EXHIBIT 10.9
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AMENDED AND RESTATED CREDIT AGREEMENT
among
ZIFF ▇▇▇▇▇ MEDIA INC., as Borrower;
CIBC WORLD MARKETS CORP., as Lead Arranger and Bookrunner;
DEUTSCHE BANK TRUST COMPANY AMERICAS
(f/k/a Bankers Trust Company), as Syndication Agent;
FLEET NATIONAL BANK, as Documentation Agent;
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent;
and
THE OTHER CREDIT PARTIES PARTY HERETO
Dated as of August 12, 2002
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AMENDED AND RESTATED CREDIT AGREEMENT
among
ZIFF ▇▇▇▇▇ MEDIA INC., as Borrower;
CIBC WORLD MARKETS CORP., as Lead Arranger and Bookrunner;
DEUTSCHE BANK TRUST COMPANY AMERICAS
(f/k/a Bankers Trust Company), as Syndication Agent
FLEET NATIONAL BANK, as Documentation Agent;
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent;
and
THE OTHER CREDIT PARTIES PARTY HERETO
W I T N E S S E T H:
WHEREAS, Ziff ▇▇▇▇▇ Media Inc., a Delaware corporation (the "Borrower"),
CIBC World Markets Corp., as lead arranger and bookrunner, Bankers Trust
Company, as syndication agent, Fleet National Bank, as documentation agent,
Canadian Imperial Bank of Commerce, as administrative agent, and the other
Credit Parties (as defined therein) party thereto are parties to that certain
Credit Agreement dated as of April 5, 2000, as amended by that certain First
Amendment to Credit Agreement dated as of June 12, 2000, as amended by that
certain Second Amendment to Credit Agreement dated as of July 19, 2000, as
amended by that certain Third Amendment to Credit Agreement dated as of January
22, 2001, as amended by that certain Fourth Amendment to Credit Agreement and
Reaffirmation Agreement dated as of July 13, 2001, as amended by that certain
Fifth Amendment to Credit Agreement and Forbearance Agreement dated as of
January 14, 2002 (the "Forbearance Agreement"), as amended by that certain Sixth
Amendment to Credit Agreement and First Amendment to Forbearance Agreement dated
as of March 14, 2002, as amended by that certain Seventh Amendment to Credit
Agreement dated as of May 24, 2002, as amended by that certain Eighth Amendment
to Credit Agreement and Second Amendment to Forbearance Agreement dated as of
June 10, 2002, as amended by that certain Ninth Amendment to Credit Agreement
and Third Amendment to Forbearance Agreement dated as of July 10, 2002 (as
amended, the "Prior Credit Agreement"); and
WHEREAS, pursuant to the terms and conditions of the Forbearance Agreement,
the Credit Parties (as defined in the Prior Credit Agreement) agreed, among
other things, to forbear from the exercise of their remedies available under the
Prior Credit Agreement and the other Loan Documents (as defined in the Prior
Credit Agreement) on account of the Specified Defaults (as defined in the Prior
Credit Agreement), a list of which is attached hereto as Schedule 1; and
WHEREAS, the Borrower has requested that the Credit Parties (as defined in
the Prior Credit Agreement) (a) waive the Specified Defaults (as defined in the
Prior Credit Agreement) and any other Defaults (as defined in the Prior Credit
Agreement) or Events of Default (as defined in the Prior Credit Agreement)
existing under the Prior Credit Agreement as of the date hereof (together with
the Specified Defaults (as defined in the Prior Credit Agreement), the "Existing
Defaults"), (b) forebear permanently from exercising their rights and remedies
arising under the Prior Credit Agreement and the other Loan Documents (as
defined in the Prior Credit Agreement) as a result of such Existing Defaults and
(c) modify the existing credit facilities to the extent set forth herein, and
the Credit Parties (as defined in the Prior Credit
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Agreement) are willing to do so in accordance with and subject to the terms and
conditions set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the security interest
granted to the Administrative Agent, in its capacity as administrative agent for
the Credit Parties (as defined in the Prior Credit Agreement), pursuant to the
Prior Credit Agreement and the other Loan Documents (as defined in the Prior
Credit Agreement), shall remain outstanding and in full force and effect in
accordance with the Prior Credit Agreement and shall continue to secure the
Obligations (as defined herein); and
WHEREAS, each of the Borrower and the Credit Parties acknowledges and
agrees that (a) the Obligations (as defined herein) represent, among other
things, the amendment, restatement, renewal, extension, consolidation and
modification of the Obligations (as defined in the Prior Credit Agreement)
arising in connection with the Prior Credit Agreement and other Loan Documents
(as defined in the Prior Credit Agreement) executed in connection therewith; (b)
the Borrower and the Credit Parties intend that the Prior Credit Agreement and
the other Loan Documents (as defined in the Prior Credit Agreement) executed in
connection therewith and the collateral pledged thereunder shall secure, without
interruption or impairment of any kind, all existing Indebtedness (as defined in
the Prior Credit Agreement) under the Prior Credit Agreement and the other Loan
Documents (as defined in the Prior Credit Agreement) executed in connection
therewith as they may be amended, restated, renewed, extended, consolidated and
modified hereunder, together with all other obligations hereunder; (c) all Liens
(as defined in the Prior Credit Agreement) evidenced by the Prior Credit
Agreement and the other Loan Documents (as defined in the Prior Credit
Agreement) executed in connection therewith are hereby ratified, confirmed and
continued; and (d) the Loan Documents (as defined herein) are intended to
restate, renew, extend, consolidate, amend and modify the Prior Credit Agreement
and the other Loan Documents (as defined in the Prior Credit Agreement) executed
in connection therewith; and
WHEREAS, each of the Borrower and the Credit Parties intend that (a) the
provisions of the Prior Credit Agreement and the other Loan Documents (as
defined in the Prior Credit Agreement) executed in connection therewith, to the
extent restated, renewed, extended, consolidated, amended and modified hereby,
be hereby superseded and replaced by the provisions hereof and of the other Loan
Documents (as defined herein); (b) the Notes (as defined herein) restate, renew,
extend, consolidate, amend, modify, replace, are substituted for and supersede
in its entirety, but do not extinguish, the Indebtedness (as defined in the
Prior Credit Agreement) arising under the Notes (as defined in the Prior Credit
Agreement) issued pursuant to the Prior Credit Agreement; and (c) by entering
into and performing their respective obligations hereunder, this transaction
shall not constitute a novation.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein set forth, as well as for other good and valuable
consideration, the receipt and adequacy of all of the foregoing as legally
sufficient consideration being hereby acknowledged, (a) the Credit Parties
hereby waive (i) the Existing Defaults and (ii) their rights and remedies under
the Prior Credit Agreement and the other Loan Documents (as defined in the Prior
Credit Agreement) which may arise as a result of the Existing Defaults, and (b)
the Borrower and the Credit Parties each do hereby agree that the Prior Credit
Agreement is amended and restated to
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read as follows:
ARTICLE 1
Definitions
For the purposes of this Agreement:
"Accounting Change" shall mean any change in accounting principles required
by any change in GAAP.
"Acquisition" shall mean, with respect to any Person, any transaction or
series of related transactions for the direct or indirect (whether by purchase,
lease, exchange, issuance of stock or other equity or debt securities, merger,
reorganization or any other method) (a) acquisition by such Person of any other
Person, which Person shall then become consolidated with the acquiring Person in
accordance with GAAP, or (b) acquisition by such Person of all or any
substantial part of the assets of any other Person, or (c) acquisition (but not
the formation) by such Person of any publications.
"Administrative Agent" shall mean CIBC, as administrative agent hereunder
for the Lenders and the other Credit Parties, together with any successor
Administrative Agent hereunder.
"Administrative Agent's Office" shall mean the office of the Administrative
Agent, located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
office as may be designated pursuant to the provisions of Section 12.1 of this
Agreement.
"Advance" or "Advances" shall mean amounts advanced to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" shall mean, with respect to a Person, (a) any other Person
directly or indirectly controlling, controlled by, or under common control with,
such first Person; (b) any Person having direct or indirect beneficial ownership
of ten percent (10%) or more of the equity interest in such first Person; (c)
any senior executive officer, director or partner of such Person; or (d) any
spouse or relative (by blood, adoption or marriage) of any such individual
Person. For purposes of this definition, "control" when used with respect to any
Person includes, without limitation, power, whether direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether through the ownership of voting securities or other equity interests, by
contract or otherwise.
"Agents" shall mean, collectively, the Administrative Agent, the Lead
Arranger, the Syndication Agent and the Documentation Agent, and "Agent" shall
mean any one of them.
"Agreement" shall mean this Credit Agreement.
"Agreement Date" shall mean the date as of which this Agreement is dated.
"Applicable Law" shall mean, in respect of any Person, all provisions of
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constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person, including, without limiting the
foregoing, the Necessary Authorizations, zoning ordinances and all Environmental
Laws, and all orders, decisions, judgments and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
or by which it is bound.
"Applicable Margin" shall mean the interest rate margin applicable to
Advances hereunder as determined in accordance with Section 2.3(f) hereof.
"Approved Fund" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund or trust or entity that invests in bank
loans and is advised or managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Assets" shall mean any or all of the property and assets of the Borrower
and its Subsidiaries.
"Assignee" shall have the meaning assigned thereto in Section 12.5(c)
hereof.
"Assignment and Assumption Agreement" shall mean each Assignment and
Assumption Agreement, in substantially the form of Exhibit A attached hereto,
pursuant to which a Lender may, subject to Section 12.5 hereof, sell or
participate a portion of its Loans and Commitments.
"Assignment of Acquisition Documents" shall mean that certain Assignment of
Acquisition Documents dated as of the Original Closing Date among the Borrower
and the Administrative Agent, for the benefit of the Credit Parties, a copy of
which is attached hereto as Exhibit B, pursuant to which the Borrower has
collaterally assigned to the Administrative Agent, for the benefit of the Credit
Parties, all of its interest in and rights under each of the ZD Acquisition
Documents.
"Attributable Indebtedness" in respect of a Sale and Lease-Back Transaction
means, as at the time of determination, the greater of (a) the fair value of the
property subject to such arrangement and (b) the present value (discounted at
the rate of interest implicit in such transaction, determined in accordance with
GAAP and compounded annually) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such Sale and
Lease-Back Transaction (including any period for which such lease has been
extended).
"Authorized Signatory" shall mean such senior personnel of a Person as may
be duly authorized by such Person to execute documents, agreements and
instruments on behalf of such Person.
"Available Cash Flow" shall mean the amount of Excess Cash Flow not
required to prepay the Loans pursuant to Section 2.7(a) hereof to the extent
that such amount has not been used for any other purpose.
"Available Revolving Commitment" shall mean, on any calculation date, the
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excess of (a) the Revolving Commitment on such date, over (b) the aggregate
amount of L/C Obligations then outstanding.
"Bankruptcy Code" shall mean the United States Bankruptcy Code (11 U.S.C.
Section 101 et seq.), as now in effect or hereafter amended, and any successor
statute.
"Base Rate" shall mean, as of any date, an interest rate per annum equal to
the higher of (a) the Prime Rate, or (b) the sum of (i) the Federal Funds Rate,
plus (ii) one-half of one percent (1/2%). The Base Rate shall be adjusted
automatically as of the opening of business on the effective date of each change
in the Prime Rate or the Federal Funds Rate, as the case may be, to account for
such change.
"Base Rate Advance" shall mean an Advance which the Borrower requests to be
made as a Base Rate Advance or which is converted to a Base Rate Advance in
accordance with the provisions of Section 2.2 hereof.
"Borrower" shall have the meaning set forth in the recitals to this
Agreement.
"Borrower Debt" shall mean, as of any calculation date, all Funded Debt of
the Borrower and the Restricted Subsidiaries, on a consolidated basis; provided,
however, solely for purposes of determining the amount of Borrower Debt set
forth in clause (a) of the definition of "Total Leverage Ratio" with respect to
any calculation date occurring prior to the Exchange Interest Commencement Date,
"Borrower Debt" shall exclude the aggregate principal amount of the Exchange
Notes then outstanding.
"Borrower Parties" shall mean, collectively, Holdco, Intermediate Holdco,
the Borrower and the Borrower's Subsidiaries.
"Borrower Pledge Agreement" shall mean that certain Borrower Pledge
Agreement between the Borrower and the Administrative Agent, for the benefit of
the Credit Parties, dated as of the Original Closing Date, a copy of which is
attached hereto as Exhibit C, pursuant to which the Borrower has pledged to the
Administrative Agent all of the Equity Interests owned by the Borrower, whether
now owned or hereafter acquired, in each of its Subsidiaries (other than the
Foreign Subsidiaries, of which sixty-six percent (66%) of the issued and
outstanding Equity Interests are pledged).
"Business Day" shall mean a day on which banks and foreign exchange markets
are open for the transaction of business required for this Agreement in London
and New York, as relevant to the determination to be made or the action to be
taken.
"Capital Expenditures" shall mean, in respect of any Person, expenditures
for the purchase of fixed assets of long-term use which are required to be
capitalized in accordance with GAAP.
"Capitalized Lease Obligation" shall mean that portion of any obligation of
a Person as lessee under a lease which is required to be capitalized on the
balance sheet of such lessee in accordance with GAAP.
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"Cash Equivalents" shall mean, collectively, (a) any Investment in direct
obligations of the United States of America or any agency thereof or obligations
Guaranteed by the United States of America or any agency thereof; (b)
Investments in time deposit accounts, certificates of deposit and money market
deposits maturing within one year of the date of acquisition thereof issued by a
Lender, an Agent, a financial institution which is organized under the laws of
the United States of America, any state thereof or any foreign country
recognized by the United States of America having capital, surplus and undivided
profits aggregating in excess of $500,000,000 (or the foreign currency
equivalent thereof) and whose long-term debt is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any
money market fund sponsored by a registered broker dealer or mutual fund
distributor; (c) repurchase and reverse repurchase obligations with a term of
not more than thirty (30) days for underlying securities of the types described
in clause (a) of this definition entered into with a financial institution
meeting the qualifications described in clause (b) of this definition; (d)
Investments in commercial paper, maturing not more than one hundred eighty (180)
days after the date of acquisition, issued by an issuer (other than an Affiliate
of the Borrower) organized and in existence under the laws of the United States
of America or any foreign county recognized by the United States of America with
a rating at the time as of which any Investment therein is made of "P-1" (or
higher) according to ▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or higher)
according to Standard & Poor's Rating Group; (e) Investments in securities with
maturities of twelve (12) months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by Standard & Poor's Ratings Group or "A" by ▇▇▇▇▇'▇ Investors
Service, Inc.; (f) securities with maturities of two (2) years or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing authority
of any such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least
"A" by Standard & Poor's Rating Group or "A" by Moody's Investor's Service,
Inc.; (g) securities with maturities of one (1) year or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
other financial institution satisfying the requirement of clause (b) above of
this definition; and (h) shares of money market mutual or similar funds which
invest substantially in assets satisfying the requirements of clauses (a)
through (g) of this definition.
"Certificate of Financial Condition" shall mean a certificate, in
substantially the form of Exhibit D attached hereto, signed by a Principal
Officer, together with any schedules, exhibits or annexes appended thereto.
"Change of Control" shall mean any of the following:
(a) the sale, lease, transfer, conveyance or other disposition, other than
by way of merger or consolidation, in one or a series of related transactions,
of all or substantially all of the Assets of, the Borrower and its Subsidiaries
taken as a whole, to any "person" or "group" (as those terms are used in Section
13(d) of the Exchange Act), other than to the Controlling Shareholders and the
Related Parties; or
(b) the approval by the Borrower and the holders of the Borrower's Equity
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Interests of the adoption of a plan for the liquidation or dissolution of the
Borrower; or
(c) any "person" or "group" (as those terms are used in Section 13(d) of
the Exchange Act), other than the Controlling Shareholders, the Related Parties,
Holdco or Intermediate Holdco, becomes the "beneficial owner" (as that term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, through one or more intermediaries, of fifty percent (50%) or more
of the voting power of Holdco; or
(d) any "person" or "group" (as those terms are used in Section 13(d) of
the Exchange Act), other than the Controlling Shareholders and the Related
Parties, becomes the "beneficial owner" (as that term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act) of more than thirty-three and one-third
percent (33-1/3%) of the total voting power of the Equity Interests of Holdco,
and the Controlling Shareholders and the Related Parties beneficially own, in
the aggregate, a lesser percentage of the total voting power of the Equity
Interests of Holdco than such other person or group; or
(e) following an Initial Public Offering, during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Borrower (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
shareholders of the Borrower has been approved by the Controlling Shareholders
and the Related Parties or a majority of the directors then still in office who
either were directors at the beginning of such period or whose election or
recommendation for election was previously so approved) cease to constitute a
majority of the Board of Directors of the Borrower; or
(f) prior to an Initial Public Offering, the failure of the Controlling
Shareholders to own and control, free of any Lien or encumbrance, at least
seventy-five percent (75%) of the Equity Interests of Holdco owned by them
collectively on the Agreement Date; or
(g) the failure of Holdco (or a Controlling Shareholder or a Person
controlled by a Controlling Shareholder) to own and control, free of any Lien or
encumbrance (other than Permitted Liens of the type described in clauses (a),
(b) and (j) of the definition of `Permitted Liens'), (i) prior to any Permitted
Holdco Merger, one hundred percent (100%) of the issued and outstanding Equity
Interests of Intermediate Holdco, and (ii) after any Permitted Holdco Merger,
one hundred percent (100%) of the issued and outstanding Equity Interests of the
Borrower; or
(h) other than in connection with a Permitted Holdco Merger, the failure of
Intermediate Holdco to own and control, free of any Lien or encumbrance (other
than Permitted Liens of the type described in clauses (a), (b) and (j) of the
definition of `Permitted Liens'), one hundred percent (100%) of the issued and
outstanding Equity Interests of the Borrower; or
(i) other than in connection with a Permitted Disposition or the issuance
of Permitted Management Shares, the failure of the Borrower to own and control,
directly or indirectly, free of any Lien or encumbrance (other than Permitted
Liens of the type described in clauses (a), (b) and (j) of the definition of
`Permitted Liens'), one hundred percent (100%) of the issued and outstanding
Equity Interests of each of its Subsidiaries.
"CIBC" shall mean Canadian Imperial Bank of Commerce acting by or through
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one or more of its affiliates, branches or agencies, and any successor thereof.
"Closing Equity" shall mean the sum of those amounts Invested as equity in
Holdco by the Controlling Shareholders and the Co-Investors from and after April
1, 2002 (approximately $71,000,000 of which will consist of cash and the
remainder of which will consist of debt securities).
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Co-Investors" shall mean, collectively, the initial investors in Holdco as
of the Original Closing Date listed on Schedule 2 attached hereto.
"Collateral" shall mean all property pledged as collateral security for the
Obligations pursuant to the Security Documents or otherwise, to the extent set
forth in the Security Documents, and all other property of Holdco, Intermediate
Holdco, the Borrower or any of its Subsidiaries that is now or hereafter in the
possession or control of any Credit Party in which any Credit Party has been
granted a Lien.
"Commitment Ratios" shall mean the several obligations of the Lenders to
make Advances to the Borrower under the Commitments in accordance with their
respective percentages thereof which are set forth (together with dollar
amounts) for each Lender, as of the Agreement Date, on Schedule 8 attached
hereto.
"Commitments" shall mean, collectively, the Revolving Commitment, the Term
A Commitment and the Term B Commitment.
"Contributed Capital" shall mean, with respect to any Acquisition or
Investment, the sum of any amounts Invested in Holdco and contributed to the
Borrower, in the form of an equity contribution or issuance, for the sole
purpose of financing the Purchase Price of such Acquisition or Investment.
"Controlling Shareholders" shall mean, collectively, ▇▇▇▇▇▇ ▇▇▇▇▇ &
Partners II, L.P., a Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III,
L.P., a Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch, L.P., a
Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-A, L.P., a
Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Dutch III-B, L.P., a
Delaware limited partnership, ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners III-C, L.P., a Delaware
limited partnership, and any other investment funds managed by ▇▇▇▇▇▇ ▇▇▇▇▇ &
Partners.
"Credit Parties" shall mean, collectively, the Administrative Agent, the
Syndication Agent, the Documentation Agent, the Lenders and each Issuing Bank.
"Debt Offering" shall have the meaning set forth in Section 2.7(c) hereof.
"Default" shall mean any Event of Default, and any of the events specified
in Section 9.1, which with the passage of time or giving of notice, or both,
would constitute such event an Event of Default.
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"Default Rate" shall mean a simple per annum interest rate equal to the sum
of (a) the Base Rate or the Eurodollar Rate, as applicable, (b) the Applicable
Margin then in effect with respect to Base Rate Advances or Eurodollar Advances,
as applicable, and (c) two percent (2%).
"Disqualified Capital Stock" shall mean any Equity Interests of a Person or
a Subsidiary thereof which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable at the option of the
holder), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
Final Maturity Date, for cash or securities constituting Indebtedness. Without
limitation of the foregoing, Disqualified Capital Stock shall be deemed to
include any Preferred Stock of a Person or a Subsidiary of such Person, with
respect to either of which, under the terms of such Preferred Stock, by
agreement or otherwise, such Person or Subsidiary is obligated to pay current
dividends or distributions in cash during the period prior to the Final Maturity
Date; provided, however, that (a) preferred stock of a Person or any Subsidiary
thereof that is issued with the benefit of customary provisions requiring a
public offering or a change of control offer to be made for such preferred stock
in the event of a change of control or a public offering by such Person or
Subsidiary and (b) Preferred Stock of a Subsidiary of any Person which is held
by such Person, will not be deemed to be Disqualified Capital Stock solely by
virtue of such provisions.
"Documentation Agent" shall mean Fleet National Bank, in its capacity as
documentation agent hereunder.
"Dollars" or "$" shall mean the basic unit of the lawful currency of the
United States of America.
"Draft" shall mean any draft, demand or other presentation for payment
received under a Letter of Credit.
"EBITDA" shall mean, for any period of determination, for the Borrower and
the Restricted Subsidiaries on a consolidated basis, an amount equal to the sum
of (without duplication) (a) Net Income for such period, plus (b) to the extent
deducted in determining Net Income, the sum of each of the following for such
period: (i) Interest Expense, (ii) income, franchise and withholding tax
expense, (iii) depreciation and amortization, (iv) extraordinary, unusual or
non-recurring restructuring charges permitted under GAAP, (v) with respect to
any applicable period, extraordinary, unusual or non-recurring expenses, charges
or losses (other than charges of the type described in the preceding clause
(iv)) incurred prior to the Agreement Date (less extraordinary, unusual or
non-recurring gains attributable to such period), (vi) with respect to any
applicable period, extraordinary, unusual or non-recurring expenses, charges or
losses (other than charges of the type described in the preceding clause (iv))
incurred on and after the Agreement Date to the extent approved by the Agents,
such approval not to be unreasonably withheld (less extraordinary, unusual or
non-recurring gains attributable to such period), (vii) any non-cash charges,
(viii) non-recurring transaction expenses and fees (including, without
limitation, underwriters' fees), and (ix) the Specified Adjustments; provided,
however, for purposes of determining the Senior Leverage Ratio and the Total
Leverage Ratio (including, without limitation, under Section 2.3 and Section 2.4
hereof) and for purposes of determining compliance with the limitations set
forth in Section 7.5(ii), (A) with respect to any Person that
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became a Restricted Subsidiary of, or was merged with or consolidated into, the
Borrower during such period, or the Acquisition by the Borrower or any of the
Restricted Subsidiaries of a substantial part of the assets of any Person during
such period, "EBITDA" shall also include the EBITDA of such Person or
attributable to such assets, as applicable, during such period as if such
Acquisition, merger or consolidation had occurred on the first day of such
period, and (B) with respect to any Person that ceased to be a Restricted
Subsidiary during such period, or any material assets of the Borrower or any of
the Restricted Subsidiaries sold or otherwise disposed of by the Borrower or any
such Restricted Subsidiary during such period, or any publications of the
Borrower or any of the Restricted Subsidiaries discontinued during such period,
"EBITDA" shall exclude the EBITDA of such Person or attributable to such assets
or publications, as applicable, during such period as if such sale, disposition
or discontinuation of such Restricted Subsidiary or such assets had occurred on
the first day of such period.
"Environmental Laws" shall mean, with respect to any Person, all applicable
federal, state, local and municipal laws, statutes, rules, regulations and
ordinances, codes, common law, consent agreements to which such Person is a
party or by which it is bound, orders, decrees, judgments, injunctions, permits,
licenses, authorizations and other requirements issued, promulgated, approved or
entered thereunder affecting such Person or its property and relating to, or
imposing liability or standards of conduct concerning, occupational health and
safety or the pollution or protection of the environment, including, without
limitation, those relating to releases, discharges, emissions, spills, or
disposals to, on, under, or in air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde, or to the treatment,
storage, disposal or management of hazardous substances.
"Equity Collateral Account" shall mean the Borrower's bank account number
▇▇▇▇▇▇▇▇▇▇ with The Bank of New York into which shall be deposited, on the
Agreement Date, a portion of the Closing Equity in an amount equal to not less
than $38,373,600.
"Equity Interests" shall mean, as applied to any Person, any capital stock
(common or preferred), general or limited partnership interests, limited
liability company interests or other equivalents of such Person, regardless of
class or designation, and all warrants, options, purchase rights, conversion or
exchange rights, voting rights, calls or claims of any character with respect
thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Affiliate" shall mean any "affiliate" of the Borrower within the
meaning of Section 414 of the Code.
"eTesting Labs" shall mean eTesting Labs, Inc., a Delaware corporation.
"eTesting Labs Disposition" shall mean the sale of the Equity Interests in
eTesting Labs by the Borrower and LaunchCo consummated prior to the Agreement
Date.
"eTesting Sale Proceeds" shall mean the Net Proceeds received by the
Borrower and LaunchCo in connection with the eTesting Labs Disposition which are
not required to
10
prepay the Loans pursuant to Section 2.7(b) hereof.
"Eurodollar Advance" shall mean an Advance which the Borrower requests
to be made as a Eurodollar Advance or which is continued as or converted to a
Eurodollar Advance in accordance with the provisions of Section 2.2 hereof.
"Eurodollar Advance Period" shall mean, in connection with any
Eurodollar Advance, the term of such Advance selected by the Borrower, which may
be, (x) with respect to any Advance made on or before the Trigger Date, one (1),
two (2) or three (3) months, and (y) with respect to any Advance made after the
Trigger Date, one (1), two (2), three (3) or six (6) months, or in either case,
as otherwise determined in accordance with this Agreement; provided, however,
notwithstanding the foregoing, (a) any applicable Eurodollar Advance Period
which would otherwise end on a day which is not a Business Day shall be extended
to the succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Eurodollar Advance Period shall end on the
preceding Business Day, (b) any applicable Eurodollar Advance Period which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Eurodollar Advance Period is to end shall
(subject to clause (a) above) end on the last day of such calendar month, and
(c) no Eurodollar Advance Period shall extend beyond the applicable Maturity
Date or such earlier date as would interfere with the Borrower's repayment
obligations under Section 2.6 hereof or, to the best knowledge of the Borrower,
Section 2.7 hereof.
"Eurodollar Base Rate" shall mean, with respect to each day during
each Eurodollar Advance Period, the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th
of 1%) of the offered rates for deposits in Dollars with a term comparable to
such Eurodollar Advance Period that appears on the Telerate British Bankers
Assoc. Interest Settlement Rates Page at approximately 11:00 a.m. (London time),
on the second (2/nd/) full Business Day preceding such Eurodollar Advance
Period; provided, however, that if there shall at any time no longer exist a
Telerate British Bankers Assoc. Interest Settlement Rates Page, "Eurodollar
Rate" shall mean, with respect to each day during each Eurodollar Advance
Period, the rate per annum equal to the rate at which the Administrative Agent
is offered Dollar deposits at or about 10:00 a.m. (New York time), two (2)
Business Days prior to the beginning of such Eurodollar Advance Period in the
interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Advances are then being
conducted for delivery on the first day of such Eurodollar Advance Period for
the number of days comprised therein and in the amount comparable to the amount
of its Eurodollar Advance to be outstanding during such Eurodollar Advance
Period. As used herein, "Telerate British Bankers Assoc. Interest Settlement
Rates Page" shall mean the display designated as page 3750 on the Telerate
System Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which Dollar deposits are
offered by leading banks in the London interbank deposit market).
"Eurodollar Rate" shall mean, with respect to each day during each
Eurodollar Advance Period, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
11
Eurodollar Base Rate
------------------------------------------------
1.00 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" shall mean, for any day as applied to
a Eurodollar Advance, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
System or other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of such Board)
maintained by a member bank of the Federal Reserve System.
"Event of Default" shall mean any of the events specified in Section
9.1, provided that any requirement for notice or lapse of time or both has been
satisfied.
"Excess Cash Flow" shall mean, with respect to the Borrower and the
Restricted Subsidiaries on a consolidated basis, as of the end of any fiscal
year of the Borrower and based on the audited financial statements required to
be provided under Section 6.3 hereof, the excess of (a) EBITDA for such fiscal
year, over (b) the sum of the following items, without duplication, for such
fiscal year: (i) Fixed Charges (less cash Interest Expense paid with respect to
the Exchange Notes on or before the four year anniversary of the Agreement
Date), (ii) to the extent added to Net Income in the calculation of EBITDA,
extraordinary, unusual or non-recurring cash expenses, charges or losses (less
extraordinary, unusual or non-recurring cash gains), (iii) increases in net
working capital (less any decreases in net working capital), (iv) to the extent
added to Net Income in the calculation of EBITDA, non-recurring cash transaction
expenses and fees, (v) to the extent not deducted in the calculation of EBITDA,
any cash payments made in respect of restructuring charges or reserves, (vi) any
cash Restricted Payments made by the Borrower pursuant to Section 7.7, and (vii)
non-cash charges added back in the calculation of EBITDA in a previous period to
the extent any such charge has become a cash item in the current period.
"Excess Cash Flow Recapture Date" shall mean, with respect to each
fiscal year of the Borrower, that date which is the earlier to occur of (a) one
hundred five (105) days after the end of such fiscal year, and (b) the date on
which the Borrower shall have provided to the Credit Parties the financial
statements required to be provided under Section 6.3 hereof with respect to such
fiscal year.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as it
may be amended, and any successor act thereto.
"Exchange Interest Commencement Date" shall mean the earlier of (a)
the first date on which the Borrower is required to make any cash payment of
interest on the Exchange Notes and (b) the date on which the Borrower shall, at
its option, make the third consecutive payment of interest on the Exchange Notes
following the two year anniversary of the Agreement Date.
"Exchange Notes" shall mean the Senior Subordinated Compounding Notes
due
12
2009 issued by the Borrower on the Agreement Date in an aggregate original
principal amount not to exceed $95,000,000, in connection with the Exchange
Offer pursuant to the terms and conditions of the Exchange Notes Indenture.
"Exchange Notes Indenture" shall mean that certain Indenture dated as
of the Agreement Date, among the Borrower, the guarantors named therein and
Deutsche Bank Trust Company Americas, as trustee, in respect of the Exchange
Notes.
"Exchange Offer" shall mean the exchange by the Borrower and Holdco of
certain of the Refinancing Securities for combination of cash, the Exchange
Notes, Equity Interests in Holdco and warrants to purchase additional Equity
Interests in Holdco pursuant to the terms and conditions of the Exchange Offer
Documents and the related consent solicitation to amend the Refinancing
Securities Indenture.
"Exchange Offer Documents" shall mean, collectively, (a) that certain
Offer to Exchange, dated as of June 17, 2002, made by the Borrower and Holdco,
(b) the Exchange Notes, (c) the Exchange Notes Indenture and (d) all other
documents and agreements executed in connection with consummation of the
Exchange Offer.
"Existing Defaults" shall have the meaning set forth in the recitals
to this Agreement.
"Federal Funds Rate" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three (3) federal
funds brokers of recognized standing selected by the Administrative Agent.
"Final Maturity Date" shall mean March 31, 2007, or such earlier date
on which the payment of all outstanding Obligations in respect of the Term B
Loans shall be due (whether by acceleration or otherwise).
"Financial Covenants" shall mean from time to time the financial
covenants applicable to the Borrower from time to time as set forth in Article 8
hereof.
"Financial Statements" shall have the meaning assigned thereto in
Section 4.1(k) hereof.
"Fixed Charge Coverage Ratio" shall mean, on any calculation date, for
the Borrower and the Restricted Subsidiaries on a consolidated basis, the ratio
of (a) EBITDA to (b) the result of (i) Fixed Charges (other than any scheduled,
permanent payments of principal made prior to the Agreement Date in respect of
the Loans), minus (ii) cash payments related to Interest Expense and, to the
extent that any such payments constitute Interest Expense, up to $23,000,000 of
any other cash payments, in each case, paid or payable with respect to any
Refinancing Securities exchanged for Exchange Notes in connection with the
Exchange Offer, minus (iii) cash Interest Expense with respect to the Loans and
the Revolving Commitment payable during
13
periods ending prior to the Agreement Date, in each case for the immediately
preceding four (4) fiscal quarter period; provided, however, for purpose of
determining Fixed Charges for the foregoing calculation, Interest Expense with
respect to the Loans and the Revolving Commitment shall be, (i) for the period
ended on December 31, 2002, cash Interest Expense with respect to the Loans and
the Revolving Commitment for the immediately preceding fiscal quarter, times
four (4), (ii) for the period ended on March 31, 2003, cash Interest Expense
with respect to the Loans and the Revolving Commitment for the immediately
preceding two (2) fiscal quarter period, times two (2), and (iii) for the period
ended on June 30, 2003, cash Interest Expense with respect to the Loans and the
Revolving Commitment for the immediately preceding three (3) fiscal quarter
period, times four-thirds (4/3).
