1
EXHIBIT 10.31
$40,000,000
CREDIT AGREEMENT
dated as of
January 21, 1997
among
GT Interactive Software Corp.
The Banks Listed Herein,
The Letter of Credit Issuing Bank Named Herein
and
Republic National Bank of New York
as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITION.............................................................................................1
SECTION 1.01. Definitions...............................................................................1
SECTION 1.02. Accounting Terms and Determinations.......................................................10
ARTICLE 2 The Credits...........................................................................................10
SECTION 2.01. Commitments to Lend......................................................................10
SECTION 2.02. Method of Borrowing......................................................................11
SECTION 2.03. Notes....................................................................................12
SECTION 2.04. Maturity of Loans........................................................................12
SECTION 2.05. Interest Rates...........................................................................12
SECTION 2.06. Fees.....................................................................................13
SECTION 2.07. Optional Termination or Reduction of
Commitments; Optional Prepayment.........................................................14
SECTION 2.08. Method of Electing Interest Rates........................................................14
SECTION 2.09. Mandatory Termination of Commitments.....................................................15
SECTION 2.10. General Provisions as to Payments........................................................15
SECTION 2.11. Funding Losses...........................................................................16
SECTION 2.12. Computation of Interest and Fees.........................................................16
SECTION 2.13. Letters of Credit........................................................................16
ARTICLE 3 CONDITION .........................................................................................19
SECTION 3.01. Closing..................................................................................19
SECTION 3.02. Borrowings and Issuances of Letters of
Credit...................................................................................19
ARTICLE 4 REPRESENTATIONS AND WARRANTIES........................................................................20
SECTION 4.01. Corporate Existence and Power............................................................20
SECTION 4.02. Corporate and Governmental Authorization;
No Contravention.........................................................................20
SECTION 4.03. Binding Effect...........................................................................20
SECTION 4.04. Financial Information....................................................................20
SECTION 4.05. Litigation...............................................................................21
SECTION 4.06. Compliance with ERISA....................................................................21
SECTION 4.07. Environmental Matters....................................................................21
SECTION 4.08. Taxes....................................................................................22
SECTION 4.09. Intellectual Property....................................................................22
SECTION 4.10. Capitalization...........................................................................22
SECTION 4.11. Debt and Liens...........................................................................22
SECTION 4.12. Subsidiaries.............................................................................23
SECTION 4.13. Regulatory Restrictions on Borrowing.....................................................23
SECTION 4.14. Full Disclosure..........................................................................23
ARTICLE 5 COVENANTS.............................................................................................24
SECTION 5.01. Information..............................................................................24
SECTION 5.02. Payment of Obligations...................................................................25
SECTION 5.03. Maintenance of Property; Insurance.......................................................26
SECTION 5.04. Conduct of Business and Maintenance of
Existence................................................................................26
SECTION 5.05. Compliance with Laws.....................................................................26
SECTION 5.06. Inspection of Property, Books and Records................................................26
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SECTION 5.07. Merger and Sales of Assets...............................................................27
SECTION 5.08. Use of Proceeds..........................................................................27
SECTION 5.09. Negative Pledge..........................................................................27
SECTION 5.10. Limitation on Debt.......................................................................28
SECTION 5.11. Minimum Tangible Net Worth...............................................................28
SECTION 5.12. Debt: Tangible Net Worth.................................................................28
SECTION 5.13. Investments..............................................................................29
SECTION 5.14. Working Capital..........................................................................29
SECTION 5.15. Current Ratio............................................................................29
SECTION 5.16. Restricted Payments......................................................................29
SECTION 5.17. Minimum Net Income.......................................................................29
SECTION 5.18. Sale-Leaseback Transactions..............................................................29
SECTION 5.19. Transactions with Affiliates.............................................................29
SECTION 5.20. Lines of Business........................................................................30
ARTICLE 6 DEFAULTS..............................................................................................30
SECTION 6.01. Events of Default........................................................................30
SECTION 6.02. Notice of Default........................................................................31
SECTION 6.03. Cash Cover...............................................................................31
ARTICLE 7 THE AGENT.............................................................................................32
SECTION 7.01. Appointment and Authorization............................................................32
SECTION 7.02. Agent and Affiliates.....................................................................32
SECTION 7.03. Action by Agent..........................................................................32
SECTION 7.04. Consultation with Experts................................................................32
SECTION 7.05. Liability of Agent.......................................................................32
SECTION 7.06. Indemnification..........................................................................32
SECTION 7.07. Credit Decision..........................................................................33
SECTION 7.08. Successor Agent..........................................................................33
SECTION 7.09. Agent's Fee..............................................................................33
ARTICLE 8 CHANGES IN CIRCUMSTANCE...............................................................................33
SECTION 8.01. Basis for Determining Interest Rate
Inadequate or Unfair.........................................................33
SECTION 8.02. Illegality...............................................................................34
SECTION 8.03. Increased Cost and Reduced Return........................................................34
SECTION 8.04. Taxes....................................................................................35
SECTION 8.05. Base Rate Loans Substituted for
Affected EuroDollar Loans....................................................36
ARTICLE 9 MISCELLANEOUS.........................................................................................37
SECTION 9.01. Notices..................................................................................37
SECTION 9.02. No Waivers...............................................................................37
SECTION 9.03. Expenses; Indemnification................................................................37
SECTION 9.04. Sharing of Set-offs......................................................................38
SECTION 9.05. Amendments and Waivers...................................................................38
SECTION 9.06. Successors and Assigns...................................................................38
SECTION 9.07. Collateral...............................................................................40
SECTION 9.08. Continuing Obligation....................................................................40
SECTION 9.09. Governing Law; Submission to Jurisdiction................................................40
SECTION 9.10. Counterparts; Integration; Effectiveness.................................................40
SECTION 9.11. WAIVER OF JURY TRIAL.....................................................................40
SECTION 9.12. Confidentiality..........................................................................41
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AGREEMENT dated as of January 21, 1997 among GT INTERACTIVE SOFTWARE CORP.,
the BANKS listed on the signature pages hereof, the LETTER OF CREDIT ISSUING
BANK named herein and REPUBLIC NATIONAL BANK OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1.
DEFINITION
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"ADJUSTED LONDON INTERBANK OFFERED RATE" has the meaning set forth in
Section 2.05(b).
"AFFILIATE" means (i) any Person that directly, or indirectly through one
or more intermediaries, controls the Borrower (a "CONTROLLING PERSON") or (ii)
any Person (other than the Borrower or a Subsidiary) which is controlled by or
is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote 25% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" means RNB, in its capacity as agent for the Banks hereunder, and
its successors in such capacity.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Domestic Lending Office and (ii) in the case of
its EuroDollar Loans, its EuroDollar Lending Office.
"ASSET SALE" means any sale or other disposition (excluding any lease or
license and any such transaction effected by way of merger or consolidation) by
the Borrower or any of its Subsidiaries of any asset, but excluding (i)
dispositions of inventory, cash, cash equivalents and other cash management
investments and obsolete, unused or unnecessary equipment and undeveloped real
estate, in each case in the ordinary course of business and (ii) dispositions to
the Borrower or a Subsidiary of the Borrower.
"ASSIGNEE" has the meaning set forth in Section 9.06(c).
"BANK" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors and shall include, as the context may require, any Issuing Bank in
such capacity.
"BASE RATE" means, for any day, a rate per annum equal to the Reference
Rate for such day.
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"BASE RATE LOAN" means (i) a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Article 8 or (ii) an overdue amount which was a
Base Rate Loan immediately before it became overdue.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan within the
meaning of Section (3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"BORROWER" means GT Interactive Software Corp., a Delaware corporation, and
its successors.
"BORROWING" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day pursuant to Article 2, all of which Loans are of the
same type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. A Borrowing is a "BASE RATE BORROWING" if
such Loans are Base Rate Loans or a "EURODOLLAR BORROWING" if such Loans are
EuroDollar Loans.
"CAYRE FAMILY" shall have the meaning set forth in Section 6.01(j) hereof.
"CLOSING DATE" means the date on or after the Effective Date on which the
Agent shall have received the documents specified in or pursuant to Section
3.01.
"COMMITMENT" means, with respect to each Bank, the amount set forth
opposite the name of such Bank on the signature pages hereof, as such amount may
be reduced from time to time pursuant to Section 2.07.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the additions to
property, plant and equipment and other capital expenditures of the Borrower and
its Consolidated Subsidiaries for such period, as the same are or would be set
forth in a consolidated statement of cash flows of the Borrower and its
Consolidated Subsidiaries for such period.
"CONSOLIDATED DEBT" means at any date the Debt of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"CONSOLIDATED NET INCOME" means, for any fiscal period, the net income of
the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis for such period, exclusive of the effect of any extraordinary or other
nonrecurring gain or loss.
"CONSOLIDATED CURRENT ASSETS" means all cash, short term investments,
customers' accounts receivable, inventory and deposits, of the Borrower and its
Consolidated Subsidiaries.
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"CONSOLIDATED CURRENT LIABILITIES" means those amounts due or to become due
for payment within twelve (12) months subsequent to the relevant statement date,
including all outstanding Loans (regardless of when due), Standby Letter of
Credit Liabilities and Documentary Letter of Credit Liabilities of the type
described in clause (x) of the definition of Letter of Credit Liabilities, but
excluding Documentary Letter of Credit Liabilities of the type described in
clause (y) of the definition of Letter of Credit Liabilities, by the Borrower or
its Consolidated Subsidiaries (excluding intercompany amounts due to the
Borrower).
"CONSOLIDATED TANGIBLE NET WORTH" means at any date (1) the aggregate
amount at which all assets of Borrower and its Consolidated Subsidiaries would
be shown on a balance sheet at such date after deducting capitalized research
and development costs, capitalized interest, goodwill, patents, trademarks,
copyrights, franchises, licenses and such other assets as are properly
classified as "intangible assets", less (2) the aggregate principal amount of
all indebtedness, liabilities (including tax and other proper accruals and all
Loans and Standby Letter of Credit Liabilities, but excluding Documentary Letter
of Credit Liabilities), deferred tax assets and reserves of Borrower and its
Consolidated Subsidiaries but only to the extent not deducted in clause (1).
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other entity
the accounts of which would be consolidated with those of the Borrower in its
consolidated financial statements if such statements were prepared as of such
date.
"CONSOLIDATED TOTAL LIABILITIES" means at any date all liabilities of the
Borrower and its Consolidated Subsidiaries (including all Loans and Letter of
Credit Liabilities (other than in the case of Documentary Letters of Credit
only, liabilities described in clause (y) of the definition of Letter of Credit
Liabilities)) which would properly appear on the liability side of a balance
sheet, other than capital stock, capital surplus, retained earnings, minority
interest, deferred credits, and contingency reserves.
"CONSOLIDATED WORKING CAPITAL" means at any date the excess of Consolidated
Current Assets over Consolidated Current Liabilities.
"DEBT" of any Person means at any date, without duplication, (i) the
principal portion of all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable and
accrued expenses arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in accordance with
generally accepted accounting principles (the
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amount of such Debt being the capitalized amount thereof on the Borrower's
financial statements), (v) all non-contingent obligations (and, for purposes of
Section 5.09 and the definition of Material Debt, all contingent obligations) of
such Person to reimburse any bank or other Person in respect of amounts paid
under a letter of credit or similar instrument, (vi) all Debt secured by a Lien
on any asset of such Person, whether or not such Debt is otherwise an obligation
of such Person (the amount of such Debt being limited to the fair market value
of such asset if such Person's liability with regard to such Debt is limited
solely to such asset) and (vii) all Debt of others Guaranteed by such Person, it
being understood that Debt shall not include amounts of outstanding Documentary
Letters of Credit but shall include amounts of outstanding Standby Letters of
Credit.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"DOCUMENTARY LETTER OF CREDIT" means a letter of credit which is used as
the payment mechanism for the acquisition of goods, rights or other assets.
"DOCUMENTARY LETTER OF CREDIT LIABILITIES" means any liabilities ensuing
from Documentary Letters of Credit.
"DOMESTIC BUSINESS DAY" means any day except a Saturday, Sunday or other
day on which commercial banks in New York City are authorized by law to close.
"DOMESTIC LENDING OFFICE" means, as to each Bank, its office located at its
address set forth below its name on the signature page thereof as its Domestic
Lending Office or such other office as such Bank may hereafter designate as its
Domestic Lending Office by notice to the Borrower and the Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower organized in a
jurisdiction within the United States.
