantholder would, except for the provisions of this Section 7, be
entitled under the terms of this Warrant Certificate to receive a fraction of a
share upon the exercise of this Warrant Certificate, the Company shall, upon the
exercise of the Warrant Certificate for the largest number of full shares then
called for thereby and receipt of the Exercise Price
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thereof, pay a sum in cash equal to the Fair Market Value of such fraction of a
share on the day preceding such exercise. The Warrantholder expressly waives its
rights to receive any fraction of a share or a Warrant Certificate representing
a fractional share upon exercise thereof.
7.2 If the taking of any action would cause an adjustment in
the Exercise Price so that the exercise of this Warrant Certificate while such
Exercise Price is in effect would cause shares to be issued at a price below
their then par value, the Company will take such action as may, in the opinion
of its counsel, be necessary in order that it may validly and legally issue
fully paid and nonassessable shares of Company Common Stock upon the exercise of
this Warrant Certificate.
8. Reservation of Shares.
8.1 The Company will cause to be reserved and kept available
out of its authorized and unissued shares of Company Common Stock the number of
whole shares of Company Common Stock sufficient to permit the exercise in full
of this Warrant Certificate.
8.2 The Company will not, by amendment of its charter or
through reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant. Without
limiting the generality of the foregoing, the Company will (a) not increase the
par value of any shares of Common Stock obtainable upon the exercise of this
Warrant and (b) take all such actions as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the exercise of this Warrant.
9. Rights of Warrantholder.
The Company may deem and treat the person in whose name this Warrant
Certificate is registered with it as the absolute owner for all purposes
whatever (notwithstanding any notation of ownership or other writing thereon
made by anyone other than the Company) and the Company shall not be affected by
any notice to the contrary. The terms "Warrantholder" and "holder of the Warrant
Certificate" and all other similar terms used herein shall mean only such
person(s) in whose name(s) this Warrant Certificate if properly registered on
the Company's books. However, notwithstanding the foregoing, no person, entity
or group may become a Warrantholder other than the Warrantholder unless and
until (a) the provisions of Section 3.1 hereof have been complied with, (b) the
Company has received an assignment transferring all right, title and interest in
and to this Warrant Certificate, and (c) such person, entity or group represents
and warrants in writing that it will be the sole legal and beneficial owner
thereof.
10. Notices.
Any notice or demand authorized by this Warrant Certificate to be given
or made by the Warrantholder to or on the Company or to be given or made by the
Company to or on the Warrantholder shall be sufficiently given or made if sent
in writing by first-class mail, postage prepaid, addressed as follows:
(a) If to the Warrantholder, to the address for such holder as
shown on the books of the Company; or
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(b) If to the Company, at the address set forth in Section
8.02 of the Credit Agreement or at such other address as the registered
holder or the Company may hereafter have advised the other.
11. Successors.
All the covenants, agreements, representations and warranties contained
in this Warrant Certificate shall bind the parties hereto and their respective
heirs, executors, administrators, distributees, successors and assigns.
12. Headings.
The Section headings in this Warrant Certificate have been inserted for
purposes of convenience only and shall have no substantive effect.
13. Law Governing.
This Warrant Certificate is delivered in the State of New York and
shall be construed and enforced in accordance with, and governed by, the laws of
the State of New York (without giving effect to the conflict of laws principles
of such state), regardless of the jurisdiction of creation or domicile of the
Company or its successors or of the holder at any time hereof.
14. Remedies.
The Company stipulates that the remedies at law of the holder of this
Warrant Certificate in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this
Warrant Certificate are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
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IN WITNESS WHEREOF, the Company has executed this Warrant
Certificate by its duly authorized officer as of the day and year first above
written.
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:________________________________
Name:
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Title: SUBSCRIPTION FORM
(To Be Executed By The Warrantholder
In Order to Exercise The Warrant Certificate)
The undersigned, pursuant to the provisions set forth in the enclosed
Warrant Certificate, hereby irrevocably elects to exercise the right to purchase
________ shares of Company Common Stock of APPLIED GRAPHICS TECHNOLOGIES, INC.
covered by such Warrant Certificate, and herewith tenders _________ having a
fair market value of $________ in full payment of the Exercise Price for such
shares (which may include foregoing receipt of ___ shares of Company Common
Stock as per Section 1.1 of the Warrant Certificate).
By: ___________________________________
Signature
___________________________________
Name
___________________________________
Address
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EXHIBIT D
FORM OF NOTICE OF BORROWING
[Date]
Fleet National Bank, as Administrative
Agent under the Credit Agreement
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Ladies and Gentlemen:
The undersigned, Applied Graphics Technologies, Inc. (the "BORROWER"),
refers to the Second Amended and Restated Credit Agreement, dated as of April
15, 2003 (as amended, supplemented, restated or otherwise modified, the "CREDIT
AGREEMENT") among the Borrower, certain Lender Parties thereto, Fleet National
Bank, as Issuing Bank, Fleet National Bank, as Swing Line Bank, and Fleet
National Bank, as Administrative Agent for said Lender Parties. Capitalized
terms used herein and not otherwise defined have the meanings ascribed to them
in the Credit Agreement. The Borrower hereby gives the Administrative Agent
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.02 of the Credit Agreement:
(1) The Business Day of the Proposed Borrowing is ____________,
_____.
(2) The Facility under which the Proposed Borrowing is to be made
is the [Revolving Credit Facility] [Term Loan Facility].
(3) The Type of Advances comprising the Proposed Borrowing is
[Prime Rate Advances] [Eurodollar Rate Advances].
(4) The aggregate amount of the Proposed Borrowing is $__________.
(5) The Interest Period for each Eurodollar Rate Advance made as
part of the Proposed Borrowing is ______ month[s].
The undersigned hereby certifies that the following statements are true
and correct on the date hereof, and will be true on the borrowing date:
(a) the representations and warranties contained in each Loan
Document are correct in all material respects on and as of the
date of the Proposed Borrowing (or, if any such representation
or warranty is expressly stated to have been made as of a
specific date, as of such specific date), both before and
after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom, as though made on and
as of such date; and
(b) no event has occurred and is continuing, or would result from
the Proposed Borrowing or from the application of the proceeds
therefrom, that constitutes a Default or an Event of Default.
Very truly yours,
APPLIED GRAPHICS TECHNOLOGIES, INC.
By:
Name:
Title:
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