"Fixed Charges" shall mean, for any period, for the Borrower and its
Restricted Subsidiaries, on a consolidated basis, the sum of the following for
such period: (a) cash Interest Expense; (b) scheduled, permanent principal
repayments with respect to Borrower Debt; (c) Capital Expenditures (other than
Capital Expenditures funded by Available Cash Flow); (d) cash income, franchise
and foreign withholding taxes payable; (e) Investments in or loans to the
Unrestricted Subsidiaries (other than any such Investments or loans funded by
Specified Equity Contributions, eTesting Sale Proceeds or Available Cash Flow);
and (f) Restricted Payments permitted under Sections 7.7(c) or (f) hereof.
"Forbearance Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Foreign Subsidiaries" shall mean, collectively, Ziff ▇▇▇▇▇ Europe
Ltd., Ziff ▇▇▇▇▇ Publishing (UK) Ltd., Ziff ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇. ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ S.A.
"Funded Debt" shall mean, with respect to any Person as of any
calculation date, the sum of the following as of such date: (a) the principal
amount of all outstanding Indebtedness for money borrowed of such Person
including, without limitation, with respect to the Borrower Parties, the
aggregate principal amount of the Loans, the Refinancing Securities and the
Exchange Notes; (b) the principal amount of all Indebtedness for money borrowed
of another Person (other than, with respect to the Borrower, any Restricted
Subsidiary) Guaranteed by such Person; (c) the stated amount of all letters of
credit issued for the account of such Person and all reimbursement obligations
with respect to such letters of credit; and (d) all Capitalized Lease
Obligations of such Person; provided, however, that Subordinated Management
Redemption Debt shall be excluded from Funded Debt.
"GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied.
"Governmental Authority" shall mean any government or political
subdivision of the United States or any other country or any agency, authority,
board, bureau, central bank, commission, department or instrumentality thereof
or therein, including, without limitation, any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to such government or political subdivision.
14
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean
and include (a) a guaranty, direct or indirect, in any manner, of all or any
part of such obligation, and (b) any agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation.
"Hazardous Materials" shall mean any substances, materials, compounds
or wastes defined, listed, or subject to control under any Environmental Law as
being hazardous, toxic, extremely hazardous or dangerous.
"Hedging Agreements" shall mean, collectively, (a) Interest Hedge
Agreements and (b) any agreements or arrangements entered into in order to
protect against fluctuations in commodity prices or currency exchange rates.
"Holdco" shall mean Ziff ▇▇▇▇▇ Holdings Inc., a Delaware corporation.
"Holdco Pledge Agreement" shall mean that certain Amended and Restated
Holdco Pledge Agreement among Holdco, Intermediate Holdco and the Administrative
Agent, for the benefit of the Credit Parties, dated as of the Agreement Date, in
substantially the form attached hereto as Exhibit E.
"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities and accrued expenses incurred in the ordinary course of business and
payable within one hundred eighty (180) days) which would be shown as a
liability on the balance sheet of such Person under GAAP, (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all Capitalized Lease Obligations of such Person, (d)
all obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations issued or created for the account of such
Person, (e) all liabilities secured by any Lien on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (f) liabilities arising under Hedging Agreements (other
than interest rate caps) of such Person, (g) withdrawal liabilities of such
Person or any of its ERISA Affiliates under any Plan, and (h) all obligations of
such Person in respect of any Guaranty, if the primary obligations would
constitute Indebtedness of another Person under clauses (a) through (g) of this
definition; provided, in any case, that the amount of Indebtedness which is
limited or non-recourse to the obligor thereunder or to such Person or for which
recourse is limited to an identified asset shall be equal to the lesser of (i)
the limited amount of such obligation and (ii) the fair market value of such
asset; provided, however, that accrued interest on the Exchange Notes reflected
on the Borrower's financial statements arising out of the "troubled debt
accounting" provisions set forth in the Statement of Financial Accounting
Standards No. 15, or any successor provisions promulgated thereunder, shall be
excluded from Indebtedness.
"Indemnified Parties" shall mean those Persons eligible to be
indemnified by the Borrower and its Subsidiaries pursuant to this Agreement, and
shall include each of the Credit Parties and each of their respective employees,
representatives, officers, agents, directors and Affiliates.
15
"Initial Maturity Date" shall mean September 30, 2006, or such earlier date
on which the payment of all outstanding Obligations in respect of the Revolving
Commitment and the Term A Loans shall be due (whether by acceleration or
otherwise).
"Initial Public Offering" shall mean the first public offering of the
common Equity Interests of Holdco.
"Insolvency Proceeding" shall mean, collectively, any insolvency,
receivership, bankruptcy, dissolution, liquidation, or reorganization
proceeding, or in any other proceeding, whether voluntary or involuntary, by or
against any of Holdco or its Subsidiaries (other than any of the Foreign
Subsidiaries) under any bankruptcy or insolvency law or laws, federal or state
relating to the relief of debtors of any jurisdiction, whether now or hereafter
in effect, and in any out-of-court composition, assignment for the benefit of
creditors, readjustment of Indebtedness, reorganization, extension or other debt
arrangement of any kind.
"Intellectual Property Security Agreement" shall mean that certain
Intellectual Property Security Agreement between Pub Holdco and the
Administrative Agent, for the benefit of the Credit Parties, dated as of the
Original Closing Date, as amended by that certain First Amendment to
Intellectual Property Security Agreement dated as of December 10, 2001, and as
further amended by that certain Second Amendment to Intellectual Property
Security Agreement dated as of the Agreement Date, a copy of all of which is
attached hereto as Exhibit F, and any similar agreement delivered pursuant to
Section 5.14 hereof.
"Interest Coverage Ratio" shall mean, on any calculation date, for the
Borrower and the Restricted Subsidiaries on a consolidated basis, the ratio of
(a) EBITDA to (b) the result of (i) cash Interest Expense, minus (ii) cash
payments related to Interest Expense and, to the extent that any such payments
constitute Interest Expense, up to $23,000,000 of any other cash payments, in
each case, paid or payable with respect to any Refinancing Securities exchanged
for Exchange Notes in connection with the Exchange Offer, minus (iii) cash
Interest Expense payable with respect to the Loans and the Revolving Commitment
during periods ending prior to the Agreement Date, in each case for the
immediately preceding four (4) fiscal quarter period; provided, however, for
purpose of the foregoing calculation, Interest Expense with respect to the Loans
and the Revolving Commitment shall be, (i) for the period ended on December 31,
2002, cash Interest Expense with respect to the Loans and the Revolving
Commitment for the immediately preceding fiscal quarter, times four (4), (ii)
for the period ended on March 31, 2003, cash Interest Expense with respect to
the Loans and the Revolving Commitment for the immediately preceding two (2)
fiscal quarter period, times two (2), and (iii) for the period ended on June 30,
2003, cash Interest Expense with respect to the Loans and the Revolving
Commitment for the immediately preceding three (3) fiscal quarter period, times
four-thirds (4/3).
"Interest Expense" shall mean, for any period, for the Borrower and the
Restricted Subsidiaries on a consolidated basis, all interest expense paid or
accrued in respect of Indebtedness or the Revolving Commitment (including,
without limitation, any imputed interest with respect to Attributable
Indebtedness, together with recurring fees (but, in any event, including,
without limitation, all fees due under Sections 2.4(b), (c) and (d) hereof)
associated therewith (other than fees payable on or prior to the Agreement Date)
and whether or not
16
capitalized (including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest component
of any deferred payment obligations, commissions, discounts and other fees and
charges incurred in respect of letters of credit, bankers' acceptances or other
financings), after giving effect to any Interest Hedge Agreements, all as
determined in accordance with GAAP.
"Interest Hedge Agreements" shall mean any interest rate swap, cap, collar,
floor, caption or swaption agreements, or any similar arrangements designed to
hedge the risk of variable interest rate volatility or to reduce interest costs,
arising at any time between the Borrower, on the one hand, and any one or more
of the Lenders, or any other Person (other than an Affiliate of the Borrower),
on the other hand, as such agreement or arrangement may be modified,
supplemented and in effect from time to time.
"Intermediate Holdco" shall mean Ziff ▇▇▇▇▇ Intermediate Holdings Inc., a
Delaware corporation.
"InternetCo" shall mean Ziff ▇▇▇▇▇ Internet Inc., a Delaware corporation.
"InternetCo Group" shall mean, collectively, InternetCo and its
Subsidiaries.
"Investment" shall mean (as calculated in accordance with GAAP), with
respect to any Person, any loan or extension of credit (other than in the
ordinary course of business) by such Person to, or any contributions to the
capital of, any other Person, or any ownership, purchase or other acquisition by
such Person of any interest in any Equity Interests of any such other Person,
other than an Acquisition; and "Invest," "Investing" or "Invested" shall mean
the making of an Investment. The amount of any Investment, with respect to the
Borrower Parties, shall be the greater of (a) the original cost of such
Investment plus the cost of all additional Investments by the Borrower Parties,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment, reduced by the (i)
amount returned in cash with respect to such Investment whether through interest
payments, principal payments, dividends or other distributions and (ii) proceeds
received by the Borrower Parties from the disposition, retirement or redemption
of all or any portion of such Investment, and (b) zero.
"Issuing Bank" shall mean the Administrative Agent, any of the Lenders
hereunder or any of their Affiliates, as issuer of any Letter of Credit
hereunder.
"LaunchCo" shall mean Ziff ▇▇▇▇▇ Development Inc., a Delaware corporation.
"LaunchCo Group" shall mean, collectively, LaunchCo and its Subsidiaries.
"L/C Obligations" shall mean, at any date, the sum (without duplication) of
(a) the aggregate amount then available to be drawn under all outstanding
Letters of Credit and (b) the aggregate amount of drawings under Letters of
Credit which have not then been reimbursed by the Borrower pursuant to Section
2.14(e) hereof.
"L/C Participants" shall mean with respect to any Letter of Credit,
collectively, all of the Lenders which have issued a Revolving Commitment other
than the Issuing Bank with
17
respect thereto.
"L/C Participating Interest" shall mean with respect to any Letter of
Credit (a) in the case of the Issuing Bank with respect thereto, its interest in
such Letter of Credit and any Letter of Credit Application relating thereto
after giving effect to the granting of participating interests therein, if any,
pursuant hereto and (b) in the case of each L/C Participant, its undivided
participating interest in such Letter of Credit and any Letter of Credit
Application relating thereto.
"Lead Arranger" shall mean CIBC World Markets Corp.
"Lender Addendum" shall mean, with respect to any Lender, a Lender
Addendum, substantially in the form of Exhibit G attached hereto, to be executed
and delivered by such Lender on the Agreement Date as provided in Section 12.15
hereof.
"Lenders" shall mean the financial institutions or other entities that from
time to time become parties to this Agreement as Lenders; and "Lender" shall
mean any one of the foregoing Lenders.
"Letter of Credit Application" shall mean an application in such form as
any Issuing Bank may specify from time to time requesting such Issuing Bank to
issue a Letter of Credit; provided, however, that to the extent any Letter of
Credit Application shall be inconsistent with this Agreement, this Agreement
shall control.
"Letter of Credit Committed Amount" shall mean $5,000,000.
"Letters of Credit" shall mean any and all letters of credit issued by any
Issuing Bank for the account of the Borrower pursuant to Section 2.14 of this
Agreement.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, collateral assignment, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether created by statute,
contract, common law or otherwise, and whether ▇▇▇▇▇▇ or inchoate, vested or
perfected.
"Loan Documents" shall mean, without limitation, this Agreement, the Notes,
the Security Documents, all Requests for Advance, all Requests for Issuance of
Letters of Credit, the Use of Proceeds Letter, the Certificate of Financial
Condition, all Performance Certificates, all Letters of Credit issued hereunder,
all Interest Hedge Agreements with respect to the Loans with a Lender or any
Affiliate of a Lender, and any other agreement executed and delivered to a
Credit Party by Holdco, Intermediate Holdco, the Borrower or any of the
Borrower's Subsidiaries pursuant to, or otherwise in connection with, the
transactions contemplated by this Agreement.
"Loans" shall mean, collectively, the Revolving Loans and the Term Loans.
"Management Notes" shall mean, with respect to Holdco and its Subsidiaries,
any Indebtedness for money borrowed issued in favor of any such Person by an
employee of such
18
Person to finance the purchase of Equity Interests by such employee.
"Management Redemption Debt" shall mean any Indebtedness issued by Holdco
or any of its Subsidiaries in favor of any officers, directors or employees of
the Borrower or any of its Subsidiaries in connection with the purchase or
redemption of Management Shares from such Person.
"Management Shares" shall mean the Equity Interests, if any, of PubCo, any
member of the LaunchCo Group or any member of the InternetCo Group issued by
such Person to its employees; provided that such Equity Interests shall be
issued pursuant to an agreement, in form and substance satisfactory to the
Agents (it being understood that any such agreement shall include a grant by the
recipients of such Equity Interests to the other holders of the Equity Interests
of such issuer and to the Administrative Agent, on behalf of the Credit Parties,
to require that in the event of the sale of all or substantially all of the
Equity Interests of such issuer to a third party, such employee shall be
required to sell such Equity Interests to such third party).
"Material Contracts" shall have the meaning assigned thereto in Section
4.1(y) hereof.
"Material Leases" shall have the meaning assigned thereto in Section
4.1(cc) hereof.
"Materially Adverse Effect" shall mean (a) any material adverse effect upon
the business, operations, properties, financial condition, prospects,
capitalization, assets or liabilities or results of operations of Holdco,
Intermediate Holdco, the Borrower and the Restricted Subsidiaries, taken as a
whole, or (b) a material adverse effect upon the binding nature, validity, or
enforceability of this Agreement and the other Loan Documents or upon the
ability of Holdco, Intermediate Holdco, the Borrower or any of the Borrower's
Subsidiaries to perform the payment obligations or other material obligations
under this Agreement or under the other Loan Documents taken as a whole, or upon
the rights, benefits or interests of the Lenders, taken as a whole, in and to
the Loans or the rights of the Administrative Agent in the Collateral; in either
case, whether resulting from any single act, omission, situation, status, event
or undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"Maturity Date" shall mean, with respect to all amounts owing, or Advances
made, under (a) the Revolving Commitment or the Term A Commitment, the Initial
Maturity Date, and (b) the Term B Commitment, the Final Maturity Date.
"Mortgage" shall mean any mortgage, deed to secure debt, deed of trust, or
other instrument encumbering or transferring title (in fee simple or leasehold)
to real property, in form and substance satisfactory to the Administrative
Agent, by which the Borrower or any of its domestic Subsidiaries grants a
mortgage to the Administrative Agent, for the benefit of the Credit Parties, in
real estate owned or leased by the Borrower or such domestic Subsidiary.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.
"Necessary Authorizations" shall mean all approvals and licenses from, and
all
19
filings and registrations with, any governmental or regulatory authority
necessary to enable the Borrower and its Subsidiaries to conduct their business.
"Net Income" shall mean, for the Borrower and the Restricted Subsidiaries
on a consolidated basis, for any period, net income determined in accordance
with GAAP.
"Net Proceeds" shall mean, with respect to (a) any sale, lease, transfer or
other disposition (including, without limitation, by casualty loss or
condemnation) of Assets by the Borrower or any of its Subsidiaries, or (b) any
issuance by the Borrower or any of its Subsidiaries of any Equity Interests or
other debt or equity securities (in the case of (a) or (b), a "Sales
Transaction"), or (c) any "key-man" life insurance policy, the aggregate amount
of cash received for such Assets or securities (including, without limitation,
any payments received in respect of covenants not to compete, consulting or
management fees, and any portion of the amount evidenced by a buyer promissory
note or other evidence of Indebtedness), or as a payment under any "key-man"
life insurance policies, net of, in the case of any Sales Transactions, (i)
taxes payable with respect to any such Sales Transaction, (ii) contingencies
with respect to any such Sales Transaction, appropriately reserved for by the
Borrower or the applicable Subsidiary under GAAP, or escrowed funds, (iii)
reasonable and customary transaction fees, expenses and costs properly
attributable to such Sales Transaction and payable by the Borrower or any of its
Subsidiaries (other than to an Affiliate) in connection with such Sales
Transaction, including, without limitation, sales commissions and underwriting
discounts, and (iv) all payments made on any Indebtedness which is secured by
any assets subject to such Sales Transaction in accordance with the terms of any
Lien upon or other security arrangement of any kind with respect to such Assets,
or which must by its terms, or in order to obtain a necessary consent to such
Sales Transaction or by Applicable Law, be repaid out of the proceeds from such
Sales Transaction.
"Net Proceeds Trust" shall have the meaning assigned thereto in Section
2.7(b)(iii) hereof.
"Notes" shall mean, collectively, any Revolving Notes and any Term Notes.
"Notice of Conversion/Continuation" shall mean a notice in substantially
the form of Exhibit H attached hereto.
"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of any of the Borrower Parties to the Credit
Parties (or their respective Affiliates in the case of Interest Hedge
Agreements), or any of them, under this Agreement and the other Loan Documents
(including, without limitation, any interest, fees, costs, expenses and other
charges accruing after any Insolvency Proceeding commences regardless of whether
such interest, fees, costs, expenses or other charges are deemed allowed or
recoverable in such Insolvency Proceeding), as they may be amended from time to
time, or as a result of making the Loans, whether such obligations are direct or
indirect, absolute or contingent, due or not due, contractual or tortious,
liquidated or unliquidated, arising by operation of law or otherwise, now
existing or hereafter arising, and (b) the obligation to pay an amount equal to
the amount of any and all damage which the Credit Parties (or their respective
Affiliates in the case of Interest Hedge Agreements), or any of them, may suffer
by reason of a
20
breach by any of the Borrower Parties of any obligation, covenant or undertaking
with respect to this Agreement or any other Loan Document.
"Original Closing Date" shall mean April 5, 2000.
"Participants" shall have the meaning assigned thereto in Section
12.5(b) hereof.
"Participated Term Loans" shall mean, collectively, the Term Loans
subject to any participation arrangements among the Lenders holding such Term
Loans, the Controlling Shareholders and the Co-Investors.
"Payment Date" shall mean the last day of any Eurodollar Advance
Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Performance Certificate" shall mean a certificate of a Principal
Officer as to the Borrower's financial performance, in substantially the form
attached hereto as Exhibit I.
"Permitted Acquisitions" shall mean Acquisitions made by the Borrower
or any of its Subsidiaries as and to the extent permitted under Section 7.5(v)
hereof.
"Permitted Disposition" shall mean any sale, lease, abandonment,
transfer, trade or other disposition of Assets by the Borrower or any of its
Subsidiaries as and to the extend permitted under Section 7.5(ii) hereof.
"Permitted Holdco Merger" shall have the meaning set forth in Section
7.5(i) hereof.
"Permitted Investments" shall mean Investments described in and
permitted to be made under Section 7.2 hereof.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien granted in favor of the Administrative Agent, for the
benefit of the Credit Parties, given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes not yet delinquent
and (ii) Liens for taxes, assessments, judgments, governmental charges or levies
or claims which are not yet delinquent or the non-payment of which is being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves have been set aside on such Person's books, but only so long
as no foreclosure, distraint, sale or similar proceedings have been commenced
with respect thereto;
(c) Liens of landlords, carriers, warehousemen, mechanics, laborers
and materialmen, or other similar Liens, and Liens arising by operation of law,
which do not materially detract from the value of the property or which are for
sums not yet due or being diligently contested in good faith, if reserves or
appropriate provisions shall have been made
21
therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation and unemployment insurance;
(e) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not materially interfere with
the ordinary conduct of the business of such Person or materially detract from
the utility or value of such real property, or Liens incidental to the conduct
of the business of such Person or to the ownership of its properties which were
not incurred in connection with Indebtedness or other extensions of credit and
which do not in the aggregate materially detract from the value of such
properties or materially impair their use in the operation of the business of
such Person;
(f) Liens securing conditional sale, rental or purchase money
obligations permitted to be incurred pursuant to Section 7.1(c) hereof, but only
in the property that is the subject of such obligation;
(g) Liens granted to secure the performance of letters of credit,
bids, tenders, contracts, leases, public or statutory obligations, surety,
customs, appeal and performance bonds and other similar obligations incurred in
the ordinary course of business and not incurred in connection with the
borrowing of money;
(h) Any interest in or title of a lessor to any property subject to a
Capitalized Lease Obligation permitted to be incurred pursuant to Section 7.1(b)
hereof;
(i) Liens existing on the Agreement Date and set forth on Schedule 3
attached hereto;
(j) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.1(h) hereof;
(k) Licenses, leases or subleases granted to third Persons in the
ordinary course of business of the Borrower or any of its Subsidiaries;
(l) Liens consisting of rights of set-off of a customary nature or
bankers' liens on amounts on deposit, whether arising by contract or operation
of law, incurred in the ordinary course of business;
(m) Liens encumbering initial deposits and margin deposits, and
similar Liens attaching to commodity trading accounts or other brokerage
accounts incurred in the ordinary course of business;
(n) Liens solely on any ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits made by the
Borrower or any of its Subsidiaries in connection with any letter of intent or
purchase agreement entered into by it in compliance with Section 7.5 hereof;
(o) Any interest, right or title of a lessor, licensor or sublessor
arising by operation of law or by contract, provided that any such interest
arising by contract shall (i) be
22
customary and in the ordinary course of business, (ii) be limited in scope to
the property subject to such contract and (iii) secure only the obligations
arising under such contract (which obligations shall not constitute Funded
Debt);
(p) Liens of any lessor of real property arising in respect of any
deposit that the Borrower or any of its Subsidiaries are required to make with
respect thereto; and
(q) Liens incurred in the ordinary course of business of the Borrower
and its Subsidiaries with respect to obligations that do not exceed $1,500,000
at any one time outstanding.
"Permitted Management Shares" shall mean Management Shares
representing up to ten percent (10%) of the Equity Interests in each of PubCo,
the members of LaunchCo Group and the members of the InternetCo Group.
"Person" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political subdivision
thereof, or any other entity.
"Plan" shall mean, with respect to any Person, an employee benefit
plan within the meaning of Section 3(3) of ERISA or any other employee benefit
plan maintained for employees of such Person.
"Preferred Stock" shall mean any Equity Interests of a Person, however
designated, which entitle the holders thereof to a preference with respect to
dividends, distributions or liquidation proceeds of such Person over the holders
of other Equity Interests issued by such Person.
"Prime Rate" shall mean, at any time, the rate of interest adopted by
the Administrative Agent as its reference rate for the determination of interest
rates for loans of varying maturities in United States dollars to United States
residents of varying degrees of creditworthiness and being quoted at such time
by the Administrative Agent as its "prime rate." The Prime Rate is not
necessarily the lowest rate of interest charged to borrowers of the
Administrative Agent or its Affiliates.
"Principal Officer" shall mean any of the chief executive officer, the
chief financial officer, the chief operating officer or the president of the
Borrower.
"Prior Credit Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Pro Rata Class" shall mean, as of any date of determination,
collectively, those Lenders having issued a Revolving Commitment and those
Lenders having any Term A Loans then outstanding.
"Projections" shall have the meaning assigned thereto in Section
3.1(e) hereof.
"Property" shall mean, with respect to any Person, any real property
or personal
23
property, plant, building, facility, structure, underground storage tank or
unit, equipment, inventory or other asset owned, leased or operated such Person
(including, without limitation, any surface water thereon or adjacent thereto,
and soil and groundwater thereunder).
"PubCo" shall mean Ziff ▇▇▇▇▇ Publishing Inc., a Delaware corporation.
"Pub Holdco" shall mean Ziff ▇▇▇▇▇ Publishing Holdings Inc., a
Delaware corporation.
"Purchase Price" shall mean, with respect to each Permitted
Acquisition and each Permitted Disposition, the total consideration payable in
connection with such Permitted Acquisition or Permitted Disposition, as the case
may be, whether payable in cash, securities, by a note or other property, or by
the assumption of Indebtedness (including, without limitation all post-closing
purchase price adjustments).
"Reaffirmation Agreement" shall mean that certain Reaffirmation
Agreement among each of the Borrower Parties and the Administrative Agent, for
the benefit of the Credit Parties, dated as of the Agreement Date, in
substantially the form of Exhibit J attached hereto.
"Refinancing Securities" shall mean the unsecured 12% Senior
Subordinated Notes due 2010 issued by the Borrower in an aggregate principal
amount of $250,000,000, pursuant to the terms and conditions of the Refinancing
Securities Indenture.
"Refinancing Securities Documents" shall mean, collectively, the
Refinancing Securities, the Refinancing Securities Indenture and all schedules
and exhibits thereto and documents executed in connection therewith.
"Refinancing Securities Indenture" shall mean that certain Indenture
dated as of July 21, 2000, among the Borrower, as issuer, the guarantors named
therein and Bankers Trust Company (now known as Deutsche Bank Trust Company
Americas), in respect of the Refinancing Securities.
"Register" shall have the meaning assigned thereto in Section 12.5(d)
hereof.
"Related Parties" shall mean, collectively, the Co-Investors and any
other investors in Holdco after the Original Closing Date, in each case which
have entered into shareholders agreements with the Controlling Shareholders
providing for, among other things, the right of the Controlling Shareholders to
vote the interests of such Co-Investor or other investor, as the case may be, on
all matters related to or restricted by the terms of the Loan Documents which
are presented to the shareholders of Holdco for a vote.
"Reportable Event" shall have the meaning set forth in Section 4043 of
ERISA, other than an event for which the reporting requirement has been waived
by regulations promulgated under such Section.
"Request for Advance" shall mean a certificate designated as a
"Request for Advance," signed by an Authorized Signatory of the Borrower
requesting an Advance hereunder, which shall be in substantially the form of
Exhibit K attached hereto and shall, among other
24
things, (a) specify the date of the Advance, which shall be a Business Day, the
amount of the Advance, the type of Advance, and, with respect to a Eurodollar
Advance, the Eurodollar Advance Period selected by the Borrower, and (b) state
that there shall not exist, on the date of the requested Advance both before and
after giving effect thereto, any Default or Event of Default.
"Request for Issuance of Letter of Credit" shall mean any certificate
signed by an Authorized Signatory of the Borrower, which certificate will be
denominated a "Request for Issuance of Letter of Credit" and shall be in
substantially the form attached hereto as Exhibit L, and shall, among other
things, (a) specify the beneficiary of the proposed Letter of Credit, the
purpose of the Letter of Credit, the proposed date of issuance of the Letter of
Credit, which shall be a Business Day, and the documents which must be presented
to draw under such Letter of Credit (including, without limitation, any
documents which the applicable Issuing Bank may require), (b) include, as an
attachment, a Letter of Credit Application, and (c) state that there shall not
exist, on the date of the request and after giving effect to the issuance of the
Letter of Credit, any Default or Event of Default hereunder.
"Required Lenders" shall mean (a) prior to the occurrence of an Event
of Default and the termination of unfunded Commitments, (i) Lenders the sum of
whose Revolving Commitment amounts plus Term Loans outstanding equals or exceeds
50.1% of such items for the Pro Rata Class and (ii) Lenders the sum of whose
Revolving Commitment amounts plus Term Loans outstanding equals or exceeds 50.1%
of the sum of such items for all Lenders, and (b) at any time that there exists
an Event of Default hereunder, and unfunded Commitments have been terminated,
(i) Lenders the total of whose Loans outstanding equals or exceeds 50.1% of the
total principal amount of the Loans of the Pro Rata Class then outstanding
hereunder and (ii) Lenders the total of whose Loans outstanding equals or
exceeds 50.1% of the total principal amount of the Loans then outstanding
hereunder.
"Restricted Group" shall mean the Borrower and the Restricted
Subsidiaries.
"Restricted Payment" shall mean (a) any direct or indirect
distribution, dividend, redemption or other payment to any Person on account of
any Equity Interests, or other securities of or equity interests, in any of the
Borrower Parties; (b) any payment of principal of or interest on any
Indebtedness of any of the Borrower Parties in favor of any Affiliate or in
respect of any Refinancing Securities or any Exchange Notes; or (c) any payment
under any management or consulting agreement with any Affiliate or other similar
agreement or arrangement with any Affiliate not entered into in the ordinary
course of business.
"Restricted Purchase" shall mean any payment on account of the
purchase, redemption or other acquisition or retirement of any Equity Interests,
or other securities of or equity interests, in any of the Borrower Parties,
including, without limitation, any warrants or other rights or options to
acquire Equity Interests of any of the Borrower Parties.
"Restricted Subsidiaries" shall mean all Subsidiaries of the Borrower
other than the Unrestricted Subsidiaries and the Foreign Subsidiaries.
"Revolving Commitment" shall mean the several obligations of certain
of the
25
Lenders to advance the sum of $10,000,000 to the Borrower, on or after the
Agreement Date, in accordance with their respective Revolving Commitment Ratios
and as such amount may be reduced from time to time, all pursuant to the terms
hereof."
"Revolving Commitment Ratios" shall mean the percentages in which
certain of the Lenders are severally bound to make Advances to the Borrower
under the Revolving Commitment, which as of the Agreement Date, are set forth
(together with dollar amounts thereof) on Schedule 8 attached hereto under the
caption "Revolving Commitment."
"Revolving Loans" shall mean, collectively, the amount advanced by
certain of the Lenders to the Borrower under the Revolving Commitment, not to
exceed the amount of the Revolving Commitment.
"Revolving Notes" shall mean those certain revolving promissory notes
issued by the Borrower to each of the Lenders issuing a Revolving Commitment
that requests a promissory note in accordance with each such Lender's Revolving
Commitment Ratio, each one substantially in the form of Exhibit M attached
hereto, and any extensions, modifications, renewals or replacements of or
amendments to any of the foregoing.
"Sale and Lease-Back Transaction" means any arrangement with any
Person providing for the leasing by means of a capital lease and not an
operating lease by the Borrower or any Restricted Subsidiary of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Borrower or such Restricted Subsidiary to such Person in
contemplation of such leasing.
"Sales Transaction" shall have the meaning assigned thereto in the
definition of "Net Proceeds".
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" shall mean that certain Amended and Restated
Security Agreement between the Borrower and the Administrative Agent, for the
benefit of the Credit Parties, dated as of the Agreement Date, in substantially
the form attached hereto as Exhibit N.
"Security Documents" shall mean, without limitation, the Security
Agreement, the Borrower Pledge Agreement, the Intellectual Property Security
Agreement, the Assignment of Acquisition Documents, the Subsidiary Guaranty, the
Subsidiary Pledge Agreement, the Subsidiary Security Agreement, the Holdco
Pledge Agreement, the Reaffirmation Agreement, all Mortgages, any other
agreement or instrument providing Collateral for the Obligations, whether now or
hereafter in existence, and any filings, instruments, agreements, and documents
related thereto.
"Security Interest" shall mean all Liens in favor of the
Administrative Agent created hereunder or under any of the Security Documents to
secure the Obligations.
"Senior Debt" shall mean, as of any calculation date, the greater of
(a) the result of (i) Borrower Debt, minus (ii) the aggregate principal amount
of the Refinancing Securities
26
then outstanding, minus (iii) to the extent included in Borrower Debt, the
aggregate principal amount of the Exchange Notes then outstanding, and (b) zero.
"Senior Leverage Ratio" shall mean, on any calculation date, the ratio
of (a) Senior Debt, to (b) EBITDA for the immediately preceding four (4) fiscal
quarter period.
"Shareholders" shall mean the shareholders of Holdco which as of the
Agreement Date are as set forth on Schedule 4.1(c) attached hereto.
"Specified Adjustments" shall mean, for any period of determination,
for the Borrower and the Restricted Subsidiaries on a consolidated basis, the
adjustments set forth with respect to such period on Schedule 4 attached hereto.
"Specified Equity Contributions" shall mean, with respect to any
Investment, Restricted Payment or Acquisition, the sum of (a) the amount of
Closing Equity on deposit in the Equity Collateral Account, plus (b) any
additional cash amounts invested in Holdco and contributed to the Borrower in
the form of an equity contribution for the sole purpose of financing such
Investment, Restricted Payment or Acquisition, and in each case to the extent
not used for any other purpose.
"Subordinated Management Redemption Debt" shall mean any Management
Redemption Debt issued with terms and conditions acceptable to the Agents in
their sole discretion, which terms and conditions shall provide, among other
things, that such Management Redemption Debt shall (a) be unsecured, (b) not pay
cash interest or principal at any time prior to the Final Maturity Date, (c)
contain no creditor-like rights or remedies, and (d) have a final maturity of no
earlier than ninety (90) days after the Final Maturity Date.
"Subsidiary" shall mean, as applied to any Person, any corporation of
which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect its board of
directors, regardless of the existence at the time of a right of the holders of
any class or classes of securities of such corporation to exercise such voting
power by reason of the happening of any contingency, or any partnership or other
entity of which more than fifty percent (50%) of the outstanding partnership or
other equity interests, is at the time owned directly or indirectly by such
Person, or by one or more Subsidiaries of such Person, or by such Person and one
or more Subsidiaries of such Person.
"Subsidiary Guaranty" shall mean that certain Amended and Restated
Subsidiary Guaranty Agreement dated as of July 13, 2001, issued by each
Subsidiary of the Borrower (other than any of the Foreign Subsidiaries) in favor
of the Administrative Agent, for the benefit of the Credit Parties, a copy of
which is attached hereto as Exhibit O, and any similar guaranty or any guaranty
supplement delivered pursuant to Section 5.14 hereof.
"Subsidiary Pledge Agreement" shall mean that certain Amended and
Restated Subsidiary Pledge Agreement dated as of July 13, 2001, between each
Subsidiary of the Borrower (other than any of the Foreign Subsidiaries) having
one or more of its own Subsidiaries and the Administrative Agent, for the
benefit of the Credit Parties, a copy of which is attached hereto as Exhibit P,
and any similar pledge agreement or any pledge agreement supplement delivered
pursuant to Section 5.14 hereof.
27
"Subsidiary Security Agreement" shall mean that certain Second Amended
and Restated Subsidiary Security Agreement dated as of the Agreement Date,
between each Subsidiary of the Borrower (other than any of the Foreign
Subsidiaries) and the Administrative Agent, for the benefit of the Credit
Parties, in substantially the form attached hereto as Exhibit Q, and any similar
security agreement or any security agreement supplement delivered pursuant to
Section 5.14 hereof.
