EXHIBIT 10.41
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CREDIT AGREEMENT
among
COINMACH LAUNDRY CORPORATION,
COINMACH CORPORATION,
THE LENDING INSTITUTIONS LISTED HEREIN,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT,
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as SYNDICATION AGENT,
and
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.,
as DOCUMENTATION AGENT
__________________________________
Dated as of January 8, 1997
__________________________________
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TABLE OF CONTENTS
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Page
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SECTION 1. Amount and Terms of Credit............................. 1
1.01 The Commitments......................................... 1
1.02 Minimum Amount of Each Borrowing........................ 4
1.03 Notice of Borrowing..................................... 4
1.04 Disbursement of Funds................................... 5
1.05 Notes................................................... 6
1.06 Conversions............................................. 7
1.07 Pro Rata Borrowings..................................... 8
1.08 Interest................................................ 8
1.09 Interest Periods........................................ 9
1.10 Increased Costs, Illegality, etc........................ 10
1.11 Compensation............................................ 12
1.12 Change of Lending Office................................ 13
1.13 Replacement of Banks.................................... 13
SECTION 2. Letters of Credit...................................... 14
2.01 Letters of Credit....................................... 14
2.02 Letter of Credit Requests............................... 15
2.03 Letter of Credit Participations......................... 15
2.04 Agreement to Repay Letter of Credit Payments............ 17
2.05 Increased Costs......................................... 18
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.. 19
3.01 Fees.................................................... 19
3.02 Voluntary Termination of Unutilized Commitments......... 20
3.03 Mandatory Reduction of Commitments...................... 21
SECTION 4. Prepayments; Payments; Taxes........................... 22
4.01 Voluntary Prepayments................................... 22
4.02 Mandatory Repayments and Commitment Reductions.......... 23
4.03 Method and Place of Payment............................. 31
4.04 Net Payments............................................ 31
SECTION 5. Conditions Precedent to Loans.......................... 33
5.01 Execution of Agreement; Notes........................... 34
5.02 Payment of Fees......................................... 34
5.03 Opinions of Counsel..................................... 34
5.04 Corporate Documents; Proceedings; etc................... 34
5.05 Certain Agreements...................................... 35
5.06 Acquisition............................................. 35
5.07 Officer's Certificate................................... 35
(i)
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5.08 Approvals............................................... 35
5.09 Existing Credit Agreement............................... 36
5.10 Pledge and Security Agreements and Collateral
Assignment of Leases.................................. 36
5.11 Mortgages; Title Insurance; Surveys; etc................ 37
5.12 Adverse Change, etc..................................... 38
5.13 Litigation.............................................. 38
5.14 Evidence of Insurance................................... 38
5.15 Pro Forma Balance Sheet................................. 39
SECTION 6. Conditions Precedent to All Credit Events.............. 39
6.01 No Default; Representations and Warranties.............. 39
6.02 Notice of Borrowing; Letter of Credit Request........... 39
SECTION 7. Representations, Warranties and Agreements............. 40
7.01 Corporate Status........................................ 40
7.02 Corporate Power and Authority........................... 40
7.03 No Violation............................................ 41
7.04 Governmental Approvals.................................. 41
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc............. 41
7.06 Litigation.............................................. 44
7.07 True and Complete Disclosure............................ 44
7.08 Use of Proceeds; Margin Regulations..................... 44
7.09 Tax Returns and Payments................................ 44
7.10 Compliance with ERISA................................... 45
7.11 The Security Documents.................................. 46
7.12 Representations and Warranties in Documents............. 47
7.13 Properties.............................................. 47
7.14 Capitalization.......................................... 47
7.15 Subsidiaries............................................ 48
7.16 Compliance with Statutes, etc........................... 48
7.17 Investment Company Act.................................. 48
7.18 Public Utility Holding Company Act...................... 48
7.19 Environmental Matters................................... 48
7.20 Labor Relations......................................... 49
7.21 Patents, Licenses, Franchises and Formulas.............. 50
7.22 Indebtedness............................................ 50
7.23 Acquisition............................................. 50
SECTION 8. Affirmative Covenants.................................. 51
8.01 Information Covenants................................... 51
(ii)
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8.02 Books, Records and Inspections.......................... 55
8.03 Maintenance of Property; Insurance...................... 55
8.04 Corporate Franchises.................................... 56
8.05 Compliance with Statutes, etc........................... 57
8.06 Compliance with Environmental Laws...................... 57
8.07 ERISA................................................... 58
8.08 End of Fiscal Years; Fiscal Quarters.................... 59
8.09 Performance of Obligations.............................. 59
8.10 Payment of Taxes........................................ 59
8.11 Additional Security; Further Assurances................. 60
SECTION 9. Negative Covenants..................................... 61
9.01 Liens................................................... 61
9.02 Consolidation, Merger, Sale or Purchase of
Assets, etc. ........................................... 64
9.03 Dividends, etc. ........................................ 67
9.04 Indebtedness............................................ 68
9.05 Advances, Investments and Loans......................... 70
9.06 Transactions with Affiliates............................ 72
9.07 Capital Expenditures.................................... 73
9.08 Leverage Ratio.......................................... 74
9.09 Consolidated Interest Coverage Ratio.................... 75
9.10 Minimum Consolidated EBITDA............................. 76
9.11 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc. ...................................... 77
9.12 Limitation on Certain Restrictions on Subsidiaries...... 77
9.13 Limitation on Issuance of Capital Stock................. 78
9.14 Business................................................ 79
9.15 Limitation on the Creation of Subsidiaries.............. 79
9.16 Restriction on Tax Consolidation........................ 79
SECTION 10. Events of Default..................................... 80
10.01 Payments............................................... 80
10.02 Representations, etc. ................................. 80
10.03 Covenants.............................................. 80
10.04 Default Under Other Agreements......................... 80
10.05 Bankruptcy, etc. ...................................... 80
10.06 ERISA.................................................. 81
10.07 Security Documents..................................... 81
10.08 Guaranty............................................... 82
(iii)
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10.09 Judgments.............................................. 82
10.10 Change of Control...................................... 82
SECTION 11. Definitions and Accounting Terms...................... 83
11.01 Defined Terms.......................................... 83
SECTION 12. The Administrative Agent.............................. 112
12.01 Appointment............................................ 112
12.02 Nature of Duties....................................... 113
12.03 Lack of Reliance on the Administrative Agent........... 113
12.04 Certain Rights of the Administrative Agent............. 113
12.05 Reliance............................................... 114
12.06 Indemnification........................................ 114
12.07 The Administrative Agent in Its Individual Capacity.... 114
12.08 Holders................................................ 115
12.09 Resignation by the Administrative Agent................ 115
SECTION 13. Miscellaneous......................................... 115
13.01 Payment of Expenses, etc............................... 115
13.02 Right of Set-off....................................... 117
13.03 Notices................................................ 117
13.04 Benefit of Agreement................................... 117
13.05 No Waiver; Remedies Cumulative......................... 119
13.06 Payments Pro Rata...................................... 119
13.07 Calculations; Computations............................. 120
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL............................ 121
13.09 Counterparts........................................... 122
13.10 Effectiveness.......................................... 122
13.11 Headings Descriptive................................... 123
13.12 Amendment or Waiver; etc. ............................. 123
13.13 Survival............................................... 125
13.14 Domicile of Loans...................................... 125
13.15 Register............................................... 125
13.16 Confidentiality........................................ 126
SECTION 14. Guaranty.............................................. 126
14.01 The Guaranty........................................... 126
14.02 Bankruptcy............................................. 128
14.03 Nature of Liability.................................... 129
14.04 Independent Obligation................................. 129
14.05 Authorization.......................................... 129
(iv)
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14.06 Reliance............................................... 130
14.07 Subordination.......................................... 130
14.08 Waiver................................................. 131
ANNEX I Commitments
ANNEX II Bank Addresses
SCHEDULE 2.01 Existing Letters of Credit
SCHEDULE 5.10 Leases
SCHEDULE 5.11 Real Property
SCHEDULE 7.01 Corporate Status
SCHEDULE 7.04 Governmental Approvals
SCHEDULE 7.05 Financials
SCHEDULE 7.06 Litigation
SCHEDULE 7.07 True and Complete Disclosure
SCHEDULE 7.13 Properties
SCHEDULE 7.15 Subsidiaries
SCHEDULE 7.16 Compliance with Statutes
SCHEDULE 7.19 Environmental
SCHEDULE 7.20 Labor Relations
SCHEDULE 7.21 Patents, Licenses, Franchises and Formulas
SCHEDULE 7.22 Indebtedness
SCHEDULE 8.03 Insurance
SCHEDULE 9.01 Existing Liens
SCHEDULE 9.05 Investments
SCHEDULE 9.06 Transactions with Affiliates
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Tranche A Term Note
EXHIBIT B-2 Form of Tranche B Term Note
EXHIBIT B-3 Form of Revolving Note
EXHIBIT B-4 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of ▇▇▇▇▇▇▇▇, Kill & Olick, P.C., Special
Counsel to Holdings and the Borrower
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Intercompany Note
EXHIBIT H Form of Assignment and Assumption Agreement
EXHIBIT I-1 Form of Borrower Pledge Agreement
EXHIBIT I-2 Form of Holdings Pledge Agreement
EXHIBIT J Form of Security Agreement
(v)
EXHIBIT K Form of Mortgage
EXHIBIT L Form of Collateral Assignment of Leases
EXHIBIT M Form of Collateral Assignment of Location Leases
EXHIBIT N Form of Landlord Consent
(vi)
CREDIT AGREEMENT, dated as of January 8, 1997 among COINMACH LAUNDRY
CORPORATION, a Delaware corporation ("Holdings"), COINMACH CORPORATION, a
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Delaware corporation (the "Borrower"), the lending institutions from time to
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time party hereto (each, a "Bank" and collectively, the "Banks"), BANKERS TRUST
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COMPANY, as Administrative Agent, FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Syndication Agent, and ▇▇▇▇▇▇ COMMERCIAL PAPER, INC., as Documentation Agent.
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 11 are used herein as therein defined).
W I T N E S S E T H :
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WHEREAS, the Borrower will incur loans from the Banks, the proceeds of
which will be used to finance the Acquisition and to provide working capital
after the Acquisition;
WHEREAS, this Agreement and the loans incurred by the Borrower
hereunder are intended to replace any and all loans made and/or credit
facilities provided under the Existing Credit Agreement;
WHEREAS, contemporaneously with the funding of the initial Loans
hereunder, the Acquisition will take place;
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 The Commitments. (a) Subject to and upon the terms and
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conditions set forth herein, each Bank with a Tranche A Term Loan Commitment
("Tranche A Term Loan Banks") severally agrees to make on the Effective Date a
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term loan (each such term loan, a "Tranche A Term Loan" and, collectively, the
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"Tranche A Term Loans") to the Borrower, which Tranche A Term Loans (i) shall be
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made and initially maintained as a single Borrowing of Base Rate Loans (subject
to the option to convert such Tranche A Term Loans pursuant to Section 1.06);
provided that, except as otherwise specifically provided in Section 1.10(b), all
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Tranche A Term Loans
comprising the same Borrowing shall at all times be of the same Type, and (ii)
shall equal for each Bank, in initial aggregate principal amount, an amount
which equals the Tranche A Term Loan Commitment of such Bank on the Effective
Date (before giving effect to any reductions thereto on such date pursuant to
Section 3.03(a)). Once repaid, Tranche A Term Loans incurred hereunder may not
be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Tranche B Term Loan Commitment ("Tranche B Term Loan Banks")
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severally agrees to make on the Effective Date a term loan (each such term loan,
a "Tranche B Term Loan" and, collectively, the "Tranche B Term Loans") to the
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Borrower, which Tranche B Term Loans (i) shall be made and initially maintained
as a single Borrowing of Base Rate Loans (subject to the option to convert such
Tranche B Term Loans pursuant to Section 1.06); provided that, except as
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otherwise specifically provided in Section 1.10(b), all Tranche B Term Loans
comprising the same Borrowing shall at all times be of the same Type, and (ii)
shall equal for each Bank, in initial aggregate principal amount, an amount
which equals the Tranche B Term Loan Commitment of such Bank on the Effective
Date (before giving effect to any reductions thereto on such date pursuant to
Section 3.03(b)). Once repaid, Tranche B Term Loans incurred hereunder may not
be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment ("Revolving Loan Banks") severally
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agrees, at any time and from time to time on and after the Effective Date and
prior to the Revolving Loan Maturity Date, to make a revolving loan or revolving
loans (each, a "Revolving Loan" and, collectively, the "Revolving Loans") to the
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Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be
Base Rate Loans or Eurodollar Loans; provided that (A) except as otherwise
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specifically provided in Section 1.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type and (B) no Revolving Loans
maintained as Eurodollar Loans may be incurred prior to the earlier of (1) the
60th day after the Effective Date or (2) the Syndication Date, (ii) may be
repaid and reborrowed in accordance with the provisions hereof, (iii) shall not
exceed for any Bank at any time outstanding that aggregate principal amount
which, when added to the product of (x) such Bank's Adjusted Percentage and (y)
the aggregate amount of all Letter of Credit Outstandings plus all Swingline
Loans then outstanding (exclusive of Unpaid Drawings and Swingline Loans which
are repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time, equals the Revolving
Loan Commitment of such Bank at such time and (iv) shall not exceed for all
Banks at any time outstanding that aggregate principal amount which, when added
to the amount of all Swingline Loans then outstanding and all Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds
of, and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time the Total Revolving Loan Commitment then in
effect.
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(d) Subject to and upon the terms and conditions herein set forth,
BTCo agrees to make at any time and from time to time on and after the Effective
Date and prior to the Swingline Expiry Date, a loan or loans to the Borrower
(each, a "Swingline Loan" and, collectively, the "Swingline Loans"), which
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Swingline Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be
repaid and reborrowed in accordance with the provisions hereof, (iii) shall not
exceed in aggregate principal amount at any time outstanding, when combined with
the aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters
of Credit which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time, an
amount equal to the Total Revolving Loan Commitment then in effect and (iv)
shall not exceed in aggregate principal amount at any time outstanding the
Maximum Swingline Amount. BTCo shall not be obligated to make any Swingline
Loans at a time when a Bank Default exists unless BTCo has entered into
arrangements satisfactory to it and the Borrower to eliminate BTCo's risk with
respect to each Bank's (including any Defaulting Bank's) participation in such
Swingline Loans, including by cash collateralizing such Defaulting Bank's or
Banks' Percentage of the outstanding Swingline Loans. BTCo will not make a
Swingline Loan after it has received written notice from the Borrower or the
Required Banks stating that a Default or an Event of Default exists until such
time as BTCo shall have received a written notice of (i) rescission of such
notice from the party or parties originally delivering the same or (ii) a waiver
of such Default or Event of Default from the Required Banks.
(e) On any Business Day, BTCo may, in its sole discretion, give
notice to the Revolving Loan Banks and the Borrower that all outstanding
Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided
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that each such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 10.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section 10),
in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each
such Borrowing, a "Mandatory Borrowing") shall be made on the immediately
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succeeding Business Day by all Revolving Loan Banks pro rata based on each
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Bank's Percentage, and the proceeds thereof shall be applied directly to repay
BTCo for such outstanding Swingline Loans. Each Revolving Loan Bank hereby
irrevocably agrees to make Base Rate Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) that the amount of the Mandatory Borrowing may not comply
with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any
conditions specified in Section 6 are then satisfied, (iii) whether a Default or
an Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing and (v) any reduction in the Total Revolving Loan Commitment
after any such Swingline Loans were made. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation,
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as a result of the commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each Revolving Loan Bank (other than BTCo) hereby
agrees that it shall forthwith purchase from BTCo (without recourse or warranty)
such assignment of the outstanding Swingline Loans as shall be necessary to
cause the Revolving Loan Banks to share in such Swingline Loans ratably based
upon their respective Percentages; provided that all interest payable on the
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Swingline Loans shall be for the account of BTCo until the date the respective
assignments is purchased and, to the extent attributable to the purchased
assignment, shall be payable to the Bank purchasing same from and after such
date of purchase.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
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amount of each Borrowing of any Tranche of Term Loans shall not be less than
$5,000,000 and, if greater, shall be in an integral multiple of $500,000. The
aggregate principal amount of each Borrowing of Revolving Loans shall be not
less than $1,000,000 and, if greater, shall be in an integral multiple of
$100,000. More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than nine Borrowings of Eurodollar Loans. The
principal amount of each Borrowing of Swingline Loans shall not be less than
$250,000 and, if greater, shall be in an integral multiple of $50,000.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
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a Borrowing hereunder (excluding Borrowings of Swingline Loans and Revolving
Loans incurred pursuant to a Mandatory Borrowing), it shall give the
Administrative Agent at its Notice Office at least one Business Day's prior
written (or telephonic promptly confirmed in writing) notice of each Base Rate
Loan and at least three Business Days' prior written (or telephonic promptly
confirmed in writing) notice of each Eurodollar Loan to be made hereunder;
provided that any such notice shall be deemed to have been given on a certain
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day only if given before 12:00 Noon (New York time) on such day. Each such
written notice or written confirmation of telephonic notice (each, a "Notice of
Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in the form of Exhibit A,
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appropriately completed to specify the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, the date of such Borrowing (which shall
be a Business Day), whether the Loans being made pursuant to such Borrowing
shall constitute Tranche A Term Loans, Tranche B Term Loans or Revolving Loans
and whether, subject to the other terms and provisions hereof, the Loans being
made pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period
to be applicable thereto. The Administrative Agent shall promptly give each
Bank which is required to make Loans of the Tranche specified in the respective
Notice of Borrowing, notice of such proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters required by the immediately
preceding sentence to be specified in the Notice of Borrowing.
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(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give BTCo not later than 12:00 noon (New York time) on the
day such Swingline Loan is to be made, written notice (or telephonic notice
promptly confirmed in writing) of each Swingline Loan to be made hereunder.
Each such notice shall be irrevocable and shall specify in each case (x) the
date of such Borrowing (which shall be a Business Day) and (y) the aggregate
principal amount of the Swingline Loan to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(e), with the Borrower hereby irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section 1.01(e).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing of Loans, the
Administrative Agent or BTCo (in the case of Swingline Loans), as the case may
be, may act without liability upon the basis of telephonic notice of such
Borrowing, reasonably believed by the Administrative Agent or BTCo, as the case
may be, in good faith to be from an Authorized Officer of the Borrower prior to
receipt of written confirmation. In each such case, the Borrower hereby waives
the right to dispute the Administrative Agent's or BTCo's, as the case may be,
record of the terms of such telephonic notice of such Borrowing of Loans.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time)
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on the date specified in each Notice of Borrowing, each Bank with a Commitment
of the respective Tranche will make available its pro rata portion of each such
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Borrowing requested to be made on such date (or in the case of Swingline Loans,
BTCo shall make available the full amount thereof). All such amounts shall be
made available in Dollars and in immediately available funds at the Payment
Office of the Administrative Agent, and the Administrative Agent will make
available to the Borrower at the Payment Office the aggregate of the amounts so
made available by the Banks. Unless the Administrative Agent shall have been
notified by any Bank prior to the date of Borrowing that such Bank does not
intend to make available to the Administrative Agent such Bank's portion of any
Borrowing to be made on such date, the Administrative Agent may assume that such
Bank has made such amount available to the Administrative Agent on such date of
Borrowing and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefore, the Administrative Agent shall promptly notify the
Borrower and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover on
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demand from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Bank, at the overnight
Federal Funds Rate and (ii) if recovered from the Borrower, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the Borrower
may have against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, the Loans made by each Bank shall be evidenced (i) if Tranche A
Term Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
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conformity herewith (each, a "Tranche A Term Note" and, collectively, the
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"Tranche A Term Notes"), (ii) if Tranche B Term Loans, by a promissory note duly
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executed and delivered by the Borrower substantially in the form of Exhibit B-2
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with blanks appropriately completed in conformity herewith (each, a "Tranche B
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Term Note" and, collectively, the "Tranche B Term Notes"), (iii) if Revolving
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Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-3, with blanks appropriately completed in
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conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
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Notes") and (iv) if Swingline Loans, by a promissory note duly executed and
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delivered by the Borrower substantially in the form of Exhibit B-4, with blanks
appropriately completed in conformity herewith (the "Swingline Note").
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(b) The Tranche A Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Tranche A
Term Loan made by such Bank on the Effective Date and be payable in the
principal amount of Tranche A Term Loans evidenced thereby, (iv) mature on the
Tranche A Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayments as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The Tranche B Term Note issued to each Bank shall (i) be executed
by the Borrower, (ii) be payable to the order of such Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Tranche B
Term Loans made by such Bank on the Effective Date and be payable in the
principal amount of Tranche B Term Loans evidenced thereby, (iv) mature on the
Tranche B Term Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby,
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(vi) be subject to voluntary prepayments as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Bank and be payable in the principal amount of the
Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayments as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo and be dated the Effective Date,
(iii) be in a stated principal amount equal to the Maximum Swingline Amount and
be payable in the principal amount of the outstanding Swingline Loans evidenced
thereby, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be
subject to voluntary prepayments as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
-----------
any Business Day occurring on or after the earlier of (1) the 60th day after the
Effective Date or (2) the Syndication Date, all or a portion equal to at least
(x) in the case of a conversion of Term Loans, $5,000,000 (and, if greater, in
an integral multiple of $500,000) and (y) in the case of a conversion of
Revolving Loans, $1,000,000 (and, if greater, in an integral multiple of
$100,000), of the outstanding principal amount of Loans made pursuant to one or
more Borrowings (so long as of the same Tranche) of one or more Types of Loans
into a Borrowing (of the same Tranche) of another Type of Loan; provided that
--------
(i) except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than (x) in the
case of Term Loans, $5,000,000 and (y) in the case of Revolving Loans,
$1,000,000, (ii) Base Rate Loans may only be
-7-
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion, and (iii) no conversion pursuant to
this Section 1.06 shall result in a greater number of Eurodollar Borrowings than
is permitted under Section 1.02. Each such conversion shall be effected by the
Borrower by giving the Administrative Agent at its Notice Office prior to 12:00
Noon (New York time) at least three Business Days' prior notice (each, a "Notice
------
of Conversion") specifying the Loans to be so converted, the Borrowing(s)
-------------
pursuant to which such Loans were made and, if to be converted into Eurodollar
Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans; provided that the failure of the
--------
Administrative Agent to give any such notice shall not affect the rights or
obligations of the Borrower hereunder.
1.07 Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
-------------------
Tranche B Term Loans and Revolving Loans under this Agreement shall be incurred
from the Banks pro rata on the basis of their Tranche A Term Loan Commitments,
--- ----
Tranche B Term Loan Commitments or Revolving Loan Commitments, as the case may
be. It is understood that no Bank shall be responsible for any default by any
other Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect
--------
of the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Applicable Base Rate
Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable, at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Eurodollar
Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
of the respective Tranche
-8-
of Loans from time to time and (y) the rate which is 2% in excess of the rate
then borne by such Loans, in each case with such interest to be payable on
demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), upon conversion, at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the applicable Banks
thereof. Each such determination shall, absent manifest error, be final and
conclusive and binding on all parties hereto.
(f) All computations of interest hereunder shall be made in
accordance with Section 13.07(b).