"EFFECTIVE DATE" means the date this Agreement becomes effective in
accordance with Section 9.10.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
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handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"EQUITY RIGHTS" means with respect to any Person, any outstanding
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or outstanding
securities convertible into, any additional shares of capital stock of any class
of, or partnership or other ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA GROUP" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EURODOLLAR BUSINESS DAY" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"EURODOLLAR LENDING OFFICE" means, as to each Bank, its office, branch or
affiliate located at its address set forth below its name on the signature page
thereof as its EuroDollar Lending Office or such other office, branch or
affiliate of such Bank as it may hereafter designate as its EuroDollar Lending
Office by notice to the Borrower and the Agent.
"EURODOLLAR LOAN" means (i) a Loan which bears interest at a EuroDollar
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or (ii) an overdue amount which was a EuroDollar Loan immediately
before it became overdue.
"EURODOLLAR MARGIN" means 1 1/4%.
"EURODOLLAR RATE" means a rate of interest determined pursuant to Section
2.05(b) on the basis of an Adjusted London Interbank Offered Rate.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning set forth in Section
2.05(b).
"EVENT OF DEFAULT" has the meaning set forth in Section 6.01.
"EXISTING APPLICATION FOR COMMERCIAL CREDIT" means the Application for
Commercial Credit dated December 24, 1996 between the Borrower and the Issuing
Bank.
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"EXISTING LETTER OF CREDIT" means the letter of credit in the face
amount of $1,666,666.66 issued before the Closing Date under the existing
Application for Commercial Credit.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to the Agent on such day on such
transactions as reasonably determined by the Agent to be relevant.
"FINANCING DOCUMENTS" means this Agreement and the Notes.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower
that is not a Domestic Subsidiary.
"GROUP OF LOANS" means at any time a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all EuroDollar Loans
having the same Interest Period at such time, provided that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation for the payment of money of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person (i) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation for the payment of
money (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt or other
obligation of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
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"HAZARDOUS SUBSTANCES" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INTEREST PERIOD" means with respect to each EuroDollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in the applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in the applicable notice; provided that:
(i) any Interest Period which would otherwise end on a day which is
not a EuroDollar Business Day shall be extended to the next succeeding
EuroDollar Business Day unless such EuroDollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding EuroDollar Business Day;
(ii) any Interest Period which begins on the last EuroDollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clause (iii) below, end on the last EuroDollar Business
Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"INVESTMENT" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, Guarantee, time deposit or otherwise (but
not including any demand deposit).
"ISSUING BANK" means RNB as issuer of a Letter of Credit hereunder.
"JOINT VENTURE" means at any time (i) any corporation of which not less
than 10% nor more than 50% of each class of capital stock having ordinary voting
power to elect the board of directors of such corporation or other persons
performing similar functions are at the time directly or indirectly owned by the
Borrower and (ii) any partnership, association or joint venture not less than
10% nor more than 50% of the equity interests of which are at the time directly
or indirectly owned by the Borrower, but excluding in any event any Subsidiary
of the Borrower.
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"LETTER OF CREDIT" means a letter of credit to be issued under Section
2.13(b) by the Issuing Bank.
"LETTER OF CREDIT LIABILITIES" means, for any Bank and at any time, the sum
of (x) the amounts then owing to such Bank (including in the case of RNB in its
capacity as an Issuing Bank) by the Borrower to reimburse it in respect of
amounts drawn under Letters of Credit and (y) such Bank's ratable participation
in the aggregate amount then available for drawing under all outstanding Letters
of Credit.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement, the
Borrower or any Subsidiary shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, capital lease or other title retention
agreement relating to such asset.
"LOAN" means a Base Rate Loan or a EuroDollar Loan and "Loans" means Base
Rate Loans or EuroDollar Loans or any combination of the foregoing..
"LONDON INTERBANK OFFERED RATE" has the meaning set forth in Section
2.05(b).
"MATERIAL DEBT" means Debt (other than the Notes) of the Borrower and/or
one or more of its Subsidiaries (other than intercompany indebtedness), arising
(a) in a single transaction, in a principal or face amount exceeding $1,000,000,
or (b) in more than one related or unrelated transactions in an aggregate
principal or face amount exceeding $2,000,000.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $1,000,000.
"MATERIAL SUBSIDIARY" means a subsidiary, including its subsidiaries, (i)
the investments in and advances to which by the Borrower and its other
subsidiaries exceed 10% of the total consolidated assets of the Borrower and its
consolidated subsidiaries as of the end of the most recently completed fiscal
quarter, or (ii) the proportionate share of the Borrower or its other
subsidiaries in the total assets of which exceeds 10% of the total assets (after
intercompany eliminations) of the Borrower and its other subsidiaries
consolidated as of the end of the most recently completed fiscal quarter, or
(iii) of which the Borrower's or its other subsidiaries' equity in the income
from continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the subsidiary exceeds
10% of such income of the Borrower and its
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subsidiaries consolidated for the most recently completed fiscal quarter.
"MONTHLY DATES" means the last day of each calendar month.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"NBD" means NBD Bank, a Michigan banking corporation and its successors.
"NOTES" means promissory notes of the Borrower, substantially in the
respective forms of Exhibits A-1 and A-2 hereto, evidencing the obligation of
the Borrower to repay the Loans, and "Note" means any one of such promissory
notes issued hereunder.
"NOTICE OF BORROWING" has the meaning set forth in Section 2.02.
"NOTICE OF ISSUANCE" has the meaning set forth in Section 2. 13(b).
"NOTICE OF INTEREST RATE ELECTION" has the meaning set forth in Section
2.08.
"PARENT" means, with respect to any Bank, any Person controlling such Bank.
"PARTICIPANT" has the meaning set forth in Section 9.06(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" means the acquisition by the Borrower or any
Subsidiary of any Person or of any division or line of business of any Person or
of any minority or majority equity interest therein, either by merger,
consolidation, purchase of stock or other equity interest, or purchase of all or
a substantial part of the assets of such business or purchase of less than all
of the equity of any Person; provided that, unless waived by the Agent and each
of the Banks, in the exercise of their respective sole discretions, each of the
following conditions shall have been satisfied:
(a) such acquisition shall be of a business which is a developer,
publisher, merchandiser or distributor of consumer software or a business
related thereto or is a start-up company intending to engage in any such
business (including in each case,
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without limitation, Internet and similar on-line or electronic related
businesses); and
(b) such transaction shall not be a "hostile" acquisition or other
"hostile" transaction (i.e., such transaction shall not be opposed by the Board
of Directors of the business), provided that in the event the Borrower proposes
to initiate such transaction as a hostile transaction with the intent to attempt
to subsequently obtain the approval of the Board of Directors of such business,
the Borrower may notify the Agent and each Bank in writing in advance of the
initiation of such proposed transaction together with any information concerning
such transaction as the Agent and Bank may reasonably request, and, provided
that each Bank shall have approved such transaction in writing prior to the
initiation of such transaction, with the approval of each Bank being based
solely on a conflict of any kind of such Bank concerning such proposed
acquisition and with such approval not to be unreasonably withheld, the Borrower
may proceed with such transaction so long as the transaction ultimately is
approved by the Board of Directors of such business (and a majority of which
were members of such Board of Directors at the time such transaction was
initiated) and is otherwise in accordance with the terms of this Agreement.
"PERSON" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof
"PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group, and as to which Borrower may have
contingent liability exceeding $1,000,000.
"REFERENCE RATE" means the rate of interest established by RNB from time to
time at its principal domestic office as its reference lending rate for domestic
commercial loans.
"REFERENCE BANK" means the principal London offices of RNB.
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REIMBURSEMENT OBLIGATIONS" means at any date the obligations of the
Borrower then outstanding under Section 2.13
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to reimburse any Bank for the amount paid by such Bank in respect of a drawing
under a Letter of Credit.
"REQUIRED BANKS" means at any time Banks having at least 75% of the
aggregate amount of the Commitments or, if the Commitments shall have been
terminated, holding Notes evidencing at least 75% of the sum of the aggregate
unpaid principal amount of the Loans and Letter of Credit Liabilities.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution on any
shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
capital stock or (b) any option, warrant or other right to acquire shares of the
Borrower's capital stock (but not including payments of principal, premium (if
any) or interest made pursuant to the terms of convertible debt securities prior
to conversion), in each case excluding repurchases under employee stock option
plans and warrant agreements, other than with the Cayre Family, to which the
Borrower is a party in an aggregate amount not exceeding $1,000,000; and
excluding the acquisition by the Borrower of shares of its Common Stock in open
market or privately negotiated transactions pursuant to a stock repurchase
program approved by its Board of Directors, provided that (i) the aggregate
amount expended therefor does not exceed $20,000,000, and (ii) such shares are
not acquired in privately negotiated transactions from any members of the Cayre
Family.
"REVOLVING CREDIT PERIOD" means the period from and including the Closing
Date to but not including the Termination Date.
"RNB" means Republic National Bank of New York, a bank organized and
existing under the laws of the United States and it successors.
"SALE-LEASEBACK TRANSACTION" means any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of any property
that, or of any property similar to and used for substantially the same purposes
as any other property that, has been or is to be sold, assigned, transferred or
otherwise disposed of by the Borrower or any of its Subsidiaries to such Person
with the intention of entering into such a lease.
"STANDBY LETTER OF CREDIT" means any Letter of Credit which is not a
Documentary Letter of Credit.
"STANDBY LETTER OF CREDIT LIABILITIES" means any liabilities ensuing from
Standby Letters of Credit.
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"SUBSIDIARY" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person; unless
otherwise specified, "SUBSIDIARY" means a Subsidiary of the Borrower.
"TEMPORARY CASH INVESTMENT" means any Investment in (a) (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by Standard & Poor's Ratings Services and PI by ▇▇▇▇▇'▇
Investors Service, Inc., (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$1,000,000,000 or (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iii) above, provided in each
case that such Investment matures within one year from the date of acquisition
thereof by the Borrower or a Subsidiary, (b) any money market mutual fund,
provided its investment policies require substantially all of its assets to be
limited to Temporary Cash Investments described in clause (a) above, or (c) such
obligations or instruments as are permitted under the Company's "Investment
Policy Guidelines", attached hereto as Exhibit C.
"TERMINATION DATE" means December 31, 1998, or, if such day is
not a
EuroDollar Business Day, the next succeeding EuroDollar Business Day unless such
EuroDollar Business Day falls in another calendar month, in which case the
Termination Date shall be the next preceding EuroDollar Business Day.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"UNITED STATES" means the United States of America, including the States
and the District of Columbia, but excluding its territories and possessions.
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SECTION 1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with
generally accepted accounting principles as in effect from time to time, applied
on a basis consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks; provided that, if the Borrower notifies the Agent that the
Borrower wishes to amend any covenant in Article 5 to eliminate the effect of
any change in generally accepted accounting principles on the operation of such
covenant (or if the Agent notifies the Borrower that the Required Banks wish to
amend Article 5 for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Banks.
ARTICLE 2
The Credits
SECTION 2.1. Commitments to Lend. During the Revolving Credit Period, each
Bank severally agrees, on the terms and conditions set forth in this Agreement,
to make loans to the Borrower from time to time in amounts such that the
aggregate principal amount of Loans by such Bank at any one time outstanding
plus its Letter of Credit Liabilities shall not exceed the amount of its
Commitment. Each Borrowing under this Section shall be in an aggregate principal
amount of $1,000,000 or any larger multiple of $100,000 (except that any such
Borrowing may be in the aggregate amount of the unused Commitments) and shall be
made from the several Banks ratably in proportion to their respective
Commitments. Within the foregoing limits, the Borrower may borrow under this
Section, prepay Loans to the extent permitted by Section 2.07 and reborrow at
any time during the Revolving Credit Period under this Section.
SECTION 2.2. Method of Borrowing. (a) The Borrower shall give the Agent
notice (a "NOTICE OF BORROWING") not later than 11:00 A.M. (New York City time)
on (x) the date of each Base Rate Borrowing and (y) the third EuroDollar
Business Day before each EuroDollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a EuroDollar Business Day in the
case of a EuroDollar Borrowing;
(ii) the aggregate amount of such Borrowing;
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(iii) whether the Loans comprising such Borrowing are to bear interest
initially at the Base Rate or the EuroDollar Rate; and
(iv) in the case of a EuroDollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly notify
each Bank of the contents thereof and of such Bank's ratable share of such
Borrowing and such Notice of Borrowing shall not thereafter be revocable by the
Borrower.
(c) Not later than 12:30 P.M. (New York City time) on the date of each
Borrowing, each Bank shall make available its ratable share of such Borrowing,
in Federal or other funds immediately available in New York City, to the Agent
at its address referred to in Section 9.01. Unless the Agent determines that any
applicable condition specified in Article 3 has not been satisfied, the Agent
will make the funds so received from the Banks available to the Borrower at the
Agent's aforesaid address.