"Syndication Agent" shall mean Deutsche Bank Trust Company Americas
(f/k/a Bankers Trust Company).
"Term A Commitment" shall mean the several obligations of certain of
the Lenders to advance the sum of $47,031,653.99 to the Borrower, in accordance
with their respective Term A Commitment Ratios, all pursuant to the terms
hereof.
"Term A Commitment Ratios" shall mean the percentages in which certain
of the Lenders are severally bound to make Advances to the Borrower under the
Term A Commitment. As of the Agreement Date, the Tranche A Commitment of each
Lender is set forth on Schedule 8 attached hereto under the caption "Term A
Commitment."
"Term A Loans" shall mean, collectively, the amounts advanced by
certain of the Lenders to the Borrower under the Term A Commitment not to
exceed, in the aggregate, the amount of the Term A Commitment.
"Term A Notes" shall mean those certain term notes issued by the
Borrower to each of the Lenders issuing a Term A Commitment that requests a
promissory note in accordance with each such Lender's Term A Commitment Ratio,
each one substantially in the form of Exhibit R attached hereto, and any
extensions, modifications, renewals or replacements of or amendments to any of
the foregoing.
"Term B Class" shall mean, as of any date of determination, those
Lenders having any Term B Loans then outstanding.
"Term B Commitment" shall mean the several obligations of certain of
the Lenders to advance the sum of $139,061,257.78 to the Borrower in accordance
with their respective Term B Commitment Ratios, all pursuant to the terms
hereof.
"Term B Commitment Ratios" shall mean the percentages in which certain
of the Lenders are severally bound to make Advances to the Borrower under the
Term B Commitment. As of the Agreement Date, the Tranche B Commitment of each
Lender is set forth on Schedule 8 attached hereto under the caption "Term B
Commitment."
"Term B Loans" shall mean, collectively, the amount advanced by
certain of the Lenders to the Borrower under the Term B Commitment not to
exceed, in the aggregate, the amount of the Term B Commitment.
"Term B Notes" shall mean those certain term notes issued by the
Borrower to each of the Lenders issuing a Term B Commitment that requests a
promissory note in accordance with each such Lender's Term B Commitment Ratio,
each one substantially in the form of
28
Exhibit S attached hereto, and any extensions, modifications, renewals or
replacements of or amendments to any of the foregoing.
"Term Loan Commitments" shall mean, collectively, the Term A
Commitment and the Term B Commitment.
"Term Loans" shall mean, collectively, the Term A Loans and the Term B
Loans.
"Term Notes" shall mean any Term A Notes and any Term B Notes.
"Total Leverage Ratio" shall mean, on any calculation date, the ratio
of (a) Borrower Debt, to (b) EBITDA for the immediately preceding four (4)
fiscal quarter period.
"Transferee" shall have the meaning assigned thereto in Section
12.5(f) hereof.
"Trigger Date" shall mean September 30, 2004.
"Uniform Customs" shall mean the Uniform Customs Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended, supplemented or modified from
time to time and, if applicable, the rules of the "International Standby
Practices 1998" (ISP98), as the same may be revised from time to time.
"Unrestricted Subsidiaries" shall mean, collectively, the members of
the InternetCo Group and the LaunchCo Group.
"Unused Revolving Commitment" shall mean, on any calculation date, the
excess of (a) the Revolving Commitment on such date, over (b) the sum (without
duplication) of (i) the aggregate principal amount of the Revolving Loans then
outstanding and (ii) the aggregate amount of L/C Obligations then outstanding.
"Use of Proceeds Letter" shall mean that certain Use of Proceeds
Letter, substantially in the form of Exhibit T attached hereto, delivered to the
Credit Parties on the Agreement Date pursuant to Article 4 hereof.
"Voting Stock" shall mean all classes of Equity Interests or other
interests, including partnership interests, of a Person then outstanding and
normally entitled, without regard to the occurrence of any contingency, to vote
in the election of directors, managers, or trustee thereof.
"ZD Acquisition Documents" shall mean that certain Purchase Agreement
dated as of December 6, 1999, as amended, among ZD Inc., a Delaware corporation,
ZD Holdings (Europe) Ltd. and the Borrower (formerly known as WS-ZD Acquisition,
Inc.), and all schedules and exhibits thereto and documents executed in
connection therewith.
Each definition of an agreement in this Article 1 shall include such
instrument or agreement as amended, restated, supplemented or otherwise modified
from time to time, and except where the context otherwise requires, definitions
imparting the singular shall include the plural and vice versa. Except where
otherwise specifically restricted, reference to a party to a
29
Loan Document includes that party and its successors and assigns. All terms used
herein which are defined in Article 9 of the Uniform Commercial Code in effect
in the State of New York on the date hereof and which are not otherwise defined
herein shall have the same meanings herein as set forth therein. All accounting
terms used herein without definition shall be used as defined under GAAP.
Subject to Section 12.6 hereof, all financial calculations hereunder shall,
unless otherwise stated, be determined for the Borrower on a consolidated basis
with its Restricted Subsidiaries and in conformity with GAAP.
ARTICLE 2
Loans
Section 2.1 The Loans. Subject to the terms and conditions of, and in
reliance upon the representations and warranties made in, this Agreement and the
other Loan Documents, the Lenders will have extended and agree, severally in
accordance with their respective Commitment Ratios and not jointly, to make
Loans to the Borrower in an aggregate principal amount not to exceed
$196,092,911.77.
(a) The Revolving Loans. The Lenders with Revolving Commitments agree,
severally in accordance with their respective Revolving Commitment Ratios and
not jointly, upon the terms and subject to the conditions of this Agreement, to
lend and re-lend to the Borrower, on and after the Agreement Date, but prior to
the Initial Maturity Date, amounts which, in the aggregate, do not exceed at any
time the amount of the Available Revolving Commitment. Subject to the terms and
conditions hereof and prior to the Initial Maturity Date, Advances under the
Revolving Commitment may be repaid and reborrowed from time to time on a
revolving basis or may be continued or converted pursuant to a Notice of
Conversion/Continuation as provided in Section 2.2 hereof.
(b) The Term A Loans. The Lenders agreeing to make Term A Loans have made,
during the period from and after the Original Closing Date to the Agreement
Date, severally in accordance with their respective Term A Commitment Ratios and
not jointly, upon the terms and subject to the conditions of this Agreement,
Term A Loans to the Borrower in an aggregate amount equal to the Term A
Commitment. Advances under the Term A Commitment may be continued or converted
pursuant to a Notice of Conversion/Continuation as provided in Section 2.2
hereof; provided, however, there shall be no increase in the aggregate principal
amount outstanding under the Term A Commitment at any time after the Agreement
Date. Amounts repaid under the Term A Commitment may not be reborrowed.
(c) The Term B Loans. The Lenders agreeing to make Term B Loans have made,
during the period from and after the Original Closing Date to the Agreement
Date, severally and in accordance with their respective Term B Commitment Ratios
and not jointly, upon the terms and subject to the conditions of this Agreement,
Term B Loans to the Borrower in an aggregate amount equal to the Term B
Commitment. Advances under the Term B Commitment may be continued or converted
pursuant to a Notice of Conversion/Continuation as provided in Section 2.2
hereof; provided, however, there shall be no increase in the aggregate principal
amount outstanding under the Term B Commitment at any time after the Agreement
Date. Amounts repaid under the Term B Commitment may not be reborrowed.
30
(d) The Letters of Credit. Each Issuing Bank agrees, prior to the Initial
Maturity Date and upon the terms and subject to the conditions of this
Agreement, to issue from time to time for the account of the Borrower, in the
ordinary course of business of the Borrower, Letters of Credit to such
beneficiaries as shall be designated in writing by the Borrower to such Issuing
Bank, in an aggregate amount not to exceed for all Letters of Credit issued
hereunder the Letter of Credit Committed Amount, or if less, the Revolving
Commitment.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, Etc. Any Advance (i) under the Revolving
Commitment (except with respect to Advances in reimbursement of amounts advanced
to beneficiaries under Letters of Credit, which Advances shall in all cases be
Base Rate Advances initially) shall, at the option of the Borrower, be made as a
Base Rate Advance or a Eurodollar Advance, (ii) under the Term A Commitment
shall, at the option of the Borrower, be made as a Base Rate Advance or a
Eurodollar Advance, and (iii) under the Term B Commitment shall, at the option
of the Borrower, be made as a Base Rate Advance or a Eurodollar Advance;
provided, however, that (i) if the Borrower fails to give the Administrative
Agent written notice specifying whether a Eurodollar Advance is to be repaid,
continued or converted on a Payment Date, such Eurodollar Advance shall be
converted to a Base Rate Advance on such Payment Date, and (ii) the Borrower may
not select a Eurodollar Advance if, at the time of such selection, a Default or
Event of Default has occurred and is continuing. All Advances of the Loans made
on the Agreement Date shall bear interest as Base Rate Advances. Any notice
given to the Administrative Agent in connection with a requested Advance
hereunder shall be given to the Administrative Agent prior to 11:00 a.m. (New
York time) in order for such Business Day to count toward the minimum number of
Business Days required.
(b) Base Rate Advances.
(i) Initial and Subsequent Advances. The Borrower shall give the
Administrative Agent in the case of Base Rate Advances, irrevocable prior
written notice not later than 11:00 a.m. (New York time) on the date of such
Advance in the form of a Request for Advance, or telephonic notice followed
promptly by a Request for Advance; provided, however, that no such notice shall
be required in connection with the making of a Base Rate Advance to repay a draw
under a Letter of Credit. In the event that the Borrower shall give the
Administrative Agent telephonic notice, but shall fail to confirm such
telephonic notice with a written Request for Advance, such failure shall not
invalidate any notice so given, but shall not obviate the Borrower's obligation
hereunder to provide the Administrative Agent with written notice.
(ii) Repayments and Conversions. The Borrower may (A) upon at least
one (1) Business Days' irrevocable prior written notice to the Administrative
Agent, repay or prepay a Base Rate Advance, or (B) upon at least three (3)
Business Days' irrevocable prior written notice to the Administrative Agent in
the form of a Notice of Conversion/Continuation, convert all or a portion of the
principal amount of such Base Rate Advance to one or more Eurodollar Advances.
On the date indicated by the Borrower, such Base Rate Advance shall be so repaid
or converted.
31
(iii) Miscellaneous. Notwithstanding any term or provision of this
Agreement which may be construed to the contrary, each Base Rate Advance (except
any Base Rate Advance in reimbursement of amounts advanced to beneficiaries
under Letters of Credit) shall be in a principal amount of at least $250,000 and
in integral multiples of $100,000 in excess thereof, or the remaining amount of
the Revolving Commitment, as the case may be.
(c) Eurodollar Advances.
(i) Initial and Subsequent Advances. The Borrower shall give the
Administrative Agent in the case of Eurodollar Advances at least three (3)
Business Days' irrevocable prior written notice not later than 11:00 a.m. (New
York time) in the form of a Request for Advance, or telephonic notice followed
promptly by a Request for Advance. The Borrower shall promptly notify the
Administrative Agent by telephone or telecopy, and shall promptly confirm any
such telephonic notice in writing, of its selection of a Eurodollar Rate and
Eurodollar Advance Period for such Advance. In the event that the Borrower shall
give the Administrative Agent telephonic notice, but shall fail to confirm such
telephonic notice with a written Request for Advance, such failure shall not
invalidate any notice so given, but shall not obviate the Borrower's obligation
hereunder to provide the Administrative Agent with written notice.
(ii) Repayments, Continuations and Conversions. At least three (3)
Business Days prior to each Payment Date for a Eurodollar Advance, the Borrower
shall give the Administrative Agent written notice in the form of a Notice of
Conversion/Continuation specifying whether all or a portion of such Eurodollar
Advance outstanding on such Payment Date (A) is to be continued in whole or in
part as a new Eurodollar Advance, in which case such notice shall also specify
the Eurodollar Advance Period for such new Eurodollar Advance, (B) is to be
converted in whole or in part to a Base Rate Advance, or (C) is to be repaid and
not continued or converted. Upon such Payment Date, such Eurodollar Advance
will, subject to the provisions hereof, be so repaid, continued or converted, as
applicable. If the Borrower fails to give the Administrative Agent written
notice specifying whether a Eurodollar Advance is to be repaid, continued or
converted on a Payment Date, such Eurodollar Advance shall be converted to a
Base Rate Advance on such Payment Date.
(iii) Miscellaneous. Notwithstanding any term or provision of this
Agreement which may be construed to the contrary, each Eurodollar Advance shall
be in a principal amount of at least $1,000,000 and in integral multiples of
$100,000 in excess thereof, and at no time shall the aggregate number of all
Eurodollar Advances outstanding exceed ten (10).
(d) Notification of Lenders. Upon receipt of a Request for Advance or a
notice from the Borrower with respect to any outstanding Advance prior to the
Payment Date for such Advance, or a request by any Issuing Bank for
reimbursement under Section 2.14 hereof, the Administrative Agent shall promptly
notify each Lender by telephone or telecopy of the contents thereof and the
amount of such Lender's portion of the Advance. Each Lender shall, not later
than 1:00 p.m. (New York time) on the date of borrowing specified in such
notice, make available to the Administrative Agent at the Administrative Agent's
Office, or at such account as the Administrative Agent shall designate, the
amount of its portion of any Advance which represents an additional borrowing
hereunder in immediately available funds.
32
(e) Disbursement.
(i) Prior to 3:00 p.m. (New York time) on the date of an Advance
hereunder, the Administrative Agent shall, subject to the satisfaction of any
applicable conditions set forth in Article 3 hereof, disburse the amounts made
available to it by the Lenders in immediately available funds by (A)
transferring the amounts so made available by wire transfer pursuant to the
Borrower's instructions, (B) in the case of an Advance representing the
reimbursement of any Issuing Bank for a draw under a Letter of Credit,
transferring such amount to such Issuing Bank, or (C) in the absence of such
instructions referred to in clause (A) above and so long as the provisions of
clause (B) above do not apply to the requested Advance, crediting the amounts so
made available to the account of the Borrower maintained with the Administrative
Agent.
(ii) Unless the Administrative Agent shall have received notice from
a Lender, prior to the date of any Advance that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Advance, the Administrative Agent may assume that such Lender, has made or will
make such portion available to the Administrative Agent on the date of such
Advance and the Administrative Agent may, in its sole discretion and in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent a Lender does not make such ratable
portion available to the Administrative Agent, such Lender, agrees to repay to
the Administrative Agent on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at the Federal Funds Rate.
(iii) If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such Lender's
portion of the applicable Advance for purposes of this Agreement. If such Lender
does not repay such corresponding amount immediately upon the Administrative
Agent's demand therefor, the Administrative Agent shall notify the Borrower, and
the Borrower shall promptly, but in any event within two (2) Business Days of
such demand, pay such corresponding amount to the Administrative Agent, together
with interest thereon. The failure of any Lender to fund its portion of any
Advance shall not relieve any other Lender of its obligation hereunder to fund
its respective portion of the Advance on the date of such borrowing, but no
Lender shall be responsible for any such failure of any other Lender.
(iv) In the event that, at any time when the Borrower is not in
Default, a Lender for any reason fails or refuses to fund its portion of an
Advance, then, until such time as such Lender has funded its portion of such
Advance, or all other Lenders have received payment in full (whether by
repayment or prepayment) of the principal and interest due in respect of such
Advance, such non-funding Lender shall not have the right (A) to vote regarding
any issue on which voting is required or advisable under this Agreement or any
other Loan Document and, with respect to any such Lender, the amount of the
Revolving Commitment and Term Loans, as applicable, or Loans, as applicable,
held by such Lender shall not be counted as outstanding for purposes of
determining "Required Lenders", the "Pro Rata Class" or the "Term B Class"
hereunder, or (B) to receive payments of principal, interest or fees from the
Borrower in respect of its unfunded portion of Advances or any of its
outstanding Advances. Notwithstanding the foregoing, within sixty (60) days of
the failure by any Lender to fund its portion of an Advance,
33
so long as no Default or Event of Default then exists, the Borrower may, in its
discretion, provide a replacement lender or lenders for such non-funding Lender,
which replacement lender or lenders will be subject to the approval of the
Agents, which shall not be unreasonably withheld, and the Administrative Agent,
such Lender and the Borrower shall take all necessary actions to transfer the
rights, duties and obligations of such non-funding Lender to such replacement
lender or lenders within such sixty (60) day period (including, without
limitation, the payment in full of all Obligations hereunder due to the
non-funding Lender being replaced).
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance shall be
computed on the basis of a year of 365/366 days for the actual number of days
elapsed and shall be payable (i) during the period from and after the Agreement
Date through the Trigger Date, monthly in arrears, commencing on the last day of
the first calendar month after the Agreement Date, and (ii) after the Trigger
Date, quarterly in arrears, commencing on the last day of the first fiscal
quarter after the Trigger Date. Interest on Base Rate Advances then outstanding
shall also be due and payable on the Initial Maturity Date or the Final Maturity
Date, as applicable. Interest shall accrue and be payable on each Base Rate
Advance at the per annum interest rate equal to the sum of (A) the Base Rate and
(B) the Applicable Margin for Base Rate Advances in effect from time to time and
as more fully set forth in Section 2.3(f) below.
(b) On Eurodollar Advances. Interest on each Eurodollar Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable in arrears (i) on the applicable Payment Date for such
Advance, and (ii) (A) during the period from and after the Agreement Date
through the Trigger Date, if the Eurodollar Advance Period for such Eurodollar
Advance exceeds one (1) month, interest on such Eurodollar Advance shall be due
and payable in arrears on every one (1) month anniversary of such Eurodollar
Advance, and (B) after the Trigger Date, if the Eurodollar Advance Period for
such Eurodollar Advance exceeds three (3) months, interest on such Eurodollar
Advance shall be due and payable in arrears on every three (3) month anniversary
of such Eurodollar Advance. Interest on Eurodollar Advances then outstanding
shall also be due and payable on the date of any repayment made under Section
2.2 or Section 2.6 hereof and on the Initial Maturity Date or the Final Maturity
Date, as applicable. Interest shall accrue and be payable on each Eurodollar
Advance at a rate per annum equal to the sum of (A) the Eurodollar Rate
applicable to such Eurodollar Advance and (B) the Applicable Margin for
Eurodollar Advances in effect from time to time and as more fully set forth in
Section 2.3(f) below.
(c) Interest if No Notice of Selection of Interest Rate. If the Borrower
fails to give the Administrative Agent timely notice of the selection of a
Eurodollar Advance, or if the Administrative Agent is unable to timely determine
a Eurodollar Rate for any Advance, the Base Rate shall apply to such Advance. If
the Borrower fails to elect to continue any Eurodollar Advance then outstanding
prior to the Payment Date applicable thereto in accordance with the provisions
of Section 2.2 hereof, the Base Rate shall apply to such Advance commencing on
and after such Payment Date.
(d) Interest Upon Default. Immediately upon the occurrence of an Event of
Default under Section 9.1(b) hereunder (including, without limitation, any such
Event of Default that
34
occurs as a result of the automatic acceleration of the Obligations hereunder
upon the occurrence of an Event of Default under Section 9.1(f) or 9.1(g)
hereof), interest on all Obligations shall accrue at the Default Rate from the
date of such Event of Default. Interest accruing at the Default Rate on the
Obligations shall be payable on the earlier of (I) demand by the Required
Lenders and (II) the last day of each calendar month during which the Default
Rate shall continue to accrue, and in any event, on the Initial Maturity Date or
the Final Maturity Date, as applicable, and shall accrue with respect to all
Obligations until the earliest to occur of (A) waiver of the applicable Event of
Default in accordance with Section 12.12 hereof, (B) agreement by the Required
Lenders to rescind the charging of interest at the Default Rate, or (C) payment
in full of the overdue Obligations. The Lenders shall not be required to (x)
accelerate the maturity of the Loans, (y) terminate the Commitments, or (z)
exercise any other rights or remedies available to them under the Loan Documents
in order to charge interest hereunder at the Default Rate.
(e) Computation of Interest. In computing interest on any Advance, the
date of making the Advance shall be included and the date of payment shall be
excluded; provided, however, that if an Advance is repaid on the date that it is
made, one (1) day's interest shall be due with respect to such Advance.
(f) Applicable Margins for Base Rate Advances and Eurodollar Advances.
(i) Advances Under the Revolving Commitment or of the Term A Loans.
With respect to any Advance under the Revolving Commitment, or any Advance of
the Term A Loans, the Applicable Margin shall be (A) on and after the Agreement
Date to and including the Trigger Date, (x) 4.25% per annum with respect to any
Eurodollar Advance and (y) 3.00% per annum with respect to any Base Rate
Advance, and (B) after the Trigger Date, the interest rate margin based upon the
Total Leverage Ratio for the most recent fiscal quarter end, effective as of the
second (2/nd/) Business Day after the financial statements referred to in
Section 6.2 hereof are delivered by the Borrower to the Administrative Agent for
the fiscal quarter of the Borrower most recently ended, expressed as a per annum
rate of interest as follows:
Then the Base Rate Advance Then the Eurodollar Advance
If the Total Leverage Ratio is: Applicable Margin shall be: Applicable Margin shall be:
------------------------------ -------------------------- --------------------------
Greater than or equal to 3.50 to 1.00 3.00% 4.25%
Less than 3.50 to 1.00 2.50% 3.75%
In the event that the Borrower fails to timely provide (i) the financial
statements referred to above in accordance with the terms of Section 6.2 hereof
or (ii) the Performance Certificate referred to in Section 6.4 hereof, and
without prejudice to any additional rights under Section 2.3(d) or Section 9.2
hereof, no downward adjustment of the Applicable Margin in effect for the
preceding quarter shall occur until the actual delivery of such statements, and
if the Borrower has not delivered such statements within ten (10) days of the
date on which such statements were due under Section 6.2 hereof, from two (2)
Business Days after such due date and until actual delivery, the Applicable
Margin shall be (x) 4.25% with respect to each Eurodollar Advance, and
35
(y) 3.00% with respect to each Base Rate Advance.
(ii) Advances of the Term B Loans. With respect to any Advance of
the Term B Loans, the Applicable Margin shall be (A) 4.75% per annum with
respect to any Eurodollar Advance and (B) 3.50% per annum with respect to any
Base Rate Advance.
Section 2.4 Fees.
(a) Amendment Fee. The Borrower agrees to pay to each Lender, on the
Agreement Date, an amendment fee in the amount of one-half of one percent
(0.500%) of the sum of (i) the outstanding principal amount of such Lender's
Term Loans (other than Participated Term Loans) and (ii) the amount of such
Lender's Revolving Commitment, in each case as of the Agreement Date after
giving effect to the amendments set forth herein. Such amendment fee shall be
fully earned when due and nonrefundable when paid.
(b) Commitment Fees. The Borrower agrees to pay to the Administrative
Agent, for the benefit of each of the Lenders in accordance with their
respective Revolving Commitment Ratios, a commitment fee on the Unused Revolving
Commitment, for each day from the Agreement Date until the Initial Maturity
Date, at a rate of, (i) so long as the Total Leverage Ratio is greater than or
equal to 4.00 to 1.00, one-half percent (0.500%) per annum, and (ii) so long as
the Total Leverage Ratio is less than 4.00 to 1.00, three-eighths percent
(0.375%) per annum, in each case based on the Total Leverage Ratio for the most
recent fiscal quarter end, effective as of the second (2nd) Business Day after
the financial statements referred to in Section 6.2 are delivered by the
Borrower to the Administrative Agent for the fiscal quarter of the Borrower most
recently ended. In the event that the Borrower fails to timely provide (i) the
financial statements referred to in the foregoing sentence in accordance with
the terms of Section 6.2 hereof, and (ii) the Performance Certificate referred
to in Section 6.4 hereof, and without prejudice to any additional rights under
Section 2.3(d) or Section 9.2 hereof, no downward adjustment of the commitment
fee rate in effect for the preceding quarter shall occur until the actual
delivery of such statements, and if the Borrower has not delivered such
statements within ten (10) days of the date on which such statements were due
under Section 6.2 hereof, from two (2) Business Days after such due date and
until actual delivery, the commitment fee shall be at a rate of one-half percent
(0.500%). Such commitment fees shall be computed on the basis of a year of
365/366 days for the actual number of days elapsed, shall be payable (x) during
the period from and after the Agreement Date through the Trigger Date, monthly
in arrears on the last day of each calendar month, and (y) after the Trigger
Date, quarterly in arrears on the last day of each fiscal quarter, commencing on
the last day of the first fiscal quarter after the Trigger Date, shall be fully
earned when due, and shall be non-refundable when paid. A final payment of any
accrued and unpaid commitment fee shall also be due and payable on the Initial
Maturity Date or such earlier date on which the Revolving Commitment is
terminated.
(c) Letter of Credit Fee. The Borrower agrees to pay to the Administrative
Agent, for the benefit of the Lenders, in accordance with their respective
Revolving Commitment Ratios, a letter of credit fee equal to the Applicable
Margin for Eurodollar Advances under the Revolving Commitment (computed on the
basis of a 360 day year for the actual number of days elapsed) on the undrawn
stated amount of each Letter of Credit issued by any Issuing Bank hereunder for
each day such Letter of Credit is outstanding. Such letter of credit fee shall
be due and payable,
36
(x) during the period from and after the Agreement Date through the Trigger
Date, monthly in arrears on the last day of each calendar month during which
such Letter of Credit is outstanding, and (y) after the Trigger Date, quarterly
in arrears on the last day of each fiscal quarter during which such Letter of
Credit is outstanding, and any accrued and unpaid letter of credit fees shall
also be due and payable on the Initial Maturity Date or such earlier date on
which the Revolving Commitment is terminated. Such letter of credit fee shall be
fully earned when due and nonrefundable when paid. In the event of any
inconsistency between the terms of this Agreement and the terms of any letter of
credit reimbursement agreements or indemnification agreements between the
Borrower and an Issuing Bank with respect to Letters of Credit issued hereunder,
the terms of this Agreement shall control.
(d) Issuing Bank Fee. The Borrower agrees to pay to each Issuing Bank, for
its own account, an issuing bank fee at a rate per annum equal to one-quarter of
one percent (0.25%) (computed on the basis of a 360 day year for the actual
number of days elapsed), or such lesser amount as is agreed between the Borrower
and such Issuing Bank, of the undrawn stated amount of each Letter of Credit
issued hereunder for each day such Letter of Credit is outstanding. Such issuing
bank fee shall be due and payable, (x) during the period from and after the
Agreement Date through the Trigger Date, monthly in arrears on the last Business
Day of each calendar month during which such Letter of Credit is outstanding,
and (y) after the Trigger Date, quarterly in arrears on the last Business Day of
each fiscal quarter during which such Letter of Credit is outstanding, and any
accrued and unpaid issuing bank fees shall also be due and payable on the
Initial Maturity Date or such earlier date on which the Revolving Commitment is
terminated. Such issuing bank fee shall be fully earned when due and
nonrefundable when paid. In the event of any inconsistency between the terms of
this Agreement and the terms of any letter of credit reimbursement agreements or
indemnification agreements between the Borrower and an Issuing Bank with respect
to the Letters of Credit issued hereunder, the terms of this Agreement shall
control.
(e) Computation of Fees. In computing any fees payable under this Section
2.4, the first day of the applicable period shall be included and the date of
payment shall be excluded.
Section 2.5 Optional Prepayment/Reduction of Commitment.
(a) Prepayment of Advances. The principal amount of any Base Rate Advance
under the Revolving Loan Commitment may be prepaid in full or in part at any
time, without penalty or premium, upon not less than one (1) Business Day's
prior written notice to the Administrative Agent; and the principal amount of
any Eurodollar Advance under the Revolving Loan Commitment may be prepaid prior
to the applicable Payment Date, without penalty or premium, upon not less than
three (3) Business Days' prior written notice to the Administrative Agent,
provided that the Borrower shall reimburse the Lenders and the Administrative
Agent, on demand, for any loss or out-of-pocket expense (other than solely a
loss of profit) incurred by any of them in connection with such prepayment of
Eurodollar Advances as set forth in Section 2.10 hereof. Each notice of
prepayment given hereunder shall be irrevocable. Upon receipt of any notice of
prepayment, the Administrative Agent shall promptly notify each Lender of the
contents thereof by telephone or telecopy and of such Lender's portion of the
prepayment.
37
(b) Permanent Prepayment or Reduction. Optional permanent prepayments of
principal of the Term Loans, and permanent reductions of the Revolving
Commitment hereunder, may be made at any time upon three (3) Business Days'
prior irrevocable written notice to the Administrative Agent, without penalty or
premium, provided that such prepayments or reductions shall be in minimum
amounts of, (i) in the case of Base Rate Advances, $500,000 and integral
multiples of $100,000, and (ii) in the case of Eurodollar Advances, $1,000,000
and integral multiples of $100,000. Each prepayment of the Term Loans shall
permanently reduce the Term A Loans and the Term B Loans on a pro rata basis,
with the amount allocated to the Term A Loans being applied to reduce, on a pro
rata basis, the remaining scheduled installments of principal due under the Term
A Loans as set forth in Section 2.6(b) hereof, and the amount allocated to the
Term B Loans being applied to reduce, on a pro rata basis, the remaining
scheduled installments of principal due under the Term B Loans as set forth in
Section 2.6(c) hereof. Each such prepayment of a Eurodollar Advance shall also
be made together with accrued interest on the amount so prepaid. As of the date
of cancellation or reduction set forth in any notice thereof, the Revolving
Commitment shall be permanently reduced to the amounts stated in the Borrower's
notice for all purposes herein, and the Borrower shall pay to the Administrative
Agent, for the benefit of the Lenders, the amount necessary to reduce the
principal amount of the Revolving Loans then outstanding to not more than the
amount of the Revolving Commitment as so reduced, together with, in the case of
Eurodollar Advances, the accrued interest on the amount so prepaid through the
date of the reduction with respect to the amount reduced. In connection with any
such permanent repayment, the Borrower shall reimburse the Administrative Agent
and the Lenders, on demand, for any loss or out-of-pocket expense (other than
solely a loss of profit) incurred by any of them in connection with such payment
of Eurodollar Advances, as set forth in Section 2.10. Upon receipt of any notice
of prepayment or reduction, the Administrative Agent shall promptly notify each
Lender of the contents thereof by telephone or telecopy and of such Lender's
portion of the prepayment or the reduction, as applicable.
Section 2.6 Repayment.
(a) The Revolving Loans. All unpaid principal and accrued interest of the
Revolving Loans and any other outstanding Obligations under the Revolving
Commitment shall be due and payable in full on the Initial Maturity Date or such
earlier date on which the Revolving Commitment is terminated.
(b) The Term A Loans. Commencing on the Trigger Date, and at the end of
each calendar quarter thereafter, the outstanding principal balance of the Term
A Loans then outstanding shall be repaid as set forth below:
Quarters Ending During the Following Periods Quarterly Payment Amount
-------------------------------------------- ------------------------
September 30, 2004 through March 31, 2006 $ 4,067,577.12
June 30, 2006 $ 6,528,632.19
September 30, 2006 $12,029,981.96
Additionally, the Term A Loans shall be repaid as may be required by Section 2.7
hereof. Any
38
unpaid principal and interest of the Term A Loans and any other outstanding
Obligations under the Term A Commitment shall be due and payable in full on the
Initial Maturity Date.
(c) Term B Loans. Commencing on the Trigger Date, and at the end of each
calendar quarter thereafter, the outstanding principal balance of the Term B
Loans then outstanding shall be repaid as set forth below:
Quarters Ending During the Following Periods Quarterly Payment Amount
-------------------------------------------- ------------------------
September 30, 2004 through September 30, 2006 $ 541,987.14
December 31, 2006 $ 59,376,115.73
March 31, 2007 $ 74,807,257.79
Additionally, the Term B Loans shall be repaid as may be required by Section 2.7
hereof. Any unpaid principal and interest of the Term B Loans and any other
outstanding Obligations shall be due and payable in full on the Final Maturity
Date.
(d) Letter of Credit Advances. All Base Rate Advances made pursuant to
draws under the Letters of Credit shall be deemed to be Advances under the
Revolving Commitment and shall be due and payable on the Initial Maturity Date
or such earlier date on which the Revolving Commitment is terminated.
Section 2.7 Mandatory Repayments. In addition to the repayments provided
for in Section 2.6 hereof, the Borrower shall, if required pursuant to this
Section 2.7, prepay the Loans, without any obligation to pay any prepayment
premium otherwise due, as follows:
(a) Excess Cash Flow. On or prior to the Excess Cash Flow Recapture Date
with respect to each applicable fiscal year, the Borrower shall make a
prepayment of the outstanding principal amount of the Term Loans in an amount
equal to the excess of (i) (A) with respect to each fiscal year end during the
period from the Agreement Date through December 31, 2004, seventy-five percent
(75%) of Excess Cash Flow for such fiscal year, and (B) with respect to each
fiscal year end during the period from January 1, 2005 through the term of this
Agreement, fifty percent (50%) of Excess Cash Flow for such fiscal year, over
(ii) any permanent, voluntary prepayments of the Loans made during such fiscal
year. The amount of any prepayment made by the Borrower pursuant to this Section
2.7(a) shall be applied to prepay the Loans as set forth in Section 2.7(d)
below.
(b) Disposition of Assets.