1.09 Interest Periods. At the time it gives any Notice of Borrowing
----------------
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect, by giving the
Administrative Agent notice thereof, the interest period (each, an "Interest
--------
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
------
option of the Borrower, be a one, two, three or six-month period; provided that:
--------
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
-9-
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
-------- -------
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when a Default
or Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche
of Loans shall be selected which extends beyond the respective Maturity
Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, shall be selected
which extends beyond any date upon which a mandatory repayment of such
Tranche of Term Loans will be required to be made under Section 4.02(c) or
(d), as the case may be, if the aggregate principal amount of Tranche A
Term Loans or Tranche B Term Loans, as the case may be, which have Interest
Periods which will expire after such date will be in excess of the
aggregate principal amount of Tranche A Term Loans or Tranche B Term Loans,
as the case may be, then outstanding less the aggregate amount of such
required prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
--------------------------------
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any Change in Law since the date of this
-10-
Agreement, such as, for example, but not limited to: (A) a change in
Covered Taxes resulting from the payment to any Bank of the principal of or
interest such Eurodollar Loan or any other amounts payable hereunder, but
without duplication of any amounts payable in respect of Taxes pursuant to
Section 4.04(a), or (B) a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the extent
included in the computation of the Eurodollar Rate and/or (y) other
circumstances since the date of this Agreement affecting such Bank or the
interbank Eurodollar market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good faith
with any governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrower and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the Banks
that the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the basis for the calculation thereof, submitted to the Borrower
by such Bank in good faith shall, absent manifest error, be final and conclusive
and binding on all the parties hereto) and (z) in the case of clause (iii)
above, the Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law. Each of the Administrative Agent and each Bank agrees that if it gives
notice to the Borrower of any of the events described in clause (i) or (iii)
above, it shall promptly notify the Borrower and, in the case of any such Bank,
the Agent, if such event ceases to exist. If any such event described in clause
(iii) above ceases to exist as to a Bank, the obligations of such Bank to make
Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans on the
terms and conditions contained herein shall be reinstated.
-11-
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Administrative Agent telephonic notice (confirmed in
writing) on the same date that the Borrower was notified by the affected Bank
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' written notice to the
Administrative Agent, require the affected Bank to convert such Eurodollar Loan
into a Base Rate Loan; provided that, if more than one Bank is affected at any
--------
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If at any time after the Effective Date, any Bank determines that
the introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Bank or any corporation controlling such Bank
based on the existence of such Bank's Commitments hereunder or its obligations
hereunder, then the Borrower shall pay to such Bank, upon its written demand
therefor, such additional amounts as shall be required to compensate such Bank
or such other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. Such Bank's reasonable
good faith determination of compensation owing under this Section 1.10(c) shall,
absent manifest error, be final and conclusive and binding on all the parties
hereto. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
------------
written request (which request shall set forth the reason for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans but excluding any loss of anticipated profit) which
such Bank may sustain: (i) if for any reason (other than a default by such
Bank) a Borrowing of, or conversion from or into, Eurodollar Loans does not
occur on a date specified therefor in a Notice of Borrowing or Notice of
Conversion (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any repayment
made pursuant to Section 4.02 or as a result of an acceleration of the Loans
-12-
pursuant to Section 10) or conversion of any of its Eurodollar Loans occurs on a
date which is not the last day of an Interest Period with respect thereto; (iii)
if any prepayment of any of its Eurodollar Loans is not made on any date
specified in a notice of prepayment given by the Borrower; or (iv) as a
consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y) any
election made pursuant to Section 1.10(b). Calculation of all amounts payable
to a Bank under this Section 1.11 shall be made as though that Bank had actually
funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having maturity comparable to the relevant Interest Period and through the
transfer of such Eurodollar deposit from an offshore office of that Bank to a
domestic office of that Bank in the United States of America; provided, however,
-------- -------
that each Bank may fund each of its Eurodollar Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that on the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.05 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable good faith efforts
(subject to overall policy considerations of such Bank) to designate another
lending office for any Loans or Letters of Credit affected by such event;
provided that such designation is made on such terms that such Bank and its
--------
lending office suffer no significant economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of such Section. Nothing in this Section 1.12 shall affect or
postpone any of the obligations of the Borrower or the right of any Bank
provided in Sections 1.10, 2.05 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting
--------------------
Bank, (y) upon the occurrence of any event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or Section 4.04 with
respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the other Banks or
becoming incapable of making Eurodollar Loans, or (z) as provided in Section
13.12(b) in the case of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks, the Borrower shall
have the right, if no Default or Event of Default will exist immediately after
giving effect to the respective replacement, to either replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferee or Transferees, none
--------------
of whom shall constitute a Defaulting Bank at the time of such replacement
reasonably acceptable to the Administrative Agent (collectively, the
"Replacement Bank"); provided that (i) at the time of any replacement pursuant
----------------- --------
to this Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all
fees payable pursuant to said
-13-
Section 13.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding Loans of,
and in each case participations in Letters of Credit and Swingline Loans by, the
Replaced Bank and, in connection therewith, shall pay to (x) the Replaced Bank
in respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to all Unpaid Drawings and Swingline Loans that have
been funded by (and not reimbursed to) such Replaced Bank, together with all
then unpaid interest with respect thereto at such time and (C) an amount equal
to all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01 and (y) BTCo an amount equal to such Replaced Bank's Adjusted
Percentage (for this purpose, determined as if the adjustment described in
clause (y) of the immediately succeeding sentence had been made with respect to
such Replaced Bank) of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) or Swingline Loans to the extent such amount was not theretofore funded
by such Replaced Bank, and (ii) all obligations of the Borrower owing to the
Replaced Bank (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) above
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans hereunder, the Replaced Bank shall
cease to constitute a Bank hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.05, 4.04, 13.01 and 13.06) and the other Credit Documents, which shall
survive as to such Replaced Bank and (y) the Adjusted Percentages of the Banks
shall be automatically adjusted at such time to give effect to such replacement
(and to give effect to the replacement of a Defaulting Bank with one or more
Non-Defaulting Banks).
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Effective Date and
prior to the Revolving Loan Maturity Date, for the account of the Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Indebtedness of the
Borrower or any of its Subsidiaries that are Guarantors, an irrevocable standby
letter of credit, in a form customarily used by such Issuing Bank or in such
other form as has been approved by such Issuing Bank (each such standby letter
of credit, a "Letter of Credit") in support of such L/C Supportable
----------------
Indebtedness.
-14-
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $10,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans made by Non-Defaulting Banks and then outstanding,
an amount equal to the Adjusted Total Revolving Loan Commitment at such time,
(ii) each Letter of Credit shall by its terms terminate on or before, the date
which occurs 12 months after the date of the issuance thereof but not beyond the
30th day prior to Revolving Loan Maturity Date (although any such Standby Letter
of Credit may be extendable for successive periods of up to 12 months, but not
beyond the 30th day prior to Revolving Loan Maturity Date), on terms acceptable
to the Issuing Bank thereof) and (iii) each Letter of Credit shall be
denominated in Dollars.
2.02 Letter of Credit Requests. (a) Whenever the Borrower desires
-------------------------
that a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and the respective Issuing Bank at least two Business Days'
(or such shorter period as is acceptable to the respective Issuing Bank) written
notice thereof. Each notice shall be in the form of Exhibit C (each, a "Letter
------
of Credit Request").
-----------------
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(b). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions specified
in Sections 5 or 6 are not then satisfied, or that the issuance of such Letter
of Credit would violate Section 2.01(b), then such Issuing Bank shall issue the
requested Letter of Credit for the account of the Borrower in accordance with
such Issuing Bank's usual and customary practices. Upon its issuance of any
Letter of Credit or any amendment thereto, such Issuing Bank shall promptly
notify each Bank of such issuance or amendment, which notice, shall be
accompanied by a copy of the amendment or Letter of Credit actually issued.
2.03 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be
deemed to have sold and transferred to each Bank with a Revolving Loan
Commitment, other than a Defaulting Bank or such Issuing Bank (each such Bank,
in its capacity under this Section 2.03, a "Participant"), and each such
-----------
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from such Issuing Bank, without recourse or warranty, an undivided
interest and participation, to the extent of such Participant's Adjusted
Percentage, in such Letter of Credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to
Section 1.13 or 13.04 or as a result of a Bank Default, it is hereby agreed
that, with
-15-
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall be
an automatic adjustment to the participations pursuant to this Section 2.03 to
reflect the new Adjusted Percentages of the assignor and assignee Bank or of all
Banks with Revolving Loan Commitments (other than Defaulting Banks), as the case
may be.
(b) In determining whether to pay under any Letter of Credit, such
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by any Issuing Bank under or in connection with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Bank any resulting liability to the Borrower or any
Bank.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Issuing Bank pursuant to Section 2.04(a), such Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Participant, of such
failure, and each Participant shall promptly and unconditionally pay to such
Issuing Bank the amount of such Participant's Adjusted Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Administrative
Agent so notifies, prior to 11:00 A.M. (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to such Issuing Bank in Dollars such
Participant's Adjusted Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its Adjusted Percentage of the amount of such payment available to such
Issuing Bank, such Participant agrees to pay to such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Bank at the overnight Federal
Funds Rate. The failure of any Participant to make available to such Issuing
Bank its Adjusted Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Bank its Adjusted Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its Adjusted Percentage thereof, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such
-16-
reimbursement obligation and interest thereon accruing after the purchase of the
respective participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated herein
or any unrelated transactions (including any underlying transaction between
the Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default unless the
Issuing Bank has received written notice from the Borrower or the Required
Banks stating that a Default or an Event of Default exists prior to the
issuance of a Letter of Credit.
2.04 Agreement to Repay Letter of Credit Payments. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by it under any Letter of Credit (each such
amount, so paid until reimbursed, an "Unpaid Drawing"), no later than one
--------------
Business Day after the date of such payment or disbursement, with interest on
the amount so paid or disbursed by such Issuing Bank, to the extent not
reimbursed prior to 12:00 Noon (New York time) on the date of such payment or
disbursement, from and including the date paid
-17-
or disbursed to but excluding the date such Issuing Bank was reimbursed by the
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Base Rate Loans; provided,
--------
however, to the extent such amounts are not reimbursed prior to 12:00 Noon (New
-------
York time) on the third Business Day following such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by such
Issuing Bank (and until reimbursed by the Borrower) at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Base Rate
Margin plus 2%, in each such case, with interest to be payable on demand. The
respective Issuing Bank shall give the Borrower prompt notice of each Drawing
under any Letter of Credit; provided that the failure to give any such notice
--------
shall in no way affect, impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.04 to
reimburse the respective Issuing Bank with respect to drawings on Letters of
Credit (each, a "Drawing") (including, in each case, interest thereon) shall be
-------
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrower may have or
have had against any Bank (including in its capacity as issuer of the Letter of
Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Bank's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to the Borrower.
2.05 Increased Costs. If at any time after the Effective Date, any
---------------
Change in Law by any Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Issuing Bank or any Participant
with any request or directive by any such authority (whether or not having the
force of law), or any change in generally acceptable accounting principles,
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by any Issuing
Bank or participated in by any Participant, or (ii) impose on any Issuing Bank
or any Participant any other conditions relating, directly or indirectly, to
this Agreement or any Letter of Credit; and the result of any of the foregoing
is to increase the cost to any Issuing Bank or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by any Issuing Bank or any Participant hereunder
or reduce the rate of return on its capital with respect to Letters of Credit,
but without duplication of any amounts payable in respect of taxes pursuant to
Section 4.04(a), then, upon demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Administrative Agent), the
-18-
Borrower shall pay to such Issuing Bank or such Participant such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. Any Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.05, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Issuing Bank or such Participant
(a copy of which certificate shall be sent by such Issuing Bank or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuing Bank or such Participant. The certificate required to
be delivered pursuant to this Section 2.05 shall, if delivered in good faith and
absent manifest error, be final and conclusive and binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
-----------------------------------------------------
3.01 Fees. (a) The Borrower agrees to pay the Administrative Agent
----
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
---------------------
Effective Date to and including the Revolving Loan Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate for each day equal to 1/2 of 1% per annum on the daily
Unutilized Revolving Loan Commitment of such Non-Defaulting Bank; provided that
--------
the Commitment Commission shall be computed at a rate equal to 3/8 of 1% per
annum for each day on which (i) no Default or Event of Default exists and (ii)
the Leverage Ratio of Holdings is less than 3.0 to 1.0. Accrued Commitment
Commission shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the Revolving Loan Maturity Date or such earlier date upon
which the Total Revolving Loan Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment (based
on their respective Adjusted Percentages) a fee in respect of each Letter of
Credit issued hereunder (the "Letter of Credit Fee"), for the period from and
--------------------
including the date of issuance of such Letter of Credit to and including the
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Eurodollar Loans (other than Eurodollar Loans constituting
Tranche B Loans) as in effect from time to time on the daily Stated Amount of
such Letters of Credit. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and upon the first day on or
after the termination of the Total Revolving Loan Commitment upon which no
Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank, for
its own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee") for the period from and including the date
----------
of issuance of
-19-
such Letter of Credit to and including the termination of such Letter of Credit,
computed at a rate equal to 1/4 of 1% per annum of the daily Stated Amount of
such Letter of Credit; provided that in no event shall the annual Facing Fee
--------
with respect to each Letter of Credit be less than $500. Accrued Facing Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
on the date upon which the Total Revolving Loan Commitment has been terminated
and such Letter of Credit has been terminated in accordance with its terms.
(d) The Borrower shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amounts as shall at the time of such
event be the administrative charge and the reasonable expenses which the
respective Issuing Bank is generally imposing in connection with such occurrence
with respect to letters of credit.
(e) The Borrower shall pay to each of the Agents, for their own
respective accounts, such other fees as have been agreed to in writing by the
Borrower and such Agent, in each case, when and as due.
(f) All computations of fees hereunder shall be made in accordance
with Section 13.07(b).
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least two Business Days' prior notice to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part, in integral multiples of $1,000,000 in the case
of partial reductions to the Total Unutilized Revolving Loan Commitment;
provided that (i) each such reduction shall apply proportionately to permanently
--------
reduce the Revolving Loan Commitment of each Bank with such a Commitment and
(ii) the reduction to the Total Unutilized Revolving Loan Commitment shall in no
case be in an amount which would cause the Revolving Loan Commitment of any Bank
to be reduced (as required by preceding clause (i)) by an amount which exceeds
the Unutilized Revolving Loan Commitment of such Bank as in effect immediately
before giving effect to such reduction.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, and subject to obtaining the consents required by Section
13.12(b), the Borrower may, upon five Business Days' written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks) terminate all of the Revolving
Loan Commitment of such Bank so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts, owing to such Bank (other than
amounts owing in respect of either Tranche of Loans maintained by
-20-
such Bank, if such Tranche of Loans are not being repaid pursuant to Section
13.12(b)) are repaid concurrently with the effectiveness of such termination (at
which time Schedule I shall be deemed modified to reflect such changed amounts),
and at such time, unless the respective Bank continues to have outstanding Loans
and/or commitments hereunder, such Bank shall no longer constitute a "Bank" for
purposes of this Agreement, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05,
4.04, 13.01 and 13.06) and the other Credit Documents, which shall survive as to
such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) In addition to any
----------------------------------
other mandatory commitment reductions pursuant to this Section 3.03, the Total
Tranche A Term Loan Commitment (and the Tranche A Term Loan Commitment of each
Bank) shall (i) terminate in its entirety on the Effective Date (after giving
effect to the making of the Tranche A Term Loans on such date) and (ii) prior to
the termination of the Total Tranche A Term Loan Commitment as provided in
clause (i) above, be reduced from time to time to the extent required by Section
4.02.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche B Term Loan Commitment (and the Tranche
B Term Loan Commitment of each Bank) shall (i) terminate in its entirety on the
Effective Date (after giving effect to the making of the Tranche B Term Loans on
such date) and (ii) prior to the termination of the Total Tranche B Term Loan
Commitment as provided in clause (i) above, be reduced from time to time to the
extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety on the Revolving
Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date after the Effective Date upon which a
mandatory prepayment of Term Loans pursuant to Section 4.02(g) is required (and
exceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if Term Loans were then outstanding, the Total Revolving
Loan Commitment shall be permanently reduced by the amount, if any, by which the
amount required to be applied pursuant to said Section (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of Term Loans then outstanding.
(e) Each reduction to the Total Tranche A Term Loan Commitment, the
Total Tranche B Term Loan Commitment and the Total Revolving Loan Commitment
pursuant to this Section 3.03 (or pursuant to Section 4.02) shall be applied
proportionately to reduce the Tranche A Term Loan Commitment, the Tranche B Term
-21-
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Bank with such a Commitment.
(f) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Swingline Commitment shall terminate in its entirety
on the Swingline Expiry Date.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Administrative Agent prior to 12:00 Noon (New York time) at its
Notice Office (x) at least one Business Day prior to the date that a prepayment
of Base Rate Loans or Swingline Loans is to be made prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, whether Term Loans, Revolving Loans or Swingline Loans shall
be prepaid, the amount of such prepayment and the Types of Loans to be prepaid
and, in the case of Eurodollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice, except in the case of Swingline Loans, the
Administrative Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least (x) $1,000,000
(or, if less, the full amount of such outstanding Loans) in the case of Term
Loans, (y) $500,000 (or, if less, the full amount of such outstanding Loans) in
the case of Revolving Loans or (z) $100,000 (or, if less, the full amount of
Swingline Loans then outstanding) in the case of Swingline Loans; provided that
--------
if any partial prepayment of Eurodollar Loans made pursuant to any Borrowing
shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to
an amount less than (1) in the case of Term Loans, $5,000,000 and (2) in the
case of Revolving Loans, $1,000,000, then such Borrowing may not be continued as
a Borrowing of Eurodollar Loans and any election of an Interest Period with
respect thereto given by the Borrower shall have no force or effect; (iii)
prepayments of Eurodollar Loans made pursuant to this Section 4.01 on any day
other than the last day of an Interest Period applicable thereto shall be
accompanied by the amounts required under Section 1.11; (iv) each prepayment in
respect of any Loans made pursuant to a Borrowing shall, except as set forth
below, be applied pro rata among such Loans; (v) in the event of certain
--- ----
refusals by a Bank as provided in Section 13.12(b) to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks, the Borrower may, upon
five (5) Business Days' written notice to the Administrative Agent at its Notice
Office (which notice, except in the case of Swingline Loans, the Administrative
Agent shall promptly transmit to each of the Banks) repay all Loans, together
with accrued and unpaid interest, Fees, and other amounts owing to such Bank (or
owing to such Bank with respect to each Tranche
-22-
which gave rise to the need to obtain such Bank's individual consent) in
accordance with said Section 13.12(b) so long as (A) in the case of the
repayment of Revolving Loans for any Bank pursuant to this clause (v) the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment, and (B) the consents required by Section 13.12(b) in connection with
the repayment pursuant to this clause (v) have been obtained; and (vi) each
voluntary prepayment of Term Loans pursuant to this Section 4.01, except
pursuant to preceding clause (v), shall be applied to the Tranche A Term Loans
and the Tranche B Term Loans, on a pro rata basis (based upon the then
--- ----
outstanding principal amount of Tranche A Term Loans and Tranche B Term Loans);
provided that at the Borrower's election (and with the consent of the
--------
Administrative Agent, unless the Administrative Agent is the Defaulting Bank) in
connection with any prepayment of Revolving Loans pursuant to this Section 4.01,
such prepayment shall not be applied to any Revolving Loan of a Defaulting Bank.
Each prepayment of principal of Tranche A Term Loans and Tranche B Term Loans
pursuant to this Section 4.01 shall be applied to reduce, in order of maturity
for Scheduled Repayments, the next succeeding four remaining Scheduled
Repayments of each such Tranche of Term Loans and thereafter, to the then
remaining Scheduled Repayments of each such Tranche of Term Loans pro rata based
--- ----
upon the then remaining principal amount of each Scheduled Repayment.
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, repayments of either Tranche of Term Loans pursuant to clause (v) of
the first sentence of Section 4.01 shall only apply to reduce the then remaining
Scheduled Repayments of such Tranche to the extent the Term Loans so repaid are
not replaced pursuant to Section 13.12(b), with any such reductions to reduce
the then remaining Scheduled Repayments in the manner set forth in the
immediately preceding sentence.
4.02 Mandatory Repayments and Commitment Reductions. (a) On any day
----------------------------------------------
on which the sum of (i) the aggregate outstanding principal amount of the
Revolving Loans and Swingline Loans (after giving effect to all other repayments
thereof on such date) made by Non-Defaulting Banks plus (ii) the Letter of
Credit Outstanding as then in effect exceeds the Adjusted Total Revolving Loan
Commitment as then in effect, the Borrower shall prepay on such date the
principal of Swingline Loans, and if no Swingline Loans are or remain
outstanding, Revolving Loans of Non-Defaulting Banks in an amount equal to such
excess. If, after giving effect to the prepayment of all outstanding Swingline
Loans and Revolving Loans of Non-Defaulting Banks, the aggregate amount of the
Letter of Credit Outstandings exceeds the Adjusted Total Revolving Loan
Commitment as then in effect, the Borrower shall pay to the Administrative Agent
at the Payment Office on such date an amount of cash or Cash Equivalents equal
to the amount of such excess (up to a maximum amount equal to the Letter of
Credit Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the Borrower to Non-Defaulting Banks hereunder
in a cash collateral account to be established by the Administrative Agent.
-23-
(b) On any day on which the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall upon prior written notice
from such Defaulting Bank prepay principal of Revolving Loans of such Defaulting
Bank in an amount equal to such excess.