(d) Unless the Agent shall have received notice from a Bank prior to the
date of any Borrowing that such Bank will not make available to the Agent such
Bank's share of such Borrowing, the Agent may assume that such Bank has made
such share available to the Agent on the date of such Borrowing in accordance
with subsection (c) of this Section and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Agent, such Bank and the Borrower severally agree to repay to the Agent
forthwith 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 Agent, at (i) in the case of the Borrower,
a rate per annum equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.05 and (ii) in the case of such
Bank, the Federal Funds Rate. If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such Bank's Loan
included in such Borrowing for purposes of this Agreement.
SECTION 2.3. Notes. (a) The Loans of each Bank shall be evidenced by a
single Note payable to the order of such Bank in an amount equal to the
aggregate unpaid principal amount of such Bank's Loans.
(b) Each Bank may, by notice to the Borrower and the Agent, request that
its Loans of a particular type be evidenced by a separate Note in an amount
equal to the aggregate unpaid principal amount of such Loans. Each such Note
shall be in substantially the form of Exhibit A hereto with appropriate
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modifications to reflect the fact that it evidences solely Loans of the relevant
type. Each reference in this Agreement to the "Note" of such Bank shall be
deemed to refer to and include any or all of such Notes, as the context may
require.
(c) Upon receipt of each Bank's Note pursuant to Section 3.01(c), the Agent
shall forward such Note to such Bank. Each Bank shall record the date, amount
and type of each Loan made by it and the date and amount of each payment of
principal made by the Borrower with respect thereto, and may, if such Bank so
elects in connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Loan then outstanding; provided
that the failure of any Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Notes. Each
Bank is hereby irrevocably authorized by the Borrower so to endorse its Note and
to attach to and make a part of its Note a continuation of any such schedule as
and when required.
SECTION 2.4. Maturity of Loans. Each Loan shall mature, and the principal
amount thereof shall be due and payable, on the Termination Date.
SECTION 2.5. Interest Rates. (a) Each Base Rate Loan shall bear interest on
the outstanding principal amount thereof for each day from the date such Loan is
made until it becomes due, at a rate per annum equal to the Base Rate for such
day. Such interest shall be payable monthly in arrears on each Monthly Date and,
with respect to the principal amount of any Base Rate Loan converted to a
EuroDollar Loan, on each date a Base Rate Loan is so converted. Any overdue
principal of any Base Rate Loan shall bear interest, payable on demand, for each
day until paid at a rate per annum equal to the sum of 2% plus the rate
otherwise applicable to Base Rate Loans for such day.
(b) Each EuroDollar Loan shall bear interest on the outstanding principal
amount thereof for each day during each Interest Period applicable thereto, at a
rate per annum equal to the sum of the EuroDollar Margin for such day plus the
Adjusted London Interbank Offered Rate applicable to such Interest Period. Such
interest shall be payable for each Interest Period on the last day thereof and,
if such Interest Period is longer than one month, at intervals of one month
after the first day thereof.
The "ADJUSTED LONDON INTERBANK OFFERED RATE" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the EuroDollar Reserve Percentage.
The "LONDON INTERBANK OFFERED RATE" applicable to any Interest Period means
the average (rounded upward, if necessary,
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to the next higher 1/8 of 1%) of the respective rates per annum at which
deposits in dollars in immediately available funds are offered to the Reference
Bank by prime commercial banks in the London interbank market at approximately
11:00 A.M. (London time) two EuroDollar Business Days before the first day of
such Interest Period for delivery on the first day of such Interest Period in an
amount approximately equal to the principal amount of the EuroDollar Loan of the
Reference Bank to which such Interest Period is to apply and for a period of
time comparable to such Interest Period.
"EURODOLLAR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "EUROCURRENCY LIABILITIES" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
EuroDollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the EuroDollar
Reserve Percentage.
(c) Any overdue principal of any EuroDollar Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
higher of (i) the sum of 2% plus the EuroDollar Margin for such day plus the
quotient obtained (rounded upward, if necessary, to the next higher 1/100 of 1%)
by dividing (x) the average (rounded upward, if necessary, to the next higher
1/8 of 1%) of the respective rates per annum at which one day (or, if such
amount due remains unpaid more than three EuroDollar Business Days, then for
such other period of time not longer than three months as the Agent may select)
deposits in dollars in an amount approximately equal to such overdue payment due
to Banks are offered to the Reference Bank by prime commercial banks in the
London interbank market for the applicable period determined as provided above
by (y) 1.00 minus the EuroDollar Reserve Percentage (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans for such day)
and (ii) the sum of 2% plus the EuroDollar Margin for such day plus the Adjusted
London Interbank Offered Rate applicable to such Loan at the date such payment
was due.
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall give prompt notice to the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of demonstrable error.
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SECTION 2.6. Fees. (a) During the Revolving Credit Period, the Borrower
shall pay to the Agent for the account of the Banks ratably in proportion to
their Commitments a commitment fee of 1/4 of 1% per annum on the daily amount by
which the aggregate amount of the Commitments exceeds the sum of the aggregate
outstanding principal amount of the Loans and the aggregate amount of Letter of
Credit Liabilities. Such commitment fee shall accrue from and including the
Closing Date to but excluding the date of termination of the Commitments in
their entirety.
(b) The Borrower shall pay to the Agent for the account of the Issuing Bank
(to be shared with the Banks in accordance with a letter agreement among the
Issuing Bank and the Banks) (i) a letter of credit fee accruing daily on the
aggregate amount then available for drawing under all Documentary Letters of
Credit at a rate per annum equal to 3/4 of 1% and (ii) a Letter of Credit fee
accruing daily on the aggregate amount then available for drawing under all
Standby Letters of Credit at a rate per annum equal to 3/4 of 1%, plus upon each
draw 1/8 of 1% the amount so drawn upon.
(c) The Borrower shall pay to the Agent, for the account of the Banks
ratably on the Closing Date, a non-refundable facility fee in an amount equal to
1/4 of 1% of the aggregate amount of the Commitments.
(d) Other than the standby letter of credit drawing fee referred to in
clause (b) above (which is due upon the Issuing Bank's payment of such draw) and
the facility fee referred to in clause (c) above, the accrued fees under this
Section shall be payable quarterly in arrears commencing March 31, 1997 and on
the date of termination of the Commitments in their entirety (and, if later, the
date the Loans and the aggregate amount of Letter of Credit Liabilities shall be
repaid in their entirety to the extent Letters of Credit have been drawn upon,
or to the extent not drawn upon, the date such Letter of Credit shall have
terminated).
SECTION 2.7. Optional Termination or Reduction of Commitments; Optional
Prepayment. (a) During the Revolving Credit Period, the Borrower may, upon at
least three Domestic Business Days' notice to the Agent, (i) terminate the
Commitments at any time, if no Loans or Letter of Credit Liabilities are
outstanding at such time or (ii) ratably reduce from time to time by an
aggregate amount of $1,000,000 or a larger multiple of $100,000, the aggregate
amount of the Commitments in excess of the sum of the aggregate outstanding
principal amount of the Loans and the aggregate amount of Letter of Credit
Liabilities.
(b) Subject in the case of any EuroDollar Borrowing to Section 2.11, the
Borrower may, upon at least one Domestic Business Day's notice to the Agent,
prepay any Group of Base Rate Loans or upon at least three EuroDollar Business
Day's notice to the Agent, prepay any Group of EuroDollar Loans, in each case in
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whole at any time, or from time to time in part in amounts aggregating
$1,000,000 or any larger multiple of $100,000, by paying the principal amount to
be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group.
(c) Upon receipt of a notice of prepayment pursuant to this Section, the
Agent shall promptly notify each Bank of the contents thereof and of such Bank's
ratable share of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.8. Method of Electing Interest Rates. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject in each case to the provisions of Article 8), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to EuroDollar Loans as of any EuroDollar Business
Day; and
(ii) if such Loans are EuroDollar Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or elect to continue such
Loans as EuroDollar Loans for an additional Interest Period, subject
to Section 2.11 in the case of any such conversion or continuation
effective on any day other than the last day of the then current
Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "NOTICE OF
INTEREST RATE ELECTION") to the Agent not later than 11:00 A.M. (New York City
time) on the third EuroDollar Business Day before the conversion or continuation
selected in such notice is to be effective. A Notice of Interest Rate Election
may, if it so specifies, apply to only a portion of the aggregate principal
amount of the relevant Group of Loans; provided that (i) such portion is
allocated ratably among the Loans comprising such Group and (ii) the portion to
which such Notice applies, and the remaining portion to which it does not apply,
are each $1,000,000 or any larger multiple of $100,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such notice
applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection(a) above;
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(iii) if the Loans comprising such Group are to be converted, the
new type of Loans and, if the Loans being converted are to be
EuroDollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as EuroDollar Loans for an
additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election shall
comply with the provisions of the definition of Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from the Borrower
pursuant to subsection (a) above, the Agent shall promptly notify each Bank of
the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
(d) An election by the Borrower to change or continue the rate of interest
applicable to any Group of Loans pursuant to this section shall not constitute a
"Borrowing" subject to the provisions of Section 3.02.
SECTION 2.9. Mandatory Termination of Commitments. The Commitments shall
terminate on the Termination Date and any Loans then outstanding (together with
accrued interest thereon) shall be due and payable on such date.
SECTION 2.10. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of and interest on, the Loans and of Letter of
Credit Liabilities and interest thereon and of fees hereunder (other than fees
payable directly to the Issuing Bank), not later than 12:00 Noon (New York City
time) on the date when due, in Federal or other funds immediately available in
New York City, to the Agent at its address referred to in Section 9.01. The
Agent will promptly distribute to each Bank its ratable share of each such
payment received by the Agent for the account of the Banks. Whenever any payment
of principal of or interest on, the Base Rate Loans or of Letter of Credit
Liabilities or interest thereon or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of or
interest on, the EuroDollar Loans shall be due on a day which is not a
EuroDollar Business Day, the date for payment thereof shall be extended to the
next succeeding EuroDollar Business Day unless such EuroDollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding EuroDollar Business Day. If the date for any payment
of principal is extended by operation of law or otherwise, interest thereon
shall be payable for such extended time.
(b) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the
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Banks hereunder that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such due date an amount equal to the amount then due
to such Bank. If and to the extent that the Borrower shall not have so made such
payment, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.11. Funding Losses. If the Borrower makes any payment of
principal with respect to any EuroDollar Loan or any EuroDollar Loan is
converted (pursuant to Article 2, 6 or 8 or otherwise) on any day other than the
last day of an Interest Period applicable thereto, or the last day of an
applicable period fixed pursuant to Section 2.05(c), or if the Borrower fails to
borrow, prepay, convert or continue any EuroDollar Loans after notice has been
given to any Bank in accordance with Section 2.02(b) or 2.08 the Borrower shall
reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or by an existing or prospective Participant in the
related Loan), including (without limitation) any loss incurred in obtaining,
liquidating or employing deposits from third parties, but excluding loss of
margin for the period after any such payment or conversion or failure to borrow,
prepay, convert or continue, provided that such Bank shall have delivered to the
Borrower a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of demonstrable error.
SECTION 2.12. Computation of Interest and Fees. All interest and fees
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
SECTION 2.13. Letters of Credit. (a) On the Closing Date, the Issuing Bank
that has issued the Existing Letter of Credit shall be deemed, without further
action by any party hereto, to have sold to each Bank, and each such Bank shall
be deemed, without further action by any party hereto, to have purchased from
the Issuing Bank, a participation in the Existing Letter of Credit and the
related Letter of Credit Liabilities in proportion to their Commitments. On and
after the Closing Date, the Existing Letter of Credit shall constitute a Letter
of Credit for all purposes hereof.
(b) Subject to the terms and conditions hereof the Issuing Bank agrees to
issue Letters of Credit hereunder from time to time before the 30th day before
the Termination Date upon the request of the Borrower; provided that,
immediately after each Letter of Credit is issued, the aggregate amount of the
Letter of Credit Liabilities shall not exceed $15,000,000 and the aggregate
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amount of the Letter of Credit Liabilities plus the aggregate outstanding amount
of all Loans shall not exceed the aggregate amount of the Commitments. Upon the
date of issuance by the Issuing Bank of a Letter of Credit, the Issuing Bank
shall be deemed, without further action by any party hereto, to have sold to
each Bank, and each Bank shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank, a participation in such Letter
of Credit and the related Letter of Credit Liabilities in the proportion their
respective Commitments bear to the aggregate Commitments.