(i) If, after the Agreement Date, the Borrower or any of its
Subsidiaries shall sell, transfer or otherwise dispose of (including, without
limitation, by way of condemnation or casualty to the extent not covered by
insurance) any Assets with Net Proceeds in excess of $1,000,000 in the aggregate
during the period from the Agreement Date through the Final Maturity Date
(including, without limitation, any Equity Interests in any Unrestricted
Subsidiary, but not including (A) the sale of obsolete equipment and inventory,
(B) the sale, transfer or other
39
disposition of fixed Assets that are replaced by property of substantially
equivalent value in the ordinary course of business, (C) the sale or lease of
databases, software, subscriber lists or office or laboratory space, or the
licensing of intellectual property, in each case in the ordinary course of
business, (D) the sale of Cash Equivalents, (E) the sale or discount of accounts
receivable in connection with compromise or collection (but not in connection
with accounts receivable securitizations or similar transactions), and (F) the
sale of any Assets by any member of the InternetCo Group to the extent that the
Borrower shall have certified to the Agents that the Net Proceeds received in
connection therewith shall have simultaneously been re-invested in the business
of the InternetCo Group), one hundred percent (100%) of the Net Proceeds from
such sale, transfer or other disposition shall, (I) in the case of Net Proceeds
received by the Borrower, be applied on the date of receipt thereof, and (II) in
the case of Net Proceeds received by any Subsidiary of the Borrower, be promptly
distributed on a pro rata basis to all of such Subsidiary's equity holders and
on the date of the Borrower's receipt of its pro rata share of any such Net
Proceeds, be applied, in either case, to permanently reduce the Loans pursuant
to Section 2.7(d) hereof. If, after the Agreement Date, the Borrower or any of
its Subsidiaries shall receive Net Proceeds in connection with the eTesting Labs
Disposition, fifty percent (50%) of such Net Proceeds shall be applied on the
date of receipt thereof to permanently reduce the Loans pursuant to Section
2.7(d) hereof, and the Borrower and its Subsidiaries may retain the remaining
fifty percent (50%) of such Net Proceeds as eTesting Sale Proceeds and may use
or reinvest such Net Proceeds for any purpose permitted under this Agreement.
(ii) If, after the Agreement Date, the Borrower or any of its
Subsidiaries shall receive (A) Net Proceeds of insurance (including, without
limitation, by way of a casualty or condemnation covered by insurance or the
over-funding of any Plan or Multiemployer Plan), in the aggregate during the
term of this Agreement, in excess of $5,000,000, 100% one hundred percent (100%)
of such Net Proceeds, or (B) Net Proceeds of "key-man" life insurance, fifty
percent (50%) of such Net Proceeds, shall, in each case, (I) in the case of Net
Proceeds received by the Borrower, be applied on the date of receipt thereof,
and (II) in the case of Net Proceeds received by any Subsidiary of the Borrower,
be promptly distributed on a pro rata basis to all of such Subsidiary's equity
holders and on the date of the Borrower's receipt of its pro rata share of any
such Net Proceeds, be applied, in either case, be applied to permanently reduce
the Loans pursuant to Section 2.7(d) hereof; provided, however, that, at the
Borrower's election, such Net Proceeds (other than the fifty percent (50%) of
the Net Proceeds of "key-man" life insurance which shall be required in any case
to repay the Loans) may be reinvested by the Borrower or such Subsidiary in
their respective businesses to the extent that the aggregate Purchase Price with
respect to such reinvestment shall not exceed the lesser of (x) such Net
Proceeds and (y) $10,000,000 in the aggregate during the term of this Agreement,
so long as (A) no Default or Event of Default then exists or would be caused
thereby and (B) the Borrower or such Subsidiary shall have concluded (or entered
into a definitive commitment for) such reinvestment within three hundred
sixty-five (365) days, in each case from the date of its receipt of such Net
Proceeds.
(iii) In the event the Borrower elects to exercise its right to
reinvest Net Proceeds under Section 2.7(b)(ii), the Borrower shall so notify the
Administrative Agent not less than five (5) Business Days after knowledge by the
Borrower of the occurrence of the loss covered by such insurance, and shall
remit, or cause the applicable Subsidiary to remit, such Net Proceeds upon
receipt thereof to the Administrative Agent to reduce the outstanding principal
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balance of the Revolving Loans (but not the Term Loans nor the amount of the
Revolving Commitment). Any amount in excess of the then outstanding balance of
the Revolving Loans shall be held in trust in an interest-bearing cash
collateral account with the Administrative Agent or an Affiliate thereof (a "Net
Proceeds Trust") for the benefit of the Borrower, to be applied to the ultimate
reinvestment, as hereinafter provided. To the extent that the applicable
Borrower Party shall not have completed the reinvestment of such Net Proceeds
within three hundred sixty-five (365) days from the date of its receipt thereof
(for whatever reason, including the occurrence of a Default or Event of Default
hereunder), or the cash Purchase Price of such reinvestments shall be less than
such Net Proceeds, the amount of Net Proceeds previously applied to reduce the
outstanding balance of the Revolving Loans and any funds held in the Net
Proceeds Trust relating to such sale shall be re-applied to the Loans in the
manner set forth in Section 2.7(d).
(iv) Amounts in any Net Proceeds Trust shall also be subject to a
valid and perfected first priority Lien in favor of the Administrative Agent
(for the benefit of the Credit Parties to secure the Obligations), pursuant to a
deposit pledge agreement or other security agreement in form and substance
reasonably satisfactory to the Administrative Agent.
(c) Debt Issuance. If, after the Agreement Date, Holdco or the Borrower
shall conduct any public or private issuance of any Funded Debt (other than the
issuance of (i) the Exchange Notes issued in exchange for all or a portion of
the Refinancing Securities in an aggregate original principal amount not to
exceed $95,000,000 and (ii) other Funded Debt permitted under Section 7.1
hereof) (each a "Debt Offering"), the Borrower shall make a prepayment of the
outstanding principal amount of the Term Loans in an amount equal to one hundred
percent (100%) of the Net Proceeds received by Holdco or the Borrower, as the
case may be, on the date of receipt of the Net Proceeds of such Debt Offering.
The amount of any prepayment made by the Borrower pursuant to this Section
2.7(c) shall be applied to prepay the Loans as set forth in Section 2.7(d)
below.
(d) Application of Payments. Except as otherwise permitted in Section
2.7(b) hereof, the amount of any prepayment required to be made pursuant to this
Section 2.7 shall be applied as follows: (i) first, to permanently prepay the
outstanding principal amount of the Term Loans, on a pro rata basis, with the
amount allocated to the Term A Loans being applied to reduce, on a pro-rata
basis, the remaining scheduled installments of principal due under the Term A
Loans as set forth in Section 2.6(b) hereof, and the amount allocated to the
Term B Loans being applied to reduce, on a pro-rata basis, the remaining
scheduled installments of principal due under the Term B Loans as set forth in
Section 2.6(c) hereof, and (ii) thereafter, to prepay the outstanding principal
amount of the Revolving Loans to the extent such amount exceeds the Revolving
Commitment. Accrued interest on the principal amount of Eurodollar Advances
being repaid, pursuant to this Section 2.7 to the date of such repayment shall
be paid by the Borrower concurrently with such principal repayment.
Section 2.8 Notes; Loan Accounts.
(a) The Loans shall be repayable in accordance with the terms and
provisions set forth herein. Upon the request of any Lender, Notes shall be
issued by the Borrower to the order of such Lender reflecting the amount of such
Lender's Commitments under this Agreement. Any
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Notes issued by the Borrower to the order of any requesting Lender shall be duly
executed and delivered by one or more Authorized Signatories of the Borrower.
(b) Each Lender may open and maintain on its books in the name of the
Borrower a loan account with respect to such Lender's portion of the Loans and
interest thereon. Each Lender which opens such a loan account shall debit such
loan account for the principal amount of its portion of each Advance made and
accrued interest thereon and shall credit such loan account for each payment on
account of principal of or interest on its Loans. The records of a Lender with
respect to the loan account maintained by it shall be prima facie evidence of
the Loans of such Lender, and accrued interest thereon, but the failure of any
Lender to maintain such records or to make any such notations, or any error or
mistake in such notations, shall not affect the Borrower's repayment obligations
with respect to such Loans.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on account of
the principal of or interest on the Loans, commitment fees, letter of credit
fees and any other amount owed to any of the Credit Parties under this Agreement
shall be made not later than 2:00 p.m. (New York time) on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office, for the account of the applicable Credit Party, in Dollars in
immediately available funds. Any payment received by the Administrative Agent
after 2:00 p.m. (New York time) shall, for the purpose of calculating interest,
be deemed received on the next Business Day. Receipt by the Administrative Agent
of any payment hereunder at or prior to 2:00 p.m. (New York time) on any
Business Day shall be deemed to constitute receipt on such Business Day. In the
case of a payment for the account of a Lender, the Administrative Agent will
promptly thereafter distribute the amount so received in like funds to such
Lender. If the Administrative Agent shall not have received any payment from the
Borrower as and when due, the Administrative Agent will promptly notify the
Credit Parties accordingly.
(b) The Borrower agrees to pay principal, interest, fees and all other
Obligations due hereunder and under the other Loan Documents without set-off or
counterclaim or, except as otherwise provided herein, and so long as any
applicable Lender complies with Section 2.13, any deduction whatsoever.
(c) Prior to the acceleration of the Loans under Section 9.2 hereof, and
other than with respect to payments required to be made pursuant to Section 2.7
hereof (which shall be applied as set forth in Section 2.7(d) hereof), if some
but less than all amounts due from the Borrower are received by the
Administrative Agent, the Administrative Agent shall distribute such amounts in
the following order of priority on a pro-rata basis: (i) FIRST, to the payment
of any fees, costs or expenses then due and payable to any of the Credit Parties
hereunder or under any other Loan Document; (ii) SECOND, to the payment of
interest then due and payable on the Loans; (iii) THIRD, to the payment of
principal then due and payable on the Term Loans; (iv) FOURTH, to the payment of
principal then due and payable on the Revolving Loans; and (v) FIFTH, to the
payment of all other amounts not otherwise referred to in this Section 2.9(c)
then due and payable to the Credit Parties hereunder or under any other Loan
Document.
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(d) Except as otherwise specified in the definition of Eurodollar Advance
Period, if any payment under this Agreement or any of the other Loan Documents
is specified to be made on a day which is not a Business Day, it shall be made
on the next Business Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(e) Notwithstanding anything to the contrary contained in this Agreement,
the Lenders shall decline any scheduled repayments of, and any mandatory or
voluntary prepayments of, any of their Participated Term Loans, and the amount
of such repayment or prepayment, as applicable, shall be applied, on a pro rata
basis, to prepay the Term A Loans (other than Term A Loans which are
Participated Term Loans) and the Term B Loans (other than Term B Loans which are
Participated Term Loans) then outstanding.
Section 2.10 Reimbursement.
(a) Whenever any Lender shall sustain or incur any losses or out-of-pocket
expenses (other than solely losses of profit) in connection with (i) failure by
the Borrower to borrow any Eurodollar Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
the Borrower's election not to proceed or the non-fulfillment of any of the
conditions set forth in Article 3), (ii) prepayment of any Eurodollar Advance
prior to the applicable Payment Date in whole or in part for any reason, or
(iii) failure by the Borrower to prepay any Eurodollar Advance after giving
notice of its intention to prepay such Advance, the Borrower agrees to pay to
such Lender, within ten (10) days of demand, an amount sufficient to compensate
such Lender for all such losses and reasonable out-of-pocket expenses (other
than solely losses of profit) resulting therefrom; provided, however, that
notwithstanding the foregoing, the Borrower shall have no obligation to make any
such payment in respect of any such losses or expenses incurred more than one
hundred eighty (180) days prior to its receipt of demand from such Lender. Such
Lender's good faith determination of the amount of such losses or out-of-pocket
expenses, as set forth in writing and accompanied by calculations in reasonable
detail demonstrating the basis for its demand, which shall be delivered at the
time of such demand to the Borrower by the Administrative Agent on behalf of
such Lender, shall be presumptively correct.
(b) Expenses subject to reimbursement hereunder shall include, without
limiting the generality of the foregoing, expenses incurred by any Lender or any
participant of such Lender permitted hereunder in connection with the
re-employment of funds prepaid, repaid, not borrowed or paid, as the case may
be, and the amount of the expenses subject to reimbursement hereunder shall be
the excess, if any, of (i) the interest or other cost to such Lender of the
deposit or other source of funding used to make any such Eurodollar Advance for
the remainder of its Eurodollar Advance Period, over (ii) the interest earned
(or to be earned) by such Lender upon the re-lending or other re-deployment of
the amount of such Eurodollar Advance for the remainder of its putative
Eurodollar Advance Period.
Section 2.11 Pro Rata Treatment.
(a) Advances. Each Advance of any of the Loans from the Lenders shall be
made pro-rata on the basis of their respective Commitment Ratios.
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(b) Payments Prior to Declaration of an Event of Default. Except as
provided in Section 2.2(e)(iv) and Section 2.7(d), prior to the declaration of
an Event of Default by the Administrative Agent on behalf of the Lenders under
Section 9.2 hereof, each payment and prepayment of principal of the Loans, and
each payment of interest on the Loans, shall be made to the Lenders pro-rata on
the basis of their respective Commitment Ratios. If any Lender shall obtain any
payment (whether involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Loans made by it in excess of its ratable share of
the Loans under its Commitment Ratio with respect thereto, such Lender shall
forthwith purchase from the other Lenders such participations in the applicable
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of the other Lenders; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded, and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery. The Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.11(b) 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 were the direct creditor of the
Borrower in the amount of such participation. The provisions of this Section
2.11(b) set forth the rights of the Lenders with respect to payment, and are not
enforceable for the benefit of the Borrower.
(c) Payments Subsequent to Declaration of an Event of Default. Subsequent
to the declaration of an Event of Default by the Administrative Agent on behalf
of the Lenders under Section 9.2 hereof, payments and prepayments made to any of
the Credit Parties, or otherwise received by any of the Credit Parties, shall be
distributed as provided in Section 9.3 hereof.
Section 2.12 Capital Adequacy. If any Lender shall have reasonably
determined that the adoption (after the Agreement Date) of any Applicable Law
regarding the capital adequacy of banks or bank holding companies, or any change
in Applicable Law (whether adopted before or after the Agreement Date) or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender with any directive issued
or adopted after the date hereof regarding capital adequacy (whether or not
having the force of law but with which such Person customarily complies) of any
such governmental authority, central bank or comparable agency, in each case
first promulgated after the Agreement Date, has or would have the effect of
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder to a level below that which it could have achieved but for
such adoption, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy immediately before such adoption,
change or compliance and assuming that such Lender's capital was fully utilized
prior to such adoption, change or compliance) by an amount reasonably deemed by
such Lender to be material, then such Lender shall promptly notify the Borrower
of such adoption, compliance, or change. Within sixty (60) days of written
notice by such Lender, the Borrower shall, in its discretion, (i) provide a
replacement lender or lenders for such Lender, which replacement lender or
lenders will be subject to the approval of the Agents, which consent shall not
be unreasonably withheld or delayed, and the Administrative Agent, such Lender
and the Borrower shall take all necessary actions to transfer the rights, duties
and obligations of such Lender to such replacement lender or lenders within such
sixty (60) day period (including, without limitation, the payment in full of all
Obligations hereunder due to the
44
Lender being replaced) and the Borrower shall pay such Lender all amounts
described in clause (ii) for the period prior to the replacement of such Lender,
or (ii) thereafter, from time to time within ten (10) days of demand by such
Lender, promptly pay to such Lender, or its applicable bank holding company or
parent, such additional amounts (other than income taxes) as shall be sufficient
to compensate such Lender for such reduced return, together with interest on
such amount from the fourth (4th) day after the date of demand until payment in
full thereof at the Base Rate plus the Applicable Margin in effect for Base Rate
Advances under the Revolving Commitment. A certificate of such Lender setting
forth the amount to be paid to such Lender by the Borrower as a result of any
event referred to in this paragraph and supporting calculations in reasonable
detail shall be conclusive, absent manifest error.
Section 2.13 Tax Forms. On or prior to the Agreement Date and on or prior
to the first Business Day of each calendar year thereafter, and with respect to
any new Lender, on the date of the applicable Assignment and Assumption
Agreement, each Lender which is organized in a jurisdiction other than the
United States shall provide each of the Administrative Agent and the Borrower
with either (a) two (2) properly executed originals of Internal Revenue Service
Forms W-8ECI, W-8IMY or W-8BEN, as appropriate (or any successor forms),
certifying (i) as to such Lender's status for purposes of determining complete
exemption from United States withholding taxes with respect to all payments to
be made to such Lender hereunder and under the other Loan Documents, or (ii)
that all payments to be made to such Lender hereunder and under the other Loan
Documents are subject to such taxes at a rate reduced to zero by an applicable
tax treaty, or (b) a certificate executed by such Lender certifying that such
Lender is not a "bank" and that such Lender qualifies for the portfolio interest
exemption under Section 881(c) of the Code, and two (2) properly executed
originals of Internal Revenue Service Forms W-8BEN or W-8IMY, as appropriate (or
any successor form), certifying such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under the other Loan Documents.
Each such Lender agrees to provide the Administrative Agent and the Borrower
with new forms to the extent prescribed by the Internal Revenue Service under
then-current law upon the expiration or obsolescence of any previously delivered
form, or after the occurrence of any event requiring a change in the most recent
forms delivered by it to the Administrative Agent and the Borrower. Each Credit
Party shall notify the Borrower at any time it determines that it is no longer
in a position to provide any previously delivered certificates to the Borrower
(or any other form of certification adopted by United States taxing authorities
for such purpose).
Section 2.14 Letters of Credit.
(a) Letter of Credit Committed Amount.
(i) Subject to the terms and conditions hereof, each Issuing Bank,
in reliance on the agreements of the L/C Participants set forth in Section
2.14(d)(i) hereof, agrees to issue Letters of Credit denominated in Dollars and
payable on a sight basis for the account of the Borrower prior to the Initial
Maturity Date, in such form as may be approved from time to time by such Issuing
Bank; provided that no Issuing Bank shall have any obligation to issue any
Letter of Credit if, after giving effect to such issuance, (A) the aggregate
amount of L/C Obligations would exceed the Letter of Credit Committed Amount, or
(B) the sum of (I) the
45
aggregate principal amount of Revolving Loans then outstanding, plus (II) the
aggregate amount of L/C Obligations then outstanding, would exceed the Revolving
Commitment.
(ii) Each Letter of Credit shall (A) be either (x) a standby letter
of credit issued to support obligations of the Borrower or any of its Restricted
Subsidiaries, contingent or otherwise, to finance the working capital and
business needs of the Borrower or any of its Restricted Subsidiaries in the
ordinary course of business, or (y) if available to the applicable Issuing Bank,
a commercial letter of credit issued in respect of the purchase of goods or
services by the Borrower or any of its Restricted Subsidiaries in the ordinary
course of business, and (B) expire no later than the earlier of (x) the date
that is twelve (12) months after the date of its issuance, and in the case of
standby Letters of Credit, may provide for the automatic extension of the expiry
date thereof for successive twelve (12) month periods and (y) the fifth (5th)
Business Day prior to the Initial Maturity Date.
(iii) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New York
or, in any case where the applicable Issuing Bank issues such Letters of Credit
from an office located outside of the United States, the laws of the
jurisdiction in which such office is located.
(iv) No Issuing Bank shall at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause such
Issuing Bank or any L/C Participant to exceed any limits imposed by, any
Applicable Law.
(b) Procedure for Issuance of Letters of Credit. The Borrower may request
that an Issuing Bank issue a Letter of Credit, at any time prior to the fifth
(5th) Business Day prior to the Initial Maturity Date, by delivering to the
applicable Issuing Bank at its address for notices specified herein a Request
for Issuance of Letter of Credit, completed to the satisfaction of such Issuing
Bank, and such other certificates, documents and other papers as such Issuing
Bank may reasonably request in connection with such Request for Issuance of
Letter of Credit. Upon receipt of any Request for Issuance of Letter of Credit,
the applicable Issuing Bank will process the Letter of Credit Application
accompanying such Request for Issuance of Letter of Credit, and the
certificates, documents and other papers and information delivered to it in
connection therewith, in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall any
Issuing Bank be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of any Request for Issuance of Letter of Credit
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by the applicable
Issuing Bank and the Borrower. The applicable Issuing Bank shall furnish a copy
of such Letter of Credit to the Borrower promptly following the issuance
thereof.
(c) Fees, Commissions and Other Charges.
(i) The Borrower shall pay to the Administrative Agent, for the
account of the applicable Issuing Bank and the L/C Participants, with respect to
each Letter of Credit issued hereunder, a per annum letter of credit fee, as and
to the extent set forth in Section 2.4(c) hereof. In addition, the Borrower
shall pay to the applicable Issuing Bank, for its own account, an
46
issuing fee, as set forth in Section 2.4(d) hereof, with respect to each Letter
of Credit issued by it hereunder.
(ii) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the applicable Issuing Bank for such normal and customary
processing or transactional fees as are incurred or charged by such Issuing Bank
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit issued by it.
(iii) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Banks and the L/C Participants all fees and
commissions received by the Administrative Agent for their respective accounts
pursuant to this Section 2.14(c), along with an accounting of the relevant
calculations.
(d) L/C Participations.
(i) Each Issuing Bank irrevocably agrees to grant and hereby grants
to each L/C Participant and, to induce such Issuing Bank to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from such Issuing Bank, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Commitment Ratio
from time to time in effect in such Issuing Bank's rights and obligations under
each Letter of Credit issued hereunder and each Letter of Credit Application and
the amount of each Draft paid by such Issuing Bank thereunder. Each L/C
Participant unconditionally and irrevocably agrees with such Issuing Bank that,
if a Draft is paid under any Letter of Credit for which such Issuing Bank is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to such Issuing Bank upon demand at
such Issuing Bank's address for notices specified herein an amount equal to such
L/C Participant's then Revolving Commitment Ratio of the amount of such Draft,
or any part thereof, which is not so reimbursed. If such demand is made prior to
12:00 noon (New York time) on a Business Day, such L/C Participant shall make
such payment to the applicable Issuing Bank prior to the end of such Business
Day and otherwise such L/C Participant shall make such payment on the next
succeeding Business Day.
(ii) If any amount required to be paid by any L/C Participant to any
Issuing Bank pursuant to Section 2.14(d)(i) in respect of any unreimbursed
portion of any payment made by such Issuing Bank under any Letter of Credit is
paid to such Issuing Bank within three (3) Business Days after the date such
payment is due, such L/C Participant shall pay to the applicable Issuing Bank on
demand an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Rate, as quoted by such Issuing Bank, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 2.14(d)(i) is not in fact made
available to the applicable Issuing Bank by such L/C Participant within three
(3) Business Days after the date such payment is due, such Issuing Bank shall be
entitled to recover from such L/C Participant, on demand, such amount with
interest thereon calculated from such due date at the rate per annum applicable
to Base Rate Advances hereunder. A certificate of any Issuing Bank submitted to
any L/C Participant with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
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(iii) Whenever, at any time after an Issuing Bank has made payment
under any Letter of Credit and has received from any L/C Participant its
pro-rata share of such payment in accordance with Section 2.14(d)(i), such
Issuing Bank receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of Collateral
applied thereto by such Issuing Bank), or any payment of interest on account
thereof, such Issuing Bank will, if such payment is received prior to 12:00 noon
(New York time) on a Business Day, distribute to such L/C Participant its
pro-rata share thereof prior to the end of such Business Day and otherwise such
Issuing Bank will distribute such payment on the next succeeding Business Day;
provided, however, that in the event that any such payment received by such
Issuing Bank shall be required to be returned by such Issuing Bank, such L/C
Participant shall return to such Issuing Bank the portion thereof previously
distributed by such Issuing Bank to it.
(e) Reimbursement Obligation of the Borrower.
(i) The Borrower agrees to reimburse each Issuing Bank, on the same
Business Day on which a Draft under any Letter of Credit paid by such Issuing
Bank, provided that such Issuing Bank provides notice to the Borrower prior to
12:00 noon (New York time) on such Business Day, and otherwise the Borrower will
reimburse such Issuing Bank on the next succeeding Business Day. The failure to
provide such notice shall not affect the Borrower's absolute and unconditional
obligation to reimburse the applicable Issuing Bank for any Draft paid under any
Letter of Credit issued by such Issuing Bank. The applicable Issuing Bank shall
provide notice to the Borrower on such Business Day as a Draft is paid by such
Issuing Bank indicating the amount of (A) such Draft so paid and (B) any taxes,
fees, charges or other costs or expenses incurred by such Issuing Bank in
connection with such payment. Each such payment shall be made to each applicable
Issuing Bank at its address for notices specified herein in Dollars in
immediately available funds.
(ii) Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this Section 2.14(e) from the date such amounts are
drawn until payment in full at the rate which would be payable on any
outstanding Base Rate Advances of Revolving Loans.
(iii) Each drawing under any Letter of Credit shall constitute a
request, with no further action required, by the Borrower to the Administrative
Agent for a borrowing pursuant to Section 2.2(b) in the amount of such drawing
which borrowing shall be funded on the date such drawing is paid unless such
drawing is otherwise reimbursed by the Borrower under Section 2.14(e)(i).
(f) Obligations Absolute.
(i) The Borrower's obligations under this Section 2.14 shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment (other than payment) which the
Borrower may have or have had against any Issuing Bank, any L/C Participant or
any beneficiary of a Letter of Credit; provided, however, that the Borrower
shall not be obligated to reimburse any Issuing Bank or any L/C Participant for
any wrongful payment, or indemnify any Issuing Bank or any L/C Participant for
any wrongful dishonor or any other matter, to the extent resulting from acts or
omissions constituting gross
48
negligence, bad faith or willful misconduct by such Issuing Bank or such L/C
Participant as determined by a court of competent jurisdiction in a final,
non-appealable judicial order.
(ii) The Borrower also agrees with any Issuing Bank and any L/C
Participant that neither any Issuing Bank nor any L/C Participant shall be
responsible for, and the Borrower's reimbursement obligations under Section
2.14(e)(i) shall not be affected by, (A) the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or (B) any dispute between or
among the Borrower and any beneficiary of any Letter of Credit or any other
party to which such Letter of Credit may be transferred, or (C) any claims
whatsoever of Borrower against any beneficiary of such Letter of Credit or any
such transferee.
(iii) Neither any Issuing Bank nor any L/C Participant shall be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the applicable
Issuing Bank's gross negligence, bad faith or willful misconduct as determined
by a court of competent jurisdiction in a final, non-appealable judicial order.
(iv) The Borrower agrees that any action taken or omitted by any
Issuing Bank under or in connection with any Letter of Credit or the related
drafts or documents, if done in absence of gross negligence, bad faith or
willful misconduct as determined by a court of competent jurisdiction in a
final, non-appealable judicial order and in accordance with the standards of
care specified in the Uniform Commercial Code of the State of New York, shall be
binding on the Borrower and shall not result in any liability of any Issuing
Bank or any L/C Participant to the Borrower.
(v) Promptly after the issuance of any standby Letter of Credit or
any amendment to any such Letter of Credit, the Administrative Agent shall
notify the L/C Participants of such issuance or amendment, as the case may be.
Upon the request of any L/C Participant, the applicable Issuing Bank shall
provide such L/C Participant with a copy of any such Letter of Credit or
amendment. Each Issuing Bank shall provide to the Administrative Agent on a
weekly basis a report for distribution to the L/C Participants setting forth the
amount of such Issuing Bank's commercial Letters of Credit issued hereunder.
(g) Letter of Credit Payments. If any Draft shall be presented for payment
under any Letter of Credit, the responsibility of the Issuing Bank with respect
thereto to the Borrower in connection with such Draft shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each Draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
(h) Application. To the extent that any provision of any Request for
Issuance of Letter of Credit or any Letter of Credit Application related to any
Letter of Credit is inconsistent with the provisions of this Section 2.14, the
provisions of this Section 2.14 shall apply.
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(i) Change in Law. If any change after the Agreement Date in Applicable
Law, any change in the interpretation or administration thereof, or any change
after the Agreement Date in compliance with Applicable Law by any Issuing Bank
or any other Lender as a result of any request or directive of any governmental
authority, central bank or comparable agency (whether or not having the force of
law but with which such Issuing Bank or Lender customarily complies) shall (i)
impose, modify or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System), special
deposit, capital adequacy, assessment or other requirements or conditions
against Letters of Credit issued by any Issuing Bank or against participations
by any L/C Participant in the Letters of Credit or (ii) impose on any Issuing
Bank or any L/C Participant any other condition regarding any Letter of Credit
or any participation therein, and the result of any of the foregoing in the
reasonable determination of such Issuing Bank or such L/C Participant, as the
case may be, is to increase the cost (other than income taxes) to such Issuing
Bank or such L/C Participant of issuing or maintaining any Letter of Credit or
purchasing or maintaining any participation therein, as the case may be, by an
amount (which amount shall be reasonably determined) deemed by such Issuing Bank
or such L/C Participant to be material, then, on the earlier of (x) ten (10)
days following the date of demand (which demand shall be made not later than six
(6) months following such Issuing Bank's or such L/C Participant's determination
of a need for additional compensation) by such Issuing Bank or such L/C
Participant or (y) the Initial Maturity Date, the Borrower shall pay such
Issuing Bank or such L/C Participant, as the case may be, such additional amount
or amounts as such Issuing Bank or such L/C Participant, as the case may be,
determines will compensate it for such increased costs. Within sixty (60) days
of such written demand by such Issuing Bank or such L/C Participant, the
Borrower may, in its discretion, provide a replacement lender or lenders for
such Issuing Bank or such L/C Participant, which replacement lender or lenders
will be subject to the approval of the Agents, which consent shall not be
unreasonably withheld or delayed, and the Administrative Agent, such Issuing
Bank or such L/C Participant, as applicable, and the Borrower shall take all
necessary actions to transfer the rights, duties and obligations of such Issuing
Bank or such L/C Participant to such replacement lender or lenders within such
sixty (60) day period. A certificate of such L/C Participant or such Issuing
Bank setting forth the amount, and in reasonable detail, the basis for such
Issuing Bank or such L/C Participant's determination of such amount, to be paid
to such Issuing Bank or such L/C Participant by the Borrower as a result of any
event referred to in this paragraph shall, absent manifest error, be conclusive.
Such certificate shall be delivered to the Borrower with each written demand for
payment referenced above. Each Issuing Bank and each L/C Participant further
agree that they shall use their best efforts to give the Borrower thirty (30)
days prior notice, and in any event shall give prompt notice, of any event
referred to in this paragraph which may have the effect of materially increasing
the cost to such Issuing Bank or such L/C Participant of issuing or maintaining
any Letter of Credit or purchasing or maintaining any participation therein.
(j) Indemnity. The Borrower will indemnify and hold harmless the
Indemnified Parties from and against any and all claims, liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, reasonable
costs, reasonable expenses or reasonable disbursements of any kind or nature
whatsoever (including, without limitation, reasonable attorneys' fees) (other
than income taxes) which may be imposed on, incurred by or asserted against any
such Indemnified Parties in any way relating to or arising out of the issuance
of a Letter of Credit, except that the Borrower shall not be liable to any of
the Indemnified Parties for any portion of
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such claims, liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence, bad faith or willful misconduct of the Indemnified Parties as
determined by a final, non-appealable judicial order. This Section 2.14(j) shall
survive termination of this Agreement.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Initial Advance of the Loans and to
the Issuance of the Initial Letter of Credit. The obligation of the Lenders to
undertake their respective Commitments and to enter into this Agreement, and of
each Issuing Bank to issue the initial Letter of Credit (if issued on the
Agreement Date), is subject to the prior fulfillment of each of the following
conditions:
(a) The Administrative Agent shall have received each of the following
(with copies for each of the Lenders), in form and substance satisfactory to the
Agents and each of the Lenders:
(i) this duly executed Agreement;
(ii) the duly executed Security Agreement;
(iii) the duly executed Subsidiary Security Agreement;
(iv) the duly executed Holdco Pledge Agreement;
(v) a duly executed Second Amendment to Intellectual Property
Security Agreement between Pub Holdco and the Administrative Agent, in form and
substance reasonably satisfactory to the Administrative Agent;
(vi) the loan certificate of the Borrower, in substantially the form
attached hereto as Exhibit U, including a certificate of incumbency with respect
to each Authorized Signatory, together with appropriate attachments which shall
include without limitation, the following items: (A) a copy of the articles or
certificate of incorporation of the Borrower, certified to be true, complete and
correct by the Secretary of State of the State of Delaware, and a true, complete
and correct copy of the by-laws of the Borrower; (B) certificates of good
standing for the Borrower issued by the Secretary of State of the State of
Delaware and by the Secretary of State or similar state official for each other
state in which the Borrower is required to or has qualified to do business; (C)
a true, complete and correct copy of the resolutions of the board of directors
of the Borrower, authorizing the borrowing hereunder and the execution, delivery
and performance by the Borrower of this Agreement and the other Loan Documents
to which it is a party; and (D) true, correct and complete copies of any
employment agreements with respect to management of the Borrower or any of its
Subsidiaries;
(vii) the duly executed Reaffirmation Agreement;
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(viii) a loan certificate from each Subsidiary of the Borrower, in
substantially the form attached hereto as Exhibit V, including a certificate of
incumbency with respect to each officer authorized to execute Loan Documents on
behalf of such Subsidiary, together with appropriate attachments which shall
include, without limitation, the following items if such Subsidiary is a
corporation, and the analogous items if such Subsidiary is a partnership or a
limited liability company: (A) a copy of the articles or certificate of
incorporation of such Subsidiary, certified to be true, complete and correct by
the Secretary of State of the state of such Subsidiary's organization, and a
true, complete and correct copy of the by-laws of such Subsidiary; (B)
certificates of good standing for such Subsidiary issued by the Secretary of
State of such Subsidiary's organization and by the Secretary of State or similar
state official for each state in which such Subsidiary is required to or has
qualified to do business; and (C) a true, complete and correct copy of the
resolutions of the board of directors of such Subsidiary authorizing the
execution, delivery and performance by such Subsidiary of the Loan Documents to
which it is a party;
(ix) a loan certificate of each of Holdco and Intermediate Holdco,
in substantially the form attached hereto as Exhibit W, including a certificate
of incumbency with respect to each officer authorized to execute Loan Documents
on behalf of Holdco or Intermediate Holdco, as applicable, together with
appropriate attachments which shall include without limitation, the following
items: (A) a copy of the certificate of incorporation of Holdco or Intermediate
Holdco, as applicable, certified to be true, complete and correct by the
Secretary of State of the State of Delaware, and a true, complete and correct
copy of the by-laws of Holdco or Intermediate Holdco, as applicable; (B)
certificates of good standing for Holdco or Intermediate Holdco, as applicable,
issued by the Secretary of State of the State of Delaware and by the Secretary
of State or similar state official for each other state in which Holdco or
Intermediate Holdco, as applicable, is required to or has qualified to do
business; and (C) a true, complete and correct copy of the resolutions of the
board of directors of Holdco or Intermediate Holdco, as applicable, authorizing
the execution, delivery and performance by Holdco or Intermediate Holdco, as
applicable, of the Loan Documents to which it is a party;
(x) copies of insurance binders or certificates covering the Assets
of the Borrower and its Subsidiaries, and otherwise meeting the requirements of
Section 5.5 hereof;
(xi) the legal opinion, dated as of the Agreement Date, of ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, as counsel to the Borrower Parties in connection with the transactions
contemplated by this Agreement and the other Loan Documents addressed to the
Administrative Agent and the other Credit Parties and in form and substance
satisfactory to the Agents and their counsel;
(xii) the duly executed Use of Proceeds Letter;
(xiii) the duly executed Certificate of Financial Condition; and
(xiv) copies of all consents of any Person, and filings with any
Governmental Authority (including, without limitation, ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
filings) made or obtained in connection with the Exchange Offer or the
transactions contemplated by this Agreement and the other Loan Documents.