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(j), a "Tranche A Scheduled Repayment," and each such date, a "Tranche A
----------------------------- ---------
Scheduled Repayment Date"):
------------------------
Tranche A Scheduled Repayment Date Amount
---------------------------------- ------
Quarterly Payment Date in March, 1997 $750,000
Quarterly Payment Date in June, 1997 $750,000
Quarterly Payment Date in Sept., 1997 $750,000
Quarterly Payment Date in Dec., 1997 $750,000
Quarterly Payment Date in March, 1998 $1,000,000
Quarterly Payment Date in June, 1998 $1,000,000
Quarterly Payment Date in Sept., 1998 $1,000,000
Quarterly Payment Date in Dec., 1998 $1,000,000
Quarterly Payment Date in March, 1999 $1,250,000
Quarterly Payment Date in June, 1999 $1,250,000
Quarterly Payment Date in Sept., 1999 $1,250,000
Quarterly Payment Date in Dec., 1999 $1,250,000
Quarterly Payment Date in March, 2000 $1,250,000
Quarterly Payment Date in June, 2000 $1,250,000
Quarterly Payment Date in Sept., 2000 $1,250,000
Quarterly Payment Date in Dec., 2000 $1,250,000
Quarterly Payment Date in March, 2001 $1,250,000
Quarterly Payment Date in June, 2001 $1,250,000
Quarterly Payment Date in Sept., 2001 $1,250,000
Quarterly Payment Date in Dec., 2001 $1,250,000
Quarterly Payment Date in March, 2002 $2,000,000
Quarterly Payment Date in June, 2002 $2,000,000
Quarterly Payment Date in Sept., 2002 $2,000,000
Quarterly Payment Date in Dec., 2002 $2,000,000
-24-
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Tranche B Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(j), a "Tranche B Term Loan Scheduled Repayment," and each such date, a
---------------------------------------
"Tranche B Scheduled Repayment Date"):
-----------------------------------
Tranche B Scheduled Repayment Date Amount
---------------------------------- ------
Semi-Annual Payment Date in June, 1997 $500,000
Semi-Annual Payment Date in Dec., 1997 $500,000
Semi-Annual Payment Date in June, 1998 $500,000
Semi-Annual Payment Date in Dec., 1998 $500,000
Semi-Annual Payment Date in June, 1999 $500,000
Semi-Annual Payment Date in Dec., 1999 $500,000
Semi-Annual Payment Date in June, 2000 $500,000
Semi-Annual Payment Date in Dec., 2000 $500,000
Semi-Annual Payment Date in June, 2001 $500,000
Semi-Annual Payment Date in Dec., 2001 $500,000
Semi-Annual Payment Date in June, 2002 $500,000
Semi-Annual Payment Date in Dec., 2002 $500,000
Semi-Annual Payment Date in June, 2003 $31,333,333
Semi-Annual Payment Date in Dec., 2003 $31,333,333
Semi-Annual Payment Date in June, 2004 $31,333,334
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives any cash proceeds from
any sale or issuance of its equity (including preferred stock) (other than (i)
proceeds received from the issuance of Holdings Common Stock on or prior to the
Effective Date, (ii) proceeds, in an amount not to exceed $15,000,000 (less any
amount of Indebtedness provided by a Strategic Investor excluded from mandatory
repayments pursuant to the proviso of 4.02(f)), received from any sale or
issuance by Holdings of equity to a Strategic Investor and (iii) proceeds
received from the issuance of Common Stock of Holdings and/or any of its
Subsidiaries to the extent such proceeds are used to (I) promptly finance all or
a portion of the purchase price and costs related to Permitted
-25-
Acquisitions effected in accordance with the requirements of Section 9.02, (II)
promptly repay the CLC Notes, (III) promptly repay the 12 3/4% Notes or (IV)
redeem or repurchase within 120 days of receipt of such proceeds by Holdings up
to an aggregate of 35% of the 11 3/4% Notes at a price not to exceed the
redemption price set forth in the indenture under which such 11 3/4% Notes were
issued as in effect on the Effective Date) an amount equal to 50% of the cash
proceeds of the respective sale or issuance (net of underwriting discounts and
commissions and other direct costs associated therewith including, without
limitation, legal and other professional fees and expenses) shall be applied as
a mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Section 4.02(j) and (k).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives any proceeds from any
incurrence by Holdings or any of its Subsidiaries of Indebtedness for borrowed
money (other than Indebtedness to the extent such proceeds thereof are used to
(I) finance Permitted Acquisitions effected in accordance with the requirements
of Section 9.02, (II) repay the CLC Notes, or (III) repay the 12 3/4% Notes), an
amount equal to 50% of the cash proceeds (net of underwriting discounts and
commissions and other costs associated therewith including, without limitation,
legal and other professional fees and expenses) of the respective incurrence of
Indebtedness shall be applied as a mandatory repayment of principal of
outstanding Term Loans in accordance with the requirements of Section 4.02(j)
and (k); provided, however, if (A) the Indebtedness so incurred is subordinated
-------- -------
to the Senior Bank Financing on terms satisfactory to the Agents and no Default
or Event of Default exists or is continuing, (B) the subordinated Indebtedness
so issued matures after September 30, 2004, (C) the amortization requirements of
such subordinated Indebtedness are on terms satisfactory to the Agents and (D)
such subordinated Indebtedness is provided by a Strategic Investor, then the
proceeds of such subordinated Indebtedness in excess of an aggregate of
$15,000,000 (less any amount of equity from a Strategic Investor excluded from
mandatory repayments pursuant to Section 4.02(e)(ii)) shall be applied as a
mandatory repayment of outstanding Term Loans in accordance with the
requirements of Section 4.02(j) and (k).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which Holdings or any of its Subsidiaries receives proceeds from any sale
of assets (including capital stock and securities held thereby, but excluding
(i) sales or transfers of inventory or equipment in the ordinary course of
business (including, without limitation, sales or transfers of inventory or
equipment to Subsidiaries), (ii) the sale or other disposition of obsolete
equipment or inventory, (iii) the sale of overdue receivables in the ordinary
course of business, and (iv) sales of assets between the Borrower and its
Subsidiaries that are Guarantors and/or sales of assets between Subsidiaries of
the Borrower that are Guarantors, in each case to the extent permitted by
Section 9.02, an amount equal to 100% of the Net Sale Proceeds therefrom shall
be
-26-
applied as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Section 4.02(j) and (k); provided that, in
--------
addition to the exceptions set forth above, so long as no Default or Event of
Default then exists, up to an aggregate of $7,500,000 of Net Sale Proceeds in
any fiscal year shall not be required to be so applied on the date of receipt
thereof to the extent that the Borrower has delivered a certificate to the
Administrative Agent within 15 days following such date stating that such Net
Sale Proceeds shall be reinvested or shall be committed to be reinvested in the
Business within 180 days following such date (and to the extent the asset sold
constituted Collateral, the assets in which such Net Sales Proceeds are
reinvested shall be pledged as Collateral pursuant to the appropriate Security
Documents); provided further, that if all or any portion of such Net Sale
-------- -------
Proceeds not required to be applied to the repayment of Term Loans pursuant to
the preceding proviso are either (a) not so used or committed to be so used
within 180 days after the date of receipt of such Net Sale Proceeds or (b) if
committed to be so used within 180 days after the date of receipt of such Net
Sale Proceeds and not so used within 270 days after the date of receipt of such
Net Sale Proceeds, then, in either such case, such remaining portion not used or
committed to be used in the case of preceding clause (a) and not used in the
case of preceding clause (b) shall be applied on the date which is 180 days
after the date of receipt of such Net Sale Proceeds in the case of clause (a)
above or the date occurring 270 days after the date of receipt of such Net Sale
Proceeds in the case of clause (b) above as a mandatory repayment of principal
of outstanding Term Loans in accordance with the requirements of Sections
4.02(j) and (k); provided further, that, in addition to the exceptions set forth
-------- -------
above, so long as no Default or Event of Default then exists, up to an aggregate
of 50% of Net Sale Proceeds of the non-route laundry business shall not be
required to be so applied on the date of receipt thereof to the extent that the
Borrower has delivered a certificate to the Administrative Agent within 15 days
following such date stating that such Net Sale Proceeds shall be reinvested or
shall be committed to be reinvested in the Business within 180 days following
such date (and to the extent the assets sold constituted Collateral, the assets
in which such Net Sales Proceeds are reinvested shall be pledged as Collateral
pursuant to the appropriate Security Documents); provided further, that if all
-------- -------
or any portion of such Net Sale Proceeds not required to be applied to the
repayment of Term Loans pursuant to the preceding proviso are either (a) not so
used or committed to be so used within 180 days after the date of receipt of
such Net Sale Proceeds or (b) if committed to be so used within 180 days after
the date of receipt of such Net Sale Proceeds and not so used within 270 days
after the date of receipt of such Net Sale Proceeds, then, in either such case,
such remaining portion not used or committed to be used in the case of preceding
clause (a) and not used in the case of preceding clause (b) shall be applied on
the date which is 180 days after the date of receipt of such Net Sale Proceeds
in the case of clause (a) above or the date occurring 270 days after the date of
receipt of such Net Sale Proceeds in the case of clause (b) above as a mandatory
repayment of principal of outstanding Term Loans in accordance with the
requirements of Sections 4.02(j) and (k).
-27-
(h) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount, if positive, equal to
the applicable Excess Cash Flow Percentage of Excess Cash Flow for the relevant
Excess Cash Payment Period shall be applied as a mandatory repayment of
principal of outstanding Term Loans in accordance with the requirements of
Sections 4.02(j) and (k).
(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date
after the Effective Date on which Holdings or any of its Subsidiaries receives
any proceeds from any Recovery Event, an amount equal to 100% of the net
proceeds of such Recovery Event (net of reasonable costs and taxes incurred in
connection with such Recovery Event including any amounts paid by the Borrower
in connection with self-insurance payments or obligations) shall be applied as a
mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Sections 4.02(j) and (k); provided that (x) so long as no
--------
Default or Event of Default then exists and such proceeds do not exceed
$5,000,000, such proceeds shall not be required to be so applied on such date to
the extent that the Borrower has delivered a certificate to the Administrative
Agent on or prior to such date stating that such proceeds shall be used to
replace or restore any properties or assets in respect of which such proceeds
were paid within 180 days following the date of such Recovery Event (which
certificate shall set forth the estimates of the proceeds to be so expended) and
(y) so long as no Default or Event of Default then exists and to the extent that
(a) the amount of such proceeds exceeds $5,000,000, (b) the amount of such
proceeds is at least equal to 90% of the cost of replacement or restoration of
the properties or assets in respect of which such proceeds were paid as
determined by the Borrower and as supported by such estimates or bids from
contractors or subcontractors or such other supporting information as the
Administrative Agent may reasonably request, and (c) the Borrower has delivered
to the Administrative Agent a certificate on or prior to the date the
application would otherwise be required pursuant to this Section 4.02(i) in the
form described in clause (x) above and also certifying its determination as
required by preceding clause (b), then the entire amount and not just the
portion in excess of $5,000,000 shall be deposited with the Administrative Agent
pursuant to a cash collateral arrangement satisfactory to the Administrative
Agent whereby such proceeds shall be disbursed to the Borrower from time to time
as needed to pay actual costs incurred by it in connection with the replacement
or restoration of the respective properties or assets (pursuant to such
certification requirements as may be established by the Administrative Agent);
provided further, that at any time while an Event of Default has occurred and is
-------- -------
continuing (other than an Event of Default existing solely as a result of the
violation of any or all of Sections 9.08, 9.09 and 9.10, but in each case only
if, and to the extent, that the violation of said covenant has occurred as a
result of the underlying event giving rise to the Recovery Event), the Required
Banks may direct the Administrative Agent (in which case the Administrative
Agent shall, and is hereby authorized by the Borrower to, follow said
directions) to apply any or all proceeds then on deposit in such collateral
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account to the repayment of Obligations hereunder in the same manner as proceeds
would be applied pursuant to the Borrower Pledge Agreement; and provided
--------
further, that if all or any portion of such proceeds not required to be applied
-------
to the repayment of Term Loans pursuant to the second preceding proviso (whether
pursuant to clause (x) or (y) thereof) are either (A) not so used or committed
to be so used within 180 days after the date of the respective Recovery Event or
(B) if committed to be used within 180 days after the date of receipt of such
proceeds and not so used within 270 days after the date of the respective
Recovery Event, then, in either such case, such remaining portion not used or
committed to be used in the case of preceding clause (A) and not used in the
case of preceding clause (B) shall be applied on the date which is 270 days
after the date of the receipt of proceeds from the respective Recovery Event in
the case of clause (A) above or the date occurring 270 days after the date of
the receipt of proceeds from the respective Recovery Event in the case of clause
(B) above as a mandatory repayment of principal of outstanding Term Loans in
accordance with the requirements of Sections 4.02(j) and (k).
(j) Each amount required to be applied to Term Loans (or to the Total
Term Loan Commitment) pursuant to Sections 4.02(e), (f), (g), (h) and (i) shall
be applied pro rata to each Tranche of Term Loans (with each Tranche of Term
--- ----
Loans to be allocated that percentage of the amount to be applied as is equal to
a fraction (expressed as a percentage) the numerator of which is the then
outstanding principal amount of such Tranche of Term Loans and the denominator
of which is equal to the then outstanding principal amount of all Term Loans).
Any amount required to be applied to either Tranche of Term Loans pursuant to
Sections 4.02(e), (f), (g), (h) and (i) shall be applied to repay the
outstanding principal amount of Term Loans of the respective Tranche then
outstanding and, if no Term Loans remain outstanding, all such amounts shall be
applied to repay outstanding borrowings under the Revolving Loan. The amount of
each principal repayment of Term Loans (and the amount of each reduction to the
Term Loan Commitments) made as required by Section 4.02(e), (f), (g), (h) and
(i) shall be applied to reduce the then remaining Scheduled Repayments of the
respective Tranche pro rata based upon the then remaining principal amount of
--- ----
each Scheduled Repayment.
(k) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made;
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02
--------
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans of the respective Tranche with Interest Periods ending on
such date of required repayment and all Base Rate Loans of the respective
Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans made
pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans
made pursuant to such Borrowing to an amount less than (x) in the case of Term
Loans, $5,000,000 and (y) in the case of Revolving Loans,
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$1,000,000, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
--- ----
Loans. In the absence of a designation by the Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its sole discretion.
(l) Notwithstanding anything to the contrary contained above in this
Section 4.02, with respect to any mandatory repayments of Tranche B Term Loans
(excluding Tranche B Scheduled Repayments) otherwise required above pursuant to
this Section 4.02, if on or prior to the date the respective mandatory repayment
is otherwise required to be made pursuant to this Section 4.02, the Borrower has
given the Administrative Agent written notification that the Borrower has
elected to give each Bank with a Tranche B Term Loan the right to waive such
Bank's rights to receive such repayment (the "Waivable Mandatory Repayment"),
----------------------------
the Administrative Agent shall notify such Banks of such receipt and the amount
of the repayment to be applied to each such Bank's Tranche B Term Loan. In the
event any such Bank with a Tranche B Term Loan desires to waive such Bank's
right to receive any such Waivable Mandatory Repayment in whole or in part,
such Bank shall so advise the Administrative Agent no later than 5:00 P.M. (New
York time) five Business Days after the date of such notice from the
Administrative Agent which notice shall also include the amount the Bank desires
to receive. If the Bank does not reply to the Administrative Agent within such
five Business Day period, it will be deemed acceptance of the total payment. If
the Bank does not specify an amount it wishes to receive, it will be deemed
acceptance of 100% of the total payment. In the event that any such Bank waives
such Bank's right to any such Waivable Mandatory Repayment, the Administrative
Agent shall apply 100% of the amount so waived by such Banks to (x) prepay the
Tranche A Term Loans in accordance with Sections 4.02(j) and (k). If the
Borrower elects to give the notice described above in Section 4.02(l) with
respect to any mandatory repayment, the amount of the respective Waivable
Mandatory Repayment shall be deposited with the Administrative Agent on the date
the mandatory repayment would otherwise be required pursuant to the relevant
provisions of this Section 4.02 (and held by the Administrative Agent as cash
collateral for the Tranche B Term Loans and, but only to the extent Banks with
Tranche B Term Loans waive their right to receive their share of the Waivable
Mandatory Repayment, for the benefit of the Tranche A Term Loans in a cash
collateral account which shall permit the investment thereof in Cash Equivalents
reasonably satisfactory to the Administrative Agent until the proceeds are
applied to the secured obligations) and the respective mandatory repayment shall
not be required to be made until the seventh Business Day occurring after the
date the respective mandatory repayment would otherwise have been required to be
made. Notwithstanding anything to the contrary contained above, if one or more
Banks waives its right to receive all or any part of any Waivable Mandatory
Repayment, but less than all the Banks holding Tranche B Term Loans waive in
full their right to receive 100% of the total payment otherwise required with
respect to the Tranche B Term Loans, then
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of the amount actually applied to the repayment of Tranche B Term Loans of Banks
which have waived in part, but not in full, their right to receive 100% of such
repayment, such amount shall be applied to each then outstanding Borrowing of
Tranche B Term Loans on a pro rata basis (so that each Bank holding Tranche B
Term Loans shall, after giving effect to the application of the respective
repayment, maintain the same percentage (as determined for such Bank, but not
the same percentage as the other Banks hold and not the same percentage held by
such Bank prior to repayment) of each Borrowing of Tranche B Term Loans, which
remains outstanding after giving effect to such application).
(m) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all other then outstanding Loans shall be repaid in full on the
respective Maturity Date for such Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
not later than 1:00 P.M. (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 Net Payments. (a) Except as provided in this Section 4.04, all
------------
payments by the Borrower to each Bank or any Agent under this Agreement and any
Note shall be made free and clear of, and without deduction or withholding for,
any Covered Taxes levied or imposed by any Governmental Authority with respect
to such payments. In addition, the Borrower agrees to pay any current or future
stamp, intangible or documentary taxes or any other excise or property taxes,
charges or similar levies (including mortgage recording taxes and similar fees
but not including any Excluded Taxes) that arise from the execution, delivery or
registration of or otherwise with respect to (other than as to any payments,
Taxes on which shall be governed by the preceding sentence) this Agreement, or
any other document in connection with this Agreement or any Note (all such
taxes, charges and levies are hereinafter referred to as, collectively, "Other
-----
Taxes").
-----
(b) If the Borrower shall be required by law to deduct or withhold any
Covered Taxes from or in respect of any sum payable hereunder to any Bank or any
Agent, then except as provided in this Section 4.04: (i) the sum payable shall
be increased as necessary so that after making all such required deductions and
withholdings (including deductions and withholdings applicable to additional
sums payable under this Section 4.04) such Bank or such Agent, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions or
-31-
withholdings been made; (ii) the Borrower shall make such deductions and
withholdings; and (iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law. Within 30 days after the date of any payment by the Borrower of
Covered Taxes or Other Taxes, the Borrower shall furnish to the Administrative
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment reasonably satisfactory to the Administrative
Agent.
(c) The Borrower agrees to indemnify and hold harmless each Bank and
each Agent for (i) the full amount of Covered Taxes (including any Covered Taxes
imposed on amounts payable under this Section 4.04) which arise from any payment
made under this Agreement or any Note and are paid by such Bank or such Agent
and any liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Covered Taxes
were correctly or legally asserted, and (ii) any Taxes paid or payable by such
Bank or such Agent (the amount of which will be determined by such Bank or such
Agent in its sole discretion, and will be binding on all parties to this
Agreement unless manifestly unreasonable) which were levied or imposed by any
Governmental Authority on any additional amounts paid by the Borrower under this
Section 4.04. A certificate as to the amount of any such required
indemnification payment prepared with a reasonable basis by the Bank or such
Agent shall be final, conclusive and binding for all purposes. Payment under
this indemnification shall be made within 30 days after the date such Bank or
such Agent makes written demand therefor by the delivery of such certificate.
(d) If a Bank or Agent receives a refund or credit of Taxes paid by
the Borrower pursuant to paragraph (b) or (c) of this Section 4.04, then such
Bank or such Agent shall promptly repay the Borrower such refund or credit net
of all out-of-pocket expenses related thereto; provided, however, that if, due
-------- -------
to any adjustment of such Taxes, such Bank or such Agent loses the benefit of
all or any portion of such refund or credit, the Borrower will indemnify and
hold harmless such Lender or such Agent in accordance with this subsection;
provided further, however, that such Bank will determine the amount of any such
-------- ------- -------
refund or credit, and the amount of any lost benefit in respect thereof, in its
sole discretion, and such determinations will be binding on all parties to this
Agreement unless manifestly unreasonable.
(e) If the Borrower is required to pay additional amounts to any Bank
or any Agent on behalf of any Bank pursuant to this Section 4.04, then such Bank
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to change the jurisdiction of its Lending Office or take other appropriate
action so as to eliminate any such additional payment by the Borrower which may
thereafter accrue, if such change or other action in the reasonable judgment of
such Bank is not otherwise disadvantageous to such Bank.
(f) (i) Each Bank which is not a U.S. Person agrees that:
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(A) it shall, no later than the Closing Date (or, in the case of a
Bank which becomes a party hereto after the Closing Date, the date upon
which such Bank becomes a party hereto) deliver to the Administrative Agent
and to the Borrower through the Administrative Agent (x) two accurate and
complete signed originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"), or two accurate and complete signed
---------
originals of Internal Revenue Service Form 1001 or any successor thereto
("Form 1001"), as appropriate, or (y) if such Bank is not a "bank" within
-----------
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Form 1001 or Form 4224 pursuant to clause (x) above, a certificate
substantially in the form of Exhibit I (any such certificate, a "Section
--------- -------
4.04(f) Certificate") and, in the case of either (x) or (y), two accurate
-------------------
and complete original signed copies of Internal Revenue Service Form W-8 or
any successor thereto ("Form W-8") or Internal Revenue Service Form W-9 or
--------
any successor thereto ("Form W-9"), whichever is applicable; and
--------
(B) it shall, before or promptly after the occurrence of any event
(including the passing of time) requiring a change in or renewal of the
most recent Form 4224, Form 1001, Form W-8, Form W-9 or Section 4.04
Certificate previously delivered by such Bank, deliver to the
Administrative Agent and to the Borrower through the Administrative Agent
two accurate and complete original signed copies of Form 4224, Form 1001,
Form W-8, Form W-9 and a Section 4.04 Certificate, in replacement of the
forms previously delivered by such Bank.
(ii) Each Bank shall, unless unable to do so by virtue of a Change in
Law occurring after the date such Bank becomes a party hereto, certify (x) in
the case of a Form 1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (y) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
(iii) Notwithstanding the foregoing provisions of this subsection (f)
or any other provision of this Section 4.04, no Bank shall be required to
deliver any form pursuant to this Section 4.04 if such Bank is not legally able
to do so.
(g) The Borrower will not be required to pay any additional amount in
respect of Taxes pursuant to this Section 4.04 to any Bank or to the
Administrative Agent with respect to any Bank if the obligation to pay such
additional amount would not have arisen but for a failure by such Bank to comply
with its obligations under subsection 4.04(f).
SECTION 5. Conditions Precedent to Loans. The occurrence of the
-----------------------------
Effective Date pursuant to Section 13.10, and the obligation of each Bank to
make
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Loans, and the obligation of each Issuing Bank to issue Letters of Credit, on
the Effective Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective
-----------------------------
Date (i) this Agreement shall have been executed and delivered as provided in
Section 13.10 and (ii) there shall have been delivered to the Administrative
Agent for the account of each of the Banks the appropriate Tranche A Term Note,
Tranche B Term Note and/or Revolving Note and to BTCo the Swingline Note
executed by the Borrower, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Payment of Fees. On or before the Effective Date and thereafter
---------------
at the time of each Credit Event and after giving effect thereto, all costs,
fees and expenses, and all other compensation contemplated by this Agreement or
any other agreement with any of the Agents, due to any of the Agents, or the
Banks (including, without limitation, legal fees and expenses) shall have been
paid to the extent then due.
5.03 Opinions of Counsel. On the Effective Date, the Agents shall
-------------------
have received, with sufficient copies for each Bank (i) from ▇▇▇▇▇▇▇▇ Kill &
Olick, P.C., special counsel to Holdings and the Borrower, an opinion addressed
to the Agents and each of the Banks and dated the Effective Date covering the
matters set forth in Exhibit E and (ii) from local counsel satisfactory to the
Agents, opinions each of which shall be in form and substance reasonably
satisfactory to the Agents and the Required Banks and shall cover the perfection
of the security interests granted pursuant to the Security Agreement and the
Mortgages and such other matters incident to the transactions contemplated
herein as the Agents may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Effective
-------------------------------------
Date, the Agents shall have received a certificate, with sufficient copies for
each Bank, dated the Effective Date, signed by an Authorized Officer and
attested to by the Secretary or any Assistant Secretary of each Credit Party, in
the form of Exhibit F with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agents.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Agents and the Required Banks, and the Agents shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Agents reasonably may have requested in
connection therewith, such documents and papers where appropriate to be
certified by proper corporate or governmental authorities.