(c) The Borrower shall give the Issuing Bank notice at least three days
prior to the requested issuance of a Letter of Credit specifying the date such
Letter of Credit is to be issued, and describing the terms of such Letter of
Credit and the nature of the transactions to be supported thereby (such notice,
including any such notice given in connection with the extension of a Letter of
Credit, a "NOTICE OF ISSUANCE"). Upon receipt of a Notice of Issuance, the
Issuing Bank shall promptly notify the Agent, and the Agent shall promptly
notify each Bank of the contents thereof and of the amount of such Bank's
participation in such Letter of Credit. The issuance by the Issuing Bank of each
Letter of Credit shall be subject to the conditions precedent that such Letter
of Credit shall be in such form and contain such terms as shall be satisfactory
to the Issuing Bank and that the Borrower shall have executed and delivered such
other instruments and agreements relating to such Letter of Credit as the
Issuing Bank shall have reasonably requested. The Borrower shall also pay to the
Issuing Bank for its own account amendment and extension charges in the amounts
and at the times as agreed between the Borrower and the Issuing Bank. The
extension or renewal of any Letter of Credit shall be deemed to be an issuance
of such Letter of Credit, and if any Letter of Credit contains a provision
pursuant to which it is deemed to be extended unless notice of termination is
given by the Issuing Bank, the Issuing Bank shall timely give such notice of
termination unless it has theretofore timely received a Notice of Issuance and
the other conditions to issuance of a Letter of Credit have also theretofore
been met with respect to such extension. No Letter of Credit shall have a term
of more than one year; provided that a Letter of Credit may contain a provision
pursuant to which it is deemed to be extended on an annual basis unless notice
of termination is given by the Issuing Bank; provided further that no Letter of
Credit shall have a term extending or be so extendible beyond six (6) months
following the Termination Date.
(d) Upon receipt from the beneficiary of any Letter of Credit of any notice
of a drawing under such Letter of Credit, the Issuing Bank shall notify the
Agent and the Agent shall promptly notify the Borrower and each other Bank as to
the amount to be paid as a result of such demand or drawing and the payment
date. Subject to the foregoing, the Borrower shall be irrevocably and
unconditionally obligated forthwith to reimburse
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the Issuing Bank for any amounts paid by the Issuing Bank upon any drawing under
any Letter of Credit, without presentment, demand, protest or other formalities
of any kind. All such amounts paid by the Issuing Bank and remaining unpaid by
the Borrower shall bear interest, payable on demand, for each day until paid at
a rate per annum equal to the sum of 2% plus the rate applicable to Base Rate
Loans for such day. In addition, each Bank will pay to the Agent, for the
account of the Issuing Bank, immediately upon the Issuing Bank's demand at any
time during the period commencing after such drawing until reimbursement
therefor in full by the Borrower, an amount equal to such Bank's ratable share
of such drawing (in proportion to its participation therein), together with
interest on such amount for each day from the date of the Issuing Bank's demand
for such payment (or, if such demand is made after 12:00 Noon (New York City
time) on such date, from the next succeeding Domestic Business Day) to the date
of payment by such Bank of such amount at a rate of interest per annum equal to
the rate applicable to Base Rate Loans for such period. The Issuing Bank will
pay to each Bank ratably all amounts received from the Borrower for application
in payment of its Reimbursement Obligations in respect of any Letter of Credit,
but only to the extent such Bank has made payment to the Issuing Bank in respect
of such Letter of Credit pursuant hereto.
(e) The obligations of the Borrower and each Bank under subsection (d)
above shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement, under all circumstances
whatsoever, including without limitation the following circumstances (except to
the extent such obligation of the Borrower to such Bank arose as a result of
such Bank's (including the Issuing Bank's) gross negligence or willful
misconduct):
(i) any lack of validity or enforceability of this Agreement or any
Letter of Credit or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of this Agreement or any Letter of Credit or any
document related hereto or thereto;
(iii) the use which may be made of the Letter of Credit by, or any
acts or omission of a beneficiary of a Letter of Credit (or any Person for
whom the beneficiary may be acting);
(iv) the existence of any claim, set-off defense or other rights that
the Borrower may have at any time against a beneficiary of a Letter of
Credit (or any Person for whom the beneficiary may be acting), the Banks
(including the Issuing Bank) or any other Person, whether in connection
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with this Agreement or the Letter of Credit or any document related hereto
or thereto or any unrelated transaction;
(v) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(vi) payment under a Letter of Credit against presentation to the
Issuing Bank of a draft or certificate that does not comply with the terms
of the Letter of Credit, provided that the Issuing Bank's determination
that documents presented under the Letter of Credit comply with the terms
thereof shall not have constituted gross negligence or willful misconduct
of the Issuing Bank; or
(vii) any other act or omission to act or delay of any kind by any
Bank (including the Issuing Bank), the Agent or any other Person or any
other event or circumstance whatsoever that might, but for the provisions
of this subsection (vii), constitute a legal or equitable discharge of the
Borrower's obligations hereunder.
(f) The Borrower hereby indemnifies and holds harmless each Bank (including
the Issuing Bank) and the Agent from and against any and all claims, damages,
losses, liabilities, reasonable costs or expenses (including without limitation,
reasonable counsel fees and disbursements) which such Bank or the Agent may
incur (including, without limitation, any claims, damages, losses, liabilities,
reasonable costs or expenses (including without limitation reasonable counsel
fees and disbursements incurred by such indemnified party in connection with any
of the below stated indemnified acts or omissions in any action, suit or
proceeding between such indemnified party and the Borrower or between such
indemnified party and any third party or otherwise) which the Issuing Bank may
incur by reason of or in connection with the failure of any other Bank to
fulfill or comply with its obligations to such Issuing Bank hereunder (but
nothing herein contained shall affect any rights the Borrower may have against
such defaulting Bank)), and none of the Banks (including an Issuing Bank) nor
the Agent nor any of their officers or directors or employees or agents shall be
liable or responsible, by reason of or in connection with the execution and
delivery or transfer of or payment or failure to pay under any Letter of Credit,
including without limitation any of the circumstances enumerated in subsection
(e) above, as well as (i) any error, omission, interruption or delay in
transmission or delivery of any messages, by mail, telefax, telex or otherwise,
(ii) any error in interpretation of technical terms, (iii) any loss or delay in
the transmission of any document required in order to make a drawing under a
Letter of Credit, (iv) any consequences arising from causes beyond the control
of the Issuing Bank, including without limitation any government acts, or any
other circumstances whatsoever in making or failing to make payment
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under such Letter of Credit; provided that the Borrower shall not be required to
indemnify the Issuing Bank for any claims, damages, losses, liabilities, costs
or expenses, and the Borrower shall have a claim for direct (but not
consequential) damage suffered by it, to the extent found by a court of
competent jurisdiction to have been caused by (x) the willful misconduct or
gross negligence of the Issuing Bank in determining whether a request presented
under any Letter of Credit complied with the terms of such Letter of Credit or
(y) the Issuing Bank's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the terms and conditions
of the Letter of Credit. Nothing in this subsection (f) is intended to limit the
obligations of the Borrower under any other provision of this Agreement. To the
extent the Borrower does not indemnify an Issuing Bank as required by this
subsection, the Banks agree to do so ratably in accordance with their
Commitments.
ARTICLE 3
CONDITIONS
SECTION 3.1. Closing. The closing hereunder shall occur upon receipt by the
Agent of the following documents, each dated the Closing Date unless otherwise
indicated:
(a) counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have been
received, telefax, telex or other written confirmation, in form satisfactory to
the Agent, from such party of execution of a counterpart hereof by such party);
(b) a duly executed Note for the account of each Bank dated on or before
the Closing Date complying with the provisions of Section 2.03;
(c) an opinion of counsel for the Borrower, substantially in the form of
Exhibit B hereto;
(d) a certificate signed by the chief financial officer or treasurer of the
Borrower as to the matters set forth in Sections 3.02(d) and 3.02(e) immediately
before and after giving effect to the transactions contemplated to occur on or
before the Closing Date;
(e) all documents the Agent may reasonably request relating to the
existence of the Borrower, the corporate authority for and the validity of the
Financing Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent.
The Agent shall promptly notify the Borrower and the Banks of the Closing Date,
and such notice shall be conclusive and binding on all parties hereto.
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SECTION 3.2. Borrowings and Issuances of Letters of Credit. The obligation
of any Bank to make a Loan, on the occasion of any Borrowing, and the obligation
of the Issuing Bank to issue (or renew or extend the term of) any Letter of
Credit is subject to the satisfaction of the following conditions:
(a) the fact that the Closing Date shall have occurred on or prior to
January 31, 1997;
(b) receipt by the Agent of a Notice of Borrowing as required by Section
2.02, or receipt by the Issuing Bank of a Notice of Issuance as required by
Section 2.13(c);
(c) the fact that, immediately after giving effect to such Borrowing or
issuance of a Letter of Credit, the sum of the aggregate outstanding principal
amount of the Loans and the aggregate amount of Letter of Credit Liabilities
will not exceed the aggregate amount of the Commitments;
(d) the fact that, immediately after giving effect to such Borrowing or
issuance of a Letter of Credit, no Default shall have occurred and be
continuing; and
(e) the fact that the representations and warranties of the Borrower
contained in this Agreement and any other Financing Document shall be true in
all material respects on and as of the date of and after giving effect to such
Borrowing or issuance of a Letter of Credit.
Each Borrowing and issuance of a Letter of Credit hereunder shall be deemed to
be a representation and warranty by the Borrower on the date of such Borrowing
or issuance of a Letter of Credit as to the facts specified in clauses (c), (d)
and (e) of this Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.1. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted and is qualified to do business and is in good
standing under the laws of the State of New York and each other jurisdiction
where the nature of its business or the ownership of property so requires,
except where the failure to so qualify does not have a material adverse effect
on the business, financial condition or results of operations of the Borrower
and its Consolidated Subsidiaries, taken as a whole.
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SECTION 4.2. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of this Agreement and
the Notes are within the corporate powers of the Borrower, have been duly
authorized by all necessary corporate action, require no action by or in respect
of or filing with, any governmental body, agency or official and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Borrower or
of any agreement, judgment, injunction, order, decree or other instrument
binding upon the Borrower or any of its Subsidiaries or result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, except for any contravention of or default under any agreement or
other instrument (other than agreements or instruments constituting or
evidencing Debt) not material to the business of the Borrower and its
Subsidiaries, taken as a whole, which contravention or default would not
materially adversely affect the business, financial position or results of
operations of the Borrower and its Subsidiaries, taken as a whole, or adversely
affect in any substantive way the rights and remedies of the Agent and the Banks
hereunder and under the Notes.
SECTION 4.3. Binding Effect. This Agreement constitutes a valid and binding
agreement of the Borrower and each Note, when executed and delivered in
accordance with this Agreement, will constitute a valid and binding obligation
of the Borrower, in each case enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 4.4. Financial Information. (a) The Borrower has heretofore
furnished to each of the Banks (x) the consolidated balance sheet as of December
31, 1995 and the related consolidated statements of income and cash flows for
the fiscal year then ended and (y) the consolidated balance sheet as of
September 30, 1996 and the related consolidated statements of income and cash
flows for the nine months then ended of each of the Borrower and its
Subsidiaries;
Each such set of annual financial statements and each such set of nine
month financial statements is complete and correct and presents fairly, in all
material respects, the consolidated financial condition of such entity and its
subsidiaries as of such date and the consolidated results of operations and cash
flows for the fiscal year or nine month period ended on said date, as the case
may be, all in accordance with generally accepted accounting principles and
practices applied on a consistent basis (subject to normal year-end adjustments,
in the case of such nine month financial statements). Each such set of financial
statements was accompanied by an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP opining as to
the foregoing. None of such entities or its subsidiaries has on the date thereof
any liabilities which
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are required by generally accepted accounting principles to be set forth on the
face of such financial statements, except as referred to or reflected or
provided for in said financial statements (or in the notes thereto) as at said
date, and as to which appropriate and reasonable reserves have been provided,
and since December 31, 1995, there has been no material adverse change in the
business, financial position or results of operations of any such entity and its
subsidiaries taken as a whole from that set forth in said financial statements
as at said date.
(b) The Borrower has heretofore furnished to each of the Banks projected
consolidated balance sheets of the Borrower and its Subsidiaries as at December
31 for each of the years 1996 through 1998 and the related projected
consolidated statements of income and cash flows of the Borrower and its
Subsidiaries for each of the fiscal years that will end on said dates. It is
understood and agreed that such projections are not a representation or warranty
of future performance.