52
(b) The Agents shall have received evidence satisfactory to them that all
material Necessary Authorizations, including all necessary material consents to
the Exchange Offer and the execution, delivery and performance by the Borrower
of this Agreement and the other Loan Documents to which it is a party and by
Holdco, Intermediate Holdco and the Subsidiaries of the Borrower of the Loan
Documents to which they are parties, have been obtained or made, are in full
force and effect and are not subject to any pending or threatened reversal or
cancellation, and the Administrative Agent shall have received a certificate of
an Authorized Signatory of the Borrower so stating.
(c) The Agents shall have received evidence satisfactory to them that (A)
all conditions precedent to the consummation of the Exchange Offer (other than
the closing of this Agreement and the financing transactions contemplated
hereby) shall have been satisfied and (B) immediately upon the closing of this
Agreement and the financing transactions contemplated hereby, the Exchange Offer
shall be consummated in accordance in all material respects with the terms of
the Exchange Offer Documents and in compliance with all Applicable Laws. The
Agents shall also have received evidence satisfactory to them and their counsel
that no litigation seeking to enjoin or otherwise prevent the consummation of
the Exchange Offer exists or is threatened.
(d) The Credit Parties shall receive payment of all fees and expenses due
and payable on the Agreement Date (including, without limitation, fees and
expenses for counsel to the Administrative Agent and for other consultants and
financial advisors engaged by the Administrative Agent on behalf of the Credit
Parties) in respect of the transactions contemplated hereby.
(e) No Default or Event of Default shall have occurred and be continuing
after giving effect to this Agreement, and the Administrative Agent shall have
received a certificate of an Authorized Signatory of the Borrower so stating.
(f) The Administrative Agent shall have received a Performance Certificate
from the Borrower demonstrating, on a pro forma basis, that the Senior Leverage
Ratio (as defined herein) calculated as of the Agreement Date, based upon the
Borrower's financial performance for the immediately preceding twelve (12) month
period as set forth in the financial statements of the Borrower delivered with
respect to the month ended June 30, 2002, is less than or equal to 6.75 to 1.00.
(g) The Administrative Agent shall have received the Borrower's financial
projections, after giving effect to the transactions contemplated hereby
(including, without limitation, consummation of the Exchange Offer) on a fiscal
year basis through the Final Maturity Date, and on a fiscal quarter basis
through September 30, 2004 (together with any revisions thereof required to be
delivered by the Borrower pursuant to the terms hereof, the "Projections").
(h) The Agents shall have received a certificate of a Principal Officer
satisfactory to them and their counsel that Holdco has received Closing Equity
of not less than $78,500,000 (approximately $71,000,000 of which will consist of
cash and the remainder of which will consist of debt securities), of which at
least $50,000,000 has been contributed as additional
53
equity to the Borrower and the remaining portion shall have been paid to the
holders of the Refinancing Securities in connection with the Exchange Offer, in
each case, on or prior to the Agreement Date, which Closing Equity has been
provided by the Controlling Shareholders and the Co-Investors on terms and
conditions reasonably acceptable in all respects to the Credit Parties.
(i) The Agents shall have received evidence satisfactory to them that the
portion of the Closing Equity received by the Borrower in connection with the
closing of this Agreement (less any transaction fees and expenses) shall have
been deposited into the Equity Collateral Account, and the Administrative Agent
(for the benefit of the Credit Parties) shall have been granted a valid and
perfected first priority Lien in all amounts deposited in the Equity Collateral
Account, pursuant to a deposit pledge agreement or other security agreement in
form and substance reasonably satisfactory to the Administrative Agent.
(j) All legal matters incident to this Agreement and the consummation of
the transactions contemplated hereby shall be reasonably satisfactory to the
Agents and their counsel.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Lenders to make each Advance is subject to the fulfillment of each of the
following conditions immediately prior to or contemporaneously with such
Advance:
(a) All of the representations and warranties made by or with respect to
the Borrower Parties, or any of them, under this Agreement and the other Loan
Documents, which, pursuant to Section 4.2 hereof, are made at and as of the time
of such Advance, shall be true and correct at such time in all material
respects, both before and after giving effect to the application of the proceeds
of such Advance unless specifically relating to an earlier date; and
(b) There shall not exist, on the date of the making of such Advance and
after giving effect to the application of the proceeds of such Advance, a
Default or Event of Default hereunder, and the Administrative Agent shall have
received a Request for Advance signed by an Authorized Signatory so certifying,
which Request for Advance shall also provide calculations demonstrating the
Borrower's compliance with Section 8.1 hereof before and after giving effect to
such Advance, which calculations shall be based, during the period from the date
that draft quarterly financial statements are delivered with respect to the
fourth quarter of any fiscal year of the Borrower pursuant to Section 6.2 hereof
until the time that final quarterly financial statements are furnished pursuant
to Section 6.2 hereof, upon the financial information set forth in such draft
financial statements, and at all other times on the financial information set
forth in the final quarterly financial statements most recently delivered under
Section 6.2 hereof.
Section 3.3 Conditions Precedent to Issuance of Each Letter of Credit. The
obligation of each Issuing Bank to issue any Letter of Credit hereunder is
subject to the prior fulfillment of each of the following conditions:
(a) All of the representations and warranties made by or with respect to
the Borrower Parties, or any of them, under this Agreement and the other Loan
Documents, which, pursuant to Section 4.2 hereof, are made at and as of the time
of the issuance of such Letter of Credit, shall
54
be true and correct at such time in all material respects, both before and after
giving effect to the issuance of such Letter of Credit unless specifically
relating to an earlier date; and
(b) There shall not exist, on the date of the issuance of such Letter of
Credit and after giving effect thereto, a Default or Event of Default hereunder,
and the Administrative Agent shall have received a Request for Issuance of
Letter of Credit so certifying, which Request for Issuance of Letter of Credit
shall also provide calculations demonstrating the Borrower's compliance with
Section 8.1 hereof before and after giving effect to the issuance of such Letter
of Credit, which calculations shall be based, during the period from the date
that draft quarterly financial statements are delivered with respect to the
fourth quarter of any fiscal year of the Borrower pursuant to Section 6.2 hereof
until the time that final quarterly financial statements are furnished pursuant
to Section 6.2 hereof, upon the financial information set forth in such draft
financial statements, and at all other times on the financial information set
forth in the final quarterly financial statements most recently delivered under
Section 6.2 hereof.
Section 3.4 Conditions Subsequent. Within one hundred eighty (180) days
after the Agreement Date, the Borrower shall seek an updated credit rating from
Standard & Poor's and ▇▇▇▇▇'▇ rating services (the failure by the Borrower to so
act constituting an Event of Default hereunder).
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower, for itself and
on behalf of each of the other Borrower Parties, hereby agrees, represents and
warrants in favor of each of the Credit Parties that:
(a) Organization; Ownership; Power; Qualification. Except as otherwise
permitted under Section 7.5 hereof, each of the Borrower Parties is a
corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the state of its incorporation or organization, has
the corporate or other organizational power and authority to own or lease and
operate its properties and to carry on its business as now being and hereafter
proposed to be conducted. Each of the Borrower Parties is duly qualified, in
good standing and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its businesses makes such
qualification or authorization necessary except where failure to be so
qualified, in good standing or authorized would not reasonably be expected to
have a Materially Adverse Effect.
(b) Authorization; Enforceability. Each of the Borrower Parties has the
corporate or other organizational power and has taken all such action, to
authorize it to execute, deliver and perform each of the Loan Documents to which
it is a party in accordance with their respective terms, and to consummate the
transactions contemplated by this Agreement and by such Loan Documents. This
Agreement, and each of the other Loan Documents to which any of the Borrower
Parties is a party, has been duly executed and delivered by such Borrower Party,
and is a legal, valid and binding obligation of such Borrower Party, enforceable
against such Borrower Party in accordance with its terms, except to the extent
that enforcement thereof may be limited
55
by bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to any Insolvency Proceeding of such Borrower Party) and by
the application of general equitable principles.
(c) Equity Interests, Business Organization and Related Matters. As of the
Agreement Date, the capitalization of Holdco will be as set forth on Schedule
4.1(c) hereof. As of the Agreement Date, the Borrower does not have any
Subsidiaries other than as set forth on Schedule 4.1(c). Holdco does not have
any Subsidiaries other than Intermediate Holdco or the Borrower, and
Intermediate Holdco does not have any Subsidiaries other than the Borrower. All
of the issued and outstanding Equity Interests of the Borrower and its
Subsidiaries (other than any of the Foreign Subsidiaries) have been duly
authorized and validly issued and are fully paid and (to the extent such Person
is a corporation) nonassessable, and are free and clear of all Liens (except for
Permitted Liens). None of such Equity Interests has been issued in violation of
the Securities Act, or the securities, "Blue Sky" or other Applicable Laws of
any applicable jurisdiction. As of the Agreement Date except as set forth in
Schedule 4.1(c), none of the Borrower Parties has outstanding any stock or
securities convertible into or exchangeable for any of its Equity Interests, nor
are there any preemptive or similar rights to subscribe for or to purchase, or
any other rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments, or claims of any character relating
to, any of such Equity Interests or any stock or securities convertible into or
exchangeable for any of such Equity Interests. As of the Agreement Date, except
as set forth in Schedule 4.1(c), none of the Borrower Parties is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its Equity Interests or to register any of its Equity Interests,
and there are no agreements restricting the transfer of any of the Equity
Interests of any of the Borrower Parties or restricting the ability of any
Subsidiary of the Borrower from making distributions, dividends or other
Restricted Payments to the Borrower other than the Loan Documents, the
Refinancing Securities Documents and the Exchange Offer Documents. Except as set
forth on Schedule 4.1(c), within the five (5) year period immediately preceding
the Agreement Date, none of the Borrower Parties has changed its name nor
transacted business under any other name or trade name.
(d) Compliance with Other Loan Documents and Contemplated Transactions.
The execution, delivery and performance by each of the Borrower Parties of this
Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms, and the consummation of the transactions
contemplated hereby and thereby, do not and will not (i) require any material
consent or approval, governmental or otherwise, not already obtained, (ii)
violate in any material respect any Applicable Law respecting any Borrower
Party, (iii) conflict with, result in a breach of, or constitute a default under
the certificate or articles of incorporation, by-laws or other governing
documents of any Borrower Party, or under any material indenture, agreement or
other instrument, to which any Borrower Party is a party or by which any of them
or their respective properties may be bound, (iv) conflict with, result in a
breach of, or constitute a default or violation of, the terms and conditions of
any Necessary Authorization, or (v) result in or require the creation or
imposition of any Lien upon or with respect to any Assets or other property now
owned or hereafter acquired by any Borrower Party, except for Permitted Liens.
56
(e) Business. Each of the Borrower and its Restricted Subsidiaries are
engaged in the business of publishing (in print or on an Internet web-site)
technology-related magazines in the United States and Europe, and in business
activities related thereto.
(f) Necessary Authorizations, Etc. The Borrower Parties have obtained all
material Necessary Authorizations, and all of the material Necessary
Authorizations are in full force and effect, and the Borrower Parties are in
compliance in all material respects with the provisions thereof. No material
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened attack or revocation, and the Borrower is not
aware of any fact or condition which would constitute grounds for any
governmental or other licensing authority to deny any pending application for
any material Necessary Authorization, to suspend, revoke, modify or annul any
material Necessary Authorizations or to impose any material financial penalty on
any Borrower Party.
(g) Compliance with Law. The Borrower Parties, and the conduct of their
respective businesses by the Borrower Parties, are in compliance in all material
respects with all, and do not violate in any material respect any, (i)
Applicable Laws and/or (ii) provisions of the certificates or articles of
incorporation, by-laws and other governing documents of any Borrower Party.
(h) Title to Assets. Except with respect to intellectual property (which
is addressed in Section 4.1(q)), the Borrower Parties each have good and legal
title to, or a valid leasehold interest in, all of their respective material
Assets, and none of such Assets is subject to any Liens, except for Permitted
Liens. Except for financing statements or other agreements evidencing Permitted
Liens, (i) no financing statement under the Uniform Commercial Code as in effect
in any jurisdiction and no other filing which names any of the Borrower Parties
as debtor, or which covers or purports to cover any of the Assets of any of the
Borrower Parties, is currently effective and on file in any state or other
jurisdiction (other than precautionary UCC financing statements regarding
operating leases or consignments), and (ii) none of the Borrower Parties has
signed any such financing statement or filing or any security agreement or other
document authorizing any secured party to file any such financing statement or
filing. None of the Borrower Parties is a party to any contract, instrument or
agreement (including, without limitation, any of the Necessary Authorizations,
but excluding (A) the Refinancing Securities Documents, (B) the Exchange Offer
Documents, (C) the Loan Documents, and (D) any agreements providing financing
for the purchase of a particular asset or assets (but only the extent of such
asset or assets financed thereunder)) restricting the ability of such Borrower
Party to enter into an agreement by which such Borrower Party agrees that it
shall not create, assume, incur or permit to exist or be created, directly or
indirectly, any Lien on its Assets other than Permitted Liens.
(i) Litigation. As of the Agreement Date and to the best of the Borrower's
knowledge, except as set forth on Schedule 4.1(i) attached hereto, there is no
material action, suit, application, complaint, petition, revocation, proceeding
or investigation, at law or in equity, or any material order, decree or
judgment, in effect or pending against, or threatened against any of the
Borrower Parties or any of their respective properties and Assets (including,
without limitation, any Necessary Authorization) in any court or before any
arbitrator of any kind or before or by any governmental body. No such action,
suit, proceeding or investigation, and no action, suit, proceeding or
investigation arising after the Agreement Date, (i) calls into question
57
the validity of this Agreement or any of the other Loan Documents, or (ii) could
reasonably be expected to have a Materially Adverse Effect.
(j) Taxes. All federal and material state, local and other tax returns
(including information returns) of each of the Borrower Parties required by law
to be filed have been duly filed and all federal and state, local and other
material taxes and impositions, including, without limitation, withholding
taxes, assessments and other governmental charges or levies required to be paid
by any of the Borrower Parties or imposed upon any of the Borrower Parties or
any of their respective properties, income, profits or Assets, which are due and
payable, have been paid prior to the time for assessment of penalties, except
any such taxes (i) the payment of which any of the Borrower Parties is
diligently contesting in good faith by appropriate proceedings, (ii) for which
adequate reserves have been provided on the books of the applicable Borrower
Party, and (iii) as to which no Lien, other than a Permitted Lien, has attached
and no foreclosure, distraint, sale or similar proceedings have been commenced.
The charges, accruals and reserves on the books of each of the Borrower Parties
in respect of any taxes or other governmental charges are adequate.
(k) Financial Information. The Borrower has furnished or caused to be
furnished to the Credit Parties (i) the unaudited balance sheets of the
Borrower, on a consolidated basis with the Restricted Subsidiaries, and of
LaunchCo and InternetCo, each on a consolidated basis with its Subsidiaries, and
the related statements of operations and the related statements of cash flows of
the Borrower, on a consolidated basis with the Restricted Subsidiaries, and the
related revenue and EBITDA on a consolidating (by publication) basis, and the
related statements of operations and the related statements of cash flows of
InternetCo and LaunchCo, each on a consolidated basis with its Subsidiaries, and
the related revenue and EBITDA on a consolidating (by publication) basis, in
each case for the month ended June 30, 2002, and for the fiscal quarter ended
March 31, 2002, and (ii) the audited balance sheet of the Borrower, on a
consolidated basis with the Restricted Subsidiaries, and the unaudited balance
sheets of InternetCo and LaunchCo, each on a consolidated basis with its
Subsidiaries, and the related audited statement of income and retained earnings
or deficit and related statements of cash flows of the Borrower, on a
consolidated basis with the Restricted Subsidiaries, and the related unaudited
statement of income and retained earnings or deficit and related statements of
cash flows of InternetCo and LaunchCo, each on a consolidated basis with its
Subsidiaries, in each case for the nine (9) month period ended December 31,
2001, which are, to the best of the Borrower's knowledge, complete and correct
in all material respects and present fairly in all material respects in
accordance with GAAP the financial position of the Borrower, on a consolidated
basis with the Restricted Subsidiaries, and of InternetCo and LaunchCo, each on
a consolidated basis with its Subsidiaries on and as at December 31, 2001
(collectively, the "Financial Statements"). As of the Agreement Date, none of
the Borrower Parties has any material liabilities, contingent or otherwise which
would be required to be disclosed in accordance with GAAP, other than as
disclosed in the financial statements referred to in the preceding sentence or
as set forth or referred to in this Agreement, and there are no material
unrealized losses of any of the Borrower Parties and no anticipated losses of
any of the Borrower Parties other than those set forth in the Projections which
have been disclosed in writing to the Credit Parties prior to the Agreement Date
and identified as such. The Projections represent the Borrower's best estimate
of projected future operations as of the Agreement Date, and to the best of the
Borrower's knowledge, there exist no facts or circumstances which the Borrower
believes could be reasonably likely to cause a
58
materially adverse change in the Projections; it being recognized by the Lenders
that business projections are not to be viewed as facts and that actual results
may differ.
(l) No Adverse Change. Since December 31, 2001, there has occurred no
event which has had or which could reasonably be expected to have a Materially
Adverse Effect, other than (i) the existence of the Existing Defaults, (ii) with
respect to the discontinuation, suspension, closure, sale or merger of any of
Ziff ▇▇▇▇▇ Smart Business, Yahoo! Internet Life, Family PC, Mac Publishing LLC
(publisher of MacWorld), Expedia Travels, Interactive Week, The Net Economy and
Smart Partner, (iii) with respect to the decline in the Borrower's business
prior to the Agreement Date attributable to the reduction in advertising pages
and circulation resulting from market conditions existing prior to the Agreement
Date and (iv) with respect to any decline in the Borrower's business after the
Agreement Date attributable to any reduction in advertising pages and
circulation resulting from market conditions affecting the publishing industry
as a whole.
(m) ERISA. As of the Agreement Date, each Plan subject to Title IV of
ERISA, or contributed to, by any of the Borrower Parties, or any of their ERISA
Affiliates, is listed on Schedule 4.1(m) attached hereto. Each of such Plans is
in compliance in all material respects with their terms, ERISA and the Code.
None of such Plans has an "accumulated funding deficiency" within the meaning of
ERISA or the Code. None of the Borrower Parties, nor any of their respective
ERISA Affiliates, has incurred any material liability to the PBGC (other than
the payment of premiums imposed by Title IV of ERISA) in connection with any
such Plan. The assets of each such Plan which is subject to Title IV of ERISA
are sufficient to provide the benefits under such Plan if such Plan were
terminated on the date hereof. No Reportable Event has occurred with respect to
any such Plan. No party in interest, fiduciary, trustee or administrator of any
such Plan or trust created thereunder has engaged in a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
which would subject any of the Borrower Parties or any of their respective ERISA
Affiliates to a tax on "prohibited transactions" imposed by Section 4975 of the
Internal Revenue Code resulting in a liability to the Borrower Parties of
greater than $1,000,000. No party in interest, fiduciary, trustee or
administrator of any such Plan or trust created thereunder has committed a
breach of its fiduciary duty or knowingly participated in any violation of ERISA
which would subject any of the Borrower Parties, or any of their respective
ERISA Affiliates to a material penalty under Section 502 of ERISA. As of the
Agreement Date, none of the Borrower Parties nor any of their respective ERISA
Affiliates is a participant in or obliged to make any payment to a Multiemployer
Plan. As of the Agreement Date, except as required by Sections 601 through 609
of ERISA, none of the Borrower Parties has made any oral or written commitments
to provide post-employment health or life insurance coverage with respect to any
former or current employee. The Borrower Parties and ERISA Affiliates have
properly classified individuals providing services to any of the Borrower
Parties or ERISA Affiliates as employees or non-employees, except to the extent
that a misclassification would not result in a Materially Adverse Effect.
(n) Compliance with Regulations U. None of the Borrower Parties is engaged
principally in, or has as one of its important activities, the business of
purchasing or carrying, or extending credit for the purpose of purchasing or
carrying, any margin stock within the meaning of Regulations U of the Board of
Governors of the Federal Reserve System.
59
(o) Investment Company Act; Public Utility Holding Company Act. None of
the Borrower Parties is required to register under the provisions of the
Investment Company Act of 1940, as amended, and neither the entering into or
performance by the Borrower of this Agreement nor the issuance of the Notes
violates any provision of such Act or requires any consent, approval or
authorization of, or registration with, the Securities and Exchange Commission
or any other governmental or public body or authority pursuant to any provisions
of such Act. None of the Borrower Parties is a "public utility holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(p) Securities Laws. Each of the Borrower Parties has complied in all
material respects with all material federal and state securities laws in
connection with the offer and sale of stock or other equity interests in any of
the Borrower Parties.
(q) Intellectual Property. Each of the Borrower Parties owns or possesses
the valid right to use all material patents, patent applications, patent and
know-how licenses, inventions, technology, trademark registrations and
applications, product designs, processes, trademarks, service marks, trade
names, copyright registrations and licenses and rights in respect of the
foregoing, which are necessary for the conduct of its business as now conducted
or hereafter proposed to be conducted free and clear of any Liens, other than
Permitted Liens. None of such material licenses and rights with respect to
material patents, trademarks, trademark rights, trade names, trade name rights,
service marks and copyrights is subject to any pending or, to the best knowledge
of the Borrower, threatened attack, conflict or revocation which would be
reasonably likely to have a Materially Adverse Effect. As of the Agreement Date,
none of the Borrower Parties owns or possesses the valid right to use any
registered patents, trademarks or copyrights, or applications for any of the
foregoing, except for those registered patents, trademarks and copyrights, and
applications therefor, owned by Pub Holdco and set forth on the schedules to the
Intellectual Property Security Agreement.
(r) True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of any Borrower
Party in writing to any Lender (other than the Projections, budgets, drafts or
other estimates) for purposes of or in connection with this Agreement or any
transaction contemplated herein is, (and, solely with respect to any such
information furnished on behalf of any Borrower Party by a third party, to the
best of Borrower's knowledge, is) true and accurate in all material respects on
the date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information was provided.
(s) Agreements with Affiliates and Management Agreements. Except as set
forth on Schedule 4.1(s) attached hereto, as of the Agreement Date, none of the
Borrower Parties has any written agreements or binding arrangements of any kind
with any Affiliate not entered into in the ordinary course of business.
(t) Environmental Matters. Except as is described on Schedule 4.1(t)
attached hereto:
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(i) Each Property of any of the Borrower Parties does not contain,
in, on or under, including, without limitation, the soil and groundwater thereon
or thereunder, any Hazardous Materials (A) except in such quantities as required
for the conduct in the ordinary course of the Borrower's business, and then only
in compliance in all material respects with applicable Environmental Laws, or
(B) in amounts or circumstances that could give rise to material liability of
the Borrower Parties under Environmental Laws.
(ii) Each of the Borrower Parties is in compliance with all
applicable Environmental Laws, and there is no condition which could interfere
with the continued operation of any of their respective Properties in compliance
with Environmental Laws or impair the financial condition of the Borrower,
except such non-compliance or condition as could not reasonably be expected to
have a Materially Adverse Effect.
(iii) As of the Agreement Date, none of the Borrower Parties has
received from any Governmental Authority or any other Person any complaint,
notice of violation, alleged violation, investigation or advisory action or
notice of potential liability regarding matters of environmental protection or
permit compliance under applicable Environmental Laws with regard to their
respective Properties, and as of the Agreement Date, none of the Borrower
Parties is aware that any Governmental Authority is contemplating delivering to
any of the Borrower Parties any such notice. As of the Agreement Date, there is
no condition or circumstance currently or with the passage of time that could
reasonably be expected to present the basis of any such notice. As of the
Agreement Date, there has been no pending or, to the Borrower's knowledge,
threatened complaint, notice of violation, alleged violation, investigation or
notice of any material potential liability under Environmental Laws with regard
to any of their respective Properties.
(iv) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the Properties of any of the Borrower
Parties by or on behalf of any of the Borrower Parties except in such quantities
as required for the conduct in the ordinary course of the Borrower's business,
and then only in compliance with applicable Environmental Laws, or in a manner
that could give rise to material liability under Environmental Laws nor have any
Hazardous Materials been transported or disposed of from any of the Properties
by or on behalf of any of the Borrower Parties to any other location except in
compliance with all Environmental Laws nor in a manner that could reasonably be
anticipated to give rise to material liability under Environmental Laws.
(v) None of the Borrower Parties is a party to any governmental
administrative actions or judicial proceedings pending under any Environmental
Law with respect to any of the Properties, nor are there any consent decrees or
other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law
with respect to any of the Properties of any of the Borrower Parties.
(vi) Notwithstanding anything to the contrary contained in this
Section 4.1(t), the foregoing representations shall only be untrue if the
aggregate effect of all conditions, failures and non-compliance of the types
described above would reasonably be expected to result
61
in liability (including, without limitation, costs to remediate any affected
Property) to the Borrower Parties in excess of $1,000,000.
(u) Payment of Wages; Labor Matters. Each of the Borrower Parties is in
compliance with the Fair Labor Standards Act, as amended, in all material
respects, and each of the Borrower Parties has complied in all material respects
with all minimum and overtime wage requirements applicable to its employees. As
of the Agreement Date, except as disclosed on Schedule 4.1(u): (i) no labor
contract to which any of the Borrower Parties is a party or is otherwise subject
is scheduled to expire during the term of this Agreement; (ii) none of the
Borrower Parties has, within the two (2) year period immediately preceding the
Agreement Date, taken any action which would have constituted or resulted in a
"plant closing" or "mass layoff" within the meaning of the Federal Worker
Adjustment and Retraining Notification Act of 1988 or any similar applicable
federal, state or local law, and the Borrower does not have any reasonable
expectation that any such action is or will be required at any time during the
term of this Agreement; (iii) all of the operations of the Borrower Parties are
conducted in all material respects in compliance with all applicable rules and
regulations promulgated by the Occupational Safety and Health Administration of
the United States Department of Labor; and (iv) as of the Agreement Date, (A)
none of the Borrower Parties is a party to any labor dispute (other than any
immaterial disputes with such Borrower Party's employees as individuals and not
affecting such Borrower Party's relations with any labor group or its workforce
as a whole) and (B) there are no pending or, to the Borrower's knowledge,
threatened strikes or walkouts relating to any labor contracts to which any of
the Borrower Parties is a party or is otherwise subject. As of the Agreement
Date, none of the employees of any of the Borrower Parties is a party to any
collective bargaining agreement with any of the Borrower Parties.
(v) Priority. The Security Interest is a valid and perfected first
priority (except for Permitted Liens) security interest, to the extent that a
security interest may be created under Article 9 of the Uniform Commercial Code
as in effect in any applicable jurisdiction, in all of the Collateral in favor
of the Administrative Agent, for the benefit of the Credit Parties, securing, in
accordance with the terms of the Security Documents, the outstanding
Obligations. The Collateral is not subject to any Liens other than Permitted
Liens. The Liens created by the Security Documents are enforceable as security
for the outstanding Obligations in accordance with their terms with respect to
the Collateral except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to any Insolvency Proceeding of any of the Borrower
Parties) and to the application of general equitable principles.
(w) Indebtedness. Except as permitted pursuant to Section 7.1 hereof, none
of the Borrower Parties has outstanding, as of the Agreement Date, and after
giving effect to the initial Advance of the Loans hereunder on the Agreement
Date, any Indebtedness.
(x) Investments. As of the Agreement Date, none of the Borrower Parties
owns any Equity Interests or other securities of, or equity interests in, or has
outstanding loans or advances to, or guaranties of the obligations of, any
Person except as reflected in the Financial Statements, or disclosed on Schedule
4.1(c) or Schedule 4.1(x) attached hereto.
62
(y) Material Contracts. Schedule 4.1(y) contains a complete list, as of
the Agreement Date, of each contract, agreement or commitment (the "Material
Contracts") to which any of the Borrower Parties is a party which is material to
its business, financial condition, operations, prospects or Assets, and, upon
the request of the Administrative Agent, the Borrower will provide the
Administrative Agent with a copy of any such contract or agreement. Schedule
4.1(y) further identifies each Material Contract which requires consent to the
granting of a Lien in favor of the Administrative Agent on the rights of any of
the Borrower Parties thereunder.
(z) Broker's or Finder's Commissions. No broker's or finder's fee or
commission will be payable with respect to this Agreement, and no other similar
fees or commissions will be payable by any of the Borrower Parties for any other
services rendered to any of them ancillary to this Agreement except to the
Administrative Agent and the other Credit Parties.
(aa) Exchange Offer Documents. The Borrower has provided to the
Administrative Agent true, correct and complete, in all material respects,
copies of the Exchange Offer Documents. As of the Agreement Date, to the best of
the Borrower's knowledge, none of the representations and warranties made by or
with respect to any of the Borrower Parties as set forth in the Exchange Offer
Documents is incorrect in any material respect as of the date made or deemed
made.
(bb) Solvency. As of the Agreement Date and after giving effect to the
Exchange Offer and the transactions contemplated by this Agreement and the other
Loan Documents, (i) the property of the Borrower and its Subsidiaries on a
consolidated basis, at a fair valuation on a going concern basis, will exceed
its debt; (ii) the capital of the Borrower and its Subsidiaries on a
consolidated basis will not be unreasonably small to conduct its business; and
(iii) the Borrower and its Subsidiaries on a consolidated basis will not have
incurred debts, or have intended to incur debts, beyond its ability to pay such
debts as they mature. For purposes of this Section 4.1(bb), "debt" means any
liability on a claim, and "claim" means (i) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (ii)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
or unsecured.
(cc) Real Property. As of the Agreement Date, Schedule 4.1(cc) sets forth
(i) all real property owned or leased by the Borrower or any of its
Subsidiaries, (ii) in the case of leased real property with lease payments in
excess of $100,000 per month (such leases being herein referred to as "Material
Leases"), the name of the lessor of such real property, a description of the
lease agreement with respect thereto, and whether such lease has been recorded
in the real property records of any jurisdiction, (iii) all such owned or leased
real property as to which title insurance or a commitment for title insurance
has been obtained, (iv) the use of such owned or leased real property in the
conduct of such Borrower Party operations, and (v) the Borrower's good faith
estimate of the fair market value of each parcel of owned real property. Each of
the leases of the Borrower and each of its Subsidiaries is valid, enforceable
against such Borrower Party and in full force and effect, except to the extent
that enforcement thereof may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to any Insolvency
63
Proceeding of such Borrower Party), and as of the Agreement Date, has not been
modified or amended, except as otherwise set forth in Schedule 4.1(cc). Each of
the Borrower and its Subsidiaries is the sole holder of the lessee's interests
under each Material Lease to which it is a party and, as of the Agreement Date,
has the right to pledge and assign the same except as qualified in Schedule
4.1(cc). Neither the Borrower nor any of its Subsidiaries has made any pledge or
assignment of any of its rights under any Material Leases except pursuant to the
Security Documents or in respect of Permitted Liens, and neither the Borrower
nor any of its Subsidiaries has received notice (written or otherwise) that the
landlord under any Material Lease intends to terminate such Material Lease. As
of the Agreement Date, except as set forth in Schedule 4.1(cc), neither the
Borrower nor any of its Subsidiaries owns or holds, or is obligated under or a
party to, any option, right of first refusal or any other contractual right to
purchase, acquire, sell, assign or dispose of any real property owned or leased
by it.
(dd) Specified Defaults. To the Borrower's knowledge, the Defaults and
Events of Default identified as Specified Defaults on Schedule 1 attached hereto
are all of the material Defaults and Events of Default existing as of the
Agreement Date.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made, and shall be true and correct in all
material respects, at and as of the Agreement Date and on the date of each
Advance and on the date of issuance of each Letter of Credit, except to the
extent expressly applicable only to an earlier date or previously fulfilled in
accordance with the terms hereof. All representations and warranties made under
this Agreement shall survive, and not be waived by, the execution hereof by the
Credit Parties, any investigation or inquiry by any Credit Party, or the making
of any Advance or the issuance of any Letter of Credit under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations (other than solely indemnification
obligations) are outstanding and unpaid, or the Borrower shall have the right to
borrow hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), and unless the Required Lenders, or such greater number of Lenders
as may be expressly provided herein, shall otherwise consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and will cause each of the other Parties to:
(a) except as otherwise permitted hereunder, preserve and maintain its
existence, and all of its material rights, franchises, licenses and privileges,
in the state of its incorporation or organization and in each other state in
which it operates a material part of its business; and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business makes such qualification or
64
authorization necessary except where the failure to be so qualified or
authorized would not reasonably be expected to have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of its Restricted Subsidiaries to, engage solely in the
business of publishing, in print or on the Internet, technology-related
magazines in the United States and Europe, and in business activities related
thereto. The Borrower will, and will cause each of the other Borrower Parties
to, comply in all material respects with the requirements of all Applicable
Laws.