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5.05 Certain Agreements. On the Effective Date, there shall have
------------------
been delivered to the Agents true and correct copies, certified as true and
complete by an appropriate officer of the appropriate Credit Party, of:
(i) each of the Acquisition Documents, including each of the CLC
Notes, and each other agreement or understanding relating to the
Acquisition or the CLC Notes or with the holders of the CLC Notes;
(ii) all agreements evidencing or relating to material Indebtedness
of Holdings or any Subsidiary of Holdings which is to remain outstanding
after giving effect to the incurrence of Loans on the Effective Date
(collectively, the "Debt Agreements"); and
---------------
(iii) all tax sharing, tax allocation and other similar agreements
entered into by Holdings or any Subsidiary of Holdings (collectively, the
"Tax Sharing Agreements");
-----------------------
all of which shall be (x) in form and substance reasonably satisfactory to the
Agents and the Required Banks and (y) in full force and effect on the Effective
Date.
5.06 Acquisition. (a) On or prior to the Effective Date, the
-----------
Acquisition shall have been consummated in accordance with the Acquisition
Documents (without waiver of any of the provisions thereof) and in a manner
reasonably satisfactory to the Agents.
(b) Each of the Borrower's and Holdings' and, to the best of their
knowledge, each other Person's representations and warranties in each of the
Acquisition Documents shall be true and correct in all material respects.
5.07 Officer's Certificate. On the Effective Date, the Agents shall
---------------------
have received certificates, with sufficient copies for each Bank, dated such
date signed by an appropriate officer of Holdings and the Borrower stating that
all of the applicable conditions set forth in Sections 5.02, 5.08, 5.12, 5.13,
5.09(a) and (b) (deleting the reference to the Agents therein), 5.06 (deleting
the reference to the Agents therein), exist as of such date.
5.08 Approvals. On or prior to the Effective Date, all necessary and
---------
material governmental (domestic and foreign) and third party approvals in
connection with the Acquisition, the transactions contemplated by the Documents
and otherwise referred to herein or therein shall have been obtained and remain
in effect and all applicable waiting periods shall have expired without any
action being taken by any competent authority which materially restrains,
prevents or imposes materially adverse conditions upon the consummation of the
Acquisition, the transactions contemplated by the Documents and otherwise
referred to herein or therein. Additionally, there shall
-35-
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon the consummation of
the Acquisition or the making of Loans.
5.09 Existing Credit Agreement. (a) On the Effective Date, the
-------------------------
commitments under the Existing Credit Agreement shall have been terminated, all
loans thereunder shall have been repaid in full, together with all accrued and
unpaid interest thereon, all accrued and unpaid fees thereon shall have been
repaid in full, all letters of credit issued thereunder shall have been
terminated or incorporated hereunder as Letters of Credit, and all other amounts
then owing pursuant to the Existing Credit Agreement shall have been repaid in
full.
(b) On the Effective Date, all security interests and Liens created
under the Existing Credit Agreement and the related security documents on the
capital stock of, and assets (including intercompany notes) owned by, the
Borrower and its Subsidiaries shall have been terminated and released, and the
Agents shall have received all such releases as may have been requested by the
Agents, which releases shall be in the form and substance reasonably
satisfactory to the Administrative Agent.
(c) The Agents shall have received evidence from the lenders under
the Existing Credit Agreement in form, scope and substance reasonably
satisfactory to it that the matters set forth in this Section 5.09(a) and (b)
have been satisfied at such time.
5.10 Pledge and Security Agreements and Collateral Assignment of
-----------------------------------------------------------
Leases. (a) On the Effective Date, Holdings shall have duly authorized,
------
executed and delivered the Holdings Pledge Agreement, the Holdings Pledge
Agreement shall be in full force and effect and the Collateral Agent shall have
in its possession all the Pledged Securities referred to in the Holdings Pledge
Agreement then owned by Holdings, together with executed and undated stock
powers.
(b) On the Effective Date, the Borrower shall have duly authorized,
executed and delivered the Borrower Pledge Agreement, the Borrower Pledge
Agreement shall be in full force and effect and the Collateral Agent shall have
in its possession all the Pledged Securities referred to in the Borrower Pledge
Agreement then owned by the Borrower, together with executed and undated stock
powers.
(c) On the Effective Date, (i) the Security Agreement shall be in
full force and effect, (ii) no filings, recordings, registrations or other
actions shall be necessary or desirable to perfect the security interests
granted pursuant to the Security Agreement in the Security Agreement Collateral
covered thereby, and (iii) the Banks shall have received:
-36-
(x) evidence of the completion of all recordings and filings of, or
with respect to, the Security Agreement as may be reasonably necessary or,
in the opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Security Agreement;
(y) evidence that all other actions necessary or, in the opinion of
the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreement have been
taken; and
(z) the Collateral Agent shall have received judgment, tax and UCC
lien search reports listing all effective financing statements which name
Holdings, the Borrower or any Subsidiary Guarantor as debtor and which are
filed in those jurisdictions in which any of the Collateral is located and
the jurisdictions in which Holdings', the Borrower's and each Subsidiary
Guarantor's principal place of business is located, none of which, except
as set forth on Exhibit 9.01, shall encumber the Collateral covered or
intended to be covered by the Security Agreement.
(d) On the Effective Date, the Borrower shall have duly authorized,
executed and delivered to the Collateral Agent a Collateral Assignment of Leases
with respect to each office or warehouse facility leased by the Borrower and
listed on Schedule 5.10, such Collateral Assignments of Leases shall be
substantially in full force and effect and the Borrower shall endeavor in a
reasonable manner to obtain and deliver to the Collateral Agent a Landlord
Consent from each lessor under those leases so indicated on Schedule 5.10
pursuant to which the Borrower leases office or warehouse space, within 90 days
of the Effective Date.
(e) On the Effective Date, the Borrower shall have duly authorized,
executed and delivered to the Collateral Agent a Collateral Assignment of
Location Leases with respect to all premises leased by the Borrower at which
Collateral constituting personal property is located and such Collateral
Assignment of Location Leases shall be substantially in full force and effect.
5.11 Mortgages; Title Insurance; Surveys; etc. Within 15 days after
----------------------------------------
the acquisition of the Mortgaged Property, the Collateral Agent shall have
received:
(i) fully executed counterparts of Mortgages, in form attached
hereto as Exhibit K, covering such of the Real Property owned or leased by
---------
the Borrower or any of the Subsidiary Guarantors as shall be designated as
such on Schedule 5.11, together with evidence that counterparts of the
Mortgages have been delivered to the title insurance company insuring the
Lien of the Mortgages for recording in all places to the extent necessary
to create a valid and enforceable first priority mortgage lien (subject to
Permitted Encumbrances relating thereto) on each Mortgaged Property in
favor of the Collateral Agent
-37-
(or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors; and
(ii) Mortgage Policies on each Mortgaged Property issued by Chicago
Title or another national title insurer licensed to do business in Texas
and Maryland and assuring the Collateral Agent that the Mortgages are valid
and enforceable first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except Permitted
Encumbrances and such Mortgage Policies shall otherwise be in form and
substance reasonably satisfactory to the Collateral Agent and shall
include, as appropriate, an endorsement for future advances under this
Agreement and the Notes and for any other matter that the Collateral Agent
in its discretion may reasonably request to the extent available in the
jurisdictions in which such Mortgaged Property is located.
5.12 Adverse Change, etc. At the time of each Credit Event and after
-------------------
giving effect thereto, nothing shall have occurred since March 31, 1996 (and the
Banks shall have become aware of no facts, conditions or other information not
previously available to them) which the Agents or the Required Banks reasonably
believe could have a material adverse effect on: (i) the rights or remedies of
the Agents or the Banks, (ii) the ability of Holdings or the Borrower to perform
their respective obligations to the Agents and the Banks or (iii) the business
operations, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole or on the Borrower and its
Subsidiaries taken as a whole (the circumstances described in clauses (i), (ii)
and (iii) as they apply to Holdings and the Borrower and their respective
Subsidiaries being collectively referred to as a "Material Adverse Effect").
-----------------------
5.13 Litigation. On the Effective Date, no litigation by any entity
----------
(private or governmental) shall be pending or threatened with respect to the
Acquisition or this Agreement or any documentation executed in connection
therewith, or which the Agents or the Required Banks shall reasonably believe
could have a Materially Adverse Effect.
5.14 Evidence of Insurance. On the Effective Date, the Borrower
---------------------
shall cause to be delivered to the Agents evidence of insurance complying with
the requirements of Section 8.03 with respect to each of the Mortgaged
Properties and for the business and properties of Holdings and its Subsidiaries,
in scope, form and substance reasonably satisfactory to the Administrative Agent
and the Required Banks and naming the Collateral Agent, in the case of
Collateral, as an additional insured and/or loss payee, and stating that such
insurance shall not be canceled or revised without at least 30 days' prior
written notice, as of a recent date, by the respective insurer to the Collateral
Agent.
-38-
5.15 Pro Forma Balance Sheet. On the Effective Date, the Banks shall
-----------------------
have received an unaudited projected pro forma consolidated balance sheet of the
--- -----
Borrower prepared on a basis substantially consistent in all material respects
with the Projections and in accordance with GAAP except as specifically set
forth in the notes to such balance sheets, both immediately before and
immediately after giving effect to the Acquisition, the related financing
thereof and the other transactions contemplated hereby and thereby, which
projected pro forma consolidated balance sheet shall be in form and substance
--- -----
reasonably satisfactory to the Agents and the Required Banks.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
-----------------------------------------
of each Bank to make Loans (including Loans made on the Effective Date), and the
obligation of an Issuing Bank to issue any Letter of Credit, is subject, at the
time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default, (ii) there shall not exist or become known any
facts, conditions, or circumstances which the Agents or the Required Banks
reasonably believe could have a Material Adverse Effect and (iii) all
representations and warranties contained herein or in any other Credit Document
shall be true and correct in all material respects with the same effect as
though such representations and warranties had been made on the date of the
making of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Loan, the Agent shall have received the notice required by
Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the Agent and the
respective Issuing Bank shall have received a Letter of Credit Request meeting
the requirements of Section 2.02(a).
The occurrence of the Effective Date and each Credit Event and the
acceptance of the proceeds of each Credit Event shall constitute a
representation and warranty by the Borrower to the Agents and each of the Banks
that all the conditions specified in Section 5 and in this Section 6 and
applicable to the occurrence of the Effective Date and such Credit Event exist
as of that time (except to the extent that any of the conditions specified in
Section 5 are required to be satisfactory to or determined by any Bank, the
Required Banks and/or the Agents). All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the Administrative
Agent at
-39-
the Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each of Holdings
and the Borrower makes the following representations, warranties and agreements,
in each case after giving effect to the Acquisition, all of which shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans and issuance of the Letters of Credit, with the occurrence of each Credit
Event on or after the Effective Date being deemed to constitute a representation
and warranty that the matters specified in this Section 7 are true and correct
in all material respects on and as of the Effective Date and on the date of each
such Credit Event (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date).
7.01 Corporate Status. Except as set forth on Schedule 7.01,
----------------
Holdings, the Borrower and each of their respective Subsidiaries (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its incorporation, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and (iii) is duly qualified and is authorized to do business and
is in good standing in each jurisdiction where the conduct of its business
requires such qualifications except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate or partnership action to authorize the execution, delivery
and performance by it of each of such Documents. Each Credit Party has duly
executed and delivered each of the Documents to which it is party, and, assuming
due execution and delivery of each other party thereto, each of such Documents
constitutes its legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by (a) bankruptcy, insolvency, fraudulent
conveyance, preferential transfer, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting creditors' rights and
remedies generally, (b) general principles of equity (whether such
enforceability is considered in a proceeding in equity or at law), and by the
discretion of the court before which any proceeding therefor may be brought, or
(c) public policy considerations or court administrative, regulatory or other
governmental decisions that may limit rights to indemnification or contribution
or limit or affect any covenants or agreements relating to competition or future
employment.
-40-
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, in each case,
to the extent such contravention could reasonably be expected to result in a
Material Adverse Effect, (ii) will conflict with or result in any breach of any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (except pursuant to the Security Documents) upon any of the
material properties or assets of Holdings, the Borrower or any of their
respective Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Holdings, the Borrower or any of their
respective Subsidiaries is a party or by which it or any of its property or
assets is bound or to which it may be subject, which conflict, breach or default
would not reasonably be expected to have a Material Adverse Effect or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of
Holdings, the Borrower or any of their respective Subsidiaries.
7.04 Governmental Approvals. Except as set forth on Schedule 7.04,
----------------------
no order, consent, approval, license, authorization or validation of, or filing,
recording or registration with (except as have been obtained or if failed to
obtain would not reasonably be expected to have a Material Adverse Effect or (in
the case of filings, recordings or registrations) made prior to the Effective
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Document or (ii) the
legality, validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. To the best knowledge of Holdings and the
-----------------------------
Borrower, (a) the statements of financial condition of Holdings and its
Subsidiaries at September 28, 1996 and of KWIK Wash and its Subsidiaries at
September 30, 1996 and the related statements of income and cash flow for the
last fiscal year and six-month period (or in the case of KWIK Wash, nine-month
period) ended on such date, as the case may be, and furnished to the Banks prior
to the Effective Date present fairly in all material respects the financial
condition of Holdings and its Subsidiaries and of KWIK Wash and its Subsidiaries
at the date of such statements of financial condition and the results of the
operations of Holdings and its Subsidiaries and of KWIK Wash and its
Subsidiaries for the respective last fiscal year or six-month or nine-month
period, as the case may be. To the best knowledge of Holdings and the Borrower,
all such financial statements have been prepared in accordance with GAAP
consistently applied, except as disclosed therein and subject to normal year end
audit adjustments.
-41-
(b) The annual and interim financial statements included in the SEC
Reports (both as to Holdings and as to its Subsidiaries on a combined basis)
(including statements of income and cash flows and changes in shareholders'
equity), present fairly in all material respects the financial condition of the
relevant Persons at the dates of said statements and the results for the periods
covered thereby. All such financial statements have been prepared in accordance
with GAAP consistently applied and the financial statements as of and for the
fiscal years have been audited by and accompanied by the opinion of Ernst &
Young LLP, independent public accountants.
(c) Since March 31, 1996, after giving effect to the Acquisition,
nothing has occurred that has had or could reasonably be expected to have a
Material Adverse Effect.
(d) Except as fully reflected in the financial statements described
in Section 7.05(b) and the Indebtedness incurred under this Agreement and except
as set forth in Schedule 7.05, (i) there were as of the Effective Date (and
after giving effect to any Loans made on such date), no liabilities or
obligations (excluding obligations or liabilities incurred in the ordinary
course of business, which, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect) with respect to
Holdings or the Borrower or any of their respective Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due), and (ii) neither Holdings nor the Borrower nor any of their respective
Subsidiaries knows of any basis for the assertion against Holdings or the
Borrower or any of their respective Subsidiaries of any such liability or
obligation which, either individually or in the aggregate, has, or could be
reasonably likely to have, a Material Adverse Effect.
(e) The pro forma information contained in the SEC Reports and the
--- -----
Projections are based on good faith estimates and assumptions made by Holdings
or Borrower, and on the Effective Date Holdings or Borrower believes that the
Projections and such pro forma information were reasonable and, in the case of
--- -----
the Projections, attainable under the facts and circumstances known to Holdings
or Borrower, it being recognized by the Banks, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections are likely to differ from the
projected results and that the differences could be material. There is no
material fact known to Holdings or the Borrower or any of their respective
Subsidiaries which would have a Material Adverse Effect and which is not
publicly available or has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection with
the transactions contemplated hereby.
(f) (i) On and as of the Effective Date, after giving effect to the
Acquisition and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Borrower in connection therewith (assuming the
full utilization of
-42-
all Commitments on the Effective Date), (a) the sum of the assets, at a going
business value (i.e., the amount that may be realized within a reasonable time,
---
considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that would be
obtained for such assets within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions), of each of Holdings, individually, and the Borrower,
individually, will exceed its debts; (b) each of Holdings, individually, and the
Borrower, individually, has not incurred and does not intend to incur, and does
not believe that it will incur, debts beyond its ability to pay such debts as
such debts mature; and (c) each of Holdings, individually, and the Borrower,
individually, will have sufficient capital with which to conduct its business.
For purposes of this Section 7.05(f), "debt" means any liability on a claim, and
----
"claim" means (i) right to payment, whether or not such a right is reduced to
-----
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured; provided that to the extent any such "claim" is not fixed,
--------
liquidated and contingent, the amount thereof shall equal the Company's good
faith estimate of the maximum amount thereof.
(g) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a), there were as of the Effective Date no liabilities
or obligations with respect to Holdings, the Borrower or any of their respective
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in aggregate,
would be material to Holdings, the Borrower or to the Borrower and its
Subsidiaries taken as a whole. As of the Effective Date, neither Holdings nor
the Borrower knows of any basis for the assertion against it of any liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements delivered pursuant to Section 7.05(a) which, either individually or
in the aggregate, could be material to Holdings or the Borrower.
(h) On and as of the Effective Date, the financial projections (the
"Projections") previously delivered to the Administrative Agent and the Banks
------------
have been prepared on a basis consistent with the financial statements referred
to in Section 7.05(a) (other than as set forth or presented in such
Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the Borrower to
be misleading in any material respect or which fail to take into account
material information regarding the matters reported therein. On the Effective
Date, the Borrower believed that the Projections were reasonable and attainable;
it being recognized by the Banks, however, that projections as to future events
are not viewed as facts and that the actual results during the period or periods
-43-
covered by the Projections are likely to differ from the projected results and
the differences could be material.
7.06 Litigation. Except as set forth on Schedule 7.06, there are no
----------
actions, suits or proceedings pending or, to the best knowledge of Holdings and
the Borrower, threatened that could reasonably be expected to, singly or in the
aggregate, have a Material Adverse Effect.
7.07 True and Complete Disclosure. To the best of Holdings' and the
----------------------------
Borrower's knowledge, all factual information (taken as a whole) furnished by or
on behalf of Holdings or the Borrower in writing and listed on Schedule 7.07 to
any of the Agents or any Bank for purposes of or in connection with this
Agreement, the other Credit Documents or any transaction contemplated herein or
therein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of Holdings or the Borrower in writing to any of the
Agents or any Bank will be, true and accurate in all material respects on the
date as of which such information is dated or certified.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
-----------------------------------
Term Loans shall be used by the Borrower (x) to effect the Acquisition and (y)
to pay fees and expenses related to the Acquisition.
(b) All proceeds of Revolving Loans shall be used (subject to the
terms and conditions contained herein) for general corporate purposes of
Holdings and the Borrower and its Subsidiaries; provided that no more than
--------
$35,000,000 in aggregate amount may be used to finance the cash portion of the
consideration paid to effect Permitted Acquisitions.
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Holdings, the Borrower and each of
------------------------
their respective Subsidiaries are members of an affiliated group of corporations
filing consolidated returns for Federal income tax purposes, of which Holdings
is the "common parent" (within the meaning of Section 1504 of the Code) of such
group. Each of Holdings, the Borrower and each of their respective
Subsidiaries have timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal and all material state and other returns, statements,
forms and reports for taxes (the "Returns") required to be filed by or with
-------
respect to the income, properties or operations of Holdings, the
-44-
Borrower and/or any of their respective Subsidiaries. To the best knowledge of
Holdings, the Returns accurately reflect all liability for taxes of Holdings,
the Borrower and their respective Subsidiaries for the periods covered thereby.
To the best knowledge of Holdings, each of Holdings, the Borrower and each of
their respective Subsidiaries have paid all taxes payable by them other than
taxes which are not delinquent, and other than those contested in good faith and
for which adequate reserves have been established in accordance with GAAP.
Except as disclosed in the financial statements referred to in Section 7.05(a),
there is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the best knowledge of Holdings or the Borrower, threatened by
any authority regarding any taxes relating to Holdings, the Borrower or any of
their respective Subsidiaries. The charges, accruals and reserves on the books
of Holding and its Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of Holdings and the Borrower, adequate. As of the
Effective Date, none of Holdings, the Borrower or any of their respective
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of taxes of Holdings, the Borrower or any of their
respective Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of Holdings, the Borrower or any of their
respective Subsidiaries not to be subject to the normally applicable statute of
limitations. None of Holdings, the Borrower or any of their respective
Subsidiaries has provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code. None of Holdings, the Borrower or
any of their respective Subsidiaries has incurred, or reasonably expect to
incur, any material tax liability in connection with the Acquisition and the
other transactions contemplated hereby.
7.10 Compliance with ERISA. Each Plan is in substantial compliance
---------------------
with ERISA and the Code; no Reportable Event has occurred with respect to a
Plan; no Plan is insolvent or in reorganization; no Plan has Unfunded Current
Liability; no Plan has an accumulated or waived funding deficiency, has
permitted decreases in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; all contributions required to be made with respect to a Plan have been
timely made; none of Holdings, the Borrower, or any of their respective
Subsidiaries nor any ERISA Affiliate has incurred any material liability to or
on account of a Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of
the Code or expects to incur any liability under any of the foregoing Sections
with respect to any Plan; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan; no condition exists which presents a
material risk to Holdings, the Borrower or any of their respective Subsidiaries
or any ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of Holdings, the Borrower, their
respective Subsidiaries and their ERISA Affiliates to all
-45-
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event, would not exceed $50,000; no lien imposed under the Code or ERISA
on the assets of Holdings, the Borrower or any of their respective Subsidiaries
or any ERISA Affiliate exists or is likely to arise on account of any Plan; and
Holdings, the Borrower and their respective Subsidiaries may cease contributions
to or terminate any Plan maintained by any of them without incurring any
material liability.
7.11 The Security Documents. (a) The provisions of the Security
----------------------
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Borrower and the Subsidiary
Guarantors in the Security Agreement Collateral described therein, and the
Security Agreement, upon the filing of Form UCC-1 financing statements or the
appropriate equivalent (which filings have been made) or other methods of
perfection (which have been completed), creates, a fully perfected first lien
on, and security interest in, all right, title and interest in all of the
Security Agreement Collateral described therein, which security interest shall
be subject to no other Liens other than Permitted Filings. The recordation of
the Assignment of Security Interest in U.S. Patents and Trademarks in the form
attached to the Security Agreement in the United States Patent and Trademark
Office together with filings on Form UCC-1 made pursuant to the Security
Agreement are effective, under applicable law, to perfect the security interest
granted to the Collateral Agent in the trademarks and patents covered by the
Security Agreement and the recordation of the Assignment of Security Interest in
U.S. Copyrights in the form attached to the Security Agreement with the United
States Copyright Office together with filings on Form UCC-1 made pursuant to the
Security Agreement are effective under federal law to perfect the security
interest granted to the Collateral Agent in the copyrights covered by the
Security Agreement. The Borrower and each Subsidiary Guarantor has good and
marketable title to all Security Agreement Collateral pledged by it under the
Security Agreement, free and clear of all Liens except those described above in
this clause (a).