SECTION 4.5. Litigation. There is no action, suit or proceeding pending
against, or to the knowledge of the Borrower threatened against or affecting,
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official in which there is a reasonable possibility
of an adverse decision which could (taking into account available insurance
coverage) materially adversely affect the business, consolidated financial
position or consolidated results of operations of the Borrower and its
Consolidated Subsidiaries, considered as a whole, or which in any manner draws
into question the validity or enforceability of this Agreement or the Notes.
SECTION 4.6. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.7. Environmental Matters. The Borrower believes that it is in
substantial compliance with all applicable Environmental Laws.
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SECTION 4.8. Taxes. The Borrower and its wholly owned Subsidiaries are
members of an affiliated group of corporations filing consolidated returns for
Federal income tax purposes, of which the Borrower is the "common parent"
(within the meaning of Section 1504 of the Internal Revenue Code) of such group.
There is no tax sharing, tax allocation or similar agreement currently in effect
providing for the manner in which tax payments owing by the members of such
affiliated group (whether in respect of Federal or state income or other taxes)
are allocated among the members of the group. The Borrower and its Subsidiaries
have filed all United States Federal income tax returns and all other material
tax returns which are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Borrower
or any Subsidiary except where the same is being contested in good faith and by
appropriate proceeding and appropriate reserves have been maintained in
accordance with generally accepted accounting principles. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrower,
adequate, and the Borrower has not given or been requested to give a waiver of
the statute of limitations relating to the payment of Federal, state, local and
foreign taxes or other impositions.
SECTION 4.9. Intellectual Property. The Borrower and each of its
Subsidiaries owns or possesses or holds under valid licenses all patents,
trademarks, service marks, trade names, copyrights, licenses and other
intellectual property rights that are necessary for the operation of their
respective properties and businesses, and neither the Borrower nor any of its
Subsidiaries is in violation of any provision thereof except for any such
failures to own, possess or hold or violations which, individually or in the
aggregate, would not have a material adverse effect on the business, financial
condition or results of operations of the Borrower and its Subsidiaries, taken
as a whole. To the best of its knowledge, none of the proprietary intellectual
properties of the Borrower or its subsidiaries infringe any license, patent,
trademark, trade name, service ▇▇▇▇, copyright, trade secret or any other
intellectual property right of others and there is no infringement by others of
any license, patent, trademark, trade name, service ▇▇▇▇, copyright, trade
secret or other intellectual property right of the Borrower and its
Subsidiaries, except for such infringements, if any, by the Borrower, its
Subsidiaries or others which, individually or in the aggregate, would not have a
material adverse effect on the business, financial condition or results of
operations of the Borrower and its Subsidiaries, taken as a whole.
SECTION 4.10. Capitalization. The authorized capital stock of the Borrower
consists, on the date hereof of an aggregate of 150,000,000 shares consisting of
shares of common stock, $0.01 par value per share, of which 66,391,318 shares of
common stock
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are duly and validly issued and outstanding, each of which shares is fully paid
and nonassessable.
SECTION 4.11. Debt and Liens. (a) Part I of Schedule 4.11(a) hereto is a
complete and correct list, as of the date of this Agreement, of each credit
agreement, loan agreement, indenture, securities purchase agreement, Guarantee,
letter of credit or other arrangement providing for or otherwise relating to any
Debt or any extension of credit (or commitment for any extension of credit) to,
or Guarantee by, the Borrower or any of its Subsidiaries the aggregate principal
or face amount of which equals or exceeds (or may equal or exceed) $1,000,000,
and the aggregate principal or face amount outstanding or that may become
outstanding under each such arrangement is correctly described in Part II of
Schedule 4. 11(a).
(b) Part I of Schedule 4.11(b) hereto is a complete and correct list, as of
the date of this Agreement, of each Lien securing Debt of any Person the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $1,000,000 and covering any property of the Borrower or any of its
Subsidiaries, and the aggregate Debt secured (or which may be secured) by each
such Lien and the property covered by each such Lien is correctly described in
Part II of Schedule 4.11(b).
(c) None of the Borrower and its Subsidiaries is, on the date of this
Agreement, party to or subject to any indenture, agreement, instrument or other
arrangement of the type described in Section 5.18, except for this Agreement.
SECTION 4.12. Subsidiaries. (a) Set forth in Part I of Schedule 4.12(a)
hereto is a complete and correct list, as of the date hereof of all of the
Subsidiaries of the Borrower, together with, for each such Subsidiary, (i) the
exact corporate name of such Subsidiary, (ii) the jurisdiction of organization
of such Subsidiary, (iii) each Person holding ownership interests in such
Subsidiary, (iv) the nature of the ownership interests held by each such Person
and the percentage of ownership of such Subsidiary represented by such ownership
interests and, (v) whether such Subsidiary is a Foreign Subsidiary. Except as
disclosed in Part II of Schedule 4.12 hereto, as of the date hereof (x) each of
the Borrower and its Subsidiaries owns, free and clear of Liens, and has the
unencumbered right to vote, all outstanding ownership interest in each Person
shown to be held by it in Part I of Schedule 4.12(a) hereto, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
(b) Set forth in Part I of Schedule 4.12(b) hereto is a complete and
correct list, as of the date hereof of all Investments (other than Investments
disclosed in Part I of Schedule 4.12(a) hereto) held by the Borrower or any of
its
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Subsidiaries in any Person and, for each such Investment, (x) the identity of
the Person or Persons holding such Investment and (y) the nature of such
Investment. Except as disclosed in Part II of Schedule 4.12(b) hereto, as of the
date of this Agreement, each of the Borrower and its Subsidiaries owns, free and
clear of all Liens, all such Investments.
(c) Each of the Borrower's corporate Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.13. Regulatory Restrictions on Borrowing. The Borrower is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or otherwise subject to any regulatory scheme
which restricts its ability to incur debt.
SECTION 4.14. Full Disclosure. All material factual information heretofore
furnished by the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Borrower to the Agent or any
Bank will be, taken as a whole, true, complete and accurate in all material
respects (it being understood and agreed that with respect to projections, such
projections are not a representation or warranty of future performance). All
such information heretofore furnished, when taken as a whole, does not, as of
the date hereof contain any untrue statement of material fact or omit to state
any material fact necessary to make the statements herein or therein, in light
of the circumstances under which they were made, not misleading.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Commitment hereunder
or any amount payable under any Note or any Letter of Credit Liability remains
unpaid:
SECTION 5.1. Information. The Borrower will deliver to each of the Banks:
(a) with respect to the Borrower, as soon as available and in any event
within 90 days after the end of each fiscal year, a consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income and cash flow for such
fiscal year, accompanied by the figures for the previous years in each case and
an audit report by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or other independent certified public
accountants of nationally recognized
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standing (which may be a single report as to all such financial statements) and,
if prepared, as soon as available, a consolidating balance sheet of the Borrower
and its Consolidated Subsidiaries as of the end of such fiscal year and related
consolidating statements of income and cash flow for such fiscal year;
(b) with respect to the Borrower, as soon as available and in any event
within 45 days after the end of each of the first three quarters of each fiscal
year of such entity, a consolidated (and, if prepared, consolidating) balance
sheet of such entity and its Consolidated Subsidiaries as of the end of such
quarter and the related consolidated (and, if prepared, consolidating)
statements of income and cash flow for such quarter and for the portion of such
entity's fiscal year ended at the end of such quarter, accompanied by the
figures for the corresponding quarter and corresponding portion of the previous
year in each case;
(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate as to fairness of
presentation, generally accepted accounting principles and consistency (subject
to normal year end adjustments) on behalf of the Borrower executed by the senior
financial officer of the Borrower or of the entity to which such financial
statements relate, provided that such certificate need not be made with respect
to the annual financial statements under clause (a);
(d) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate of the senior financial
officer of the Borrower (i) setting forth in reasonable detail the calculations
required to establish whether the Borrower was in compliance with the
requirements of Sections 5.07 and 5.09 to 5.15, inclusive, and 5.17, on the date
of such financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to take
with respect thereto;
(e) simultaneously with the delivery of each set of annual financial
statement referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) whether
anything has come to their attention to cause them to believe that any Default
existed on the date of such statements and (ii) confirming the calculations set
forth in the officer's certificate delivered simultaneously therewith pursuant
to clause (c) above;
(f) within five days after any of the chairman, the president, the
executive vice president or the chief financial officer of the Borrower obtains
knowledge of any Default, if such Default is then continuing, a certificate of
the chief financial officer or the chief accounting officer of the Borrower
setting
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forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(g) promptly upon the filing thereof copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
or other periodic reports which the Borrower or any of its Subsidiaries shall
have filed with the Securities and Exchange Commission, NASDAQ or any national
securities exchange;
(h) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which might constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of or
appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement or makes any amendment to any Plan or Benefit
Arrangement which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth details as
to such occurrence and action, if any, which the Borrower or applicable member
of the ERISA Group is required or proposes to take;
(i) at the request of the Banks, as soon as available and in any event not
less than 30 days after the first day of each fiscal year of the Borrower,
forecasts prepared by management of the Borrower, including consolidated and
consolidating statement of income and cash flow of the Borrower and its
Consolidated Subsidiaries, on a quarterly and annual basis for such fiscal year
and on an annual basis for the next fiscal year of the Borrower (provided that
in preparing such forecasts the Borrower and its Subsidiaries may be treated on
a consolidated basis);
(j) Promptly upon receipt thereof, copies of any reports submitted to the
Borrower by its accountants in connection with
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any examination of the financial statements of the Borrower or any of its
Consolidated Subsidiaries made by such accountants, and copies of any other
communications received by the Borrower, or any of its directors from such
accountants relative to any internal controls and systems of the Borrower
(unless the delivery of such report to the Banks would constitute the waiver of
any attorney-client privilege otherwise in effect with respect to any Person
other than the Agent or the Banks); and
(k) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Agent, at the
request of any Bank, may reasonably request.
SECTION 5.2. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
their respective material obligations and liabilities (including, without
limitation, tax liabilities and claims of materialmen, warehousemen and the like
which if unpaid would by law give rise to a Lien on the Borrower's assets),
except where the same may be contested in good faith by appropriate proceedings,
and will maintain, and will cause each Subsidiary to maintain, in accordance
with generally accepted accounting principles, appropriate reserves for the
accrual of any of the same.
SECTION 5.3. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted.
(b) The Borrower will, and will cause each of its Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary's own name) with
financially sound and responsible insurance companies, insurance on all their
respective properties in at least such amounts, against at least such risks and
with such risk retention as are usually maintained, insured against or retained,
as the case may be, in the same general area by companies of established repute
engaged in the same or a similar business, subject to, and including reasonable
provisions for self-insurance; and will furnish to the Banks, upon request for
the Agent, information presented in reasonable detail as to the insurance so
carried.
SECTION 5.4. Conduct of Business and Maintenance of Existence. The Borrower
will continue, and will cause each Subsidiary to continue, to engage in business
of the same general type as now conducted by the Borrower and its Subsidiaries,
and will preserve, renew and keep in full force and effect, and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
corporate existence and their respective rights, privileges and franchises
necessary or desirable in the normal conduct of business; provided that nothing
in this Section 5.04 shall prohibit (i) the merger of a
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Subsidiary into the Borrower or the merger or consolidation of a Subsidiary with
or into another Person if the corporation surviving such consolidation or merger
is a Subsidiary and if, in each case, after giving effect thereto, no Default
shall have occurred and be continuing or (ii) the termination of the corporate
existence of any Subsidiary if the Borrower in good faith determines that such
termination is in the best interest of the Borrower and is not materially
disadvantageous to the Banks.
SECTION 5.5. Compliance with Laws. The Borrower will comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws,
ordinances, rules, regulations, and requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA and the rules and
regulations thereunder) except where the necessity of compliance therewith is
contested in good faith by appropriate proceedings or where the failure to so
comply, individually or in the aggregate, would not have a material adverse
effect on the business, financial position or results of operations of the
Borrower and its Subsidiaries, taken as a whole.
SECTION 5.6. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
SECTION 5.7. Merger and Sales of Assets. (a) The Borrower will not, and
will not permit any Subsidiary to, consolidate or merge with or into any other
Person, provided that (i) the Borrower may merge with another Person if the
Borrower is the corporation surviving such merger and immediately after giving
effect to such merger, no Default shall have occurred and be continuing, and
(ii) any Subsidiary may merge with any other Person if the corporation surviving
the merger is the Borrower or a Subsidiary and, immediately after giving effect
to such merger, no Default have occurred and be continuing.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
make any Asset Sale, unless the consideration therefor is not less than the fair
market value of the related asset.
SECTION 5.8. Use of Proceeds. The proceeds of the Loans made under this
Agreement will be used by the Borrower for general corporate purposes and for
Permitted Acquisitions. None of such proceeds will be used, directly or
indirectly, for the
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purpose, whether immediate, incidental or ultimate, of buying or carrying any
"margin stock" within the meaning of Regulation U.