Section 5.3 Maintenance of Properties and Assets. The Borrower will, and
will cause each of the other Borrower Parties to, (a) maintain or cause to be
maintained in the ordinary course of business in good repair, working order and
condition (reasonable wear and tear and damage by casualty excepted) all
material properties used in their respective businesses (whether owned or held
under lease), and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements to such properties to the extent deemed necessary in the business
judgment of the Borrower and in compliance with this Agreement, and (b) obtain
and maintain and preserve in full force and effect, and renew and extend as
necessary, all material Necessary Authorizations.
Section 5.4 Accounting Methods and Financial Records. The Borrower will
maintain, on a consolidated basis with its Subsidiaries, a system of accounting
established and administered in accordance with GAAP consistently applied, keep
adequate records and books of account in which complete entries will be made in
accordance with such accounting principles consistently applied and reflecting
all transactions required to be reflected by such accounting principles, and
keep accurate and complete records of the Collateral. Each of the Borrower
Parties will maintain a fiscal year ending on December 31.
Section 5.5 Insurance. The Borrower will, and will cause each of its
Subsidiaries to:
(a) Maintain insurance, including, but not limited to, business
interruption coverage, public liability coverage insurance, from responsible
companies in such amounts and against such risks to each of the Borrower and its
Subsidiaries as is prudent in the reasonable business judgment of the Borrower
(including, without limitation, larceny, embezzlement, employee fidelity, and
other criminal misappropriation insurance and insurance against claims for
personal or bodily injury, death or property damage);
(b) Keep their respective Assets insured by responsible companies against
loss or damage by fire, theft, burglary, pilferage, loss in transit, explosions
and hazards insured against by extended coverage, in amounts and scope of
coverage which are prudent for the magazine publishing industry, in accordance
with industry standards, all premiums thereon to be paid by the Borrower and its
Subsidiaries;
(c) Require that each casualty and liability insurance policy for the
Borrower and its Subsidiaries provide for at least thirty (30) days' prior
written notice to the Administrative Agent of any termination of or proposed
cancellation or non-renewal of such policy, or material reduction in coverage,
and name the Administrative Agent (for the benefit of the Credit Parties) as
additional named loss payee to the extent of the Obligations and additional
named insured.
65
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will cause
each of the other Borrower Parties to, pay and discharge all material taxes,
including, without limitation, withholding taxes, assessments and governmental
charges or levies required to be paid by them or imposed upon them or their
income or profits or upon any properties belonging to them, prior to the date on
which penalties attach thereto, and all material lawful claims for labor,
materials and supplies which, if unpaid, might become a Lien or charge upon any
of their properties; except that no such tax, assessment, charge, levy or claim
need be paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as such tax, assessment, charge, levy or
claim does not become a Lien or charge other than a Permitted Lien and no
foreclosure, distraint, sale or similar proceedings shall have been commenced.
The Borrower will, and will cause each of the other Borrower Parties to, timely
file all material information returns required by federal, state or local tax
authorities.
Section 5.7 Visits and Inspections. The Borrower will, and will cause each
of the other Borrower Parties to, permit representatives of any of the Credit
Parties, including, without limitation, any financial advisor retained by the
Administrative Agent, during normal business hours, or otherwise upon reasonable
advance notice to such Borrower Party to (a) visit and inspect the properties of
such Borrower Party, (b) inspect and make extracts from and copies of their
respective books and records, and (c) discuss with their respective principal
officers their respective businesses, assets, liabilities, financial positions,
results of operations and business prospects. Notwithstanding anything to the
contrary contained in this Agreement, the Borrower shall promptly pay or
reimburse all out-of-pocket expenses of the Administrative Agent (but not any
other Credit Party) in connection with the exercise of its inspection rights
under this Section 5.7 during the existence of any Default or Event of Default.
Each of the Borrower Parties will also permit representatives of the
Administrative Agent, including any financial advisor retained by the
Administrative Agent, upon reasonable advance notice to such Borrower Party, to
discuss with their respective auditors their respective businesses, assets,
liabilities, financial positions, results of operations and business prospects,
and the Administrative Agent agrees to permit such Borrower Party to be present
at such discussion.
Section 5.8 Use of Proceeds. The Borrower will use the aggregate proceeds
of all Advances (a) to finance Capital Expenditures and Permitted Investments
and (b) for working capital and other general corporate purposes (including,
without limitation, fees and expenses relating to the transactions contemplated
by this Agreement and the other Loan Documents). No proceeds of Advances
hereunder shall be used for the purchase or carrying or the extension of credit
for the purpose of purchasing or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System.
Section 5.9 Real Property. With respect to each parcel of real property
with a fair market value in excess of $500,000 at any time owned by the Borrower
or any of its Subsidiaries, to the extent requested by the Administrative Agent,
the Borrower shall, and shall cause each of its Subsidiaries to, promptly
following such request execute and deliver to the Administrative Agent, a
Mortgage (except with respect to property subject only to Liens of the type
described in clauses (f) and (p) of the definition of Permitted Liens) covering
such parcel of real property, and collaterally assign, to the extent permitted
therein, any lease agreements entered into by the Borrower or any of its
Subsidiaries as lessor with respect to such real
66
property, in either case to the extent requested by the Administrative Agent. To
the extent that the lessor's consent is required with respect to the grant of
any Mortgage with respect to any parcel of leased real property, the Borrower
shall use its commercially reasonable efforts to obtain from the applicable
lessor such consent in writing.
Section 5.10 Indemnity. The Borrower, for itself and on behalf of each of
the other Borrower Parties, agrees to indemnify and hold harmless each
Indemnified Party from and against any and all claims, liabilities, actual
losses, damages, actions, reasonable attorneys' fees and expenses, including the
costs of investigating and defending such claims, whether or not any of the
Borrower Parties or the Person seeking indemnification is the prevailing party,
arising out of or in connection with any action brought by a third party against
such Indemnified Party in connection with (a) the Commitments, the Loans or
otherwise under this Agreement or any other Loan Document (including, without
limitation, the taking of collateral security for the Obligations), including
the use of the proceeds of Loans hereunder in any fashion by the Borrower or any
of its Subsidiaries or the performance of their respective obligations under the
Loan Documents by any of the Borrower Parties, (b) allegations of any
participation by the Credit Parties, or any of them, in the affairs of any of
the Borrower Parties, or allegations that any of them has any joint liability
with any of the Borrower Parties for any reason, or (c) any claims against the
Credit Parties, or any of them, by any shareholder, partner, or other investor
in or lender to any of the Borrower Parties, by any brokers or finders or
investment advisers or investment bankers retained by any of the Borrower
Parties or by any other third party, arising out of the Commitments, the Loans
or otherwise under this Agreement or any other Loan Document, unless the Person
seeking indemnification hereunder is determined in such case to have (i) acted
with gross negligence, bad faith or willful misconduct or (ii) have breached in
any material respect its obligations to the Borrower Parties, in any case as
determined by a final, non-appealable judicial order. The obligations of the
Borrower Parties under this Section 5.10 are in addition to, and shall not
otherwise limit, any liabilities which any of the Borrower Parties might
otherwise have in connection with any warranties or similar obligations of such
Borrower Party in any other agreement or instrument or for any other reason.
Section 5.11 Environmental Matters. The conduct of each Borrower Party's
business operations will not violate in any material respect any Environmental
Laws, and none of the Borrower Parties will use, or permit any other Person to
use, any Hazardous Materials at any of its places of business except such
materials as are incidental to such Borrower Party's normal course of business,
maintenance and repairs, and then only in compliance in all material respects
with all applicable Environmental Laws. The Borrower shall promptly notify the
Credit Parties in writing of (a) any and all material enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions instituted,
completed or threatened in writing pursuant to any applicable Environmental Law;
(b) the existence of any condition or circumstances; and (c) all claims made or
threatened by any third party against any of the Borrower Parties relating to
damages, contribution, cost recovery compensation, loss or injury resulting from
any Hazardous Materials, which, in the case of (a), (b) or (c), could reasonably
be expected to result in any material liability under any Environmental Laws.
The Borrower shall promptly notify the Credit Parties of any remedial action
taken by any of the Borrower Parties pursuant to Environmental Laws with respect
to such Borrower Party's business operations which remedial action resulted in
costs and expenses in excess of $100,000.
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Section 5.12 ERISA. The Borrower shall, and shall cause each of the other
Borrower Parties to, at all times make, or cause to be made, prompt payment of
contributions required under the terms of their Plans and to meet the minimum
funding standards set forth in ERISA with respect to such Plans. The Borrower
shall maintain, and shall cause each of its Subsidiaries to maintain, each of
the Plans of the Borrower Parties in material compliance with their terms and
applicable provisions of ERISA and the Code.
Section 5.13 Further Assurances. The Borrower, at its sole expense, will
promptly execute and deliver to the Credit Parties, or cause to be executed and
delivered to the Credit Parties, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower Parties in the Loan Documents
(including, without limitation, this Agreement), or to obtain any consents, all
as may be reasonably necessary or appropriate in connection therewith as may be
reasonably requested.
Section 5.14 Covenants Regarding Formation of Subsidiaries, the Making of
Investments and Acquisitions. At the time of any Acquisition by any of the
Borrower Parties, or the formation of any new Subsidiary of any of the Borrower
Parties, the Borrower will, and will cause each of the other Borrower Parties,
as applicable, to (a) (other than in the case of the Foreign Subsidiaries)
provide to the Administrative Agent a duly executed supplement to the Subsidiary
Security Agreement for any new Subsidiary, together with appropriate UCC-1
financing statements, (b) (other than in the case of the Foreign Subsidiaries),
provide to the Administrative Agent a duly executed supplement to the Subsidiary
Guaranty and a loan certificate for any such new Subsidiary, substantially in
the form of Exhibit V attached hereto, together with appropriate attachments
thereto; (c) (other than in the case of the Foreign Subsidiaries) pledge to the
Administrative Agent all (or in the case of the Foreign Subsidiaries, sixty-six
percent (66%)) of the Equity Interests (or other instruments or securities
evidencing ownership) of any Subsidiary or Person which is acquired or formed,
beneficially owned by any of the Borrower Parties as additional Collateral for
the Obligations to be held by the Administrative Agent in accordance with the
terms of the Borrower Pledge Agreement or the Subsidiary Pledge Agreement, as
applicable, and execute and deliver to the Administrative Agent all such
documentation for such pledge (including, without limitation, a supplement to
the Subsidiary Pledge Agreement, original certificates representing the pledged
Equity Interests and corresponding certificate powers duly executed in blank)
as, in the reasonable opinion of the Administrative Agent, is appropriate; and
(d) provide all other documentation, including, without limitation, an
Intellectual Property Security Agreement or any other security agreement
covering any additional intellectual property obtained by such Borrower Party
(other than in the case of the Foreign Subsidiaries), additional UCC-1 financing
statements, and one or more opinions of counsel reasonably satisfactory to the
Administrative Agent which in the reasonable opinion of the Administrative Agent
is appropriate with respect to such Acquisition or the formation of such new
Subsidiary. In addition, if the Borrower or any of the Subsidiaries of the
Borrower (other than the Foreign Subsidiaries) shall at any time obtain any
interest in any registered patent, trademark or copyright, or application for
any of the foregoing, the Borrower or the applicable Subsidiary shall, as soon
as reasonably practicable thereafter, execute and deliver to the Administrative
Agent an Intellectual Property Security Agreement (or amendment thereto), such
UCC-1 financing statements and one or more opinions of counsel reasonably
satisfactory to the Administrative Agent which in the reasonable opinion of the
Administrative Agent is appropriate for the pledge of such interests to the
Administrative Agent. Investments made by any of the
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Borrower Parties (other than the Foreign Subsidiaries) after the Agreement Date
shall also be treated as additional Collateral and shall be subject to the
provisions of appropriate Security Documents. Any agreement or instrument
executed or issued pursuant to this Section 5.14 shall be a "Security Document"
and a "Loan Document" for purposes of this Agreement.
ARTICLE 6
Information Covenants
So long as any of the Obligations (other than solely indemnification
obligations) is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), and unless the Required Lenders, or such greater number of Lenders
as may be expressly provided herein, shall otherwise consent in writing, the
Borrower will furnish or cause to be furnished to each Credit Party at its
offices:
Section 6.1 Monthly Financial Statements and Information. Within thirty
(30) days after the last day of each month (other than March, June, September
and December), unaudited balance sheets of the Borrower, on a consolidated basis
with the Restricted Subsidiaries, and of LaunchCo and of InternetCo, each on a
consolidated basis with its Subsidiaries, in each case as of the end of such
month and as of the end of the preceding fiscal year, and the related statements
of operations and the related statements of cash flows of the Borrower, on a
consolidated basis with the Restricted Subsidiaries, and the related revenue and
EBITDA on a consolidating (by publication) basis, and the related statements of
operations and the related statements of cash flows of LaunchCo and of
InternetCo, each on a consolidated basis with its Subsidiaries and the related
revenue and EBITDA of LaunchCo, on a consolidating (by publication) basis, in
each case for such month and for the elapsed portion of the year ended with the
last day of such month, which shall set forth in comparative form such figures
(x) as at the end of and for such month, (y) as against the corresponding month
during the preceding fiscal year and (z) (I) for each month ended during the
period from the Agreement Date through December 31, 2002, as against the figures
set forth for such month in the Projections delivered in connection with the
closing of this Agreement and (II) for each month ended thereafter, as against
the figures set forth for such month in the Borrower's business plan provided to
the Credit Parties pursuant to Section 6.5(c) hereof. The foregoing financial
statements shall be certified by a Principal Officer to be, in his or her
opinion, complete and correct in all material respects and to present fairly in
all material respects, in accordance with GAAP, the financial position of the
Borrower, on a consolidated and consolidating (by publication) basis, as at the
end of such period and the results of operations for such period, and for the
elapsed portion of the year ended with the last day of such period, subject only
to normal year-end adjustments and the absence of footnotes. Notwithstanding
anything to the contrary contained in the foregoing, the Borrower will furnish
draft monthly financial statements with respect to December during each fiscal
year of the Borrower, within sixty (60) days after the last day of such month.
Section 6.2 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each of the first three (3) quarters,
and within one hundred five (105) days after the last day of the fourth quarter,
of each fiscal year of the Borrower, unaudited balance sheets of the Borrower,
on a consolidated basis with the Restricted Subsidiaries, and of LaunchCo and of
InternetCo, each on a consolidated basis with its Subsidiaries, in each case as
69
at the end of such quarter and as of the end of the preceding fiscal year, and
the related statements of operations and the related statements of cash flows of
the Borrower, on a consolidated basis with the Restricted Subsidiaries, and the
related revenue and EBITDA on a consolidating (by publication) basis, and the
related statements of operations and the related statements of cash flows of
LaunchCo and of InternetCo, each on a consolidated basis with its Subsidiaries
and the related revenue and EBITDA of LaunchCo, on a consolidating (by
publication) basis, in each case for such quarter and for the elapsed portion of
the year ended with the last day of such quarter, which shall set forth in
comparative form such figures (x) as at the end of and for such quarter, (y) as
against the corresponding quarter during the preceding fiscal year and (z) (I)
for each quarter ended during the period from the Agreement Date through
December 31, 2002, as against the figures set forth for such quarter in the
Projections delivered in connection with the closing of this Agreement and (II)
for each quarter ended thereafter, as against the figures set forth in the
Borrower's business plan provided to the Credit Parties pursuant to Section
6.5(c) hereof. The foregoing financial statements shall be certified by a
Principal Officer to be, in his or her opinion, complete and correct in all
material respects and to present fairly in all material respects, in accordance
with GAAP, the financial position of the Borrower, on a consolidated and
consolidating (by publication) basis, as at the end of such period and the
results of operations for such period, and for the elapsed portion of the year
ended with the last day of such period, subject only to normal year-end
adjustments and the absence of footnotes. Notwithstanding anything to the
contrary contained in the foregoing, the Borrower will furnish draft quarterly
financial statements with respect to the fourth fiscal quarter during each
fiscal year of the Borrower, within sixty (60) days after the last day of such
quarter.
Section 6.3 Annual Financial Statements and Information. Within one hundred
five (105) days after the end of each fiscal year of the Borrower, the audited
balance sheet of the Borrower, on a consolidated basis with the Restricted
Subsidiaries, and the unaudited (or, to the extent such financial statements
have been audited, the audited) balance sheets of InternetCo and LaunchCo, each
on a consolidated basis with its Subsidiaries, in each case as at the end of
such fiscal year and the related audited statement of income and retained
earnings or deficit and related statements of cash flows of the Borrower, on a
consolidated basis with the Restricted Subsidiaries, and the related audited the
unaudited (or, to the extent such financial statements have been audited, the
audited) statements of income and retained earnings or deficit and related
statements of cash flows of InternetCo and LaunchCo, each on a consolidated
basis with its Subsidiaries, in each case for such fiscal year, setting forth in
comparative form the figures as at the end of and for the previous fiscal year
and certified, without any qualifications or explanatory paragraphs, by
independent certified public accountants of national recognized standing, whose
opinion shall be in scope and substance reasonably satisfactory to the Agents,
and include a statement certifying that no Default or Event of Default was
detected during the examination of the Borrower and the Restricted Subsidiaries
and that such accountants have authorized the Borrower to deliver such financial
statements and opinion thereon to the Credit Parties pursuant to this Agreement.
Section 6.4 Performance Certificates. At the time the financial statements
are furnished pursuant to Section 6.2 hereof (other than any draft financial
statements delivered with respect to any December of any fiscal year of the
Borrower), a Performance Certificate:
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(i) setting forth as at the end of such fiscal quarter, (A) the
arithmetical calculations required to establish (I) whether the Borrower was in
compliance with the requirements of the Financial Covenants, and (II) the
Applicable Margin, and (B) to the extent that the Borrower or any of the
Restricted Subsidiaries shall have made any payment during such period to cover
operating expenses incurred in the ordinary course of business which are
allocable to the operations of any Unrestricted Subsidiary, evidence that the
Borrower shall have received (whether during or prior to such fiscal quarter)
(I) Specified Equity Contributions or (II) Available Cash Flow, in either case
in an amount sufficient to cover such operating expenses and not used for other
purposes;
(ii) setting forth a summary of all Investments received by (A) any
member of the InternetCo Group (other than from any other member of the
InternetCo Group) and (B) any member of the LaunchCo Group (other than from any
other member of the LaunchCo Group), in each case during the applicable fiscal
quarter, which summary shall (I) include the total amount of all such
Investments received from and after the Agreement Date, (II) identify the Person
making such Investment, and (III) with respect to Investments made by the
Borrower or any of its Subsidiaries, indicate whether each such Investment was
funded with Specified Equity Contributions or Available Cash Flow permitted to
be invested in the Unrestricted Subsidiaries pursuant to Section 7.2; and
(iii) stating that, to the best of his or her knowledge, no Default or
Event of Default has occurred as at the end of such period, or, if a Default or
an Event of Default has occurred, disclosing each such Default or Event of
Default and its nature, when it occurred, whether it is continuing and the steps
being taken by the Borrower with respect to such Default or Event of Default.
Section 6.5 Other Reports.
(a) Promptly upon receipt thereof, copies of all material reports, if any,
submitted to the Borrower by its independent public accountants regarding the
Borrower, including, without limitation, any management report prepared in
connection with the annual audit referred to in Section 6.3.
(b) Promptly upon receipt thereof, copies of any material notice or report
received from any Governmental Authority, or regarding any material Necessary
Authorization from the grantor of such Necessary Authorization.
(c) Annually, and in no event later than January 31 of any year, a copy of
the Borrower's annual business plan, including (i) updated financial projections
for itself and its Subsidiaries, on a consolidating basis between the Restricted
Subsidiaries and the Unrestricted Subsidiaries, set forth on a monthly, by
publication basis for such fiscal year and (ii) balance sheets and cash flow
statements, on a monthly basis, (A) for the Borrower and the Restricted
Subsidiaries taken as a whole and (B) for the Unrestricted Subsidiaries taken as
a whole.
(d) To the extent not covered elsewhere in this Article 6, promptly after
the sending thereof, copies of all financial statements, reports and other
material written information which any of the Borrower Parties sends to any
holder of its Funded Debt or its securities holders
71
generally or which any of the Borrower Parties files with the Securities and
Exchange Commission or any national securities exchange.
(e) Semi-annually, and in no event later than the date on which financial
statements are required to be delivered with respect to the second and fourth
quarters of each fiscal year of the Borrower under Section 6.2 hereof and with a
copy to counsel for the Administrative Agent, a list of any new federally
registered patent, trademark or copyright registrations and applications, and,
to the extent required under the Intellectual Property Security Agreement, any
new trademark, patent or copyright license agreements, of the Restricted Group
supplementing the schedules to the Security Documents relating to such Assets.
(f) Promptly following the receipt of any notice of default delivered under
the terms of the Refinancing Securities Documents or the Exchange Offer
Documents, copies of such notice of default.
(g) Promptly, and in no event later than ten (10) Business Days, following
the consummation thereof, written notice to the Administrative Agent of any
capital contribution made to any of the Borrower Parties.
Section 6.6 Notice of Litigation and Other Matters. Prompt notice (and, in
any event notice within fifteen (15) Business Days) of any of the following
events after any Borrower Party has received notice or otherwise becomes aware
thereof:
(a) the commencement of all material proceedings and investigations by or
before any governmental body and all actions and proceedings in any court or
before any arbitrator against, or to the extent known to any of the Borrower
Parties, in any other way relating materially adversely to, any of the Borrower
Parties, or any of their respective properties, assets or businesses, or any
material Necessary Authorization;
(b) any material adverse amendment or change to the Projections provided to
the Credit Parties by the Borrower;
(c) any Default or Event of Default, or the occurrence or non-occurrence of
any event which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by any of the Borrower Parties under
the Refinancing Securities Documents or the Exchange Offer Documents, other than
this Agreement, to which any of the Borrower Parties is a party or by which any
of their respective assets or properties may be bound, which could reasonably be
expected to have a Materially Adverse Effect, giving in each case the details
thereof and specifying the action proposed to be taken with respect thereto;
(d) the occurrence of any Reportable Event or a "prohibited transaction"
(as such term is defined in Section 406 of ERISA or Section 4975 of the Code)
with respect to any Plan of the Borrower or any of its Subsidiaries or the
institution or threatened institution by PBGC of proceedings under ERISA to
terminate or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan; and
(e) the occurrence of any event subsequent to the Agreement Date which, if
such event had occurred prior to the Agreement Date, would have constituted an
exception to the
72
representation and warranty in Section 4.1(l) or 4.1(s), or in the last sentence
of Section 4.1(u), of this Agreement.
ARTICLE 7
Negative Covenants
So long as any of the Obligations (other than solely indemnification
obligations) is outstanding and unpaid or the Borrower has a right to borrow
hereunder (whether or not the conditions to borrowing have been or can be
fulfilled), or any Letter of Credit is outstanding, and unless the Required
Lenders (or such greater number of Lenders as may be expressly provided herein)
shall otherwise consent in writing:
Section 7.1 Indebtedness. The Borrower shall not, and shall cause each of
the other Borrower Parties not to, create, assume, incur or otherwise become or
remain obligated in respect of, or permit to be outstanding, any Indebtedness
except:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) Capitalized Lease Obligations not to exceed the aggregate principal
amount of $5,000,000 at any one time outstanding over the remainder of the term
of such obligations;
(c) Indebtedness in respect of conditional sale, rental or purchase money
obligations in an aggregate amount not to exceed $5,000,000 at any one time
outstanding;
(d) Obligations of the Restricted Group under Hedging Agreements entered
into in the ordinary course of business;
(e) Indebtedness of the Borrower or any of the Restricted Subsidiaries
(other than any of the Foreign Subsidiaries) owing to the Borrower or any of its
Subsidiaries;
(f) Indebtedness that constitutes an Investment permitted under Section 7.2
hereof (provided that, to the extent any such Funded Debt shall be evidenced by
a promissory note in favor of the Borrower or any of its Subsidiaries, such note
shall be collaterally assigned to the Administrative Agent and, if such Funded
Debt is secured, each security agreement or other collateral document relating
thereto shall also be collaterally assigned to the Administrative Agent);
(g) Guaranties permitted under Section 7.6 hereof;
(h) Indebtedness representing extensions, renewals, refinancings or
replacements (but not increases in principal amounts) of any of the foregoing;
(i) Indebtedness of the Borrower represented by (i) the Exchange Notes
issued on the Agreement Date to refinance the Refinancing Securities in an
aggregate original principal amount not to exceed $95,000,000, plus the amount
of any accrued interest (whether capitalized or paid-in-kind) thereon, or (ii)
the Refinancing Securities in an aggregate principal amount not
73
to exceed $12,280,000, plus the amount of any accrued interest (whether
capitalized or paid-in-kind) thereon;
(j) Indebtedness existing on the Agreement Date and described on Schedule
7.1 hereof;
(k) Management Redemption Debt issued during any fiscal year in an
aggregate principal amount not to exceed $2,000,000 outstanding at any one time
during such fiscal year (with unused amounts in any fiscal year being carried
over to the immediately following fiscal year, but only to such immediately
following fiscal year and not any subsequent fiscal year and amounts available
during the current fiscal year must be used before any amounts carried forward
may be used); provided, however, that Management Redemption Debt may not be
incurred during the existence of any Default or Event of Default;
(l) Indebtedness of any member of the LaunchCo Group to any other member of
the LaunchCo Group;
(m) Indebtedness of any member of the InternetCo Group to any other member
of the InternetCo Group; and
(n) Indebtedness consisting of customary forms of deferred compensation,
such as customary non-compete, consulting and similar agreements, incurred in
connection with a Permitted Acquisition.
Section 7.2 Investments. The Borrower shall not, and shall cause each of
its Subsidiaries not to, own or make any Investment except that the Borrower and
its Subsidiaries may:
(a) make Investments in and loans to the Borrower and to the Restricted
Subsidiaries, the members of the LaunchCo Group may make Investments in and
loans to other members of the LaunchCo Group, and the members of the InternetCo
Group may make Investments in and loans to other members of the InternetCo
Group;
(b) purchase or otherwise acquire and own Cash Equivalents;
(c) make Investments permitted by Section 7.5 hereof;
(d) so long as no Default or Event of Default under any of Sections 9.1(b),
(f) or (g) hereof shall then exist, but notwithstanding the existence of any
other Default or Event of Default, make Investments in (A) the LaunchCo Group to
the extent such Investments are funded solely with eTesting Sale Proceeds to the
extent such eTesting Sale Proceeds are not used for any other purpose and (B)
the Unrestricted Subsidiaries to the extent such Investments are funded solely
with Specified Equity Contributions or, after the Trigger Date, Available Cash
Flow, in each case to the extent not used for any other purpose;
(e) receive and own Investments acquired pursuant to Permitted Dispositions
of up to twenty-five percent (25%) of the Purchase Price thereof;
74
(f) may make pledges and deposits of the type described in clauses (d),
(g), (m) and (n) of the definition of "Permitted Liens";
(g) make Investments permitted under Sections 7.1 and 7.6 hereof;
(h) may acquire and own Investments (including debt obligations) received
in connection with the bankruptcy or reorganization of suppliers and customers
and in good faith settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business and
past due accounts;
(i) may make Investments that could otherwise be made as distributions
permitted under Section 7.7 hereof;
(j) may own and hold Investments existing on the Agreement Date which are
reflected in the Financial Statements or which are set forth on Schedule 4.1(c)
or Schedule 4.1(x) attached hereto;
(k) make loans and advances to employees in the ordinary course of business
in an aggregate amount not to exceed $500,000 at any one time outstanding;
(l) the Borrower and its Subsidiaries may sublease any real property leased
by them; and
(m) may own and hold the Management Notes.
Section 7.3 Limitation on Liens. The Borrower shall not, and shall cause
each of the other Borrower Parties not to, create, assume, incur or permit to
exist or to be created, assumed, incurred or permitted to exist, directly or
indirectly, any Lien on any of their respective properties or assets, whether
now owned or hereafter acquired, except for Permitted Liens.
Section 7.4 Amendment and Waiver. The Borrower shall not, and shall cause
each of the other Borrower Parties not to, without the prior written consent of
the Required Lenders, enter into any amendment of, or agree to or accept any
waiver, which would materially adversely affect the rights of the Borrower and
the Credit Parties (in their capacity as Lenders under this Agreement), or any
of them, of any of the provisions of, (a) its organizational documents,
including, without limitation, its certificate or articles of incorporation and
by-laws, (b) the ZD Acquisition Documents, (c) the Refinancing Securities
Documents, or (d) the Exchange Notes Documents.
Section 7.5 Liquidation; Merger; Acquisition or Disposition of Assets. The
Borrower shall not, and shall cause each of the other Borrower Parties not to,
at any time: (a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; (b) enter into any merger, consolidation or
other business combination; (c) sell, lease (as lessor), abandon, transfer,
trade or otherwise dispose of (including, without limitation, by way of a Sale
and Lease-Back Transaction), in a single transaction or in a series of related
transactions, any of its Assets, property or business (other than such
transactions in the ordinary course of business); (d) acquire Equity Interests
of another Person or make any Acquisition; or (e) create or acquire any
Subsidiary; provided, however, that:
75
(i) the following are permitted: (A) a merger of Intermediate
Holdco into Holdco, provided that Holdco is the surviving Person (a "Permitted
Holdco Merger"); (B) a merger among the Borrower and one or more Restricted
Subsidiaries, provided the Borrower is the surviving Person; (C) a merger
between or among two or more Restricted Subsidiaries; (D) an Acquisition
permitted hereunder with the consent of the Required Lenders effected by a
merger in which the Borrower or a Restricted Subsidiary is or will become the
surviving Person; and (E) a liquidation or dissolution of one or more Restricted
Subsidiaries into its or their parent entity (provided the Borrower or one of
the Restricted Subsidiaries is such parent entity);
(ii) so long as no Default or Event of Default then exists or would
be caused thereby and subject to compliance with the mandatory prepayment
provision of Section 2.7(b), the Borrower and the Restricted Subsidiaries may
sell, lease, abandon, transfer, trade or otherwise dispose of, in a single
transaction or in a series of related transactions, any Assets, in each case at
not less than the fair market value thereof and in connection therewith the
Administrative Agent shall, upon the request of the Borrower, release any Liens
granted pursuant to the Security Documents with respect to such Assets, subject
to the following conditions:
(A) the Borrower shall provide to the Administrative Agent and the
Lenders a Performance Certificate setting forth the arithmetical
calculations required to establish the Borrower's pro forma compliance
with Section 8.1 of this Agreement;
(B) with respect to any disposition having a Purchase Price (with
respect to a single transaction or a series of related transactions)
in excess of $5,000,000, the Borrower shall provide to the
Administrative Agent and the Lenders (I) revised Projections assuming
consummation of such disposition and demonstrating pro forma
compliance with the terms of this Agreement through the Final Maturity
Date, and (II) evidence satisfactory to the Agents and their counsel
that the board of directors of the applicable Borrower Party shall
have certified in good faith as to the fair market value determination
of the Purchase Price with respect to such disposition;
(C) at least seventy-five percent (75%) of the Purchase Price with
respect to such disposition shall be in the form of cash;
(D) the aggregate Purchase Price for Assets disposed of by the
Borrower and its Subsidiaries, with respect to a single transaction or
a series of related transactions, shall not exceed $20,000,000; and
(E) each of the Lenders shall have consented to such disposition
except to the extent that the Assets subject to such disposition,
together with (x) the Assets subject to all other Permitted
Dispositions consummated since the Agreement Date and (y) the Assets
related to all operations of the Borrower and the Restricted
Subsidiaries discontinued since the Agreement Date, shall not exceed
fifteen percent (15%) of EBITDA for the twelve (12) month period most
recently ended for which financial statements are required to have
been provided pursuant to Section 6.1 hereof;
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provided, however, that notwithstanding the existence of any Default
or Event of Default, the Borrower and the Restricted Subsidiaries may sell,
lease, abandon, transfer, trade or otherwise dispose of, in a single transaction
or in a series of related transactions, any Assets in an aggregate amount not to
exceed $1,000,000 during the term of this Agreement pursuant to the foregoing
terms and conditions so long as the Borrower shall prepay the Loans pursuant to
Section 2.7(b) hereof without regard to the $1,000,000 threshold for repayment
contained therein.