(b) The security interests created in favor of the Collateral Agent,
as Pledgee, for the benefit of the Secured Creditors under the Pledge
Agreements, upon the delivery of the Pledged Securities to the Collateral Agent,
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreements, subject to no security interests of any
other Person. No filings or recordings are required in order to perfect the
security interests created in the Pledged Securities and the proceeds thereof
under the Pledge Agreements other than filings on Form UCC-1 deemed necessary by
the Collateral Agent.
(c) After the recording thereof, the Mortgages will create, as
security for the obligations purported to be secured thereby, a valid and
enforceable perfected security interest in and mortgage lien on all of the
Mortgaged Properties in favor of the
-46-
Collateral Agent (or such other trustee as may be required or desired under
local law) for the benefit of the Secured Creditors, superior to and prior to
the rights of all third persons (except that the security interest and mortgage
lien created in the Mortgaged Properties may be subject to the Permitted
Encumbrances related thereto) and subject to no other Liens. Schedule 5.11
contains a true and complete list of each parcel of Real Property owned or
leased by the Borrower and the Subsidiary Guarantors on the Effective Date, and
the type of interest therein held by the Borrower or such Subsidiary Guarantor.
The Borrower and each of the Subsidiary Guarantors have good and indefeasible
title to all fee owned Mortgaged Properties on the Effective Date free and clear
of all Liens except those described in the first sentence of this subsection
(c).
7.12 Representations and Warranties in Documents. All
-------------------------------------------
representations and warranties set forth in the other Documents are true and
correct in all material respects at the time as of which such representations
and warranties were made (or deemed made) and will be true and correct in all
material respects on the Effective Date.
7.13 Properties. Except as set forth on Schedule 7.13, Holdings, the
----------
Borrower and each of their respective Subsidiaries have good and valid title to
all properties owned in fee by them, including all property reflected in the
balance sheet referred to in Section 7.05(a) and in the pro forma balance sheet
--- -----
referred to in Section 5.15 (except as sold or otherwise disposed of since the
date of such balance sheet in the ordinary course of business or in accordance
with the terms of this Agreement), free and clear of all Liens, other than Liens
which are (x) in the case of Mortgaged Real Property, Prior Liens and Liens
permitted by the applicable Mortgage and (y) in the case of other Real Property,
Permitted Liens.
7.14 Capitalization. (a) On the Effective Date, the authorized
--------------
capital stock of Holdings shall consist of (i) 15,000,000 shares of Holdings
Common Stock, $.01 par value per share, of which 10,004,278 shares shall be
issued and outstanding, (ii) 1,000,000 shares of Holdings Nonvoting Common
Stock, $.01 par value per share, of which 480,648 shares shall be issued and
outstanding and (iii) 1,000,000 shares of Holdings Preferred Stock, $.01 par
value per share, none of which shall be issued and outstanding. All such
outstanding shares have been duly and validly issued, are fully paid and non-
assessable and have been issued free of preemptive rights. As of the Effective
Date, Holdings does not have outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreement providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its capital stock, in each case other than as set
forth in the SEC Reports.
(b) The authorized capital stock of the Borrower shall consist of
1,000 shares of common stock, $.01 par value per share, 100 of which shall be
issued and
-47-
outstanding. All such outstanding shares of common stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. As of the Effective Date, the Borrower does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its capital
stock.
7.15 Subsidiaries. On and as of the Effective Date, the Borrower has
------------
no Subsidiaries other than those Subsidiaries listed on Schedule 7.15 and as of
the Effective Date, Holdings has no direct Subsidiary other than the Borrower
and no indirect Subsidiary other than the direct Subsidiaries of the Borrower
listed on Schedule 7.15.
7.16 Compliance with Statutes, etc. Except as set forth on Schedule
-----------------------------
7.16, each of Holdings, the Borrower and their respective Subsidiaries is in
compliance with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.17 Investment Company Act. None of Holdings, the Borrower or any
----------------------
of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7.18 Public Utility Holding Company Act. None of Holdings, the
----------------------------------
Borrower or any of their respective Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
7.19 Environmental Matters. Except as set forth on Schedule 7.19,
---------------------
(a) Holdings, the Borrower and each of their respective Subsidiaries have
complied in all material respects with, and on the date of each Credit Event
will be in compliance in all material respects with, all Environmental Laws and
the requirements of any permits, licenses or other authorizations issued under
such Environmental Laws. There are no pending or, to the best knowledge of
Holdings and the Borrower, past or threatened Environmental Claims against
Holdings, the Borrower or any of their respective Subsidiaries or any Real
Property now or formerly owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries. There are no facts, circumstances, conditions or
occurrences on any Real Property now or formerly owned or operated by Holdings,
the Borrower or any of their respective Subsidiaries or, to the
-48-
best knowledge of Holdings or the Borrower, on any property adjoining or in the
vicinity of any such Real Property that, to the best knowledge of Holdings or
the Borrower, could reasonably be expected (i) to form the basis of an
Environmental Claim against Holdings, the Borrower or any of their respective
Subsidiaries or any such Real Property, which Environmental Claim could
reasonably be expected to result in a Material Adverse Effect, individually or
in the aggregate with all other Environmental Claims, or (ii) to cause any such
Real Property to be subject to any restrictions on the ownership, occupancy, use
or transferability of such Real Property by Holdings, the Borrower or any of
their respective Subsidiaries under any Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings, the Borrower or any of their respective Subsidiaries where
such generation, use, treatment or storage has violated or resulted in liability
under, or could reasonably be expected to violate or to result in liability
under, any Environmental Law, which violation or liability could reasonably be
expected to result in a Material Adverse Effect, individually or in the
aggregate with all other violations of or liability under any Environmental Law.
Hazardous Materials have not at any time been Released on or from any Real
Property owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries where such Release has violated or resulted in material liability
under, or could reasonably be expected to violate or to result in material
liability under, any Environmental Law. There are not now nor have there been
any underground storage tanks or related piping located on any Real Property
owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.19,
the representations made in this Section 7.19 shall only be untrue if the
aggregate effect of all failures, noncompliances and liabilities of the types
described above could reasonably be expected to result in a Material Adverse
Effect.
7.20 Labor Relations. Except as set forth on Schedule 7.20, none of
---------------
Holdings, the Borrower or any of their respective Subsidiaries is engaged in any
unfair labor practice that could reasonably be expected to have a material
adverse effect on Holdings, the Borrower or on the Borrower and its Subsidiaries
taken as a whole. There is (i) no unfair labor practice complaint pending
against Holdings, the Borrower or any of their respective Subsidiaries or, to
the best knowledge of Holdings or the Borrower, threatened against any of them,
before the National Labor Relations Board, and no material grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings, the Borrower or any of their
respective Subsidiaries or, to the best knowledge of Holdings or the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Holdings, the Borrower or any of their respective
Subsidiaries or, to the best knowledge of the Borrower, threatened against
Holdings, the Borrower or any
-49-
of their respective Subsidiaries and (iii) to the best knowledge of Holdings and
the Borrower, no union representation proceeding is pending with respect to the
employees of Holdings or the Borrower or any of their respective Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to result in a Material Adverse Effect.
7.21 Patents, Licenses, Franchises and Formulas. Except as set forth
------------------------------------------
on Schedule 7.21, each of Holdings, the Borrower and their respective
Subsidiaries owns all material patents, trademarks, permits, service marks,
trade names, copyrights, licenses, franchises and formulas, or rights with
respect to the foregoing, and has obtained assignments of all leases and other
rights of whatever nature, reasonably necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, would reasonably be expected to
result in a Material Adverse Effect.
7.22 Indebtedness. Schedule 7.22 sets forth a true and complete list
------------
of all Indebtedness of Holdings, the Borrower and their respective Subsidiaries
as of the Effective Date and which is to remain outstanding after giving effect
to the Acquisition and the incurrence of Loans on such date (excluding the Loans
and the Letters of Credit, the "Existing Indebtedness"), in each case showing
---------------------
the aggregate principal amount thereof and the name of the respective borrower
and any other entity which directly or indirectly guaranteed such debt.
7.23 Acquisition. At the time of consummation thereof, the
-----------
Acquisition shall have been consummated in all material respects and
substantially in accordance with the terms of the respective Documents and all
applicable laws. At the time of consummation of the Acquisition, all consents
and approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Acquisition will have been obtained, given,
filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained), except where the
failure to so obtain, give, file or take would not have a Material Adverse
Effect. All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Acquisition. Additionally, to the
best of Holdings' and the Borrower's knowledge, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Acquisition, or the occurrence of any Credit Event or the
performance by Holdings or the Borrower of its obligations under the respective
Documents. All actions taken by the Borrower pursuant to or in furtherance of
the Acquisition have been taken in material compliance with the respective
Documents and all applicable laws.
-50-
SECTION 8. Affirmative Covenants. Holdings and the Borrower hereby
---------------------
covenant and agree that as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Total Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been cash collateralized in a cash collateral
account satisfactory to the Letter of Credit Issuer in its sole and absolute
discretion) or Notes are outstanding and the Loans, together with interest, Fees
and all other obligations (other than indemnities described in Section 13.13
which are not then due and payable) incurred hereunder are paid in full:
8.01 Information Covenants. Holdings and/or the Borrower will
---------------------
furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month of Holdings, (i) the consolidated and consolidating balance sheets of
Holdings and its consolidated Subsidiaries as at the end of such month and
the related consolidated and consolidating statements of operations and
retained earnings/stockholders deficiency and statement of cash flows for
such month and for the elapsed portion of the fiscal year ended with the
last day of such month, in each case setting forth comparative figures for
the corresponding month in the prior fiscal year and the budgeted figures
for such month as set forth in the respective budget delivered pursuant to
Section 8.01(e) and (ii) management's discussion and analysis of the
important operational and financial developments during the month and year-
to-date periods, all of which shall be certified by the chief financial
officer or other Authorized Officer of the Company, subject to certain
recurring quarter-end adjustments and normal year-end audit adjustments and
the absence of footnotes.
(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of each of the first three quarterly accounting periods in each fiscal year
of Holdings, consolidated and consolidating balance sheet of Holdings and
its Subsidiaries as at the end of such quarterly accounting period and the
related consolidated and consolidating statements of operations, statements
of changes in stockholders equity and statements of cash flows for such
quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period; all of which
shall be in reasonable detail and certified by the chief financial officer
or other Authorized Officer of Holdings that they fairly present in all
material respects the financial condition of Holdings and its Subsidiaries
taken as a whole as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes.
-51-
(c) Annual Financial Statements. Within 95 days after the close of
---------------------------
each fiscal year of Holdings, (i) the consolidated and consolidating
balance sheets of Holdings and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of operation
and retained earnings/stockholder deficiency and of cash flows for such
fiscal year setting forth comparative figures for the preceding fiscal year
and certified by Ernst & Young LLP or such other independent certified
public accountants of recognized national standing reasonably acceptable to
the Agents, together with a report of such accounting firm stating that in
the course of its regular audit of the financial statements of Holdings and
its Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm obtained no knowledge of
any Default or Event of Default which has occurred and is continuing under
Sections 9.04, 9.05 or 9.07 through 9.10 inclusive or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and (ii) management's
discussions and analysis of the important operational and financial
developments during such fiscal year.
(d) Management Letters. Promptly after the receipt thereof by
------------------
Holdings, the Borrower or any of their respective Subsidiaries, a copy of
any final "management letter" received by any of them from its certified
public accountants and the management's responses thereto.
(e) Budgets. No later than 35 days following the commencement of the
-------
first day of each fiscal year of Holdings, a budget in form consistent with
past practices and in the form delivered to the Agents on or prior to the
Effective Date (including budgeted statements of operation and sources and
uses of cash and balance sheets) prepared by Holdings for (x) each of the
twelve months of such fiscal year prepared in detail and (y) each of the
five years immediately following such fiscal year prepared in summary form,
in each case, of Holdings and its Subsidiaries, accompanied by the
statement of the Chief Financial Officer or Treasurer of the Borrower to
the effect that, to the best of his knowledge, the budget is a reasonable
estimate for the period covered thereby, the principal assumptions upon
which such budgets are based. Together with each delivery of financial
statements pursuant to Section 7.01(b) and (c), a comparison of the current
year to date financial results (other than in respect of the balance sheets
included therein) against the budgets required to be submitted pursuant to
this clause (e) shall be presented.
(f) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(a), (b) and (c),
certificates of an Authorized Officer of each of the Borrower and Holdings
to the effect that, to the best of such officer's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or Event
of Default has occurred
-52-
and is continuing, specifying the nature and extent thereof and what action
the Borrower and Holdings propose to take with respect thereto, which
certificate shall, in the case of any such financial statements delivered
in respect of a period ending on the last day of the respective fiscal
quarter or year, (x) set forth the calculations required to establish
whether there was compliance with the provisions of Sections 4.02(g) and
(h) (but with respect to Section 4.02(h) only to the extent delivered with
the financial statements required by Sections 8.01(a)), 9.04, 9.05 and 9.07
through 9.10, inclusive, at the end of such fiscal quarter or year, as the
case may be, and (y) if delivered with the financial statements required by
Section 8.01(a), set forth the amount of Excess Cash Flow for the
respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within three Business Days after an officer of Holdings or the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default specifying the nature and extent
thereof and what action the Borrower and Holdings propose to take with
respect thereto and (ii) any litigation or governmental investigation or
proceeding pending (x) against Holdings, the Borrower or any of their
respective Subsidiaries which, singly or in the aggregate could reasonably
be expected to have a Materially Adverse Effect, (y) with respect to (i)
the CLC Notes or (ii) any material Indebtedness of the Borrower and its
Subsidiaries taken as a whole or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
-------------------------
information, proxy materials and other information and reports ("SEC
---
Reports"), if any, which Holdings, the Borrower or any of their respective
-------
Subsidiaries shall file with the Securities and Exchange Commission or any
successor thereto (the "SEC") or sent generally to analysts or holders of
---
capital stock or other securities of Holdings, the Borrower or any of their
respective Subsidiaries (in their capacities as such) including holders of
its Indebtedness (including the CLC Notes) pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
---------------------
ten Business Days after, an officer of Holdings, the Borrower or any of
their respective Subsidiaries obtains knowledge thereof, notice of one or
more of the following environmental matters, unless such environmental
matters could not, individually or when aggregated with all other such
environmental matters, be reasonably expected to materially and adversely
affect the business, operations, assets, liabilities, condition (financial
or otherwise) or prospects of Holdings, the Borrower or of the Borrower and
its Subsidiaries taken as a whole:
-53-
(i) any pending or threatened Environmental Claim against
Holdings, the Borrower or any of its Subsidiaries or any Real Property
owned or operated by the Borrower or any of their respective
Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries that (a) results in noncompliance by Holdings,
the Borrower or any of their respective Subsidiaries with any
applicable Environmental Law or (b) could reasonably be expected to
form the basis of an Environmental Claim against Holdings, the
Borrower or any of their respective Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned
or operated by Holdings, the Borrower or any of their respective
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by Holdings, the Borrower or any of
their respective Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Hazardous Material on any
Real Property owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries as required by any Environmental Law or
any governmental or other administrative agency; provided that in any
--------
event Holdings and the Borrower shall deliver to each Bank all notices
received by it or any of their respective Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings', the Borrower's or such Subsidiary's response thereto. In
addition, the Borrower will provide the Banks with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all material communications with any Person (other than
its attorneys) relating to Environmental Claims, and such detailed reports
of any Environmental Claim as may reasonably be requested by the Banks.
(j) Annual Meetings with Banks. At the request of the Administrative
--------------------------
Agent, Holdings shall within 120 days after the close of each fiscal year
of Holdings hold a meeting at a time and place selected by Holdings and
acceptable to the Agents with all of the Banks at which meeting shall be
reviewed the financial results of the previous fiscal year and the
financial condition of
-54-
Holdings and the budgets presented for the current fiscal year of Holdings
and its Subsidiaries.
(k) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to Holdings, the Borrower
or their respective Subsidiaries as any Bank may reasonably request in
writing.
(l) Promptly upon, and in any event within five Business Days after,
the closing of a Permitted Acquisition, Holdings will deliver to the
Administrative Agent a certificate of an Authorized Officer setting forth
in reasonable detail the pro forma calculation of Pro Forma Leverage Ratio
--- -----
as of the date of the Permitted Acquisition, giving effect thereto.
8.02 Books, Records and Inspections. Holdings and the Borrower will,
------------------------------
and will cause each of their respective Subsidiaries to, keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all requirements of law shall be made of all dealings and transactions
in relation to its business and activities. Holdings and the Borrower will, and
will cause each of their respective Subsidiaries to, permit officers and
designated representatives of the Agents or any Bank to visit and inspect,
during regular business hours and under guidance of officers of Holdings and the
Borrower or such Subsidiary, any of the properties of Holdings and the Borrower
or such Subsidiary, and to examine the books of account of Holdings and the
Borrower or such Subsidiary and discuss the affairs, finances and accounts of
Holdings and the Borrower or such Subsidiary with, and be advised as to the same
by, its and their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Agents or such Bank may
request.
8.03 Maintenance of Property; Insurance. (a) Schedule 8.03 sets
----------------------------------
forth a true and complete listing of all insurance maintained by Holdings, the
Borrower and their respective Subsidiaries as of the Effective Date. Holdings
and the Borrower will, and will cause each of their respective Subsidiaries to,
(i) keep all property necessary in its business in good working order and
condition (ordinary wear and tear excepted), (ii) maintain insurance on all its
property in at least such amounts and against at least such risks as is
consistent and in accordance with industry practice and (iii) furnish to each
Bank, upon written request, full information as to the insurance carried. In
addition to the requirements of the immediately preceding sentence, Holdings and
the Borrower will at all times cause insurance of the types described in
Schedule 8.03 to be maintained (with the same scope of coverage as that
described in Schedule 8.03) at levels which are at least as great as the
respective amount described on Schedule 8.03 in footnotes (1) and (2) thereof.
(b) Holdings and the Borrower will, and will cause their respective
Subsidiaries to, at all times keep their respective property insured in favor of
the
-55-
Collateral Agent, and all policies or certificates (or certified copies thereof)
with respect to such insurance (and any other insurance maintained by Holdings,
the Borrower or any of their respective Subsidiaries) (i) shall be endorsed to
the Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee or
as an additional insured), (ii) shall state that such insurance policies shall
not be canceled without 30 days' prior written notice thereof by the respective
insurer to the Collateral Agent, (iii) shall provide that the respective
insurers irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Secured Creditors, (iv) shall contain the standard non-
contributory mortgagee clause endorsement in favor of the Collateral Agent with
respect to hazard insurance coverage, (v) shall, except in the case of public
liability insurance and workers' compensation insurance, provide that any losses
shall be payable notwithstanding (A) any act or neglect of Holdings, the
Borrower or any of their respective Subsidiaries, (B) the occupation or use of
the properties for purposes more hazardous than those permitted by the terms of
the respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties if
such coverage is available at commercially reasonable rates or (D) any change in
the title to or ownership or possession of the insured properties and (vi) shall
be deposited with the Collateral Agent if such coverage is available at
commercially reasonable rates.
(c) If Holdings, the Borrower or any of their respective Subsidiaries
shall fail to maintain all insurance in accordance with this Section 8.03, or if
Holdings, the Borrower or any of their respective Subsidiaries shall fail to so
endorse and deposit all policies or certificates with respect thereto, the
Agents and/or the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and the Borrower agrees to reimburse the
Agents or the Collateral Agent, as the case may be, for all costs and expenses
of procuring such insurance.
8.04 Corporate Franchises. Holdings and the Borrower will, and will
--------------------
cause each of their respective Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, licenses and patents; provided, however, that
-------- -------
nothing in this Section 8.04 shall prevent (i) sales of assets by Holdings, the
Borrower or any of their respective Subsidiaries in accordance with Section 9.02
or (ii) the withdrawal by Holdings, the Borrower or any of their respective
Subsidiaries of their qualification as a foreign corporation in any jurisdiction
where such withdrawal could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
-56-
8.05 Compliance with Statutes, etc. Holdings and the Borrower will,
-----------------------------
and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings, the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
8.06 Compliance with Environmental Laws. (a) Holdings and the
----------------------------------
Borrower will comply, and will cause each of their respective Subsidiaries to
comply, in all material respects with, and not incur material liability under,
all Environmental Laws applicable to the business or operations of Holdings, the
Borrower or any of their respective Subsidiaries or to the ownership or use of
the Real Property now or hereafter owned or operated by Holdings, the Borrower
or any of their respective Subsidiaries, will promptly pay or cause to be paid
all reasonable costs and expenses incurred in connection with such compliance
and liability, and will keep or cause to be kept all such Real Property free and
clear of any material Liens imposed pursuant to such Environmental Laws. None
of Holdings, the Borrower nor any of their respective Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries, or transport or knowingly permit the
transportation of Hazardous Materials to or from any such Real Property except
for Hazardous Materials used or stored at any such Real Properties in compliance
in all material respects with all Environmental Laws and reasonably required in
connection with the operation, use and maintenance of any such Real Property.
(b) The Borrower will promptly give notice to the Administrative
Agent upon determining the existence of (i) any material violation of any
Environmental Law or (ii) any Environmental Claim, in each of clause (i) or
(ii), related to the business or operations of Holdings, the Borrower or any of
their respective Subsidiaries or to the ownership or use of any Real Property
now or hereafter owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries, or (iii) any release or threatened release of Hazardous
Materials at, on, upon, under or from any Real Property now or hereafter owned
or operated by Holdings, the Borrower or any of their respective Subsidiaries,
or any facility or equipment thereat, in excess of a reportable quantity or
allowable standard or level under any Environmental Laws, or in a manner and/or
amount which could reasonably be expected to result in liability under any
Environmental Law, in each of clause (i), (ii) or (iii), in excess of $500,000
individually or in the aggregate with any other liability under any
Environmental Laws. In each of the aforementioned circumstances, immediately
following discovery thereof, Holdings and the Borrower will, and will cause each
of their respective Subsidiaries to,
-57-
take appropriate steps to initiate and expeditiously complete all investigation,
compliance, response, corrective and other action required under any
Environmental Law to mitigate and eliminate any such violation or liability and
shall keep the Administrative Agent apprised of such action.
(c) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, the Borrower will provide, at the
Borrower's sole cost and expense, an environmental site assessment report
concerning any Real Property now or hereafter owned or operated by Holdings, the
Borrower or any of their respective Subsidiaries, prepared by an environmental
consulting firm approved by the Administrative Agent which approval shall not be
unreasonably withheld or delayed, indicating status of compliance with
Environmental Laws and the presence or absence of Hazardous Materials and the
estimated cost of any compliance, investigation, removal or remedial action in
connection with any Hazardous Materials on, at, under or emanating from such
Real Property; provided that such request may be made only if (i) there has
--------
occurred and is continuing an Event of Default, (ii) the Administrative Agent
reasonably believes that Holdings, the Borrower or any such Real Property is not
in material compliance with any material Environmental Law, or (iii)
circumstances exist that reasonably could be expected to form the basis of a
material Environmental Claim against Holdings, the Borrower or any of their
respective Subsidiaries or any such Real Property. If the Borrower fails to
provide the same within 30 days after such request was made (or within such
longer period as the Administrative Agent may approve in writing, such approval
not to be unreasonably withheld), the Administrative Agent may order the same,
and the Borrower shall grant and hereby grants to the Administrative Agent and
the Banks and their agents access to such Real Property and specifically grants
the Administrative Agent and the Banks an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment, all at the
Borrower's expense.