SECTION 5.9. Negative Pledge. Neither the Borrower nor any Subsidiary will
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except:
(a) Liens existing on the date of this Agreement securing Debt outstanding
on the date of this Agreement in an aggregate principal or face amount not
exceeding $1,000,000;
(b) any Liens existing on any asset of any Person at the time such person
becomes a Subsidiary (or such asset is acquired by the Borrower or any
Subsidiary) and not created in contemplation of such event, and Liens on the
proceeds thereof;
(c) any Lien on any asset securing Debt incurred or assumed for the purpose
of financing all or any part of the cost of acquiring such asset (including
Capital Leases), provided that such Lien attaches to such asset concurrently
with or within 180 days after the acquisition thereof;
(d) any Lien on any asset of any Person existing at the time such Person is
merged or consolidated with or into the Borrower or a Subsidiary and not created
in contemplation of such event;
(e) any Lien existing on any asset prior to the acquisition thereof by the
Borrower or a Subsidiary and not created in contemplation of such acquisition;
(f) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not increased or is not
secured by any additional assets (other than by virtue of an after-acquired
property clause covering assets of the same category or description as were
covered by such original Lien);
(g) Liens arising in the ordinary course of its business which (i) do not
secure Debt, and (ii) do not in the aggregate materially detract from the value
of its assets or materially impair the use thereof in the operation of its
business;
(h) Liens for taxes not yet payable or being contested in good faith and by
appropriate proceedings and adequate reserves have been maintained in accordance
with generally accepted accounting principles;
(i) Statutory liens of landlords, carriers and other statutory liens
incurred in the ordinary course of business;
(j) zoning restrictions, easements, rights of way, licenses, encroachments,
covenants, conditions, tenancies, minor
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defects in title, and other restrictions, charges or encumbrances affecting real
property that do not in the aggregate have a material adverse effect on the
Borrower;
(k) deposits made and liens incurred to secure performance of bids, trade
contracts, licenses, leases and statutory and other similar obligations;
(l) rights of set-off or security interests in deposit accounts held at
banks and other financial institutions to secure the payment or reimbursement of
overdraft, acceptance or other facilities maintained at such financial
institution, to the extent permitted by this Agreement; and
(m) Liens not otherwise permitted by the foregoing clauses of this Section
securing Debt or other obligations in an aggregate principal or face amount at
any one time outstanding not to exceed $1,000,000 (excluding the Debt referred
to in clause (a)).
SECTION 5.10. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time become liable with
respect to any Debt except:
(a) Debt under this Agreement;
(b) Debt secured by Liens permitted by Section 5.09(c) in an aggregate
principal amount at any time outstanding not exceeding $200,000; and
(c) Debt of the Borrower and its Subsidiaries not otherwise permitted by
this Section incurred after the Closing Date in an aggregate principal amount at
any time outstanding not to exceed $1,000,000.
SECTION 5.11. Minimum Tangible Net Worth. The Borrower will not permit
Consolidated Tangible Net Worth as at December 31, 1996 to be less than
$106,500,000, as at June 30, 1997 to be less than $106,500,000 plus 25% of
Consolidated Net Income for the six-month period ending on such date, as at
December 31, 1997 to be less than $106,500,000 plus 25% of Consolidated Net
Income for the 12-month period ending on such date, as at June 30, 1998 to be
less than such December 31, 1997 required minimum amount plus 25% of
Consolidated Net Income for the six-month period ending on June 30, 1998 and as
at December 31, 1998 such December 31, 1997 required amount plus 25% of the
Consolidated Net Income for the 12-month period ending on December 31, 1998.
SECTION 5.12. Debt: Tangible Net Worth. The Borrower will not permit the
ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth at
the end of any fiscal quarter to exceed 1.7 to 1.0.
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SECTION 5.13. Investments. The Borrower will not purchase or make any
Investment in the stock, securities or evidences of indebtedness (excluding
accounts receivable from others) of any other Person except: (i) the Borrower;
(ii) the United States Government and its agencies; (iii) certificates of
deposit of domestic banks having capital and surplus in excess of $100,000,000;
(iv) Temporary Cash Investments, and (v) Permitted Acquisitions.
SECTION 5.14. Working Capital. The Borrower will not permit Consolidated
Working Capital at the end of any fiscal quarter prior to October 1, 1997 to be
less than $20,000,000, and at the end of any fiscal quarter any time after
October 1, 1997 to be less than $30,000,000.
SECTION 5.15. Current Ratio. The Borrower will not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities as at December
31, 1996 and thereafter as at the last day of each fiscal quarter to be less
than 1.1 to 1.0.
SECTION 5.16. Restricted Payments. Neither the Borrower nor any Subsidiary
will declare or make any Restricted Payment.
SECTION 5.17. Minimum Net Income. The Borrower will not permit: its
Consolidated Net Income for its fiscal year ending December 31, 1996 to be less
than $20,000,000, for its fiscal year ending December 31, 1997 to be less than
$25,000,000, and for its fiscal year ending December 31, 1998 to be less than
$25,000,000; and will not permit its Consolidated Net Income for any two
consecutive quarters (whether or not in the same fiscal year) to be less than
$5,000,000.
SECTION 5.18. Sale-Leaseback Transactions. Neither the Borrower nor any of
its Subsidiaries will engage in any Sale-Leaseback Transactions unless the
Borrower or such Subsidiaries would be entitled, pursuant to the other
provisions of Article 5, to incur Debt with a principal amount equal to or
exceeding the Value of such Sale-Leaseback Transaction secured by a Lien on the
property to be leased (after giving similar effect to all other Sale-Leaseback
Transactions in effect at such time). For purposes of this Section, "VALUE"
means, with respect to a Sale-Leaseback Transaction, at any time, the amount
equal to the greater of (i) the net proceeds of the sale or transfer of the
property leased pursuant to such Sale-Leaseback Transaction and (ii) the fair
value in the opinion of the Board of Directors of the Borrower of such property
at the time of entering into such Sale-Leaseback Transaction, in either case
divided first by the number of full years of the term of the lease and then
multiplied by the number of full years of such term remaining at the time of
determination, without regard to any renewal or extension options contained in
the lease.
SECTION 5.19. Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or
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indirectly, pay any funds to or for the account of, make any investment (whether
by acquisition of stock or indebtedness, by loan, advance transfer of property,
guarantee or other agreement to pay, purchase or service, directly or
indirectly, any Debt, or otherwise) in, lease, sell, transfer or otherwise
dispose of any assets, tangible or intangible, to, or participate in, or effect,
any transaction with, any Affiliate except on an arms-length basis on terms at
least as favorable to the Borrower or such Subsidiary as could have been
obtained from a third party who was not an Affiliate; provided that the
foregoing provisions of this Section shall not prohibit any such Person from
declaring or paying any lawful dividend or other payment ratably in respect of
all of its capital stock of the relevant class so long as, after giving effect
thereto, no Default shall have occurred and be continuing.
SECTION 5.20. Lines of Business. The Borrower will not, and will not permit
any of its Subsidiaries to, engage in any line or lines of business activity
other than the business of developing, publishing, merchandising and
distributing consumer software and related businesses (including, in each case,
without limitation, Internet and similar on-line or electronic related
businesses).
ARTICLE 6
DEFAULTS
SECTION 6.1. Events of Default. If one or more of the following events
("EVENTS OF DEFAULT") shall have occurred and be continuing:
(a) the Borrower shall fail to reimburse any drawing under the Letter of
Credit when required hereunder or to pay when due any principal of any Loan or
pay within 10 days after due any interest or fees payable hereunder or under the
Notes;
(b) the Borrower shall fail to observe or perform any covenant or agreement
contained in Article 5, other than those contained in Sections 5.01 through
5.06, 5.13, 5.19 or 5.20;
(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in any Financing Document (other than those covered by clause (a) or
(b) above) for 30 days after notice thereof has been given to the Borrower by
the Agent at the request of any Bank;
(d) any material representation, warranty, certification or statement made
by the Borrower in any Financing Document or in any certificate, financial
statement or other document delivered pursuant to any such Financing Document
shall prove to have been incorrect in any material respect when made (or deemed
made);
(e) any event or condition shall occur which results in the acceleration of
the maturity of any Material Debt or enables (or
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with the giving of notice or lapse of time or both, would enable) the holder of
such Debt or any Person acting on such holder's behalf to accelerate the
maturity thereof;
(f) the Borrower or any Material Subsidiary shall commence a voluntary case
or other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall take any corporate action to authorize any of
the foregoing;
(g) an involuntary case or other proceeding shall be commenced against the
Borrower or any Material Subsidiary seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Material Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(h) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $1,000,000 which it shall have become liable
(pursuant to a final determination by a court of competent jurisdiction, not
subject to further appeal) to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to
terminate, to impose liability (other than for premiums under Section 4007 of
ERISA) in respect of or to cause a trustee to be appointed to administer any
Material Plan; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated; or there shall occur a complete or partial withdrawal from, or a
default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one
or more Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $1,000,000;
(i) any judgment or order for the payment of money in excess of $1,000,000
shall be rendered against the Borrower or any Material Subsidiary and such
judgment or order shall continue unsatisfied or unstayed for a period of 45 days
if such judgment or order is for an amount in excess of $1,000,000 but less than
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$15,000,000 or unsatisfied or unstayed for a period of 30 days if in an amount
equal to or in excess of $15,000,000; or
(j) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, their
spouses and their lineal descendents, including trusts for the benefit of any of
the foregoing (collectively the "Cayre Family"), shall (i) collectively
beneficially own less than 30%, but more than 20%, of the outstanding voting
stock of the Borrower at a time when another Person or group (as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as in effect on the
date hereof) beneficially owns shares of the outstanding voting stock of the
Borrower of an equal or greater percentage than the Cayre Family; or (ii) cease
collectively to beneficially own at least 20% of the outstanding voting stock of
the Borrower;
then, and in any such event, the Agent shall if requested by the Required
Banks, by notice to the Borrower, terminate the Commitments and they shall
thereupon terminate and/or declare the Loans and the Letter of Credit
Liabilities (together with accrued interest thereon) to be, and the Loans and
the Letter of Credit Liabilities shall thereupon become, immediately due and
payable without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower; provided that in the case of any of the
Events of Default specified in clause 6.01(f) or 6.01(g) above with respect to
the Borrower, without any notice to the Borrower or any other act by the Agent
or the Banks, the Commitments shall thereupon terminate and the Loans and the
Letter of Credit Liabilities (together with accrued interest thereon) shall
become immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower.
SECTION 6.2. Notice of Default. The Agent shall give notice to the Borrower
under Section 6.01(c) promptly upon being requested to do so by any Bank and
shall thereupon notify all the Banks thereof.
SECTION 6.3. Cash Cover. The Borrower agrees, in addition to the provisions
of Section 6.01 hereof that upon the occurrence and during the continuance of
any Event of Default, it shall, if requested by the Agent upon the written
instruction of the Required Banks, pay to the Agent an amount in immediately
available funds (which funds shall be held as collateral pursuant to
arrangements satisfactory to the Agent) equal to the aggregate amount available
for drawing under all Letters of Credit then outstanding at such time, provided
that, upon the occurrence of any Event of Default specified in Section 6.01(f)
or 6.01(g) with respect to the Borrower, the Borrower shall pay such amount
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forthwith without any notice or demand or any other act by the Agent or the
Banks.
ARTICLE 7
THE AGENT
SECTION 7.1. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement and the Notes as are delegated to the
Agent by the terms hereof or thereof together with all such powers as are
reasonably incidental thereto.
SECTION 7.2. Agent and Affiliates. RNB shall have the same rights and
powers under this Agreement as any other Bank and may exercise or refrain from
exercising the same as though it were not the Agent, and RNB and its affiliates
may accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or affiliate of the Borrower as if
it were not the Agent.
SECTION 7.3. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
SECTION 7.4. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for the Borrower), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 7.5. Liability of Agent. Neither the Agent nor any of its
affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it as Agent in connection
herewith (i) with the consent or at the request of the Required Banks or (ii) in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (i) any statement, warranty or representation made in
connection with this Agreement or any borrowing hereunder; (ii) the performance
or observance of any of the covenants or agreements of the Borrower; (iii) the
satisfaction of any condition specified in Article 3, except receipt of items
required to be delivered to the Agent; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes or any other instrument or writing
furnished in connection herewith. The Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, statement, or other
writing (which may be a bank wire, telex, facsimile transmission
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or similar writing) believed by it to be genuine or to be signed by the proper
party or parties.