(iii) the Borrower and the Restricted Subsidiaries may (A) make
Investments as permitted under Section 7.2 hereof; and (B) transfer Assets
amongst themselves;
(iv) subject to compliance with Section 5.14, the Borrower and the
Restricted Subsidiaries (w) may form Subsidiaries organized under any
jurisdiction located within the United States, (x) may make Acquisitions of
replacement Assets with Net Proceeds of insurance to the extent such Net
Proceeds are permitted to be so used pursuant to Section 2.7(b)(iii) hereof, (y)
so long as no Default or Event of Default then exists or would be caused thereby
and subject to delivery to the Administrative Agent and the Lenders of
arithmetical calculations demonstrating a pro forma reduction in the Senior
Leverage Ratio after giving effect thereto, may make Acquisitions and
Investments within their respective lines of business in an aggregate amount not
to exceed $5,000,000 during the term of this Agreement to the extent such
Acquisitions and Investments are funded solely with Specified Equity
Contributions not used for other purposes, and (z) so long as the Required
Lenders shall consent thereto, and subject to any conditions imposed by the
Required Lenders in connection therewith, may make Acquisitions and Investments
of (I) publications from members of the LaunchCo Group and (II) other Assets or
businesses, within their respective lines of business;
(v) subject to compliance with Sections 2.7 and 5.14, the
Unrestricted Subsidiaries (A) may make Investments as permitted under Section
7.2 hereof, (B) so long as no Default or Event of Default under any of Sections
9.1(b), (f) or (g) hereof then exists, but notwithstanding the existence of any
other Default or Event of Default, may make Acquisitions and Investments, (I)
with respect to members of the LaunchCo Group, to the extent such Acquisitions
and Investments are funded solely with eTesting Sale Proceeds not used for any
other purpose, and (II) with respect to all Unrestricted Subsidiaries, to the
extent such Acquisitions and Investments are funded solely with Specified Equity
Contributions not used for other purposes, and (C) so long as the Required
Lenders shall consent thereto, and subject to any conditions imposed by the
Required Lenders in connection therewith, may make other Acquisitions and
Investments of Assets or businesses, within their respective lines of business;
(vi) subject to compliance with Sections 2.7 and 5.14 hereof, (A)
members of the InternetCo Group may transfer Assets to other members of the
InternetCo Group, members of the LaunchCo Group (whether such transfer is made
in a substantially contemporaneous transaction through the Borrower or any other
Subsidiary or otherwise) or, subject to delivery of a Performance Certificate to
the Administrative Agent and the Lenders setting forth the arithmetical
calculations required to establish the Borrower's pro forma compliance with
Section 8.1 hereof, members of the Restricted Group, (B) members of the LaunchCo
Group may transfer Assets to other members of the LaunchCo Group or, subject to
delivery of a Performance Certificate to the Administrative Agent and the
Lenders setting forth the arithmetical calculations
77
required to establish the Borrower's pro forma compliance with Section 8.1
hereof, to members of the Restricted Group, (C) members of the InternetCo Group
may enter into any merger, consolidation or other business combination with
other members of the InternetCo Group, and (D) members of the LaunchCo Group may
enter into any merger, consolidation or other business combination with other
members of the LaunchCo Group;
(vii) so long as no Default or Event of Default then exists or
would be caused thereby, LaunchCo may form or acquire Subsidiaries provided that
LaunchCo shall own at least ninety percent (90%) of the Equity Interests of such
Subsidiary and the Equity Interests which are not owned by LaunchCo shall be
Permitted Management Shares;
(viii) the Borrower and its Subsidiaries may sell or exchange
used, obsolete or uneconomical assets for cash or other consideration;
(ix) so long as no Default or Event of Default then exists or
would be caused thereby, the Borrower and its Subsidiaries may sell Permitted
Management Shares; and
(x) subject to Section 2.7 hereof, the Unrestricted
Subsidiaries may sell, lease, abandon, transfer, trade or otherwise dispose of
any of their respective Assets (other than Equity Interests).
Section 7.6 Limitation on Guaranties. The Borrower shall not, and shall
cause each of the other Borrower Parties not to, at any time Guaranty, assume,
be obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) under any of the Loan Documents or
as permitted under Section 7.1 hereof, (b) a guaranty by the Borrower or any of
its Subsidiaries of the obligations of the Borrower or any of the Restricted
Subsidiaries, (c) a guaranty by endorsement of negotiable instruments for
collection in the ordinary course of business, (d) contingent obligations in the
form of customary indemnifications for agents, employees, consultants, officers
and directors of such Borrower Party, and (e) performance, surety, bid, appeal
and other similar bonds as expressly referred to under the definition of
"Permitted Liens".
Section 7.7 Restricted Payments and Purchases. The Borrower shall not,
and shall cause each of its Subsidiaries not to, directly or indirectly, declare
or make any Restricted Payment or Restricted Purchase except that (a) the
Borrower may make regularly scheduled cash payments of interest when due on the
Refinancing Securities (including, without limitation, any Refinancing
Securities held by an Affiliate), and after the fourth anniversary of the
Agreement Date, on the Exchange Notes (including, without limitation, any
Exchange Notes held by an Affiliate), (b) after the Trigger Date, so long as (i)
no Default or Event of Default then exists or would be caused thereby and (ii)
the Borrower shall provide to the Administrative Agent and the Lenders a
Performance Certificate setting forth the arithmetical calculations required to
establish the Borrower's pro forma compliance with Section 8.2 hereof after
giving effect to such payment, the Borrower may make cash payments of interest
when due on the Exchange Notes (including, without limitation, any Exchange
Notes held by an Affiliate) to the extent such payments are made after the
Excess Cash Flow Recapture Date and are funded with Available Cash Flow, (c) the
Borrower may make Restricted Payments to Holdco to permit Holdco to pay taxes,
salaries, directors fees, indemnities and expenses and other corporate expenses
in the
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ordinary course of its business, (d) the Subsidiaries of the Borrower may make
distributions to the holders of their respective Equity Interests, (e) the
Borrower and its Subsidiaries may declare and pay dividends solely in common
stock or Preferred Stock (other than Disqualified Capital Stock), and (f) so
long as no Default or Event of Default then exists or would be caused thereby,
the Borrower and its Subsidiaries may (i) make Restricted Payments or Restricted
Purchases in connection with the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of Holdco or any of its
Subsidiaries held by any employee, former employee, spouse, former spouse of any
employee or former employee and any of their respective estates, or make
payments on notes evidencing any Management Redemption Debt, in an aggregate
amount not to exceed the sum of (A) $1,000,000 during any fiscal year (with
unused amounts in any fiscal year being carried over to the immediately
following fiscal year, but only to such immediately following fiscal year and
not any subsequent fiscal year and amounts available during the current fiscal
year must be used before any amounts carried forward may be used), plus (B) the
Borrower's fifty percent (50%) share of the aggregate cash Net Proceeds received
from any 'key-man' life insurance policies, (ii) repurchase Equity Interests by
the issuance of Management Redemption Debt permitted under Section 7.1 hereof,
(iii) repurchase Equity Interests or make payments with respect to Management
Redemption Debt with Specified Equity Contributions expressly made for such
purpose, and (iv) repurchase Equity Interests in consideration for the
cancellation of any Management Notes issued in connection with the original
purchase thereof. Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, the Borrower's share of all Restricted
Payments made by the direct Unrestricted Subsidiaries shall be paid to the
Borrower.
Section 7.8 Affiliate Transactions. The Borrower shall not, and shall cause
each of its Subsidiaries not to, at any time engage in any transaction with an
Affiliate (other than the Borrower or a Restricted Subsidiary ), nor make an
assignment or other transfer of any of its Assets to any Affiliate, on terms
materially less advantageous than would be the case if such transaction had been
effected with a non-Affiliate, except with respect to (a) Investments and loans
(other than loans made by any of the Unrestricted Subsidiaries to any member of
the Restricted Group) permitted under Section 7.1 and Section 7.2 (other than
loans made by any of the Unrestricted Subsidiaries to any member of the
Restricted Group), (b) payments under any tax sharing agreement or arrangements
among the Borrower and other members of the affiliated group of corporations of
which the Borrower is the common parent, which agreement or agreements have been
approved by the Agents, and (c) other transactions set forth on Schedule 4.1(s)
hereto.
Section 7.9 Business Name; Business Structure; Business. The Borrower shall
not, and shall cause each of the other Borrower Parties not to (a) change its
name or business structure without giving the Administrative Agent thirty (30)
days' prior written notice of its intention to do so and complying with all
reasonable requirements of the Administrative Agent relating to the Security
Documents in regard thereto, or (b) (i) with respect to the Borrower and the
Restricted Subsidiaries, engage in any businesses other than the business of
publishing, in print or on the Internet, technology-related magazines in the
United States, and in business activities related thereto, or make any material
change in any of their respective business objectives, purposes and operations,
(ii) with respect to Intermediate Holdco, engage in any commercial business
other than holding the Equity Interests of the Borrower, and (iii) with respect
to Holdco, engage in any commercial business other than holding the Equity
Interests of
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Intermediate Holdco. The InternetCo Group shall not engage in any business other
than the acquisition, development and management of Internet initiatives, and
the LaunchCo Group shall not engage in any business other than the acquisition,
development and management of new magazine publishing initiatives and events
with respect to new or existing magazines. Nothing contained in this Section 7.9
shall be deemed to limit or restrict any business activities otherwise permitted
under this Agreement.
Section 7.10 Real Estate. The Borrower shall not, and shall cause each of
its Subsidiaries not to, purchase or become obligated to purchase any real
estate except in the ordinary course of business, in compliance with Section 5.9
hereof and subject to the restrictions contained in Section 7.5 hereof.
Section 7.11 ERISA Liabilities. The Borrower shall not, and shall cause the
other Borrower Parties not to, fail to make all material contributions in
accordance with the terms of their respective Plans and to meet all of the
applicable minimum funding requirements of ERISA and the Code, without regard to
any waivers thereof, and, to the extent that the assets of any of such Plans
would be less than an amount sufficient to provide all accrued benefits payable
under such Plans, shall make the maximum deductible contributions allowable
under the Code. Neither the Borrower nor any of its Subsidiaries shall incur any
material withdrawal liability with respect to any Multiemployer Plan. The
Borrower shall not, and shall cause the other Borrower Parties not to, make any
commitment to provide post-employment health or life insurance benefits, except
as required by Section 601 through 609 of ERISA.
Section 7.12 Negative Pledge. The Borrower shall not, and shall cause its
Subsidiaries not to, directly or indirectly, enter into any agreement (other
than the Loan Documents, the Refinancing Securities Documents and the Exchange
Offer Documents) with any Person that prohibits or restricts or limits the
ability of any of the Borrower Parties to create, incur, pledge, or suffer to
exist any Lien upon any of its Assets, or restricts the ability of any
Subsidiary of the Borrower to make Restricted Payments to the Borrower, except
(a) any encumbrance or restriction that restricts in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to a
lease, license or other contract or the assignment, encumbrance or hypothecation
of such lease, license or other contract; (b) any limitation or restriction
contained in any Permitted Lien to the extent such limitation or restriction
restricts the transfer of the property subject to such Permitted Liens; and (c)
any restriction imposed pursuant to an agreement entered into in connection with
a Permitted Disposition pending the closing of such sale or disposition.
Section 7.13 Stay, Extension and Usury Laws. The Borrower shall not, and
shall cause each of the other Borrower Parties not to, (to the extent it may
lawfully do so) at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay, extension or usury law or
other law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of its obligations under this Agreement
and the other Loan Documents, and the Borrower, for itself and on behalf of each
of the other Borrower Parties, hereby expressly waives (to the extent it may
lawfully do so) all benefit or advantage of any such law.
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Section 7.14 Limitation on Sale and Lease-Back Transactions. The Borrower
shall not, and shall cause each of the other Borrower Parties not to, enter into
any Sale and Lease-Back Transaction, except that the Borrower or any other
Borrower Party may enter into a Sale and Lease-Back Transaction if (a) the
Borrower or such other Borrower Party, as applicable, could have (i) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such Sale and Lease-Back Transaction under Section 7.1 hereof and (ii) incurred
a Lien to secure such Indebtedness pursuant to Section 7.3 hereof, (b) the gross
cash proceeds of that Sale and Lease-Back Transaction are at least equal to the
fair market value of the property sold, and (c) the transfer of assets in that
Sale and Lease-Back Transaction is permitted by Section 7.5 hereof.
ARTICLE 8
Financial Covenants
Section 8.1 Senior Leverage Ratio. The Borrower shall not permit for any
fiscal quarter end during the periods set forth below, or as of the date of any
Advance during such periods, the Senior Leverage Ratio, after giving effect to
such Advance (if applicable), to exceed the applicable ratio for such date
during the periods as set forth below:
Applicable Period Ratio
Agreement Date through March 31, 2003 6.75 to 1.00
April 1, 2003 through June 30, 2003 6.50 to 1.00
July 1, 2003 through September 30, 2003 6.00 to 1.00
October 1, 2003 through December 31, 2003 5.25 to 1.00
January 1, 2004 through March 31, 2004 4.75 to 1.00
April 1, 2004 through June 30, 2004 4.50 to 1.00
July 1, 2004 through September 30, 2004 4.25 to 1.00
October 1, 2004 through March 31, 2005 4.00 to 1.00
April 1, 2005 through June 30, 2005 3.75 to 1.00
July 1, 2005 through September 30, 2005 3.50 to 1.00
October 1, 2005 through March 31, 2006 3.25 to 1.00
April 1, 2006 through June 30, 2006 3.00 to 1.00
July 1, 2006 and thereafter 2.50 to 1.00
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Section 8.2 Interest Coverage Ratio. For any fiscal quarter end during the
periods set forth below, the Borrower shall not permit the Interest Coverage
Ratio to be less than the applicable ratio for such fiscal quarter end during
the periods as set forth below:
Period Ratio
December 31, 2002 through June 30, 2003 1.75 to 1.00
September 30, 2003 2.00 to 1.00
December 31, 2003 2.25 to 1.00
March 31, 2004 and thereafter 2.50 to 1.00
Section 8.3 Fixed Charge Coverage Ratio. Commencing December 31, 2002, the
Borrower shall not permit the Fixed Charge Coverage Ratio to be less than 1.25
to 1.00 with respect to any fiscal quarter end.
Section 8.4 Capital Expenditures. The Borrower and the Restricted
Subsidiaries shall not make Capital Expenditures, during any fiscal year during
the period from the Agreement Date through December 31, 2004, in excess of the
sum of (a) $5,000,000, plus (b) up to fifty percent (50%) of any unused amounts
to be carried over from the prior period, which carried over amount shall not be
available until the basket for the current period is fully used, plus (c)
Available Cash Flow not used for other purposes.
ARTICLE 9
Default
Section 9.1 Events of Default. Each of the following shall constitute an
Event of Default with respect to the Obligations, whatever the reason for such
event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or any other
Loan Document shall prove to be incorrect or misleading in any material respect
when made or deemed to be made pursuant to Section 4.2 hereof;
(b) (i) The Borrower shall default in the payment of any principal of the
Loans when due, or (ii) the Borrower shall default in the payment of any
interest, fees or other amounts payable to any of the Credit Parties when due
and such Default shall not be cured by payment in full of such amounts within
five (5) Business Days;
(c) The Borrower shall default in the performance or observance of any
agreement or covenant contained in Section 5.1(a), 5.5, 5.7 or 5.8 or in Article
6 or Article 7 or Article 8 of
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this Agreement or in any Security Documents; provided, however, that in the case
of Article 6, the Administrative Agent shall have given the Borrower written
notice of such Default;
(d) The Borrower shall default in the performance or observance of any
other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 9.1, and such default, if curable, shall
not be cured within a period of thirty (30) days from the earlier of (i) the
Borrower obtaining knowledge thereof, or (ii) written notice thereof having been
given to the Borrower;
(e) There shall occur any default in the performance or observance of any
agreement or covenant contained in any of the Loan Documents (other than this
Agreement or as otherwise provided in this Section 9.1) by any of the Borrower
Parties or any other obligor thereunder, which shall not be cured within the
cure period, if any, set forth in such Loan Document;
(f) There shall be entered and remain unstayed a decree or order for relief
in respect of any of Holdco and its Subsidiaries (other than any of the Foreign
Subsidiaries) under Title 11 of the United States Code as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or the appointment of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or similar official of any of Holdco and its
Subsidiaries (other than any of the Foreign Subsidiaries), or of any substantial
part of their respective properties, or ordering the winding-up or liquidation
of the affairs of any of Holdco and its Subsidiaries (other than any of the
Foreign Subsidiaries), or an involuntary petition shall be filed against any of
Holdco and its Subsidiaries (other than any of the Foreign Subsidiaries) and a
temporary stay entered, and (i) such petition and stay shall not be diligently
contested, or (ii) such petition and stay shall remain uncontroverted for a
period of fifteen (15) consecutive days, or continue undismissed for a period of
sixty (60) consecutive days;
(g) Any of Holdco and its Subsidiaries (other than any of the Foreign
Subsidiaries) shall file a petition, answer or consent seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other applicable Federal or state bankruptcy law or other similar law, or
any of Holdco and its Subsidiaries (other than any of the Foreign Subsidiaries)
shall consent to the institution of proceedings thereunder or to the filing of
any such petition or shall seek or consent to the appointment or taking of
possession of a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of any of Holdco and its Subsidiaries (other than any
of the Foreign Subsidiaries), or of any substantial part of their respective
properties, or any of Holdco and its Subsidiaries (other than any of the Foreign
Subsidiaries), shall fail generally to pay their respective debts as they become
due, or any of Holdco and its Subsidiaries (other than any of the Foreign
Subsidiaries) shall take any action in furtherance of any such action;
(h) A judgment shall be entered by any court against any of the Borrower
Parties (other than any of the Foreign Subsidiaries) for the payment of money
which exceeds $2,000,000 (in excess of insurance) or a warrant of attachment or
execution or similar process shall be issued or levied against property of any
of the Borrower Parties (other than any of the Foreign Subsidiaries) which,
together with all other such property of the Borrower Parties (other than any of
the Foreign Subsidiaries) subject to other such process, exceeds in value
$2,000,000 in the aggregate, and if, within thirty (30) days after the entry,
issue or levy thereof, such judgment,
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warrant or process shall not have been paid or discharged or stayed pending
appeal, or if, after the expiration of any such stay, such judgment, warrant or
process shall not have been paid or discharged within fifteen (15) days;
(i) There shall be at any time any "accumulated funding deficiency," as
defined in Section 302 of ERISA or in Section 412 of the Code, with respect to
any Plan maintained by any of the Borrower Parties, or to which any of the
Borrower Parties has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
such Plan; or PBGC shall institute proceedings to terminate any such Plan; or
any of the Borrower Parties shall incur any material liability to PBGC in
connection with the termination of any such Plan; or any fiduciary of, or party
in interest to, any Plan or trust created under any Plan of any of the Borrower
Parties shall engage in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) which would subject any of the
Borrower Parties to a tax on "prohibited transactions" imposed by Section 4975
of the Code; or any fiduciary of, or party in interest to, any Plan or trust
created under any Plan of any of the Borrower Parties shall engage in a breach
of fiduciary responsibility or knowingly participate in any violation of ERISA;
or any Plan of any of the Borrower Parties which is intended to qualify under
Section 401(a) of the Code shall fail to meet the qualification requirements
under such Code section, and, in each case, such event or condition, together
with other such events or conditions, if any, would subject the Borrower Parties
to any tax, liability or penalty in excess of $2,000,000;
(j) There shall occur any default under any mortgage, deed to secure debt,
note, loan agreement, indenture or other instrument of any of the Borrower
Parties (other than any of the Foreign Subsidiaries) evidencing Funded Debt,
which default is not cured within the applicable cure period and which results
in acceleration thereunder of an amount in excess of $2,000,000;
(k) There shall occur any default which would permit acceleration of the
Indebtedness evidenced thereby under the Refinancing Securities or the Exchange
Notes (or the Refinancing Securities Documents or the Exchange Offer Documents);
(l) Any Security Document or any other Loan Document or any material
provision thereof shall at any time and for any reason cease to be in full force
and effect or be declared by a court of competent jurisdiction to be null and
void, or a proceeding shall be commenced by any of the Borrower Parties, or by
any Governmental Authority having jurisdiction over any of the Borrower Parties,
seeking to establish the invalidity or unenforceability thereof (exclusive of
questions of interpretation of any provision thereof), or any of the Borrower
Parties shall deny that it has any liability or obligation for the payment of
principal or interest or other obligations purported to be created under any
Loan Document; or
(m) There shall occur any Change of Control.
Section 9.2 Remedies.
(a) If an Event of Default specified in Section 9.1 (other than an Event of
Default under Section 9.1(f) or Section 9.1(g)) shall have occurred and shall be
continuing, the Administrative Agent, at the request of the Required Lenders,
shall formally declare that an
84
Event of Default has occurred and (i) terminate the Revolving Commitment and
(ii) declare the principal of and interest on the Loans and all other amounts
owed to the Credit Parties under this Agreement and any other Obligations to be
forthwith due and payable without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, anything in this Agreement or in
any other Loan Document to the contrary notwithstanding, and the Revolving
Commitment shall thereupon forthwith terminate and all such amounts shall be
immediately due and payable, and during the continuance of an Event of Default
specified in Section 9.1(b) hereof, the principal amount of the Loans
outstanding hereunder shall bear interest at the Default Rate.
(b) Upon the occurrence and continuance of an Event of Default specified in
Section 9.1(f) or Section 9.1(g), all principal, interest and other amounts due
hereunder, and all other Obligations, shall thereupon and concurrently therewith
become due and payable and the Revolving Commitment shall forthwith terminate
and the principal amount of the Loans outstanding hereunder shall bear interest
at the Default Rate, all without any action by the Agents, the Lenders and the
Required Lenders, or any of them, and without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or in the other Loan Documents to the contrary notwithstanding.
(c) With respect to any outstanding Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of any acceleration of
the Obligations pursuant to this Section 9.2, the Borrower shall promptly, upon
demand by any Issuing Bank, pay to such Issuing Bank an amount equal to one
hundred two percent (102%) of the aggregate undrawn and unexpired amount of each
Letter of Credit then outstanding, which cash will be held as cash collateral by
such Issuing Bank for the L/C Obligations and applied to the payment of Drafts
drawn under such Letters of Credit and the unused portion thereof after such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other Obligations hereunder in the manner set forth in Section
9.3 hereof.
(d) Upon acceleration of the Loans, as provided in subsection (a) or (b) of
this Section 9.2, the Credit Parties shall have all of the post-default rights
granted to them, or any of them, under the Loan Documents and under Applicable
Law.
(e) Upon acceleration of the Loans, as provided in subsection (a) or (b) of
this Section 9.2, the Administrative Agent, upon request of the Required
Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Subsidiaries, both to operate and
to sell such properties and assets, and the Borrower, for itself and on behalf
of its Subsidiaries, hereby consents to such right and such appointment and
hereby waives any objection the Borrower or any Subsidiary may have thereto or
the right to have a bond or other security posted by the Administrative Agent,
on behalf of the Credit Parties, in connection therewith.
(f) The rights and remedies of the Credit Parties hereunder shall be
cumulative and not exclusive.
(g) Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, the Credit Parties hereby agree not to exercise any of
the remedies available to
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them under this Agreement or any other Loan Document or under Applicable Law
against the Lien granted to the Administrative Agent (for the benefit of the
Credit Parties) in the Equity Collateral Account until after the occurrence and
during the continuation of an Event of Default under any of Sections 9.1(b), (f)
or (g) hereof.
Section 9.3 Payments Subsequent to Acceleration. Subsequent to the
acceleration of the Loans under Section 9.2 hereof, payments and prepayments
under this Agreement made to any of the Credit Parties or otherwise received by
any of such Persons (from realization on Collateral for the Obligations or
otherwise) shall be paid over to the Administrative Agent (if necessary) and
distributed by the Administrative Agent as follows: FIRST, to the reasonable
costs and expenses, if any, incurred in connection with the collection of such
payment or prepayment including, without limitation, any reasonable costs
incurred by the Administrative Agent in connection with the sale or disposition
of any Collateral for the Obligations; SECOND, to the Credit Parties for any
fees hereunder or under any of the other Loan Documents then due and payable;
THIRD, to the Lenders pro-rata on the basis of their respective unpaid principal
amounts, to the payment of any unpaid interest which may have accrued on the
Obligations; FOURTH, to the Lenders pro-rata until all Loans have been paid in
full (and, for purposes of this clause, obligations under Interest Hedge
Agreements with any of the Lenders shall be deemed to be Loans and shall be paid
on a pro-rata basis with the Loans); FIFTH, to the Lenders pro-rata on the basis
of their respective unpaid amounts, to the payment of any other unpaid
Obligations; SIXTH, to damages incurred by any Credit Party by reason of any
breach hereof or of any other Loan Document; and SEVENTH, upon satisfaction in
full of all Obligations (other than contingent indemnity obligations), to the
Borrower or as otherwise required by law. Notwithstanding the foregoing, each
Lender may allocate amounts received by it pursuant to this Section 9.3 in its
discretion to the various Obligations held by it.
ARTICLE 10
The Agents
Section 10.1 Appointment and Authorization. Subject only to Section 10.13
hereof, each of the Lenders hereby irrevocably appoints and authorizes, and
hereby agrees that it will require any transferee of any of its interest in its
Loans irrevocably to appoint and authorize, each of the Agents to take such
actions as its agent on its behalf and to exercise such powers hereunder and
under the Security Documents as are delegated to such Agents by the terms hereof
and thereof, together with such powers of such Agents as are reasonably
incidental thereto. None of the Agents nor any of their respective directors,
officers, employees or agents shall be liable for any action taken or omitted to
be taken by it or them hereunder or in connection herewith, except for its or
their own gross negligence or willful misconduct.
Section 10.2 Interest Holders. The Administrative Agent and the other
Agents may treat each Lender, or the Person designated in the last notice filed
with the Administrative Agent under this Section 10.2, as the holder of all of
the interests of such Lender in its Loans until written notice of transfer,
signed by such Lender (or the Person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
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Section 10.3 Consultation with Counsel. The Administrative Agent may
consult with Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel to the
Administrative Agent, or with other legal counsel selected by them and shall not
be liable for any action taken or suffered by them in good faith in consultation
with such counsel, or at the direction of the Required Lenders and in reasonable
reliance on such consultations or direction.
Section 10.4 Documents. None of the Agents shall be under any duty to
examine, inquire into, or pass upon the validity, effectiveness or genuineness
of this Agreement, any other Loan Document, or any other instrument, document or
communication furnished pursuant hereto or in connection herewith, and each of
the Agents shall be entitled to assume (absent knowledge to the contrary) that
they are valid, effective and genuine, have been signed or sent by the proper
parties and are what they purport to be.
Section 10.5 Agents' Affiliates. With respect to the Commitments and the
Loans, the Agents and their respective Affiliates shall have the same rights and
powers hereunder and under the other Loan Documents as any other Lender, and
Affiliates of any of the Agents may accept deposits from, lend money to and
generally engage in any kind of business with any of the Borrower Parties or any
Affiliates of, or Persons doing business with, any of the Borrower Parties, as
if they were not affiliated with such Agent and without any obligation to
account therefor.
Section 10.6 Responsibility of the Agents. The duties and obligations of
each of the Agents under this Agreement and the Security Documents are only
those expressly set forth in this Agreement and the Security Documents. Each of
the Agents shall be entitled to assume that no Default has occurred and is
continuing unless it has actual knowledge, or has been notified by the Borrower,
of such fact, or has been notified by a Lender in writing that such Lender
considers that a Default has occurred and is continuing, and such Lender shall
specify in detail the nature thereof in writing. None of the Agents shall be
liable hereunder for any action taken or omitted to be taken except for its own
gross negligence or willful misconduct. The Administrative Agent shall provide
promptly each of the Lenders with copies of such documents received from the
Borrower as such Lender may reasonably request.
Section 10.7 Security Documents. The Administrative Agent, as
administrative agent hereunder and under the Security Documents, is hereby
authorized to act on behalf of the Lenders, in its own capacity and through
other agents and sub-agents appointed by it with due care, under the Security
Documents, provided that the Administrative Agent shall not agree to the release
of any Collateral, or any property encumbered by any mortgage, pledge or
security interests, except in compliance with Section 12.12 hereof. In
connection with its role as secured party with respect to the Collateral
hereunder, the Administrative Agent shall act as administrative agent, for the
benefit of the Credit Parties, and such role as administrative agent shall be
disclosed on all appropriate accounts, certificates, filings, mortgages, and
other collateral documentation.
Section 10.8 Action by the Agents.
(a) Each of the Agents shall be entitled to use its discretion with respect
to exercising or refraining from exercising any rights which may be vested in it
by, and with respect to taking
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or refraining from taking any action or actions which it may be able to take
under or in respect of, this Agreement, unless such Agent shall have been
instructed by the Required Lenders to exercise or refrain from exercising such
rights or to take or refrain from taking such action; provided that the
Administrative Agent shall not exercise any rights under Section 9.2(a) of this
Agreement except upon the request of the Required Lenders. None of the Agents
shall incur any liability under or in respect of this Agreement with respect to
anything which it may do or refrain from doing in the reasonable exercise of its
judgment or which may seem to it to be necessary or desirable in the
circumstances for the protection of the interests of the Lenders except for its
gross negligence, bad faith or willful misconduct, or conduct in breach of this
Agreement as determined by a final, non-appealable order of a court having
jurisdiction over the subject matter.
(b) None of the Agents shall be liable to the Lenders, or to any of them,
in acting or refraining from acting under this Agreement or any other Loan
Document in accordance with the instructions of the Required Lenders (or all of
the Lenders where expressly required by this Agreement), and any action taken or
failure to act pursuant to such instructions shall be binding on all Lenders.
Section 10.9 Notice of Default or Event of Default. In the event that any
Agent or any Lender shall acquire actual knowledge, or shall have been notified,
of any Default (other than through a notice by one party hereto to all other
parties), such Agent or such Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall take such action and assert such
rights under this Agreement and the other Loan Documents as the Required Lenders
(or all of the Lenders where expressly required by this Agreement) direct, and
the Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Required Lenders shall fail to
request the Administrative Agent to take action or to assert rights under this
Agreement in respect of any Default within ten (10) days after their receipt of
the notice of any Default from any Agent or any Lender, or shall request
inconsistent action with respect to such Default, the Administrative Agent may,
but shall not be required to, take such action and assert such rights (other
than rights under Article 9 hereof) as it deems in its discretion to be
advisable for the protection of the Lenders, except that, if the Required
Lenders have instructed the Administrative Agent not to take such action or
assert such right, in no event shall the Administrative Agent act contrary to
such instructions.
Section 10.10 Responsibility Disclaimed. None of the Agents shall be under
any liability or responsibility whatsoever as an Agent:
(a) To the Borrower or any other Person as a consequence of any failure or
delay in performance by or any breach by, the Lenders, or any of them, of any of
its or their obligations under this Agreement;
(b) To the Lenders, or any of them, as a consequence of any failure or
delay in performance by, or any breach by, any of the Borrower Parties of any of
their respective obligations under this Agreement or any other Loan Document to
which it is a party; or
(c) To the Lenders, or any of them, for any statements, representations or
warranties in this Agreement, or any other document contemplated by this
Agreement or any other Loan Document, or any information provided pursuant to
this Agreement, any other Loan Document,
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or any other document contemplated by this Agreement, or for the validity,
effectiveness, enforceability or sufficiency of this Agreement, any other Loan
Document, or any other document contemplated by this Agreement.
Section 10.11 Indemnification. The Lenders agree to indemnify each of the
Agents (to the extent not reimbursed by the Borrower), pro-rata in accordance
with their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, reasonable fees and expenses of
experts, agents, consultants and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agents in any way relating to or arising out of their respective roles as Agents
under this Agreement, any other Loan Document, or any other document
contemplated by this Agreement or any action taken or omitted by the Agents
under this Agreement, any other Loan Document, or any other document
contemplated by this Agreement in their respective roles as Agents, except that
none of the Lenders shall be liable to either of the Agents for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements resulting from the gross negligence,
bad faith or willful misconduct of the Agents as determined by a final,
non-appealable order of a court having jurisdiction over the subject matter.
Section 10.12 Credit Decision. Each of the Lenders represents and warrants
to each other Credit Party that:
(a) In making its decision to enter into this Agreement and to make its
Advances it has independently taken whatever steps it considers necessary to
evaluate the financial condition and affairs of the Borrower Parties and that it
has made an independent credit judgment, and that it has not relied upon any
other Credit Party or upon information provided by any Agent (other than
information provided to the Lead Arranger by the Borrower and forwarded by the
Lead Arranger to the Lenders); and
(b) So long as any portion of the Obligations remains outstanding, it will
continue to make its own independent evaluation of the financial condition and
affairs of the Borrower Parties.
Section 10.13 Successor Agents. Subject to the appointment and acceptance
of a successor Agent as provided below, any Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent subject, so long as no Default or Event of Default then exists, to the
approval of the Borrower. If no successor Agent shall have been so appointed by
the Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent gives notice of resignation, then the retiring
Agent may, on behalf of the Credit Parties, appoint a successor Agent which
shall be any Lender or a commercial bank organized under the laws of the United
States of America or any political subdivision thereof which has combined
capital and reserves in excess of $250,000,000, or any existing Lender. Upon the
acceptance of any appointment as an Agent hereunder by a successor Agent such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges, duties and obligations of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as
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Agent, the provisions of this Article shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as an Agent. The resignation of an Agent may not take effect until a successor
Agent is appointed.
ARTICLE 11
Change in Circumstances
Affecting Eurodollar Advances
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair. If with
respect to any proposed Eurodollar Advance for any Eurodollar Advance Period,
the Administrative Agent determines after consultation with the Lenders that
deposits in Dollars (in the applicable amount) are not being offered to each of
the Lenders in the relevant market for such Eurodollar Advance Period, the
Administrative Agent shall forthwith give notice thereof to the Borrower and the
Lenders, whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
any affected Lender to make Eurodollar Advances shall be suspended. Before
giving any notice to the Administrative Agent pursuant to this Section 11.1,
such Lender shall designate a different lending office if such designation will
avoid the need for giving such notice and will not, in the sole judgment of such
Lender, be otherwise materially disadvantageous to such Lender.
Section 11.2 Illegality. If, after the Agreement Date, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Agreement Date), or any change in interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any directive (whether or not having the force of law but with which such
Lender customarily complies) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Lender to make, maintain or
fund Eurodollar Advances, such Lender shall so notify the Administrative Agent,
and the Administrative Agent shall forthwith give notice thereof to the other
Lenders and the Borrower. Before giving any notice to the Administrative Agent
pursuant to this Section 11.2, such Lender shall designate a different lending
office if such designation will avoid the need for giving such notice and will
not, in the sole judgment of such Lender, be otherwise materially
disadvantageous to such Lender. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each Eurodollar Advance of such Lender,
together with accrued interest thereon and any reimbursement required under
Section 2.10 hereof, on either (a) the last day of the then current Eurodollar
Advance Period applicable to such affected Eurodollar Advances if such Lender
may lawfully continue to maintain and fund such Eurodollar Advances to such day
or (b) immediately if such Lender may not lawfully continue to fund and maintain
such affected Eurodollar Advances to such day. Concurrently with repaying each
affected Eurodollar Advance of such Lender, notwithstanding anything contained
in Article 2 or Article 3 hereof, the Borrower may borrow a Base Rate Advance
from such Lender, and such Lender shall make such Advance, if so requested, in
an amount such that the outstanding principal amount of the Loans owed to such
Lender shall equal the outstanding principal amount of such Loans immediately
prior to such repayment.