8.07 ERISA. As soon as possible and, in any event, within 20 days
-----
after Holdings, the Borrower or any of their respective Subsidiaries or any
ERISA Affiliate knows or has reason to know of the occurrence of any of the
following, Holdings or the Borrower will deliver to each of the Banks a
certificate of the Chief Financial Officer or Treasurer of Holdings or the
Borrower setting forth details as to such occurrence and the action, if any,
that Holdings, the Borrower, such Subsidiary or such ERISA Affiliate is required
or proposes to take, together with any notices required or proposed to be given
to or filed with or by Holdings, the Borrower, such Subsidiary, the ERISA
Affiliate, the PBGC, or a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application may be or has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code with respect to a Plan;
that a
-58-
contribution required to be made to a Plan has not been timely made; that a Plan
has been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; that a Plan has an Unfunded Current Liability giving
rise to a lien under ERISA or the Code; that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan, that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that Holdings, the Borrower, any of their
respective Subsidiaries or any ERISA Affiliate will or may incur any liability
(including any contingent or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29),
4971 or 4975 of the Code or Section 409 or 502(i) or 502(l) of ERISA; or that
Holdings, the Borrower or any Subsidiary may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan. The Borrower will
deliver to each of the Banks a complete copy of the annual report (Form 5500) of
each Plan required to be filed with the Internal Revenue Service. In addition
to any certificates or notices delivered to the Banks pursuant to the first
sentence hereof, copies of annual reports and any material notices received by
Holdings, the Borrower or any of their respective Subsidiaries or any ERISA
Affiliate with respect to any Plan shall be delivered to the Banks no later than
20 days after the date such report has been filed with the Internal Revenue
Service or such notice has been received by Holdings, the Borrower, the
Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Each of Holdings and the
------------------------------------
Borrower shall cause (i) each of its, and each of its Subsidiaries', fiscal
years to end on the Friday closest to March 31 and (ii) each of its, and each of
its Subsidiaries', fiscal quarters to end on a date consistent with the date of
its fiscal year end; provided that Holdings and the Borrower may change such
--------
fiscal year to any other fiscal year period of twelve consecutive months with
the consent of the Agents, which consent shall not be unreasonably withheld.
8.09 Performance of Obligations. Each of Holdings and the Borrower
--------------------------
will, and will cause each of its Subsidiaries to, perform all of its obligations
under the terms of each mortgage, indenture, security agreement and other debt
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, the Borrower or of
the Borrower and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. Each of Holdings and the Borrower will pay
----------------
and discharge or cause to be paid and discharged, and will cause each of their
respective Subsidiaries to pay and discharge, all material Taxes imposed upon it
or upon its income or profits, or upon any material properties belonging to it,
in each case
-59-
on a timely basis, and all lawful claims which, if unpaid, might become a lien
or charge upon any properties of Holdings, the Borrower or any of their
respective Subsidiaries; provided that none of Holdings, the Borrower or any of
--------
their respective Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has maintained adequate reserves with respect thereto in
accordance with GAAP.
8.11. Additional Security; Further Assurances. (a) Pledge of
--------------------------------------- ---------
Additional Collateral. Promptly, and in any event within 90 days after the
---------------------
acquisition of assets of the type that would have constituted Collateral (if the
person acquiring such assets had executed an appropriate Security Document on
the Effective Date) at the Effective Date (the "Additional Collateral"),
---------------------
Holdings and the Borrower will, and will cause each of the Guarantors to, at the
request of the Collateral Agent following consultation with the Company as to
the value of any such Additional Collateral, take all necessary action,
including entering into the appropriate security documents and filing the
appropriate financing statements under the provisions of the UCC or applicable
foreign, domestic or local laws, rules or regulations in each of the offices
where such filing is necessary or appropriate to grant the Collateral Agent a
perfected Lien in such Collateral (or comparable interest under foreign law in
the case of foreign Collateral) pursuant to and to the full extent required by
the Security Documents and this Agreement, subject to Permitted Liens and Prior
Liens; provided that no such action will be required by the Borrower or any
--------
Guarantor to the extent that any such Additional Collateral is subject to a
preexisting agreement which prohibits the granting of any additional liens;
provided further that such preexisting agreement was not entered into in
-------- -------
connection with, or in anticipation of or contemplation of, the acquisition of
such assets by the Borrower or any of its Subsidiaries. In the event that the
Borrower or a Guarantor acquires an interest in additional real property, the
Borrower or such Guarantor, as the case may be, will take such actions and
execute such documents as the Administrative Agent shall require to confirm the
Lien of a Mortgage, if applicable, or to create a new Mortgage (including,
without limitation, satisfaction of the conditions set forth in Sections 5.03
and 5.11) or leasehold mortgage in the event a fee interest is not acquired.
All actions taken by the parties in connection with the pledge of Additional
Collateral, including, without limitation, reasonable costs of counsel for the
Collateral Agent, shall be for the account of the Company, which shall pay all
reasonable sums due on demand.
(b) Holdings and the Borrower will, and will cause each of the
Guarantors to, at the expense of Holdings and the Borrower, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
real property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require upon reasonable notice.
Furthermore, the Company shall cause to
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be delivered to the Collateral Agent such opinions of counsel, title insurance
surveys and other related documents as may be reasonably requested by the
Collateral Agent to assure themselves that this Section 8.11 has been complied
with.
(c) If the Administrative Agent or the Required Banks reasonably
determine (and so advise Holdings and the Borrower) that they are required by
law or regulation to have appraisals prepared in respect of the Real Property of
the Company and its Subsidiaries constituting Collateral, the Company shall
provide to the Collateral Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989 and which shall be in
form and substance reasonably satisfactory to the Collateral Agent[; provided
--------
however, that no Guarantor, Borrower or Subsidiary, collectively, shall be
-------
required to obtain any such appraisal for any such location more frequently than
once in any 36 consecutive month period.]
(d) Holdings and the Borrower agree that each action required above by
this Section 8.11 shall be completed within 90 days after such action is either
requested to be taken by the Administrative Agent or the Required Banks or
required to be taken by Holdings or the Borrower or any Subsidiary Guarantor
pursuant to the terms of this Section 8.11 or, if such action is not capable of
completion within such 90 day period, Holdings or the Borrower or any Subsidiary
Guarantor, as the case may be, shall use their reasonable efforts to complete
such action within the reasonable period in which it can be expected to be
completed; provided that in no event shall Holdings or the Borrower or any of
--------
their Subsidiaries be required to take any action, other than using its
reasonable efforts, to obtain consents from third parties with respect to its
compliance with this Section 8.11.
SECTION 9. Negative Covenants. Holdings and the Borrower hereby
------------------
covenant and agree that as of the Effective Date and thereafter for so long as
this Agreement is in effect and until the Total Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been cash collateralized in a cash collateral
account in a manner satisfactory to the Letter of Credit Issuer in its sole and
absolute discretion) or Notes are outstanding and the Loans, together with
interest, Fees and all other Obligations (other than any indemnities described
in Section 13.13 which are not then due and payable) incurred hereunder, are
paid in full:
9.01 Liens. Holdings and the Borrower will not, and will not permit
-----
any of their respective Subsidiaries to, create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of Holdings or the Borrower or any of their respective
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or
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assets, or assign any right to receive income or permit the filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar recording or notice statute; provided that the provisions of this
--------
Section 9.01 shall not prevent the creation, incurrence, assumption or existence
of the following (Liens described below are herein referred to as "Permitted
---------
Liens"):
-----
(a) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's, vendor's and mechanics' liens and
other similar Liens arising in the ordinary course of business, and (x)
which do not in the aggregate materially detract from the value of the
Borrower's or such Subsidiary's property or assets or materially impair the
use thereof in the operation of the business of the Borrower or such
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or assets subject to any such Lien;
(c) Liens in existence on the Effective Date which are listed, and the
property subject thereto described, in Schedule 9.01, but only to the
respective date, if any, set forth in such Schedule 9.01 for the removal
and termination of any such Liens, plus renewals, replacements and
extensions of such Liens to the extent set forth on Schedule 9.01; provided
--------
that (x) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase from that amount outstanding at the
time of any such renewal or extension and (y) any such renewal or extension
does not encumber any additional assets or properties of Holdings or any of
its Subsidiaries;
(d) Permitted Encumbrances;
(e) Liens created pursuant to the Security Documents or in favor of
the Agents or the Banks;
(f) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Holdings and its Subsidiaries taken as a whole or any
interest or title of a lessor or sublessor under any lease permitted by
Section 9.04(d);
-62-
(g) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrower or any of its
Subsidiaries;
(h) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(i) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09; provided that no cash
--------
or property is deposited or delivered to secure the respective judgment or
award (or any appeal bond in respect thereof, except as permitted by
following clause (k));
(j) statutory and common law landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
(k) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or (y) to secure the performance of tenders, statutory
obligations, surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return of
money bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(l) Liens (which may be pari passu with Liens securing Obligations)
---- -----
granted in favor of a Bank to secure Obligations of the Borrower and its
Subsidiaries in respect of Interest Rate Protection Agreements;
(m) Liens in favor of a banking institution arising as a matter of law
encumbering deposits (including the right of set-off) held by such banking
institutions incurred in the ordinary course of business and which are
within the general parameters customary in the banking industry;
(n) Liens in favor of customs and revenue authorities arising as a
matter of law to secure the payment of customs duties in connection with
the importation of goods;
(o) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business
in accordance with the past practices of the Borrower and its Subsidiaries
prior to the Effective Date;
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(p) Deposits made to secure statutory, regulatory, contractual or
warranty requirements or obligations, including rights of offset and set-
off;
(q) Liens arising pursuant to Capitalized Lease Obligations and
purchase money obligations or security interests securing Indebtedness
representing the purchase price (or financing of the purchase price within
90 days after the respective purchase) of assets acquired after the
Effective Date; provided that (i) any such Liens attach only to the assets
--------
so purchased and does not encumber any other asset of Holdings or any of
its Subsidiaries, (ii) the Indebtedness secured by any such Lien (including
refinancings thereof) does not exceed 100% of the lesser of the fair market
value or the purchase price of the property being purchased at the time of
the incurrence of such Indebtedness and (iii) the Indebtedness secured
thereby is permitted to be incurred pursuant to Section 9.04(d);
(r) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Subsidiary of the Borrower in
existence at the time such Subsidiary is acquired pursuant to a Permitted
Acquisition; provided that (i) any Indebtedness that is secured by such
--------
Liens is permitted to exist under Section 9.04(g), and (ii) such Liens are
not incurred in connection with, or in contemplation or anticipation of,
such Permitted Acquisition and do not attach to any other asset of the
Borrower or any of its Subsidiaries;
(s) Deposits made in the ordinary course of business to secure
liability to insurance carriers in an amount not to exceed $500,000 in the
aggregate at any time outstanding;
(t) Liens arising out of or created by motor vehicle leases in an
amount not to exceed $12,500,000 in the aggregate at any time outstanding;
(u) Liens securing reimbursement obligations with respect to
commercial letters of credit not issued under this Agreement; and
(v) Liens not otherwise permitted by the foregoing clauses (a) through
(u) to the extent attaching to properties and assets with an aggregate fair
value not in excess of and securing liabilities not in excess of $500,000
in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
------------------------------------------------------
Holdings and the Borrower will not, and will not permit any of their respective
Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation, or convey, sell, lease or otherwise
dispose of (or agree to do any of the foregoing at any future time) all or any
part of its property or assets (other than
-64-
inventory in the ordinary course of business, including sales of inventory on
consignment in the ordinary course of business), or enter into any partnerships,
joint ventures or sale-leaseback transactions, or purchase or otherwise acquire
(in one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that the
following shall be permitted:
(a) Holdings and its Subsidiaries may, as lessee or lessor, enter
into operating leases in the ordinary course of business with respect to
real or personal property;
(b) Capital Expenditures by Holdings and its Subsidiaries to the
extent not in violation of Section 9.07;
(c) the advances, investments and loans permitted pursuant to Section
9.05;
(d) Holdings and its Subsidiaries may sell or discount, in each case
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
(e) Holdings and its Subsidiaries may sell or exchange specific items
of machinery or equipment, so long as the proceeds of each such sale or
exchange is used to acquire (and results within 180 days of such sale or
exchange in the acquisition of) replacement items of machinery or equipment
which are the functional equivalent of the item of equipment so sold or
exchanged;
(f) Holdings and its Subsidiaries may, in the ordinary course of
business, license, as licensor or licensee, patents, trademarks, copyrights
and know-how to third Persons and to one another, so long as any such
license by Holdings or its Subsidiaries in its capacity as licensor is
permitted to be assigned pursuant to the Security Agreement (to the extent
that a security interest in such patents, trademarks, copyrights and know-
how is granted thereunder) and does not otherwise prohibit the granting of
a Lien by Holdings or any of its Subsidiaries pursuant to the Security
Agreement in the intellectual property covered by such license;
(g) any Wholly Owned Subsidiary of the Borrower may transfer assets
to the Borrower or to any other Wholly Owned Subsidiary of the Borrower, so
long as (i) if the transferee is a Subsidiary, such Subsidiary is a
Guarantor and (ii) the security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security Documents
in the assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such transfer);
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(h) any Wholly Owned Subsidiary of the Borrower may merge with and into,
or be dissolved or liquidated into, the Borrower so long as (i) the
Borrower is the surviving corporation of any such merger, dissolution or
liquidation and (ii) the security interests granted to the Collateral Agent
for the benefit of the Secured Creditors pursuant to the Security
Documents in the assets of such Wholly Owned Subsidiary shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such merger, dissolution or liquidation);
(i) any Wholly Owned Subsidiary of the Borrower may merge with and
into, or be dissolved or liquidated into, any Wholly Owned Subsidiary of
the Borrower so long as (i) such Wholly Owned Subsidiary is a Guarantor and
is the surviving corporation of any such merger, dissolution or liquidation
and (ii) the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets of such Wholly Owned Subsidiary shall remain in full force and
effect and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation);
(j) so long as no Default or Event of Default then exists or would
result therefrom (including giving pro forma effect to such acquisition and
--- -----
any additional Indebtedness resulting therefrom or incurred or assumed in
connection therewith as if such acquisition had occurred and such
Indebtedness had been incurred as of the first day of the most recently
completed Test Period (including any other Permitted Acquisition that
occurred, and related Indebtedness that was incurred, during or subsequent
to such Test Period)), Holdings or any of its Wholly Owned Subsidiaries may
consummate a Permitted Acquisition; provided that (i) Holdings shall have
--------
delivered to the Administrative Agent, at the time of delivery of the
Permitted Acquisition Notice, a certificate of the Chief Financial Officer
of Holdings showing compliance (in reasonable detail as to pro forma
calculations) with all of the provisions of this paragraph (j), and (ii)
Holdings or the Borrower shall have given the Agents and the Banks at least
30 days prior notice of any Permitted Acquisition (each such notice a
"Permitted Acquisition Notice");
-----------------------------
(k) leases or subleases granted by Holdings or any of its
Subsidiaries to third Persons not interfering in any material respect with
the business of Holdings or any of its Subsidiaries;
(l) "inactive" or "shell" Subsidiaries may be dissolved or otherwise
liquidated;
(m) other sales or dispositions of assets in the ordinary course of
business (other than assets disposed of in connection with a Recovery
Event);
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provided that (x) the aggregate Net Sale Proceeds received from all such
--------
sales and dispositions shall not exceed $5,000,000 in any fiscal year of
the Borrower, (y) each such sale shall be in an amount at least equal to
the fair market value thereof (as determined in good faith by the Borrower)
and for proceeds consisting solely of not less than (A) 85% cash and (B)
seller indebtedness evidenced by promissory notes, which promissory notes
shall be pledged and delivered to the Collateral Agent pursuant to the
Pledge Agreement, and (z) the Net Cash Proceeds of any such sale are
applied to repay the Loans to the extent required by Section 4.02(g); and
provided further, that the sale or disposition of the capital stock of (i)
-------- -------
any Subsidiary Guarantor shall be prohibited and (ii) any other Subsidiary
of the Borrower shall be prohibited unless it is for all of the outstanding
capital stock of such Subsidiary owned by the Borrower and its
Subsidiaries; and
(n) Holdings and its Subsidiaries may (i) purchase or sell inventory,
equipment and/or other assets in the ordinary course of business in
connection with transactions contemplated by Section 9.05(b) and (ii)
dispose of obsolete inventory or equipment not used or useful in the
business of Holdings or such Subsidiaries.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 9.02, such Collateral
in each case shall be sold or otherwise disposed of free and clear of the Liens
created by the Security Documents and the Administrative Agent shall take such
actions (including, without limitation, directing the Collateral Agent to take
such actions) as are appropriate in connection therewith.
9.03 Dividends, etc. Holdings and the Borrower will not, and will
--------------
not permit any of their respective Subsidiaries to, declare or pay any dividends
(other than dividends payable solely in common stock or preferred stock
(provided such preferred stock meets the requirements of Section 9.13(c)(ii),
---------
(iii), (iv) and (v)) of Holdings or any such Subsidiary, as the case may be) or
return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
for any consideration, any shares of any class of its capital stock, now or
hereafter outstanding (or any warrants for or options or stock appreciation
rights in respect of any of such shares), or set aside any funds for any of the
foregoing purposes, and the Borrower will not permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock of the Borrower or any Subsidiary of the Borrower now or hereafter
outstanding (or any options or warrants or such stock appreciation rights issued
by such Person with respect to its capital stock) (all of the foregoing
"Dividends", it being understood that the payments
----------
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made in accordance with the clauses contained in the proviso of Section 9.06
shall not be deemed to be Dividends), except that:
(a) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Wholly-Owned Subsidiary of the Borrower; and
(b) as long as no Default or Event of Default shall then exist or
result therefrom, the Borrower may declare and pay a Dividend on the
Borrower's Common Stock in an amount not to exceed the amount required for
payment of principal and interest under the terms of the CLC Notes
provided, that such Dividend is not declared earlier than thirty days prior
--------
to such required payment;
(c) Borrower or any Subsidiary of Borrower may make payments to
Holdings in an amount not in excess of the federal and state (in such
states that permit consolidated or combined tax returns) income tax
liability that Holdings, the Borrower and its Subsidiaries would have been
liable for if Holdings, the Borrower and its Subsidiaries had filed their
taxes on a stand-alone basis; provided that such payments shall be made by
--------
Holdings no earlier than five days prior to the date on which Holdings is
required to make its payments to the Internal Revenue Service or the
applicable taxing authority, as applicable;
(d) if no Default or Event of Default shall have occurred and be
continuing, Borrower may declare and pay dividends to Holdings so that
Holdings may repurchase Holdings Common Stock (or rights to acquire
Holdings Common Stock) from members of Holdings' or the Borrower's
management in connection with certain executive employment agreements in an
aggregate amount not to exceed $750,000 in any fiscal year;
(e) if no Default or Event of Default shall have occurred and be
continuing, Borrower may declare and pay dividends to Holdings to pay
reasonable accounting fees and other support services provided to the
Borrower and to pay Holdings' operating expenses, in an aggregate amount
not to exceed $500,000 in any fiscal year; and
(f) Borrower may declare and pay dividends to Holdings in connection
with any payment obligations (including administration costs and expenses)
under (i) Holdings' stock purchase program offered to employees of Holdings
and/or subsidiaries of Holdings; (ii) the Employee Stock Option Plan; or
(iii) options to purchase Holdings Common Stock in an aggregate amount not
to exceed $500,000 in any fiscal year.
9.04 Indebtedness. The Holdings and the Borrower will not, and will
------------
not permit any of their respective Subsidiaries to, contract, create, incur,
assume or suffer to exist any Indebtedness, except:
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(a) Indebtedness incurred pursuant to this Agreement and the other Credit
Documents;
(b) Existing Indebtedness outstanding on the Effective Date and listed
on Schedule 7.22, including any extensions, refinancings, replacements or
restructurings thereof; provided that the then outstanding principal amount
--------
thereof is not increased; provided, however, the Borrower shall not extend,
-------- -------
refinance, replace or restructure the 11 3/4% Notes;
(c) Indebtedness under Interest Rate Protection Agreements relating
to Indebtedness under this Agreement;
(d) Capitalized Lease Obligations and Indebtedness of Holdings and its
Subsidiaries incurred pursuant to purchase money Liens permitted under
Section 9.01(q); provided that all such Capitalized Lease Obligations are
--------
permitted under Section 9.02, and (ii) the sum of (x) the aggregate
Capitalized Lease Obligations outstanding at any time plus (y) the
aggregate principal amount of such purchase money Indebtedness outstanding
at such time shall not exceed $15,000,000 (including Capital Lease
Obligations referred to on Schedule 7.22);
(e) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(g);
(f) Indebtedness consisting of guaranties by the Borrower of
Indebtedness, leases and other contractual obligations permitted to be
incurred by Subsidiaries of the Borrower that are Guarantors;
(g) Indebtedness acquired as a result of a Permitted Acquisition (or
Indebtedness assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness); provided that (i) such Indebtedness was not
--------
incurred in connection with, or in anticipation or contemplation of, such
Permitted Acquisition, (ii) at the time of such Permitted Acquisition such
Indebtedness does not exceed $10,000,000 in the aggregate, and (iii) so
long as, before and after giving effect to such Permitted Acquisition, no
Default or Event of Default shall have occurred or would result therefrom;
(h) additional Indebtedness (on terms reasonably satisfactory to the
Agents) of the Borrower and its Subsidiaries to effect a Permitted
Acquisition in an amount not to exceed $200,000,000 in an aggregate
principal amount at any time outstanding so long as such Indebtedness is
incurred within one year of the Effective Date;
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(i) additional Indebtedness of Holdings and its Subsidiaries not
otherwise permitted hereunder not exceeding $15,000,000 in aggregate
principal amount at any time outstanding; provided that no more than
--------
$10,000,000 shall be Indebtedness not satisfying the requirements of the
proviso to Section 4.02(f);
(j) Indebtedness of Holdings and its Subsidiaries represented by
letters of credit not issued under this Agreement for the account of
Holdings or such Subsidiaries, as the case may be, in an aggregate amount
not to exceed $3,000,000;
(k) Indebtedness resulting from endorsement of negotiable instruments
for collection in the ordinary course of business;
(l) Indebtedness arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection with any sale
of assets of Holdings or any of its Subsidiaries permitted under Section
9.02; and
(m) Indebtedness incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds
and other similar obligations.