SECTION 7.6. Indemnification. Each Bank shall, ratably in accordance with
its Commitment, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements
incurred by such indemnitees in any action; suit or proceeding between such
indemnitees and such indemnifying Bank or between such indemnities and any third
party or otherwise), claim, demand, action, loss or liability (except such as
result from such indemnities' gross negligence or willful misconduct) that such
indemnitees may suffer or incur in connection with this Agreement or any action
taken or omitted by such indemnitees hereunder.
SECTION 7.7. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking any action under this Agreement.
SECTION 7.8. Successor Agent. The Agent may resign at any time by giving
notice thereof to the Banks and the Borrower. Upon any such resignation, the
Required Banks shall have the right to appoint a successor Agent reasonably
acceptable to Borrower. If no successor Agent shall have been so appointed by
the Required Banks, and shall have accepted such appointment, within 30 days
after the retiring Agent gives notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent reasonably acceptable to
Borrower, which shall be a commercial bank organized or licensed under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $100,000,000. Upon the acceptance of its
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights and duties 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
Agent, the provisions of this Article shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
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SECTION 7.9. Agent's Fee. The Borrower shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon between the
Borrower and the Agent.
ARTICLE 8
CHANGES IN CIRCUMSTANCE
SECTION 8.1. Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any EuroDollar Loan:
(a) the Agent is advised by the Reference Bank that quotations for deposits
(in the applicable amounts) are not being offered to the Reference Bank, or
(b) Banks having 50% or more of the aggregate principal amount of the
affected Loans advise the Agent that the Adjusted London Interbank Offered Rate
will not adequately and fairly reflect the cost to such Banks of funding their
EuroDollar Loans for such Interest Period, the Agent shall forthwith give notice
thereof to the Borrower and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspension no longer exist
(which notice shall be given forthwith upon receipt by the Agent of notice of
such determination), (i) the obligations of the Banks to make EuroDollar Loans,
or to continue or convert outstanding Loans as or into EuroDollar Loans, shall
be suspended and (ii) each outstanding EuroDollar Loan, shall be converted into
a Base Rate Loan on the last day of the then current Interest Period applicable
thereto. Unless the Borrower notifies the Agent at least two Domestic Business
Days before the date of any EuroDollar Borrowing for which a Notice of Borrowing
has previously been given (which has not been followed by a notification from
the Agent as aforesaid) that it elects not to borrow on such date, such
Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.2. Illegality. If after the date of this Agreement, the adoption
of any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, 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 any Bank (or
its EuroDollar Lending Office) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Bank (or its EuroDollar
Lending Office) to make, maintain or fund its EuroDollar Loans and such Bank
shall so notify the Agent, the Agent shall forthwith give notice thereof to the
other Banks and the Borrower, whereupon until such Bank notifies the Borrower
and the Agent that the circumstances giving rise to such suspension no longer
exist, the obligation of such Bank to make EuroDollar Loans or to convert
outstanding Loans into EuroDollar Loans shall be suspended. Before giving any
notice to the Agent pursuant to
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this Section, such Bank shall designate a different EuroDollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
reasonable judgment of such Bank, be otherwise disadvantageous to such Bank. If
such notice is given, each EuroDollar Loan of such Bank then outstanding shall
be converted to a Base Rate Loan either (a) on the last day of the then current
Interest Period applicable to such EuroDollar Loan if such Bank may lawfully
continue to maintain and fund such Loan to such day or (b) immediately if such
Bank shall determine that it may not lawfully continue to maintain and fund such
Loan to such day.
SECTION 8.3. Increased Cost and Reduced Return. (a) If after the date
hereof the adoption of any applicable law, rule or regulation, or any change in
any applicable law, rule or regulation, 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 any Bank (or its Applicable Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding any such requirement
included in an applicable EuroDollar Reserve Percentage in the case of a
EuroDollar Loan), special deposit, insurance assessment or similar requirement
against assets of deposits with or for the account of or credit extended by, any
Bank (or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or the London interbank market or other relevant
market any other condition affecting its EuroDollar Loans, its Note or its
obligation to make EuroDollar Loans or its obligations hereunder in respect of
Letters of Credit and the result of any of the foregoing is to increase the cost
to such Bank (or its Applicable Lending Office) of making or maintaining any
EuroDollar Loan or of issuing or participating in any Letter of Credit, or to
reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note with respect
thereto, by an amount reasonably deemed by such Bank to be material, then,
within 15 days after demand, which demand shall include a brief description of
the change giving rise to such increased cost or reduction and an explanation as
to how such increased cost or reduction was determined, by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
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administration thereof or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Bank (or its Parent) as a consequence of such Bank's
obligations hereunder to a level below that which such Bank (or its Parent)
could have achieved but for such adoption, change, request or directive (taking
into consideration its policies with respect to capital adequacy) by an amount
reasonably deemed by such Bank to be material, then from time to time, assuming
such Bank was not compensated for such reduction pursuant to Section 8.03(a)
above, within 15 days after demand, which demand shall include a brief
description of the change giving rise to such reduction and an explanation as to
how such reduction was determined, by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its Parent) for such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any event
of which it has knowledge, occurring after the date hereof which will entitle
such Bank to compensation pursuant to this section 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 reasonable judgment of such
Bank, be otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this section and setting forth the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
demonstrable error. In determining such amount, such Bank may use any reasonable
averaging and attribution methods.
SECTION 8.4. Taxes. (a) For the purposes of this Section 8.04, the
following terms have the following meanings:
"TAXES" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings with respect to any payment by the Borrower
pursuant to this Agreement or under any Note, and all liabilities with respect
thereto, excluding (i) in the case of each Bank and the Agent, taxes imposed on
its income, and franchise or similar taxes imposed on it, by a jurisdiction
under the laws of which such Bank or the Agent (as the case may be) is organized
or in which its principal executive office is located or, in the case of each
Bank, in which its Applicable Lending Office is located and (ii) in the case of
each Bank, any United States withholding tax imposed on such payments.
"OTHER TAXES" means any present or future stamp or documentary taxes and
any other excise or property taxes, or similar charges or levies, which arise
from any payment made pursuant to this Agreement or under any Note or from the
execution or delivery of or otherwise with respect to, this Agreement or any
Note.
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(b) Any and all payments by the Borrower to or for the account of any Bank
or the Agent hereunder or under any Note shall be made without deduction for any
Taxes or Other Taxes; provided that, if the Borrower shall be required by law to
deduct any Taxes or Other Taxes from any such payments, (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
such Bank or the Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Agent, at its address referred
to in Section 9.01, the original or a certified copy of a receipt evidencing
payment thereof.
(c) The Borrower agrees to indemnify each Bank and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by such Bank or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. This indemnification shall be paid within 15 days after such
Bank or the Agent (as the case may be) makes demand therefor.
(d) Each Bank organized under the laws of a jurisdiction outside the United
States, on or prior to the date of its execution and delivery of this Agreement
in the case of each Bank listed on the signature pages hereof and on or prior to
the date on which it becomes a Bank in the case of each other Bank, and from
time to time thereafter if requested in writing by the Borrower (but only so
long as such Bank remains lawfully able to do so), shall provide the Borrower
and the Agent with (i) Internal Revenue Service form 1001 or 4224, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
certifying that such Bank is entitled to benefits under an income tax treaty to
which the United States is a party which exempts the Bank from United States
withholding tax or reduces the rate of withholding tax on payments of interest
for the account of such Bank or certifying that the income receivable pursuant
to this Agreement is effectively connected with the conduct of a trade or
business in the United States or (ii) solely if such Lender is claiming
exemption from United States withholding tax under Section 871(h) or 881(c) of
the Internal Revenue Code with respect to payments of "portfolio interest", a
Form W-8, or any successor form prescribed by the Internal Revenue Service, and
a certificate representing that such Lender is not a bank for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
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(within the meaning of Section 864(d)(4) of the Internal Revenue Code).
(e) For any period with respect to which a Bank has failed to provide the
Borrower or the Agent with the appropriate form pursuant to Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
subsequent to the date on which such form originally was required to be
provided), such Bank shall not be entitled to indemnification under Section
8.04(b) or 8.04(c) with respect to Taxes imposed by the United States; provided
that if a Bank, which is otherwise exempt from or subject to a reduced rate of
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Borrower, at such Bank's sole expense, shall take
such steps as such Bank shall reasonably request to assist such Bank to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Bank pursuant to this Section, then such Bank will change the
jurisdiction of its Applicable Lending Office if in the reasonable judgment of
such Bank, such change (i) will eliminate or reduce any such additional payment
which may thereafter accrue and (ii) is not otherwise disadvantageous (other
than in any insignificant respect) to such Bank.
SECTION 8.5. Base Rate Loans Substituted for Affected EuroDollar Loans. If
(i) the obligation of any Bank to make, or convert outstanding Loans to,
EuroDollar Loans has been suspended pursuant to Section 8.02 or (ii) any Bank
has demanded compensation under Section 8.03 or 8.04 with respect to its
EuroDollar Loans and the Borrower shall, by at least five EuroDollar Business
Days' prior notice to such Bank through the Agent, have elected that the
provisions of this section shall apply to such Bank, then, unless and until such
Bank notifies the Borrower that the circumstances giving rise to such suspension
or demand for compensation no longer exist:
(a) all Loans which would otherwise be made by such Bank as (or continued
as or converted into) EuroDollar Loans, as the case may be, shall instead be
Base Rate Loans (on which interest and principal shall be payable
contemporaneously with the related EuroDollar Loans of the other Banks); and
(b) after each of its EuroDollar Loans, has been repaid (or converted to a
Base Rate Loan), all payments of principal which would otherwise be applied to
repay such EuroDollar Loans shall be applied to repay its Base Rate Loans
instead. If such Bank notifies the Borrower that the circumstances giving rise
to such notice no longer apply, the principal amount of each such Base Rate Loan
shall be converted into a EuroDollar Loan on the first day of the next
succeeding Interest Period applicable to the related EuroDollar Loans of the
other Banks.
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ARTICLE 9
MISCELLANEOUS
SECTION 9.1. Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (a) in the
case of the Borrower, any Bank or the Agent, at its address, facsimile number or
telex number set forth on the signature pages hereof, or (b) in the case of any
party, such other address, facsimile number or telex number as such party may
hereafter specify for the purpose by notice to the Agent, the Banks and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified on the signature pages hereof and the appropriate answerback is
received, (ii) if given by facsimile transmission, when transmitted to the
facsimile number specified on the signature pages hereof and confirmation of
receipt is received, (iii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, (iv) if sent by recognized overnight courier, on the next business
day after delivery to such courier, or (v) if given by any other means, when
delivered at the address specified on the signature pages hereof; provided that
notices to the Agent or the Issuing Bank under Article 2 or Article 8 shall not
be effective until received.
SECTION 9.2. No Waivers. No failure or delay by the Agent or any Bank in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.3. Expenses; Indemnification. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent, in connection with the
preparation of this Agreement, any waiver or consent hereunder or any amendment
hereof or any Default hereunder and (ii) if any Default or Event of Default
occurs and is continuing, all out-of-pocket expenses incurred by the Agent and
each Bank, including the reasonable fees and disbursements of counsel (which
shall be limited to counsel to the Agent unless an Event of Default has occurred
and is continuing), in connection with such Default or Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
(b) The Borrower agrees to indemnify the Agent, the Issuing Bank and each
Bank, their respective affiliates and the respective directors, officers, agents
and employees of the foregoing (each an "INDEMNITEE") and hold each Indemnitee
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harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind (including, without limitation, the reasonable counsel fees
and disbursements incurred by an Indemnitee in any proceedings between such
Indemnitee and the Borrower or between such Indemnitee and any third party or
otherwise), which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of this Agreement or any actual or proposed use of proceeds of
Loans hereunder; provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
SECTION 9.4. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it and any Letter of Credit Liabilities which is greater
than the proportion received by any other Bank in respect of the aggregate
amount of principal and interest due with respect to any Note and Letter of
Credit Liabilities held by such other Bank, the Bank receiving such
proportionately greater payment shall purchase such participations in the Notes
and Letter of Credit Liabilities held by the other Banks, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Notes and Letter of Credit
Liabilities held by the Banks shall be shared by the Banks pro rata in
proportion with their Commitments; provided that nothing in this section shall
impair the right of any Bank to exercise any right of set-off or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of any Obligor other than its indebtedness hereunder. Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any holder of a participation in a Note or Letter of Credit Liabilities,
whether or not acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of Borrower in the amount of such participation.