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Section 11.3 Increased Costs.
(a) If, after the Agreement Date, the adoption of any Applicable Law, or
any change in any Applicable Law (whether adopted before or after the Agreement
Date), or any interpretation or change in interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by any Lender
with any directive (whether or not having the force of law but with which such
Lender customarily complies) of any such authority, central bank or comparable
agency:
(i) shall subject any Lender to any tax, duty or other charge with
respect to its obligation to make Eurodollar Advances, or shall change the basis
of taxation of payments to any Lender of the principal of or interest on its
Eurodollar Advances or in respect of any other amounts due under this Agreement,
in respect of its Eurodollar Advances or its obligation to make Eurodollar
Advances (except for imposition of, or changes in the rate or method of
calculation of, tax on the overall net income of such Lender) in any such case;
or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System, but excluding any included in an applicable Eurodollar Reserve
Percentage), special deposit, capital adequacy, assessment or other requirement
or condition against assets of, deposits with or for the account of, or
commitments or credit extended by, any Lender or shall impose on any Lender or
the London interbank borrowing market any other condition affecting its
obligation to make Eurodollar Advances or its Eurodollar Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any such Eurodollar Advances hereunder, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement
with respect thereto in each case in amounts that such Lender deems material,
then, within ten (10) days after demand by such Lender, the Borrower agrees to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased costs. Each Lender will promptly notify the Borrower
and the Administrative Agent of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Lender to compensation pursuant
to this Section 11.3 and will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Lender, be otherwise disadvantageous
to such Lender.
(b) Any Lender claiming compensation under this Section 11.3 shall provide
the Borrower with a written certificate setting forth the additional amount or
amounts to be paid to it hereunder and calculations therefor in reasonable
detail. Such certificate shall be presumptively correct, absent manifest error.
In determining such amount, such Lender shall use any reasonable averaging and
attribution methods. If any Lender demands compensation under this Section 11.3,
the Borrower may at any time, upon at least five (5) Business Days' prior notice
to such Lender, prepay in full the then outstanding Eurodollar Advances of such
Lender, together with accrued interest thereon to the date of prepayment, along
with any reimbursement required under Section 2.10 hereof. Concurrently with
prepaying such Eurodollar Advances, the Borrower may borrow a Base Rate Advance
from such Lender, and such Lender shall, if so
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requested, make such Advance in an amount such that the outstanding principal
amount of the Loans owing to such Lender shall equal the outstanding principal
amount of such Loans immediately prior to such prepayment.
Section 11.4 Effect On Other Advances.
(a) If notice has been given pursuant to Section 11.1, 11.2 or 11.3
suspending the obligation of any Lender to make Eurodollar Advances, or
requiring Eurodollar Advances of any Lender to be converted, repaid or prepaid,
then, unless and until the circumstances giving rise to such repayment no longer
apply, all Advances which would otherwise be made by such Lender as Eurodollar
Advances affected shall be made instead as Base Rate Advances.
(b) Within sixty (60) days after written notice pursuant to Section 11.1,
11.2 or 11.3 by any Lender, the Borrower may, in its discretion, provide a
replacement lender or lenders for such Lender, which replacement lender or
lenders will be subject to the approval of the Agents which shall not be
unreasonably withheld or delayed, and the Administrative Agent, such Lender and
the Borrower shall take all necessary actions to transfer the rights, duties and
obligations of such Lender to such replacement lender or lenders within such
sixty (60) day period (including, without limitation, the payment in full of all
Obligations hereunder due to the Lender being replaced).
ARTICLE 12
Miscellaneous
Section 12.1 Notices.
(a) Unless otherwise specifically provided herein, all notices and other
communications under this Agreement shall be in writing and shall be deemed to
have been given three (3) days after deposit in the mail, designated as
certified mail, return receipt requested, postage-prepaid, or one (1) Business
Day after being entrusted to a reputable commercial overnight delivery service,
or when sent by telecopy addressed to the party to which such notice is directed
at its address determined as provided in this Section 12.1. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, to it at:
Ziff ▇▇▇▇▇ Media Inc.
▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
Aon Center
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Administrative Agent, to it at:
Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Canadian Imperial Bank of Commerce
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Lenders, to them at the addresses set forth
beside their names on the Lender Addendum with
respect thereto or in an Assignment and Assumption
Agreement.
(b) Copies shall be provided to Persons other than the parties
hereto only in the case of notices under Article 9 hereof.
(c) Any party hereto may change the address to which notices shall
be directed under this Section 12.1 by giving ten (10) days' written notice of
such change to the other parties.
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Section 12.2 Expenses. The Borrower shall promptly pay or reimburse:
(a) all reasonable out-of-pocket legal expenses of the Administrative Agent
and all reasonable other out-of-pocket expenses of the Administrative Agent
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and the other Loan Documents, and the transactions
contemplated hereunder and thereunder in connection with the making of the
initial Advance hereunder (whether or not such Advance is made), including, but
not limited to, the reasonable fees and disbursements of Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, special counsel for the Administrative Agent;
(b) all reasonable out-of-pocket legal expenses of the Administrative Agent
and all other reasonable out-of-pocket expenses of the Administrative Agent in
connection with the syndication of the Loans;
(c) all reasonable out-of-pocket legal expenses of the Administrative Agent
and all other reasonable out-of-pocket expenses of the Administrative Agent in
connection with the administration of the transactions contemplated in this
Agreement or the other Loan Documents, and all other reasonable expenses of the
Administrative Agent customarily reimbursed by borrowers for transactions of
similar size, type and purpose as such transactions;
(d) from and after and during the occurrence of an Event of Default, (i)
all reasonable legal and other out-of-pocket expenses of the Credit Parties
incurred in connection with the enforcement of this Agreement and the other Loan
Documents, (ii) all reasonable legal and other out-of-pocket expenses of the
Credit Parties incurred in connection with any restructuring or "work out" of,
or bankruptcy proceeding relating to, the transactions contemplated by this
Agreement or the other Loan Documents (including, without limitation, the
reasonable fees and disbursements of any experts, agents or consultants engaged
by the Administrative Agent or its counsel on behalf of the Credit Parties) and
which shall include, with respect to legal fees, only the reasonable legal fees
of one counsel for the Administrative Agent and one counsel and one local
counsel, in each case if any, engaged at the request of the Required Lenders to
represent the Credit Parties, and any exercise by any of the Credit Parties of
their respective remedies provided for in this Agreement or the other Loan
Documents, and (iii) all reasonable out-of-pocket expenses (including, without
limitation, reasonable attorneys' fees and expenses) of the Administrative Agent
and each of the Lenders holding Participated Term Loans incurred in connection
with the negotiation, preparation and execution of any documentation relating
to, and any administration of, the Participated Term Loans.
Section 12.3 Waivers. The rights and remedies of the Agents and the Lenders
under this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No failure
or delay by the Agents, the Required Lenders or the Lenders, or any of them, in
exercising any right shall operate as a waiver of such right. The Agents and the
Lenders expressly reserve the right to require strict compliance with the terms
of this Agreement in connection with any future funding of a request for an
Advance. In the event the Lenders decide to fund an Advance at a time when the
Borrower is not in strict compliance with the terms of this Agreement, such
decision by the Lenders shall not be deemed to constitute an undertaking by the
Lenders to fund any further Advances or to preclude the Lenders or the Agents
from exercising any rights available to them
94
under the Loan Documents or at law or equity. Any waiver or indulgence granted
by the Agents, the Required Lenders or Lenders shall not constitute a
modification of this Agreement, except to the extent expressly provided in such
waiver or indulgence, or constitute a course of dealing at variance with the
terms of this Agreement such as to require further notice of their intent to
require strict adherence to the terms of this Agreement in the future.
Section 12.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and during the continuation thereof, the
Agents and the Lenders are hereby authorized by the Borrower at any time or from
time to time, without notice to any Borrower Party or to any other Person, any
such notice being hereby expressly waived, to set-off and to appropriate and to
apply any and all deposits (general or special, time or demand, including, but
not limited to, Indebtedness evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other Indebtedness at any time held or
owing by any Lender or any Agent to or for the credit or the account of any of
the Borrower Parties against and on account of the Obligations irrespective of
whether (a) the Lenders and the Agents, or any of them, shall have made any
demand hereunder or (b) the Administrative Agent shall have declared the
principal of and interest on the Loans and other amounts due hereunder to be due
and payable as permitted by Section 9.2 hereof and although all or any of such
Obligations shall be contingent or unmatured. Upon direction by the
Administrative Agent, with the consent of the Required Lenders, each Lender
holding deposits of any of the Borrower Parties shall exercise its set-off
rights as so directed.
Section 12.5 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Credit Parties and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of business or investment in
accordance with Applicable Law, at any time sell, to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder and under the other Loan Documents. In the event of any such sale by a
Lender of a participating interest to a Participant, (i) such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible for the
performance thereof, (iii) such Lender shall remain the holder of any such Loan
for all purposes under this Agreement and the other Loan Documents, and (iv) the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. No Lender shall be entitled to
create in favor of any Participant, in the participation agreement pursuant to
which such Participant's participating interest shall be created or otherwise,
any right to vote on, consent to or approve any matter relating to this
Agreement or any other Loan Document except for those matters specified as
requiring the consent of all Lenders in Section 12.12 hereof. The Borrower
agrees that upon the occurrence and during the continuance of an Event of
Default, each Participant shall, to the maximum extent permitted by Applicable
Law, be deemed to have the right of set-
95
off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under this Agreement; provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section
12.4 as fully as if it were a Lender hereunder. The Borrower also agrees that
each Participant shall be entitled to the benefits of Section 2.10, Section
2.12, Section 2.14(j) and Article 11 of this Agreement with respect to its
participation in the Commitments and the Loans outstanding from time to time as
if it were a Lender; provided, further, that, in the case of Section 2.12, such
Participant shall have complied with the requirements of such Section, and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its business or investment
activities and in accordance with Applicable Law, at any time and from time to
time assign, with prior written notice to the Administrative Agent, to any
Lender or any branch or Affiliate thereof, or with the consent of the
Administrative Agent and, so long as no Default exists hereunder, the Borrower
(which consents shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or Approved Fund (an "Assignee"), all or any part of
its rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Assumption Agreement. Each Assignment and
Assumption Agreement shall be executed by the applicable Assignee and assigning
Lender (and, in the case of an Assignee that is not then a Lender, or a branch
or an Affiliate thereof, by the Administrative Agent and, so long as no Default
exists hereunder, the Borrower) and delivered to the Administrative Agent for
its acceptance and recording in the Register; provided that, with respect to
each Lender, in the case of any such assignment to an additional bank or
financial institution, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal amount
of the Loans, the aggregate amount of the L/C Obligations and the aggregate
amount of the Commitments being assigned shall not be less than $2,500,000 in
the case of any assignments of the Term B Loans, and $5,000,000 in the case of
any assignment of the other Loans, L/C Obligations and Commitments, and in each
case in an in integral multiple of $1,000,000 in excess thereof (or such lesser
amount as may be agreed to by the Administrative Agent and the Borrower);
provided further that, notwithstanding anything to the contrary contained
herein, with respect to any assignment of any Term Loans by a Lender holding
Participated Term Loans, (I) if such assignment is of less than all of such
Lender's Participated Term Loans or if such assignment is of all of such
Lender's Participated Term Loans to an Assignee that is not an existing Lender
holding Term Loans, such assignment shall be made on a pro rata basis between
the Participated Term Loans and the other Term Loans of such Lender, and while
it shall not be required that such assignment of the Term Loans (other than the
Participated Term Loans) be made on a pro rata basis between Term A Loans and
Term B Loans, it shall be required that any assignment of the Participated Term
Loans be made pro rata between Term A Loans and Term B Loans, and (II) if such
assignment is of all of such Lender's Participated Term Loans to an existing
Lender holding Term Loans, such assignment shall not be required to be made on a
pro rata basis between the Participated Term Loans and the other Term Loans of
such Lender and may be made without regard to the contemporaneous assignment, if
any, of all or any portion of such Lender's Term Loans that do not constitute
Participated Term
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Loans. Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and Assumption
Agreement, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Assumption Agreement, have the rights and
obligations of a Lender hereunder with Commitments as set forth therein, and (y)
the assigning Lender thereunder shall, to the extent provided in such Assignment
and Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto but shall
nonetheless continue to be entitled to the benefits of, and subject to the
obligations set forth in, Sections 2.10, 2.11, 2.13, 2.14, 5.10, 10.11, 11.3 and
12.2 hereof).
(d) The Administrative Agent, on behalf of the Borrower, shall maintain at
the address of the Administrative Agent referred to in Section 12.1, a copy of
each Assignment and Assumption Agreement delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amounts of the Loans owing to, each Lender
from time to time (whether or not evidenced by a Note). Any assignment or
transfer of all or part of a Loan evidenced by a Note shall be registered on the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such Loan, accompanied by a duly executed Assignment and
Assumption Agreement, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the designated Assignee and the old Note
shall be returned by the Administrative Agent to the Borrower marked "canceled".
The entries in the Register shall be conclusive, in the absence of manifest
error, and the Borrower and the Credit Parties shall treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation (whether or not evidenced by a Note) hereunder
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Credit Party at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Assumption Agreement executed by
an assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or any branch or an Affiliate thereof, by the Administrative Agent
and, so long as no Default exists hereunder, the Borrower) together with payment
to the Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall promptly accept such Assignment and Assumption
Agreement and record the information contained therein in the Register. Such
Assignment and Assumption Agreement and the assignment evidenced thereby shall
only be effective upon appropriate entries with respect to the information
contained therein being made in the Register pursuant to Section 12.5(d).
(f) The Borrower hereby authorizes each Lender to disclose to any
Participant or Assignee (each a "Transferee") and any prospective Transferee,
subject to such Person agreeing to comply with the provisions of Section 12.17
of this Agreement, any and all financial and other information in such Lender's
possession concerning the Borrower which has been delivered to
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such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section 12.5 concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit any
pledge or any assignments creating security interests or the assignment of any
Loan or Note pursuant to the terms of such pledge or security interest,
including, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with Applicable Law.
(h) Any Person purchasing a participation or an assignment of Loans from
any Lender shall be required to represent and warrant that its purchase shall
not constitute a "prohibited transaction" (as defined in Section 4.1(m) hereof).
(i) Each Lender agrees to provide the Administrative Agent and the Borrower
with prompt written notice of any issuance of participations or assignments of
its interests hereunder.
(j) No assignment, participation or other transfer of any rights by any
Lender hereunder or under the Notes shall be affected that would result in any
interest requiring registration under the Securities Act, or qualification under
any state securities law.
(k) No such assignment may be made to any Lender or other financial
institution (x) with respect to which a receiver or conservator (including,
without limitation, the Federal Deposit Insurance Corporation or the Office of
Thrift Supervision) has been appointed or (y) that is not "adequately
capitalized" (as such term is defined in Section 131(b)(1)(B) of the Federal
Deposit Insurance Corporation Improvement Act as in effect on the Agreement
Date).
Section 12.6 Accounting Principles. Except as set forth in the following
sentence, references in this Agreement to GAAP shall be to such principles as in
effect from time to time, and all accounting terms used herein without
definition shall be used as defined under GAAP. All financial calculations
hereunder shall, unless otherwise stated, be determined for the Borrower on a
consolidated basis with its Restricted Subsidiaries. Except as otherwise
provided herein, all computations and determinations for purposes of determining
compliance with the financial requirements of this Agreement shall be made in
accordance with GAAP in effect in the United States of America on a basis
consistent with the presentation of the financial statements delivered pursuant
to Sections 6.1, 6.2 and 6.3 hereof, and all financial statements delivered
pursuant to Sections 6.1, 6.2 and 6.3 hereof shall be prepared in accordance
with GAAP as in effect on the date of their respective preparation. In the event
that any Accounting Change shall occur and such change shall result in a change
in the method of calculation of the Financial Covenants, or any other financial
standards or terms in this Agreement, the Borrower and the Administrative Agent
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such Accounting Change on terms reasonably acceptable to both
parties. Until such time as such an amendment to this Agreement shall have been
executed and delivered by the Borrower, the Administrative Agent and the
Required Lenders, the Financial Covenants and all other financial standards and
terms in this Agreement shall continue to be calculated or construed as if such
Accounting Change had not occurred.
98
Section 12.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
In proving this Agreement or any other Loan Document in any judicial
proceedings, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.
Any signatures delivered by a party by facsimile transmission shall be deemed an
original signature hereto.
Section 12.8 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN NEW YORK.
Section 12.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 12.10 Interest.
(a) In no event shall the amount of interest due or payable hereunder
exceed the maximum rate of interest allowed by Applicable Law, and in the event
any such payment is inadvertently made by the Borrower or inadvertently received
by any Lender, then such excess sum shall be credited as a payment of principal,
unless the Borrower shall notify the Administrative Agent or such Lender in
writing that it elects to have such excess returned forthwith. It is the express
intent hereof that the Borrower not pay and the Lenders not receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may
legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the Base Rate and the
Eurodollar Rate as reference rates for the determination of interest on the
Loans, the Lenders shall be under no obligation to obtain funds from any
particular source in order to charge interest to the Borrower at interest rates
related to such reference rates.
Section 12.11 Headings. Headings used in this Agreement are for convenience
only and shall not in any way modify or amend any of the terms or provisions
hereof nor be used in connection with the interpretation of any provision
hereof.
Section 12.12 Amendment and Waiver. Neither this Agreement nor any other
Loan Document (other than Interest Hedge Agreements), nor any term hereof or
thereof, may be amended orally, nor may any provision hereof or thereof be
waived orally, but only by an instrument in writing signed by (or, in the case
of Security Documents executed by the Administrative Agent signed by the
Administrative Agent and approved by) the Required Lenders and, in the case of
an amendment, by the Borrower, except that (a) any increase in the amount of the
Commitments of any Lender shall require the consent of such Lender; (b) in the
event of any change in the application of repayment of the Loans provided in
Section 2.7 hereof, any amendment or waiver or consent may be made only by an
instrument in writing signed by (i)
99
Lenders of the Pro Rata Class the sum of whose Revolving Commitment amounts plus
Term A Loans outstanding equals or exceeds 50.1% of the sum of such items for
all Lenders of the Pro Rata Class and (ii) Lenders of the Term B Class whose
Term B Loans outstanding equal or exceed 50.1% of the Term B Loans outstanding
for all Lenders of the Term B Class, and (c) in the event of (i) any change in
the terms of repayment or in the order of application of repayment of the Loans
provided in Section 2.6 hereof, (ii) any reduction in (but not change in the
terms of repayment of) principal, interest or fees due hereunder (other than any
waiver of the Default Rate), (iii) any release of all or substantially all of
the Collateral (other than in connection with a disposition permitted under
Section 7.5 hereof which shall require only the consent of the Agents), (iv) any
waiver of any Default due to the failure by the Borrower to pay any sum due
under Section 2.6 hereof to the Credit Parties, (v) any release of any Guaranty
(or any guarantor thereunder) of all or any portion of the Obligations other
than in connection with a disposition permitted under 7.5, (vi) any amendment,
whether direct or indirect, of this Section 12.12, or of any of the definitions
of "Initial Maturity Date" or "Final Maturity Date", of the percentages set
forth in the definition of "Required Lenders" or of any portion of Sections
2.9(c), 2.11, 9.3 or Article 11 as they relate to the relative priority of
payment among the Obligations, or (vii) any other provision of this Agreement or
any of the other Loan Documents specifically requiring the consent or approval
of each of the Lenders, any amendment or waiver or consent may be made only by
an instrument in writing signed by (or, in the case of Security Documents
executed by the Administrative Agent, signed by the Administrative Agent and
approved by) each of the Lenders and, in the case of an amendment, by the
Borrower; provided, however, that notwithstanding anything to the contrary
contained in the foregoing, any amendment or waiver or consent with respect to
the class voting provisions set forth in clause (b) hereof may be made by an
instrument in writing signed by the requisite members of each class described
therein. Notwithstanding the foregoing, so long as no Default or Event of
Default then exists, within sixty (60) days of the failure of any Lender to
consent to any amendment requested by the Borrower under this Section 12.12, the
Borrower may, in its discretion, provide a replacement lender or lenders for
such Lender, which replacement lender or lenders will be subject to approval of
the Agents, and the Administrative Agent, such Lender and the Borrower shall
take all necessary actions to transfer the rights, duties and obligations of
such Lender to such replacement lender or lenders within such sixty (60) day
period (including, without limitation, the payment in full of all Obligations
hereunder due to the Lender being replaced). Any amendment to any provision
hereunder, or any waiver or consent with respect thereto, governing the rights,
obligations, or liabilities of the Administrative Agent in its capacity as such,
may be made only by an instrument in writing signed by the Administrative Agent
and by each of the Lenders.
Section 12.13 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
Section 12.14 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of any Credit
Party or any of their respective Affiliates to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
100
Section 12.15 Lender Addenda. Each initial Lender shall become a party
to this Agreement by delivering to the Administrative Agent a Lender Addendum
duly executed by such Lender, the Borrower and the Administrative Agent.
Section 12.16 Loan Documents. All references to this Agreement or to
any other Loan Document whether herein or in any other Loan Document shall refer
to this Agreement or such other Loan Document as the same may be amended,
restated, supplemented or otherwise modified from time to time. Each of the Loan
Documents is hereby deemed modified and amended to the extent necessary to
reflect the amendments contained herein, and each reference to the "Credit
Agreement" contained therein shall be deemed to refer to this Agreement.
Section 12.17 Reliance on and Survival of Various Provisions. All
covenants, agreements, statements, representations and warranties made herein or
in any certificate delivered pursuant hereto (i) shall be deemed to have been
relied upon by each of the Agents and each of the Lenders notwithstanding any
investigation heretofore or hereafter made by them, and (ii) shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect so long as any of the Obligations is outstanding and unpaid. Any right to
indemnification hereunder, including, without limitation, rights pursuant to
Sections 2.10, 2.12, 2.14, 5.10, 10.11, 11.3 and 12.2 hereof, shall survive the
termination of this Agreement and the payment and performance of all of the
Obligations.
Section 12.18 Confidentiality. All agreements, instruments, documents
and other information received pursuant to this Agreement or any other Loan
Document by the Credit Parties shall be held in confidence by the Credit
Parties, except for disclosures made (a) in connection with assignments of or
participations in the Loans made pursuant to Section 12.5 hereof (provided that
such assignees or participants shall agree in writing to keep such information
confidential as provided herein), (b) as otherwise required to be disclosed by
banking regulations, process of law or other Applicable Law, or to government
regulators, (c) of information received by a Credit Party without restriction as
to its disclosure or use from a Person who, to such Credit Party's knowledge or
reasonable belief, was not prohibited from disclosing it by any duty of
confidentiality, (d) in connection with litigation arising from this Agreement
or any other Loan Document to which a Credit Party is a party, (v) of
information which is or has become public (other than through unauthorized
disclosure by any Credit Party), (vi) to the attorneys, accountants, and other
expert consultants (including rating agencies) for any Credit Party (who shall
be requested to similarly hold such information in confidence), (vii) to any
direct or indirect contractual counterparty of a Lender in connection with a
swap agreement or such contractual counterparty's professional advisor so long
as such contractual counterparty or professional advisor, as the case may be,
agrees in writing to be bound by the provisions of this Section 12.17, (viii) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (ix) as otherwise permitted hereunder.
Section 12.19 Waiver of Existing Defaults. The Credit Parties hereby
waive (a) each of the Existing Defaults and (b) their rights and remedies under
this Agreement, the Loan Documents (as defined herein), the Prior Credit
Agreement and the Loan Documents (as defined in the Prior Credit Agreement)
which may arise as a result of any of the Existing Defaults. The
101
waivers contained in the foregoing sentence shall not waive any other
requirement or hinder, restrict or otherwise modify the rights and remedies of
the Credit Parties following the occurrence of any other present or future
Default or Event of Default (whether or not related to any Existing Default )
under this Agreement, any Loan Document (as defined herein), the Prior Credit
Agreement or any Loan Document (as defined in the Prior Credit Agreement).
ARTICLE 13
Waiver of Jury Trial
Section 13.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON
BEHALF OF EACH OF THE OTHER BORROWER PARTIES, AND EACH OF THE CREDIT PARTIES
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR
PROCEEDING OF ANY TYPE IN WHICH ANY OF THE BORROWER PARTIES OR ANY OF THE CREDIT
PARTIES, OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS, IS A PARTY, AS TO ALL
MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS
SECTION 13.1.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
day and year first written above.
BORROWER: ZIFF ▇▇▇▇▇ MEDIA INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Operating Officer and Chief Financial Officer
LEAD ARRANGER: CIBC WORLD MARKETS CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
SYNDICATION
AGENT: DEUTSCHE BANK TRUST COMPANY AMERICAS
(f/k/a Bankers Trust Company)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Director
DOCUMENTATION
AGENT: FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ADMINISTRATIVE
AGENT: CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director,
CIBC World Markets Corp., as Agent
TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS...................................................................... 3
ARTICLE 2 LOANS............................................................................ 30
Section 2.1 The Loans....................................................................... 30
Section 2.2 Manner of Borrowing and Disbursement............................................ 31
Section 2.3 Interest........................................................................ 34
Section 2.4 Fees............................................................................ 36
Section 2.5 Optional Prepayment/Reduction of Commitment..................................... 37
Section 2.6 Repayment....................................................................... 38
Section 2.7 Mandatory Repayments............................................................ 39
Section 2.8 Notes; Loan Accounts............................................................ 41
Section 2.9 Manner of Payment............................................................... 42
Section 2.10 Reimbursement................................................................... 43
Section 2.11 Pro Rata Treatment.............................................................. 43
Section 2.12 Capital Adequacy................................................................ 44
Section 2.13 Tax Forms....................................................................... 45
Section 2.14 Letters of Credit............................................................... 45
ARTICLE 3 CONDITIONS PRECEDENT............................................................. 51
Section 3.1 Conditions Precedent to Initial Advance of the Loans and to the Issuance of
the Initial Letter of Credit.................................................... 51
Section 3.2 Conditions Precedent to Each Advance............................................ 54
Section 3.2 Conditions Precedent to Issuance of Each Letter of Credit....................... 54
ARTICLE 4 REPRESENTATIONS AND WARRANTIES................................................... 55
Section 4.1 Representations and Warranties.................................................. 55
Section 4.2 Survival of Representations and Warranties, etc................................. 64
ARTICLE 5 GENERAL COVENANTS................................................................ 64
Section 5.1 Preservation of Existence and Similar Matters................................... 64
Section 5.2 Business; Compliance with Applicable Law........................................ 65
Section 5.3 Maintenance of Properties and Assets............................................ 65
Section 5.4 Accounting Methods and Financial Records........................................ 65
Section 5.5 Insurance....................................................................... 65
Section 5.6 Payment of Taxes and Claims..................................................... 66
Section 5.7 Visits and Inspections.......................................................... 66
Section 5.8 Use of Proceeds................................................................. 66
Section 5.9 Real Property................................................................... 66
Section 5.10 Indemnity....................................................................... 67
Section 5.11 Interest Rate Hedging....................................Error! Bookmark not defined.
Section 5.12 Environmental Matters........................................................... 67
Section 5.13 ERISA........................................................................... 68
Section 5.14 Further Assurances.............................................................. 68
Section 5.15 Covenants Regarding Formation of Subsidiaries, the Making of Investments and
Acquisitions.................................................................... 68
ARTICLE 6 INFORMATION COVENANTS............................................................ 69
Section 6.1 Monthly Financial Statements and Information.................................... 69
Section 6.2 Quarterly Financial Statements and Information.................................. 69
Section 6.3 Annual Financial Statements and Information..................................... 70
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Section 6.4 Performance Certificates........................................................ 70
Section 6.5 Other Reports................................................................... 71
Section 6.6 Notice of Litigation and Other Matters.......................................... 72
ARTICLE 7 NEGATIVE COVENANTS............................................................... 73
Section 7.1 Indebtedness.................................................................... 73
Section 7.2 Investments..................................................................... 74
Section 7.3 Limitation on Liens............................................................. 75
Section 7.4 Amendment and Waiver............................................................ 75
Section 7.5 Liquidation; Merger; Acquisition or Disposition of Assets....................... 75
Section 7.6 Limitation on Guaranties........................................................ 78
Section 7.7 Restricted Payments and Purchases............................................... 78
Section 7.8 Affiliate Transactions.......................................................... 79
Section 7.9 Business Name; Business Structure; Business..................................... 79
Section 7.10 Real Estate..................................................................... 80
Section 7.11 ERISA Liabilities............................................................... 80
Section 7.12 Negative Pledge................................................................. 80
Section 7.13 Stay, Extension and Usury Laws.................................................. 80
Section 7.14 Limitation on Sale and Lease-Back Transactions.................................. 81
ARTICLE 8 FINANCIAL COVENANTS.............................................................. 81
Section 8.1 Total Leverage Ratio.....................................Error! Bookmark not defined.
Section 8.2 Senior Leverage Ratio........................................................... 81
Section 8.3 Interest Coverage Ratio......................................................... 82
Section 8.4 Fixed Charge Coverage Ratio..................................................... 82
Section 8.5 Capital Expenditures............................................................ 82
ARTICLE 9 DEFAULT.......................................................................... 82
Section 9.1 Events of Default............................................................... 82
Section 9.2 Remedies........................................................................ 84
Section 9.3 Payments Subsequent to Acceleration............................................. 86
ARTICLE 10 THE AGENTS....................................................................... 86
Section 10.1 Appointment and Authorization................................................... 86
Section 10.2 Interest Holders................................................................ 86
Section 10.3 Consultation with Counsel....................................................... 87
Section 10.4 Documents....................................................................... 87
Section 10.5 Agents' Affiliates.............................................................. 87
Section 10.6 Responsibility of the Agents.................................................... 87
Section 10.7 Security Documents.............................................................. 87
Section 10.8 Action by the Agents............................................................ 87
Section 10.9 Notice of Default or Event of Default........................................... 88
Section 10.10 Responsibility Disclaimed....................................................... 88
Section 10.11 Indemnification................................................................. 89
Section 10.12 Credit Decision................................................................. 89
Section 10.13 Successor Agents................................................................ 89
Section 10.14 Co-Agents; Managing Agents...............................Error! Bookmark not defined.
ARTICLE 11 CHANGE IN CIRCUMSTANCES AFFECTING EURODOLLAR ADVANCES............................ 90
Section 11.1 Eurodollar Basis Determination Inadequate or Unfair............................. 90
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Section 11.2 Illegality...................................................................... 90
Section 11.3 Increased Costs................................................................. 91
Section 11.4 Effect On Other Advances........................................................ 92
ARTICLE 12 MISCELLANEOUS.................................................................... 92
Section 12.1 Notices......................................................................... 92
Section 12.2 Expenses........................................................................ 94
Section 12.3 Waivers......................................................................... 94
Section 12.4 Set-Off......................................................................... 95
Section 12.5 Successors and Assigns; Participations and Assignments.......................... 95
Section 12.6 Accounting Principles........................................................... 98
Section 12.7 Counterparts.................................................................... 99
Section 12.8 Governing Law................................................................... 99
Section 12.9 Severability.................................................................... 99
Section 12.10 Interest........................................................................ 99
Section 12.11 Headings........................................................................ 99
Section 12.12 Amendment and Waiver............................................................ 99
Section 12.13 Entire Agreement................................................................ 100
Section 12.14 Other Relationships............................................................. 100
Section 12.15 Loan Documents.................................................................. 101
Section 12.16 Reliance on and Survival of Various Provisions.................................. 101
Section 12.17 Confidentiality................................................................. 101
ARTICLE 13 WAIVER OF JURY TRIAL............................................................. 102
Section 13.1 Waiver of Jury Trial............................................................ 102
-iii-
EXHIBITS
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Copy of Assignment of Acquisition Documents
Exhibit C - Copy of Borrower Pledge Agreement
Exhibit D - Form of Certificate of Financial Condition
Exhibit E - Form of Holdco Pledge Agreement
Exhibit F - Copy of Intellectual Property Security Agreement
Exhibit G - Form of Lender Addendum
Exhibit H - Form of Notice of Conversion/Continuation
Exhibit I - Form of Performance Certificate
Exhibit J - Form of Reaffirmation Agreement
Exhibit K - Form of Request for Advance
Exhibit L - Form of Request for Issuance of Letter of Credit
Exhibit M - Form of Revolving Note
Exhibit N - Form of Security Agreement
Exhibit O - Copy of Subsidiary Guaranty
Exhibit P - Copy of Subsidiary Pledge Agreement
Exhibit Q - Form of Subsidiary Security Agreement
Exhibit R - Form of Term A Note
Exhibit S - Form of Term B Note
Exhibit T - Form of Use of Proceeds Letter
Exhibit U - Form of Borrower's Loan Certificate
Exhibit V - Form of Subsidiary Loan Certificate
Exhibit W - Form of Holdco Loan Certificate
SCHEDULES
Schedule 1 - Specified Defaults
Schedule 2 - Co-Investors
Schedule 3 - Liens Existing as of the Agreement Date
Schedule 4 - Specified Adjustments
Schedule 4.1(c) - Capitalization
Schedule 4.1(i) - Litigation
Schedule 4.1(m) - ERISA
Schedule 4.1(s) - Agreements with Affiliates
Schedule 4.1(t) - Environmental Matters
Schedule 4.1(u) - Labor Matters
Schedule 4.1(x) - Investments
Schedule 4.1(y) - Material Contracts
Schedule 4.1(cc) - Real Property
Schedule 7.1 - Indebtedness Existing as of the Agreement Date
Schedule 8 - Commitment Ratios