9.05 Advances, Investments and Loans. Holdings and the Borrower
-------------------------------
will not, and will not permit any of their respective Subsidiaries to, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash, Cash Equivalents (collectively, "Investments"), except:
-----------
(a) Holdings and the Borrower and their Subsidiaries may invest in
cash and Cash Equivalents;
(b) the Borrower and its Subsidiaries may acquire and hold receivables
owing to it (and, in the case of Super Laundry, notes receivable created in
the ordinary course of business consistent with past practice), if created
or acquired in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms (including the dating of
receivables) of the Borrower or such Subsidiary (or in the case of Super
Laundry, having payment and other terms consistent with past practice);
(c) the Borrower and its Subsidiaries may acquire and own investments
(including debt obligations) received in connection with the
-70-
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into to protect
Borrower against fluctuations in interest rates in respect of the
Obligations;
(e) advances, loans and investments in existence on the Effective Date
and listed on Schedule 9.05 shall be permitted, without giving effect to
any additions thereto or replacements thereof (except those additions or
replacements which are existing obligations as of the Effective Date but
only to the extent such further obligations are described on such Schedule
9.05);
(f) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases or other contractual
arrangements shall be permitted;
(g) Holdings and the Borrower may make intercompany loans and advances
to any of their Subsidiaries that are Guarantors and any Subsidiary of
Holdings and the Borrower may make intercompany loans and advances to the
Borrower or any other Subsidiary of Holdings and the Borrower that is a
Guarantor (collectively, "Intercompany Loans"); provided that (x) each
------------------ --------
Intercompany Loan shall contain subordination provisions satisfactory to
the Administrative Agent, (y) each Intercompany Loan shall be evidenced by
an Intercompany Note and (z) each such Intercompany Note shall be pledged
to the Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries in the ordinary course of
business and consistent with past practices shall be permitted in an
aggregate principal amount not to exceed $500,000 at any one time
outstanding; provided, however, that the foregoing limitation shall not
-------- -------
apply to loans and advances for moving and travel expenses or relocation
expenses incurred in connection with a Permitted Acquisition, which loans,
advances and expenses shall be permitted;
(i) Permitted Acquisitions shall be permitted;
(j) the Borrower and its Subsidiaries may acquire and hold promissory
notes and/or equity securities issued by the purchaser or purchasers in
connection with the sale of assets to the extent permitted under Section
9.02;
(k) Holdings and the Borrower may contribute cash to one or more of
their Subsidiaries that are or become Guarantors formed after the Effective
-71-
Date in accordance with Section 9.15 (including in connection with a
Permitted Acquisition) so long as such Subsidiary remains a Guarantor;
(l) Holdings and the Borrower may make capital contributions to any of
their respective Subsidiaries that are Guarantors;
(m) Holdings may acquire Holdings Common Stock issuable to holders of
Holdings Common Stock Options granted by Holdings or pursuant to the
Employee Stock Option Plan, in each case by means of cashless transactions;
and
(n) Holdings and its Subsidiaries may make cash Investments not
otherwise permitted by clauses (a) through (m) above, in an amount not to
exceed $10,000,000 outstanding at any one time; provided such Investment is
--------
made with the cash proceeds of equity after giving effect to the
application of cash proceeds in accordance with Section 4.02(e); provided
--------
further, that before and after giving effect to each such Investment, no
-------
Default or Event of Default shall have occurred or result therefrom.
9.06 Transactions with Affiliates. Except as set forth on Schedule
----------------------------
9.06, Holdings and the Borrower will not, and will not permit any of their
respective Subsidiaries to, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate, other than in the ordinary course of business and on terms and
conditions substantially as favorable to Holdings, the Borrower or such
Subsidiary as would reasonably be obtained by Holdings, the Borrower or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that:
(a) Dividends may be paid to the extent provided in Section 9.03;
(b) loans may be made and other transactions may be entered into by
the Borrower and its Subsidiaries to the extent permitted by Sections 9.02,
9.04 and 9.05;
(c) customary fees may be paid to non-officer directors of Holdings;
(d) Holdings and its Subsidiaries may enter into employment
arrangements with their respective officers and employees in the ordinary
course of business;
(e) payments under Tax Sharing Agreements may be paid to the extent
permitted by Section 9.03(c); and
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(f) reasonable fees and compensation may be paid to and indemnity
provided on behalf of officers, directors, employees or consultants of
Holdings or any of its Subsidiaries.
Except as specifically provided above, no management or similar fees
shall be paid or payable by Holdings or any of its Subsidiaries to any Person
other than the Borrower.
9.07 Capital Expenditures. (a) Holdings will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any period set forth below (taken as one accounting period) the Borrower
and its Subsidiaries may make Capital Expenditures so long as the aggregate
amount of such Capital Expenditures made under this Section 9.07(a) does not
exceed in any period set forth below the amount set forth opposite such period
below:
Period Amount
------ ------
Effective Date through last day
of Fiscal Year ending
closest to March 31, 1998 $50,000,000
Fiscal Year ending closest to
March 31, 1999 $50,000,000
Fiscal Year ending closest to
March 31, 2000 $50,000,000
Fiscal Year ending closest to
March 31, 2001 $55,000,000
Fiscal Year ending closest to
March 31, 2002 $55,000,000
Fiscal Year ending closest to
March 31, 2003 $55,000,000
Fiscal Year ending closest to
March 31, 2004 and each
Fiscal Year ending thereafter $60,000,000
(b) Notwithstanding anything to the contrary contained in clause (a)
above, to the extent that the Capital Expenditures made by Holdings and its
Subsidiaries in any period set forth in clause (a) above are less than the
amount permitted to be made in such period (without giving effect to any
additional amount available as a result
-73-
of this clause (b) or clause (c) below), the amount of such difference (the
"Rollover Amount") may be carried forward and used to make Capital Expenditures
----------------
in the immediately succeeding fiscal year of the Borrower; provided that in no
--------
event shall the Rollover Amount be greater than $5,000,000.
(c) In addition to the Capital Expenditures permitted pursuant to
preceding clauses (a) and (b), Holdings and its Subsidiaries may make additional
Capital Expenditures as follows: (i) Capital Expenditures consisting of the
reinvestment of Net Sale Proceeds of asset sales not required to be applied to
prepay the Loans pursuant to Section 4.02(g) as a result of clause (iv) of the
parenthetical phrase contained therein or the proviso thereto, (ii) the
reinvestment of proceeds of Recovery Events not required to be applied to prepay
the Loans pursuant to Section 4.02(i), (iii) Permitted Acquisitions made in
accordance with Section 9.02(k) and (iv) Permitted Acquisition Capital
Expenditures.
9.08 Leverage Ratio. Holdings and its Subsidiaries will not permit
--------------
the Consolidated Adjusted Leverage Ratio for any Test Period (taken as one
accounting period) ending on the last day of any fiscal quarter described below
to be greater than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ended
Closest to Ratio
-------------------- -----
March 31, 1997 5.00
June 30, 1997 5.00
September 30, 1997 4.75
December 31, 1997 4.75
March 31, 1998 4.60
June 30, 1998 4.50
September 30, 1998 4.45
December 31, 1998 4.35
March 31, 1999 4.25
June 30, 1999 4.15
September 30, 1999 4.05
December 31, 1999 3.95
March 31, 2000 3.90
June 30, 2000 3.80
September 30, 2000 3.70
December 31, 2000 3.60
March 31, 2001 3.50
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June 30, 2001 3.40
September 30, 2001 3.30
December 31, 2001 3.20
March 31, 2002 3.10
June 30, 2002 3.05
September 30, 2002 3.00
December 31, 2002 2.95
March 31, 2003 and each Fiscal 2.90
Quarter thereafter
9.09 Consolidated Interest Coverage Ratio. Holdings and its
------------------------------------
Subsidiaries will not permit the Consolidated Interest Coverage Ratio for any
Test Period ended on the last day of a fiscal quarter of Holdings described
below to be less than the amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ended
Closest to Ratio
-------------------- -----
March 31, 1997 2.00
June 30, 1997 2.00
September 30, 1997 2.00
December 31, 1997 2.00
March 31, 1998 2.00
June 30, 1998 2.00
September 30, 1998 2.05
December 31, 1998 2.10
March 31, 1999 2.15
June 30, 1999 2.20
September 30, 1999 2.25
December 31, 1999 2.30
March 31, 2000 2.35
June 30, 2000 2.40
September 30, 2000 2.45
December 31, 2000 2.50
March 31, 2001 2.55
June 30, 2001 2.60
September 30, 2001 2.65
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December 31, 2001 2.75
March 31, 2002 2.85
June 30, 2002 2.90
September 30, 2002 2.95
December 31, 2002 3.00
March 31, 2003 and each Fiscal 3.10
Quarter thereafter
9.10 Minimum Consolidated EBITDA. Holdings and its Subsidiaries will
---------------------------
not permit Consolidated EBITDA for any Test Period, in each case taken as one
accounting period, ended on the last day of a fiscal quarter of Holdings
described below to be less than the amount set forth opposite such fiscal
quarter below:
Fiscal Quarter Ended Amount
Closest to (in millions)
-------------------- -------------
March 31, 1997 $ 75.0
June 30, 1997 75.0
September 30, 1997 75.0
December 31, 1997 75.0
March 31, 1998 75.0
June 30, 1998 75.0
September 30, 1998 77.5
December 31, 1998 77.5
March 31, 1999 80.0
June 30, 1999 80.0
September 30, 1999 82.5
December 31, 1999 82.5
March 31, 2000 85.0
June 30, 2000 85.0
September 30, 2000 87.5
December 31, 2000 87.5
March 31, 2001 90.0
June 30, 2001 90.0
September 30, 2001 92.5
December 31, 2001 92.5
March 31, 2002 95.0
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Fiscal Quarter Ended Amount
Closest to (in millions)
-------------------- -------------
June 30, 2002 95.0
September 30, 2002 97.5
December 31, 2002 97.5
March 31, 2003 and each 100.0
Fiscal Quarter thereafter
9.11 Limitation on Voluntary Payments and Modifications of
-----------------------------------------------------
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
--------------------------------------------------------------------------------
Other Agreements; etc. Holdings and the Borrower will not, and will not permit
---------------------
any of their respective Subsidiaries to:
(a) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any Existing Indebtedness (other than, as long
as no Default or Event of Default exists, (i) the prepayment of the 12 3/4%
Notes, (ii) the prepayment of the CLC Notes with the net cash proceeds from
the issuance of debt or equity securities by Holdings or any of its
Subsidiaries or (iii) prepayment of up to an aggregate of 35% of the 11
3/4% Notes made with the net cash proceeds of equity securities by Holdings
to the extent invested by Holdings in the Borrower in the form of a common
equity investment by redemption or repurchase within 120 days of receipt of
such proceeds by Holdings at a price not to exceed the redemption price set
forth in the indenture under which such 11 3/4% Notes were issued as in
effect on the Effective Date);
(b) amend or modify in any material respect or in any manner adverse
to the Borrower or the Banks, or permit such an amendment or modification
of, any provision of the Existing Indebtedness; and
(c) amend, modify or change in any way adverse to the interests of
the Banks, any Tax Sharing Agreement, its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws.
9.12 Limitation on Certain Restrictions on Subsidiaries. Holdings
--------------------------------------------------
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits
-77-
owned by Holdings or any Subsidiary of Holdings, or pay any Indebtedness owed to
Holdings or a Subsidiary of Holdings, (b) make loans or advances to Holdings or
any of Holdings' Subsidiaries or (c) transfer any of its properties or assets to
Holdings, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or a Subsidiary of the
Borrower, (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrower or a Subsidiary of the Borrower in the
ordinary course of business, (v) any instrument governing any Indebtedness
permitted under Section 9.04(g), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person so acquired; (vi)
agreements existing on the Effective Date to the extent and in the manner such
agreements are in effect on the Effective Date; and (vii) an agreement governing
Indebtedness incurred to refinance the Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clauses (ii), (v) or (vi).
9.13 Limitation on Issuance of Capital Stock. Except as provided
---------------------------------------
otherwise herein (a) Holdings and the Borrower and their respective Subsidiaries
shall not issue (i) any preferred stock or (ii) any redeemable common stock.
(b) The Borrower shall not issue, or permit any of its Subsidiaries
to issue, any capital stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, capital stock,
except (i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and similar issuances which do not
decrease the percentage ownership of Holdings or any of its Subsidiaries in any
class of the capital stock of the Borrower or such Subsidiary, (iii) to qualify
directors to the extent required by applicable law, (iv) Subsidiaries formed
after the Effective Date pursuant to Section 9.15 may issue capital stock to the
Borrower or its Wholly-Owned Subsidiaries, in accordance with the other
requirements of this Agreement, (v) under or in connection with the Employee
Stock Option Plan or options to purchase Holdings Common Stock and (vi) Borrower
may issue equity securities to Holdings so long as such equity securities are
pledged to the Agents and the Banks as security for Borrower's obligations under
this Agreement on substantially the same terms and conditions as the pledge by
Holdings of the capital stock of Borrower on the Effective Date and the cash
proceeds of such equities will be applied in accordance with Section 4.02(e).
(c) Notwithstanding the above, Holdings may issue preferred stock so
long as (i) cash proceeds are applied in accordance with Section 4.02(e); (ii)
no dividends are payable in cash; (iii) it is not redeemable at the option of
the holder thereof in whole or in part; (iv) it is not convertible into
Indebtedness of Holdings; and (v) it matures after September 30, 2004 and
provides for no mandatory prepayment or mandatory offers to purchase prior to
such date.
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9.14 Business. (a) Holdings shall engage in no business activities
--------
and shall have no assets or liabilities, other than its ownership of the capital
stock of the Borrower and liabilities incident thereto and except as otherwise
permitted by this Agreement.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which the Borrower and its Subsidiaries are engaged on the Effective
Date and reasonable extensions thereof or businesses complementary to their
respective businesses.
9.15 Limitation on the Creation of Subsidiaries. Notwithstanding
------------------------------------------
anything to the contrary contained in this Agreement, Holdings will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Effective Date any Subsidiary; provided that Holdings and its Wholly Owned
--------
Subsidiaries shall be permitted to establish or create Subsidiaries as a result
of investments made pursuant to Section 9.05(i), (k), (l) or (n) so long as (i)
at least 15 days' prior written notice thereof is given to the Administrative
Agent (or such shorter period of time as is acceptable to the Administrative
Agent), (ii) the capital stock of such new Subsidiary is promptly pledged
pursuant to, and to the extent required by, this Agreement and the Pledge
Agreement and the certificates, if any, representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent,
(iii) such new Subsidiary promptly executes a counterpart of the Guaranty, the
Pledge Agreement and the Security Agreement, and (iv) to the extent requested by
the Administrative Agent or the Required Banks, takes all actions required
pursuant to Section 8.11; provided that no such action will be required by any
--------
new Subsidiary (that is not a Wholly Owned Subsidiary) to the extent such new
Subsidiary is a party to a pre-existing agreement which prohibits such new
Subsidiary from executing a Guaranty; provided further, such pre-existing
-------- -------
agreement was not entered into for the purpose of avoiding the requirements of
Section 9.14 and the restrictions contained therein are no more adverse to
Holdings and its Subsidiaries than to the other equity owners in such new
Subsidiary. In addition, each new Subsidiary that is required to execute any
Credit Document shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in Section 5
as such new Subsidiary would have had to deliver if such new Subsidiary were a
Credit Party on the Effective Date.
9.16 Restriction on Tax Consolidation. Holdings will not, and will
--------------------------------
not permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any Person other than Holdings and its
Subsidiaries except for tax periods beginning prior to such entity's having
become a Subsidiary of Holdings; provided, however, that if Holdings disposes of
-------- -------
more than 50% of the outstanding stock of any Subsidiary (by both voting power
and value), this Section 9.16 will not apply with respect to such Subsidiary.
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SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
----------------
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any Unpaid Drawings or interest on any Loan or Note, or any Fees or any
other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
--------------------
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. Holdings or the Borrower shall (i) default in the
---------
due performance or observance by it of any term, covenant or agreement contained
in Section 8.01(g) or (i) or 8.08 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by the Agents or any
Bank; or
10.04 Default Under Other Agreements. Holdings, the Borrower or any
------------------------------
of their respective Subsidiaries shall (i) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Obligations) of Holdings, the Borrower or any of
their respective Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that (x) it shall not be a
Default or Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i)
through (iii), inclusive, is at least $2,500,000; or
10.05 Bankruptcy, etc. Holdings, the Borrower or any of their
---------------
respective Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in
----------
effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case
---------------
is commenced against Holdings, the Borrower or any of their respective
Subsidiaries and the petition
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is not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings, the Borrower or any of their respective Subsidiaries, or Holdings, the
Borrower or any of their respective Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings, the Borrower or any of
their respective Subsidiaries, or there is commenced against Holdings, the
Borrower or any of their respective Subsidiaries any such proceeding which
remains undismissed for a period of 60 days, or Holdings, the Borrower or any of
their respective Subsidiaries is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
Holdings, the Borrower or any of their respective Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings, the Borrower or any of their respective Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Holdings, the Borrower or any of their respective Subsidiaries for the purpose
of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or, in the reasonable opinion of the
Required Banks, is likely to have a trustee appointed to administer such Plan,
any Plan is, shall have been or is likely to be terminated or to be the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made to a Plan has not been made,
Holdings, the Borrower or any their respective Subsidiaries or any ERISA
Affiliate has incurred or is likely to incur a liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code, or Holdings,
the Borrower or any of their respective Subsidiaries has incurred or is likely
to incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA); (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and in each case in clauses (a) and (b) above, such lien, security
interest or liability, individually and/or in the aggregate in the reasonable
opinion of the Required Banks, will have a material adverse effect upon the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of Holdings, the Borrower or of the Borrower and its Subsidiaries
taken as a whole; or
10.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full force
and effect, or
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shall cease in any material respect to give the Collateral Agent for the benefit
of the Secured Creditors the Liens, rights, powers and privileges purported to
be created thereby (including, without limitation, except with respect to the
Collateral Assignments of Leases and the Collateral Assignment of Location
Leases, a perfected security interest in, and Lien on, all of the Collateral),
in favor of the Collateral Agent, superior to and prior to the rights of all
third Persons, and subject to no other Liens except as permitted pursuant to
this Agreement or the Security Documents, or any Credit Party shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any of the Security Documents and such
default shall continue beyond any grace period specifically applicable thereto
pursuant to the terms of such Security Document; or
10.08 Guaranty. Any Guaranty or any material provision thereof shall
--------
cease to be in full force or effect as to the relevant Guarantor, or any
Guarantor or Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under the relevant Guaranty, or any
Guarantor shall default in the due performance or observance of any material
term, covenant or agreement on its part to be performed or observed pursuant to
the Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings, the Borrower or any of their respective Subsidiaries involving
in the aggregate for Holdings, the Borrower and their respective Subsidiaries a
liability (not paid or fully covered by a reputable and solvent insurance
company) and such judgments and decrees either shall be final and non-appealable
or shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 60 consecutive days, and the aggregate amount of all such judgments
exceeds $2,500,000; or
10.10 Change of Control. A Change of Control shall occur;
-----------------
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agents may, and upon the written request of the
Required Banks, shall, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of any Agents, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided
--------
that, if an Event of Default specified in Section 10.05 shall occur with respect
to the Borrower or Holdings, the result which would occur upon the giving of
written notice by the Agent to the Borrower as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice and the
Agent may exercise the rights specified in clause (v) below without the giving
of any such notice): (i) declare the Total Commitments terminated, whereupon
all Commitments of each Bank shall forthwith terminate immediately and any
Commitment Commission shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without
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presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Credit Party; (iii) terminate any Letter of Credit, which
may be terminated, in accordance with its terms; (iv) direct the Borrower to pay
(and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower or Holdings, it will pay) to the Collateral Agent at the Payment Office
such additional amount of cash, to be held as security by the Collateral Agent,
as is equal to the aggregate Stated Amount of all Letters of Credit issued for
the account of the Borrower and then outstanding; (v) enforce, as Collateral
Agent, any or all of the Liens, security interests and rights created pursuant
to the Security Documents; and (vi) apply any cash collateral as provided in
Section 4.02.
SECTION 11. Definitions and Accounting Terms.
--------------------------------
11.01 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition" shall mean the acquisition of all of the outstanding
capital stock of the partners of KWIK Wash pursuant to the Acquisition Documents
and the merger of KWIK Wash into the Borrower.
"Acquisition Documents" shall mean the Stock Purchase Agreement and
the partnership agreement and related organizational documents of KWIK Wash.
"Additional Mortgage" shall have the meaning provided in Section
8.11(a).
"Additional Mortgaged Property" shall have the meaning provided in
Section 8.11(a).
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Agent on the basis of quotations for such
certificates received by it from three certificate of deposit dealers in New
York of recognized standing or, if such quotations are unavailable, then on the
basis of other sources reasonably selected by the Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve requirements as
specified in Regulation D applicable on such day to a three-month certificate of
deposit of a member
-83-
bank of the Federal Reserve System in excess of $100,000 (including, without
limitation, any marginal, emergency, supplemental, special or other reserves),
plus (2) the then daily net annual assessment rate as estimated by the Agent for
determining the current annual assessment payable by BTCo to the Federal Deposit
Insurance Corporation for insuring three month certificates of deposit.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such termination;
provided that (A) no Bank's Adjusted Percentage shall change upon the occurrence
--------
of a Bank Default from that in effect immediately prior to such Bank Default if
after giving effect to such Bank Default, and any repayment of Revolving Loans
at such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the
aggregate outstanding principal amount of Revolving Loans of all Non-Defaulting
Banks plus (ii) the Letter of Credit Outstandings plus (iii) the outstanding
principal amount of Swingline Loans exceed the Adjusted Total Revolving Loan
Commitment; (B) the changes to the Adjusted Percentage that would have become
effective upon the occurrence of a Bank Default but that did not become
effective as a result of the preceding clause (A) shall become effective on the
first date after the occurrence of the relevant Bank Default on which the sum of
(i) the aggregate outstanding principal amount of the Revolving Loans of all
Non-Defaulting Banks plus (ii) the Letter of Credit Outstandings plus (iii) the
outstanding principal amount of Swingline Loans is equal to or less than the
Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's
Adjusted Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to
Letters of Credit, that were made during the period commencing after the date of
the relevant Bank Default and ending on the date of such change to its Adjusted
Percentage must be returned to the Borrower as a preferential or similar payment
in any bankruptcy or similar proceeding of the Borrower, then the change to such
Non-Defaulting Bank's Adjusted Percentage effected pursuant to said clause (B)
shall be reduced to that positive change, if any, as would have been made to its
Adjusted Percentage if (x) such repayments had not been made and (y) the maximum
change to its Adjusted Percentage would have resulted in the sum of the
outstanding principal of Revolving Loans made by such Bank plus such Bank's new
Adjusted Percentage of the outstanding principal amount of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
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"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
all Defaulting Banks.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Agent for the Banks hereunder, and shall include any successor to
the Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
-------- -------
Section 9.06, an Affiliate of Holdings shall include any Person that directly or
indirectly owns more than 5% of any class of the capital stock of Holdings and
any officer or director of Holdings or any such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agents" shall mean, collectively, the Administrative Agent, the
Syndication Agent and the Documentation Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Applicable Base Rate Margin" shall mean a percentage per annum equal
to (i) in the case of Loans other than Tranche B Term Loans, 1.25% and (ii) in
the case of Tranche B Term Loans, 1.75%; provided that each of the percentages
--------
set forth above shall be adjusted by the applicable Leverage Pricing Adjustment.
"Applicable Eurodollar Margin" shall mean a percentage per annum equal
to (i) in the case of Loans other than Tranche B Term Loans, 2.25% and (ii) in
the case of Tranche B Term Loans, 2.75%; provided that each of the percentages
--------
set forth above shall be adjusted by the applicable Leverage Pricing Adjustment,
if any.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit H hereto
---------
(appropriately completed).