SECTION 9.5. Amendments and Waivers. Any provision of this Agreement or the
Notes may be amended or waived if but only if such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Agent or the Issuing Banks are affected thereby, by the Agent
or the Issuing Banks, as relevant); provided that no such amendment or waiver
shall, unless signed by all the Banks, (i) increase or decrease the Commitment
of any Bank (except for a ratable decrease in the Commitments of all Banks) or
subject any Bank to any additional obligation, (ii) reduce the principal of or
rate of interest on any Loan or the amount to be reimbursed in
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respect of any Letter of Credit or any interest thereon or any fees hereunder,
(iii) postpone the date fixed for any payment of principal of or interest on any
Loan or the amount to be reimbursed in respect of any Letter of Credit or any
interest thereon or any fees hereunder or for any scheduled reduction or
termination of any Commitment or (except as expressly provided in Section 2.13)
expiry date of any Letter of Credit, or (iv) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Notes and Letter
of Credit Liabilities, or the number of Banks, which shall be required for the
Banks or any of them to take any action under this section or any other
provision of this Agreement.
SECTION 9.6. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower may not assign or
otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks other than in connection with a merger or
consolidation permitted under Section 5.07.
(b) Any Bank may at any time grant to one or more banks or other financial
institutions (each a "PARTICIPANT") participating interests in its Commitment or
any or all of its Loans and Letter of Credit Liabilities. In the event of any
such grant by a Bank of a participating interest to a Participant, whether or
not upon notice to the Borrower and the Agent, such Bank shall remain
responsible for the performance of its obligations hereunder, and the Borrower,
the issuing Banks and the Agent shall continue to deal solely and directly with
such Bank in connection with such Bank's rights and obligations under this
Agreement. Any agreement pursuant to which any Bank may grant such a
participating interest shall provide that such Bank shall retain the sole right
and responsibility to enforce the obligations of the Borrower hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii), or (iii) of
Section 9.05 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits (and subject to also having the corresponding
obligations) of Article 8 with respect to its participating interest. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "ASSIGNEE") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such
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rights and obligations, pursuant to an Assignment and Assumption Agreement in
substantially the form provided by the Agent executed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the Borrower,
the Agent, and the Issuing Bank, except that no such consents shall be required
if such Assignee is an Affiliate of such assigning Bank or if at the time of
such assignment an Event of Default has occurred and is continuing and no such
assignment shall be made if after giving effect thereto the number of Banks
would exceed four. Upon execution and delivery of such instrument and payment by
such Assignee to such transferor Bank of an amount equal to the purchase price
agreed between such transferor Bank and such Assignee, such Assignee shall be a
Bank party to this Agreement and shall have all the rights and obligations of a
Bank with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the Agent
an administrative fee for processing such assignment in the amount of $2,500. If
the Assignee is not incorporated under the laws of the United States of America
or a state thereof it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of any United States federal
income taxes in accordance with Section 8.04.
(d) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
(e) The Borrower designates the Agent to serve as the Borrower's agent,
solely for purposes of this subsection to maintain a register (the "REGISTER")
on which the Agent will record the Commitments from time to time of each Bank,
the Loans made by each Bank and each repayment in respect of the principal
amount of the Loans of each Bank and to retain a copy of each Assignment and
Assumption Agreement delivered to the Agent pursuant to this Section. Failure to
make any such recordation, or any error in such recordation, shall not affect
the Borrower's obligations in respect of such Loans. The Borrower, the Agent,
the Issuing Bank and the Banks shall treat each Person in whose name a Loan and
the Note evidencing the same is registered as the owner thereof for all purposes
of this Agreement, notwithstanding notice or any provision herein to the
contrary. With respect to
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any Bank, no assignment or other transfer of any of its rights or obligations
under this Agreement or its Note shall be effective until such assignment or
other transfer is recorded on the Register and otherwise complies with this
Section 9.06, and prior to such recordation all amounts owing to the transferor
Bank under this Agreement and its Note shall remain owing to the transferor
Bank. The registration of any such assignment or other transfer shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered Assignment and Assumption Agreement. The
Register shall be available at the offices where kept by the Agent for
inspection by the Borrower or any Bank at any reasonable time upon reasonable
prior notice to the Agent.
SECTION 9.7. Collateral. Each of the Banks represents to the Agent and each
of the other Banks that it in good faith is not relying upon any "margin stock"
(as defined in Regulation U) as collateral in the extension or maintenance of
the credit provided for in this Agreement.
SECTION 9.8. Continuing Obligation. Notwithstanding the occurrence and
continuance of an Event of Default or the occurrence of the Termination Date,
the Borrower's obligations and agreements hereunder shall continue until all
obligations, direct or contingent, have been satisfied and all Letter of Credit
Liabilities have terminated.
SECTION 9.9. Governing Law; Submission to Jurisdiction. This Agreement and
each Note shall be governed by and construed in accordance with the laws of the
State of New York. Borrower hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Borrower irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 9.10. Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon receipt by the Agent of counterparts
hereof signed by each of the parties hereto (or, in the case of any party as to
which an executed counterpart shall not have been received, receipt by the Agent
in form satisfactory to it of telex, facsimile or other
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written confirmation from such party of execution of a counterpart hereof by
such party).
SECTION 9.11. WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 9.12. Confidentiality. The Agent and each Bank agrees to keep any
information delivered or made available by the Borrower pursuant to the
provisions of this Agreement or any other Financing Document confidential from
anyone other than persons employed or retained by the Agent or such Bank who are
engaged in evaluating, approving, structuring or administering the credit
facility contemplated hereby; provided that nothing herein shall prevent the
Agent or any Bank from disclosing such information (a) to any other Bank or to
the Agent, as the case may be, (b) upon the order of any court or administrative
agency, (c) upon the request or demand of any regulatory agency or authority,
(d) which had been publicly disclosed other than as a result of a disclosure by
the Agent or any Bank prohibited by this Agreement, (e) in connection with any
litigation to which the Agent, any Bank or its subsidiaries or parent may be a
party arising out of or otherwise relating to this Agreement, (f) to such Bank's
or Agent's legal counsel and independent auditors, or other professional
advisers engaged in connection with this facility, so long as in each case such
Persons are advised of the provisions of this Section, and (g) subject to the
receipt by such Bank of an agreement or undertaking containing provisions
substantially similar to those contained in this Section, to any actual or
proposed Participant or Assignee.
IN WITNESS WHEREOF this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
GT INTERACTIVE SOFTWARE CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Financial Officer
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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LENDERS
$25,000,000 REPUBLIC NATIONAL BANK OF NEW YORK
as a Lender and as Issuing Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
Domestic Lending ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Middle Market Lending,
Department 381
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President
Telex: 234967; Answerback: BLICBANK
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EuroDollar Lending Office:
London, England
$15,000,000 NBD BANK
By: /s/ ▇▇▇▇▇▇ ▇. LEVASSEW
---------------------------------
Name: ▇▇▇▇▇▇ ▇. Levassew
Title: Vice President
Domestic Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Banking
Department
Attn.: ▇▇▇▇▇▇ ▇▇▇▇,
Administrative Assistant
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
EuroDollar Lending Office:
London, England
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$40,000,000
REPUBLIC NATIONAL BANK OF NEW YORK, as
Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Middle Market Lending,
Department 381;
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President
Telex: 234967; Answerback: BLICBANK
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
January 21, 1997
For value received, GT INTERACTIVE SOFTWARE CORP., a Delaware corporation
(the "BORROWER"), promises to pay to the order of Republic National Bank of New
York (the "Bank"), the unpaid principal amount of each Loan made by the Bank to
the Borrower pursuant to the Credit Agreement referred to below on the maturity
date provided for in the Credit Agreement. The Borrower promises to pay interest
on the unpaid principal amount of each such Loan on the dates and at the rate or
rates provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of the Agent at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
All Loans made by the Bank, the respective types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in the Credit Agreement dated as
of January __, 1997 among the Borrower, the banks listed on the signature pages
thereof, the Letter of Credit Issuing Bank party thereto and Republic National
Bank of New York, as Agent (as the same may be amended from time to time, the
"CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
GT INTERACTIVE SOFTWARE CORP.
By:
---------------------------------
Name:
Title:
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LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Principal
Date Amount of Type of Loan Prepaid Notation Made
Loan By
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▇▇
▇▇▇▇▇▇▇ ▇-▇
▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
January 21, 1997
For value received, GT INTERACTIVE SOFTWARE CORP., a Delaware corporation
(the "BORROWER"), promises to pay to the order of NBD Bank (the "Bank"), the
unpaid principal amount of each Loan made by the Bank to the Borrower pursuant
to the Credit Agreement referred to below on the maturity date provided for in
the Credit Agreement. The Borrower promises to pay interest on the unpaid
principal amount of each such Loan on the dates and at the rate or rates
provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of the Agent at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
All Loans made by the Bank, the respective types thereof and all repayments
of the principal thereof shall be recorded by the Bank and, if the Bank so
elects in connection with any transfer or enforcement hereof appropriate
notations to evidence the foregoing information with respect to each such Loan
then outstanding may be endorsed by the Bank on the schedule attached hereto, or
on a continuation of such schedule attached to and made a part hereof provided
that the failure of the Bank to make any such recordation or endorsement shall
not affect the obligations of the Borrower hereunder or under the Credit
Agreement.
This note is one of the Notes referred to in the Credit Agreement dated as
of January __, 1997 among the Borrower, the banks listed on the signature pages
thereof, the Letter of Credit Issuing Bank party thereto and Republic National
Bank of New York, as Agent (as the same may be amended from time to time, the
"CREDIT AGREEMENT"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
GT INTERACTIVE SOFTWARE CORP.
By:
---------------------------------
Name:
Title:
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LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Principal
Date Amount of Type of Loan Prepaid Notation Made
Loan By
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EXHIBIT B - OPINION
January __, 1997
To the Banks and the Agent
Referred to Below
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
as Agent
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Ladies and Gentlemen:
We have acted as counsel for GT Interactive Software Corp. (the "BORROWER")
and certain of its Subsidiaries in connection with the Credit Agreement (the
"CREDIT AGREEMENT") dated as of December , 1996 among the Borrower, the banks
listed on the signature pages thereof, the Letter of Credit Issuing Banks party
thereto and Republic National Bank of New York, as Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This opinion is being
rendered to you at the request of our clients pursuant to Section 3.01(d) of the
Credit Agreement.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing and in
good standing under the laws of Delaware and is qualified to do business and is
in good standing under the laws of the State of New York and has the corporate
power to enter into the Credit Agreement and the documents and instruments
referred to therein.
2. The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes are within the corporate powers of the Borrower, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any
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provision of applicable law of regulation or of the certificate of incorporation
or by-laws of the Borrower or, to our knowledge, of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any
of its Material Subsidiaries or, to our knowledge, result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of the
Borrower and each Note constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and by general principles of equity.
4. To our knowledge, there is no action, suit or proceeding pending or
threatened against or affecting the Borrower or any of its Material Subsidiaries
before any court or arbitrator or any governmental body, agency or official, in
which there is a reasonable possibility of an adverse decision which could
materially adversely affect the business, consolidated financial position or
consolidated results of operations of the borrower and its Consolidated
Subsidiaries, considered as a whole, or which in any manner draws into question
the validity of the Credit Agreement or the Notes.
5. Each of the Borrower's Material Subsidiaries is a corporation validly
existing and in good standing under the laws of its jurisdiction of
incorporation.
The foregoing opinions are subject to the following qualifications:
(a) We are members of the Bar of the State of New York and do not purport
to be expert or express any opinion except as to matters involving the laws of
such State, the General Corporation Law of the State of Delaware, and the
federal laws of the United States of America.
(b) [We express no opinion as to the validity, binding effect or
enforceability of any choice of law, consent to jurisdiction, consent to venue
or consent to service provision in a court other than a court of the State of
New York].
(c) [The enforceability of Sections 2.13(e), 9.03 and [9.11] of the
Agreement may be limited by laws rendering unenforceable indemnification
contrary to
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state or federal laws or public policy underlying such laws.]
(d) We express no opinion as to the enforceability of any provision
purporting to waive unmatured rights to the extent such provision may be limited
by applicable state or federal laws or public policy underlying such laws.
(e) As used in this opinion letter, "to our knowledge" shall mean the
knowledge that attorneys employed by us have obtained solely from their
representation of the Borrower. Nothing has come to our attention which has
caused us to believe that the statements so made herein "to our knowledge" are
untrue or incorrect. However, except as specifically noted above, we do not
purport to have made any review of court records or proceedings or made any
other independent review or investigation of any factual matter.
This opinion letter is being provided to you pursuant to Section 3.01(d) of
the Credit Agreement and may not be relied upon by any other person or for any
purpose other than in connection with the transactions contemplated by the
Credit Agreement without our prior written consent in each instance.
Very truly yours,
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