"Authorized Officer" of any Credit Party shall mean any of the
Chairman of the Board, the President, any Vice President, the Treasurer, the
Secretary, any Assistant Secretary, any Assistant Treasurer or the Controller of
such Credit Party or any other officer of such Credit Party which is designated
in writing to the Agent by any of the foregoing officers of such Credit Party as
being authorized to give such notices under this Agreement.
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"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.03(c) or (ii) a Bank
having notified in writing the Borrower and/or the Agent that it does not intend
to comply with its obligations under Section 1.01 or Section 2, in the case of
either clause (i) or (ii) as a result of any takeover of such Bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the highest of (x) the rate which
is 1/2 of 1% in excess of the Adjusted Certificate of Deposit Rate, (y) the
Prime Lending Rate and (z) the rate which is 1/2 of 1% in excess of the Federal
Funds Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated
as such by the Borrower at the time of the incurrence thereof or conversion
thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower's Common Stock" shall mean the common stock of Coinmach
Corporation.
"Borrower Pledge Agreement" shall mean the Borrower Pledge Agreement,
substantially in the form of Exhibit I-1 hereto, made by the Borrower in favor
-----------
of the Collateral Agent, as such agreement may be amended, modified or
supplemented from time to time.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments of the respective Tranche on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period; provided that Base
--------
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on,
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Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day for trading by and between banks in the New York
interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be added to the fixed assets account on
the consolidated balance sheet of such Person in accordance with GAAP (which
shall not include (i) interest capitalized during construction but only to the
extent included in Consolidated Interest Expense and (ii) increases to property
and equipment that are reflected (or under the accounting policies and
presentation of the Borrower as in effect on the Effective Date, would have been
reflected) in "Additions to net assets from acquired businesses" on the
Borrower's Condensed Consolidated Statements of Cash Flows), including all such
expenditures with respect to plant, property or equipment (including, without
limitation, expenditures for maintenance and repairs which should be capitalized
in accordance with GAAP and the amount reflected (or under the accounting
policies and presentation of the Borrower as in effect on the Effective Date,
would have been reflected) in "Advance rental payments to location owners" on
the Borrower's Condensed Consolidated Statements of Cash Flows) and the amount
of all Capitalized Lease Obligations incurred by such Person.
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, should be accounted for as a capital lease on the balance
sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of Holdings or any of its Subsidiaries in each case taken at the
amount thereof that should be accounted for as liabilities in accordance with
GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
--------
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition, (ii) U.S. dollar denominated
time deposits, certificates of deposit and banker acceptances of (x) any Bank or
(y) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent
thereof (any such bank or Bank, an "Approved Bank"), in each case with
maturities of not more than twelve months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, as the case may be, and in each case maturing within twelve months
after the date of acquisition, (iv) marketable direct obligations issued by any
state of the United States
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of America or any political subdivision of any such state or any public
instrumentality thereof maturing within twelve months from the date of
acquisition thereof and, at the time of acquisition having one of the two
highest ratings obtainable from either S&P or Moody's, (v) any repurchase
agreement entered into with any Approved Bank which is secured by any obligation
of the type described in any of clauses (i) through (iii) and (vi) investments
in money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. (S) 9601 et. seq., as the
same may be amended from time to time.
"Change in Law" shall mean the introduction of any law or governmental
rule, regulation, order, guideline or request (whether or not having the force
of law), or any change in law or governmental rule, regulation, order, guideline
or request (whether or not having the force of law), or the interpretation or
administration thereof.
"Change of Control" shall mean (i) Holdings shall at any time cease to
own directly 100% of the capital stock of the Borrower; (ii) any "Person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act), excluding GTCR, is or shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of a
greater percentage of the common stock of Holdings than is owned by GTCR at such
time; or (iii) the Board of Directors of Holdings shall cease to consist of a
majority of Continuing Directors.
"CLC Notes" shall mean the $15,000,000 principal amount of senior
promissory notes issued by Holdings in connection with the Acquisition as in
effect on the Effective Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties and all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
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"Collateral Assignment of Leases" shall mean the Collateral Assignment
of Leases, substantially in the form of Exhibit L hereto, made by the Borrower
---------
and the Subsidiary Guarantors in favor of the Collateral Agent relating to
certain warehouse and office facilities, as such agreement may be amended,
modified or supplemented from time to time.
"Collateral Assignment of Location Leases" shall mean the Collateral
Assignment of Location Leases, substantially in the form of Exhibit M hereto,
---------
made by the Borrower and the Subsidiary Guarantors in favor of the Collateral
Agent relating to leased premises at which Collateral constituting personal
property is located, as such agreement may be amended, modified or supplemented
from time to time.
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment" shall mean any of the commitments of any Bank; i.e.,
---
whether the Tranche A Term Loan Commitment, Tranche B Term Loan Commitment or
Revolving Loan Commitment or the commitment of BTCo to make Swingline Loans.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Adjusted Leverage Ratio" shall mean the ratio of
Holdings' Consolidated Indebtedness to Holdings' Consolidated EBITDA, measured
on a trailing 12 months basis, including any Permitted Acquisition Cost-Savings.
"Consolidated Adjusted Senior Leverage Ratio" shall mean the ratio of
Holdings' Consolidated Secured Senior Indebtedness to Holdings' Consolidated
EBITDA, measured on a trailing 12 months basis, including any Permitted
Acquisition Cost-Savings.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Consolidated Subsidiaries
excluding cash and Cash Equivalents.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Consolidated Subsidiaries
at such time, but excluding (i) the current portion of any Indebtedness under
this Agreement and any other long-term Indebtedness which would otherwise be
included therein and (ii) the current portion of Indebtedness.
"Consolidated EBIT" shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for cash
taxes based on income, (iii) Consolidated Net Cash Interest Expense, (iv)
amortization or
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write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary or nonrecurring losses
less (B) the amount for such period of gains on sales of assets (excluding sales
----
in the ordinary course of business) and other extraordinary or nonrecurring
gains, all as determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense,
(iii) amortization expense and (iv) without duplication, all other non-cash
charges (including non-cash compensation expenses relating to employee stock
options) included in determining Consolidated Net Income during such period, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Indebtedness" shall mean an amount equal to the
principal amount of all Indebtedness of Holdings and its Subsidiaries,
determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA to Consolidated Net Cash Interest Expense for such
period.
"Consolidated Net Cash Interest Expense" shall mean, for any period,
without duplication, the total consolidated cash interest expense of Holdings
and its Consolidated Subsidiaries on a consolidated basis for such period plus,
without duplication, that portion of Capitalized Lease Obligations of Holdings
and its Consolidated Subsidiaries representing the interest factor for such
period, in each case net of the total consolidated cash interest income of
Holdings and its Consolidated Subsidiaries for such period, but excluding the
amortization of any deferred financing costs.
"Consolidated Net Income" shall mean, for any period, the consolidated
net after tax income of Holdings and its Consolidated Subsidiaries determined in
accordance with GAAP.
"Consolidated Secured Senior Indebtedness" shall mean an amount equal
to the principal amount of all funded secured Senior Indebtedness of Holdings
and its Subsidiaries determined in accordance with GAAP.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with GAAP.
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"Consolidated Working Capital" shall mean Consolidated Current Assets
minus Consolidated Current Liabilities.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
-------- -------
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
Effective Date and each other director, if such Director's nomination for
election to the Board of Directors of Holdings is recommended by a majority of
the then Continuing Directors.
"Covered Taxes" shall mean any and all Taxes, other than Excluded
Taxes.
"Credit Documents" shall mean (i) this Agreement, (ii) each Note,
(iii) each Security Document and (iv) each Mortgage.
"Credit Event" shall mean the making of any Loan or the issuance of
any Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
"Debt Agreements" shall have the meaning provided in Section 5.05.
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"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Direct Wholly-Owned Subsidiary" shall mean, as to any Person, any
other Person which would constitute a Wholly-Owned Subsidiary of such Person
even if the phrase "and/or one or more Wholly-Owned Subsidiaries of such Person"
appearing in the definition of the term "Wholly-Owned Subsidiary" were deleted.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Effective Date (or any options
or warrants issued by such Person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments made or required to be made by such Person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"Documentation Agent" shall mean ▇▇▇▇▇▇ Commercial Paper, Inc. in its
capacity as Documentation Agent for the Banks hereunder, and shall include any
successor to the Documentation Agent.
"Documents" shall mean the Credit Documents and the Acquisition
Documents.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"11 3/4% Notes" shall mean the 11 3/4% Notes due 2005 issued pursuant
to an indenture between the Borrower and Fleet Bank of Connecticut as in effect
on the Effective Date.
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"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other institutional "accredited investor" (as defined
in Regulation D of the Securities Act).
"Employee Benefit Plans" shall mean all employee benefit plans (other
than multiemployer plans as defined in Section 4001(a)(3) of ERISA), or any
other similar plans or arrangements for the benefit of employees of Holdings or
any Subsidiary of Holdings and any profit sharing plans and deferred
compensation plans of Holdings or any Subsidiary of Holdings (collectively, the
"Employee Benefit Plans").
----------------------
"Employee Stock Option Plan" shall mean the Seconded Amended and
Restated 1996 Employee Stock Option Plan of Holdings existing on the Effective
Date as such plan may be amended from time to time.
"Employment Agreements" shall mean any employment agreement entered
into by Holdings or any Subsidiary of Holdings.
"End Date" shall have the meaning provided in the definition of
Leverage Pricing Adjustment contained herein.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
------
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, investigation, removal, response, remedial or other
actions or damages pursuant to any Environmental Law, and (b) any and all Claims
by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief in connection with alleged injury or
threat of injury to health, safety or the environment due to the presence of
Hazardous Materials.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, legally binding guideline
or written policy and any rule of common law now or hereafter in effect and in
each case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or judgment, to
the extent binding on Holdings, the Borrower or any of their respective
Subsidiaries, relating to the environment, employee health and safety or
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.C. (S) 1251 et seq.; the Toxic Substances
-- ---
Control Act, 15 U.S.C. (S) 2601 et seq.; the Clean Air Act, 42 U.S.C. (S) 7401
-- ---
et seq.; the Safe Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the Oil
-- --- -- ---
Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq.; the Emergency Planning and
-- ---
the Community Right-to-Know Act of 1986, 42 U.S.C. (S) 11001 et seq., the
-- ---
Hazardous
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Material Transportation Act, 49 U.S.C. (S) 1801 et seq. and the Occupational
-- ---
Safety and Health Act, 29 U.S.C. (S) 651 et seq. (to the extent it regulates
-- ---
occupational exposure to Hazardous Materials); and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the applicable regulations promulgated
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean with respect a Eurodollar Loan (a) the
offered quotation to first-class banks in the New York interbank Eurodollar
market by BTCo for Dollar deposits of amounts in immediately available funds
comparable to the outstanding principal amount of the Eurodollar Loan for which
an interest rate is then being determined with maturities (comparable to the
Interest Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded off
to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean, for any fiscal year of Holdings,
Consolidated EBITDA for such period minus Consolidated Net Cash Interest Expense
-----
for such period minus the provision for income taxes for such period (to the
-----
extent paid in cash) minus the amount of Capital Expenditures made by Holdings
-----
and its Subsidiaries during such period minus (plus) additions (reductions) to
-----
Consolidated Working Capital for such period minus scheduled repayments of
-----
principal of outstanding Indebtedness to the extent actually paid (including any
voluntary payments of principal of Indebtedness but excluding voluntary payments
---
of Revolving Loans).
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"Excess Cash Flow Percentage" shall mean 75% unless and so long as the
Consolidated Adjusted Leverage Ratio is less than 3.00:1.00, in which case it
shall mean 50%.
"Excess Cash Payment Date" shall mean the date occurring 95 days after
the last day of each fiscal year of the Borrower (beginning with its fiscal year
ended closest to March 31, 1998).
"Excess Cash Payment Period" shall mean with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of the Borrower.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Taxes" shall mean Taxes (including income or franchise
Taxes) imposed upon or determined by reference to any Bank's net income or net
profits but only to the extent such Taxes are imposed
(i) by the United States of America (or any State or local
jurisdiction or any agency thereof) including, without limitation, branch
profits Taxes; or
(ii) by any jurisdiction in which an applicable Bank is organized or
has its principal office or applicable lending office.
"Existing Credit Agreement" shall mean the revolving credit facility
provided to the Borrower pursuant to the Revolving Credit Agreement dated as of
November 30, 1995 between the Borrower and ▇▇▇▇▇▇ Financial Inc.
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Letters of Credit" shall have the meaning provided in
Section 2.01(a).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the
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Administrative Agent from three Federal Funds brokers of recognized standing
selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Scheduled Maturity Dates" shall mean, collectively, the
Revolving Loan Maturity Date, the Tranche A Term Loan Maturity Date and the
Tranche B Term Loan Maturity Date.
"Form 1001" shall have the meaning set forth in Section 4.04(f).
"Form 4224" shall have the meaning set forth in Section 4.04(f).
"Form W-8" shall have the meaning set forth in Section 4.04(f).
"Form W-9" shall have the meaning set forth in Section 4.04(f).
"GAAP" shall have the meaning provided in Section 13.07(a).
"GTCR" shall mean, collectively, Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Inc.,
or any entity controlled thereby.
"Governmental Authority" shall mean any government or political
subdivision or any agency, authority, board, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury or
arbitrator, in each case whether foreign or domestic, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranteed Obligations" shall mean the irrevocable and unconditional
guaranty made by Holdings and each Subsidiary Guarantor (i) to each Bank for the
full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of the principal and interest on each Note issued by
the Borrower to such Bank, and Loans made, under the Credit Agreement and all
reimbursement obligations and Unpaid Drawings with respect to Letters of Credit,
together with all the other obligations and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrower to such Bank
now existing or hereafter incurred under, arising out of or in connection with
the Credit Agreement or any other Credit Document and the due performance and
compliance with all the terms, conditions and agreements contained in the Credit
Documents by the Borrower and (ii) to each Bank and each Affiliate of a Bank
which enters into an Interest Rate Protection Agreement with the Borrower, which
by its express terms are entitled to the benefit of the Guaranty pursuant to
Section 14 with the written consent of the Borrower, the full and prompt payment
when due (whether by acceleration or otherwise) of all obligations of the
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Borrower owing under any such Interest Rate Protection Agreement, whether now in
existence or hereafter arising, and the due performance and compliance with all
terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean the guaranty issued pursuant to Section 14.
"Hazardous Materials" means (a) any petroleum or petroleum products or
constituents thereof, radioactive materials, asbestos that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls in excess of 50
ppm, and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority under Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Common Stock" shall mean the common stock of Holdings.
"Holdings Pledge Agreement" shall mean the Holdings Pledge Agreement,
substantially in the form of Exhibit I-2 hereto, made by Holdings in favor of
-----------
the Collateral Agent, as such agreement may be amended, modified or supplemented
from time to time.
"Holdings Preferred Stock" shall mean the Preferred Stock, par value
$0.01 per share, of Holdings.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness of such Person for borrowed money (ii) the deferred purchase
price of assets or services payable to the sellers thereof or any of such
seller's assignees which in accordance with GAAP would be shown on the liability
side of the balance sheet of such Person but excluding deferred rent as
determined in accordance with GAAP, or for the deferred purchase price of
property or services, (iii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iv) all Indebtedness of the types
described in clause (i), (ii), (iii), (iv), (v), (vi), (vii) or (viii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person (to the extent of the
value of the
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respective property), (v) the aggregate amount required to be capitalized under
leases under which such Person is the lessee, (vi) all obligations of such
person to pay a specified purchase price for goods or services, whether or not
delivered or accepted; i.e., take-or-pay and similar obligations, (vii) all
---
Contingent Obligations of such Person and (viii) all obligations under any
Interest Rate Protection Agreement or Other Hedging Agreement or under any
similar type of agreement.
"Intercompany Loans" shall have the meaning provided in Section
9.05(g).
"Intercompany Notes" shall mean promissory notes, in the form of
Exhibit G, evidencing an Intercompany Loan.
---------
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"Issuing Bank" shall mean BTCo and any Bank which at the request of
the Borrower and with the consent of the Agent agrees, in such Bank's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2. The sole Issuing Bank on the Effective Date is
BTCo.
"KWIK Wash" shall mean KWIK Wash Laundries L.P., a Texas limited
partnership.
"Landlord Consent" shall mean a Landlord Consent substantially in the
form of Exhibit N hereto.
---------
"L/C Supportable Indebtedness" shall mean (i) obligations of Holdings,
the Borrower or the Borrower's Subsidiaries incurred in the ordinary course of
business with respect to insurance obligations and workers' compensation, surety
bonds and other similar statutory obligations and (ii) such other obligations of
Holdings, the Borrower or any of the Borrower's Subsidiaries as are reasonably
acceptable to the respective Issuing Bank and otherwise permitted to exist
pursuant to the terms of this Agreement.
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"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.02(a).
"Letter of Credit Sublimit" shall mean $10,000,000.
"Leverage Pricing Adjustment" shall mean zero; provided that from and
--------
after the first day of any Margin Adjustment Period (the "Start Date") to and
----------
including the last day of such Margin Adjustment Period (the "End Date"), the
--------
Leverage Pricing Adjustment shall be the respective percentage per annum set
forth in clause (A), (B), (C), or (D) below if, but only if, as of the last day
of the most recent fiscal quarter or year, as the case may be, ended immediately
prior to such Start Date (the "Test Date"), the applicable conditions set forth
---------
in clause (A), (B), (C), or (D) below, as the case may be, are met:
(A) in the case of all Loans, +.25% if, but only if, as of the Test
Date for such Start Date the Pro Forma Leverage Ratio for the Test Period
ended on such Test Date shall be greater than 4.25:1.00;
(B) in the case of Loans other than Tranche B Term Loans, -.25% if,
but only if, as of the Test Date for such Start Date the Pro Forma Leverage
Ratio for the Test Period ended on such Test Date shall be less than
4.00:1.00 and none of the conditions set forth in clause (C) or (D) below,
as the case may be, are satisfied;
(C) in the case of Loans other than Tranche B Term Loans, -.50% if,
but only if, as of the Test Date for such Start Date the Pro Forma Leverage
Ratio for the Test Period ended on such Test Date shall be less than
3.50:1.00 and neither of the conditions set forth in clause (D) below, is
satisfied; or
(D) in the case of Loans other than Tranche B Term Loans, -.75% if,
but only if, as of the Test Date for such Start Date the Pro Forma Leverage
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Ratio for the Test Period ended on such Test Date shall be less than
3.00:1.00. Notwithstanding anything to the contrary contained above in
this definition, the Leverage Pricing Adjustment shall be +.25% at all
times during which there shall exist a Default or an Event of Default.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing) including any agreement
to give any of the foregoing.
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term Loan,
each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
"Margin Adjustment Period" shall mean each period which shall commence
on a date on which the financial statements (or certificate in the case of
Section 8.01(l)) are delivered pursuant to Section 8.01(b), (c) or (l), as the
case may be, and which shall end on the earlier of (i) the date of actual
delivery of the next financial statements (or certificate in the case of Section
8.01(l)) pursuant to Section 8.01(b), (c) or (l), as the case may be, and (ii)
the latest date on which the next financial statements (or certificate in the
case of Section 8.01(l)) are required to be delivered pursuant to Section
8.01(b), (c) or (l), as the case may be; provided that the first Margin
--------
Adjustment Period shall commence on the date that the financial statements are
delivered for the Company's first fiscal quarter ending after the Effective Date
(other than in the case of a consummation of a Permitted Acquisition, in which
case the Margin Adjustment Period shall commence on the consummation of such
Permitted Acquisition).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall have the meaning provided in Section
5.12.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date, the
Revolving Loan Maturity Date or the Swingline Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
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"Mortgage" shall mean fully executed counterparts of mortgages,
leasehold mortgages, deeds of trust and leasehold deeds of trust to secure debt
executed and delivered on the Effective Date with respect to a Mortgaged
Property, in each case in form and substance reasonably satisfactory to the
Agent.
"Mortgage Policies" shall mean the mortgage title insurance policies
issued on the Effective Date in respect of each Mortgage Property.
"Mortgaged Properties" shall mean, collectively, each Mortgaged
Property and each Additional Mortgaged Property.
"Mortgaged Property" shall mean each Real Property owned or leased by
the Borrower or a Subsidiary Guarantor and listed on Schedule 5.11 hereto and
any Additional Mortgaged Property.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and the estimated marginal increase in income taxes which will
be payable by Holdings' consolidated group with respect to the fiscal year in
which the sale occurs as a result of such sale; but excluding any portion of any
such gross cash proceeds which Holdings determines in good faith should be
reserved for post-closing adjustments (to the extent Holdings delivers to the
Banks a certificate signed by its chief financial officer, controller or chief
accounting officer as to such determination), it being understood and agreed
that on the day that all such post-closing adjustments have been determined,
(which shall not be later than six months following the date of the respective
asset sale), the amount (if any) by which the reserved amount in respect of such
sale or disposition exceeds the actual post-closing adjustments payable by
Holdings or any of its Subsidiaries shall constitute Net Sale Proceeds on such
date) received by Holdings and/or any of its Subsidiaries from such sale, lease,
transfer or other disposition.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Tranche A Term Note, each Tranche B Term Note,
each Revolving Note and the Swingline Note.
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"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. Prior, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Agent, the Collateral Agent or any Bank pursuant to the terms of any Credit
Document.
"Other Taxes" shall have the meaning set forth in Section 4.04(a).
"Participant" shall have the meaning provided in Section 2.03(a).
"Payment Office" shall mean the office of the Administrative Agent
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other
office as the Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided that if the Percentage of any Bank is to be
--------
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquisition" shall mean the acquisition by Holdings or its
Subsidiaries of all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any Person) not
already a Subsidiary of Holdings or 100% of the capital stock of any such
Person; provided that any such acquisition shall only be a Permitted Acquisition
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so long as (A) no Default or Event of Default exists (or will result from such
acquisitions) and pro forma for such acquisitions and the financings incurred
--- -----
and conforming accounting adjustments made in connection therewith, (B) (x) the
Consolidated Adjusted Senior Leverage Ratio of Holdings is less than 2.25:1.00;
and (y) the Consolidated Adjusted Leverage Ratio of Holdings is less than
4.50:1.00; and (C) such Permitted Acquisition is funded with (i) cash and Cash
Equivalents as reflected on the consolidated balance sheet of Holdings as of the
date of such Permitted Acquisition, (ii) Revolving Loans not to exceed
$35,000,000 in the aggregate or (iii) as to any Permitted Acquisition
consummated within one year of the
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Effective Date, proceeds of either Indebtedness incurred pursuant to Section
9.04(h) or equity (subject to the provisions of 4.02(e)); provided, however,
-------- -------
that for any Permitted Acquisition funded in accordance with either subclause
(i) and/or (ii) of this clause (C), the total consideration, after the first
anniversary of the Effective Date, shall be limited to $20,000,000 unless
otherwise agreed to by the Agents; and provided further, that to the extent any
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such Permitted Acquisition or series of Permitted Acquisitions funded under
subclause (iii) of this clause (C) is not made by the Borrower or any of its
Subsidiaries or is not contributed by Holdings to either the Borrower or any of
its Subsidiaries, neither the Borrower nor any of its Subsidiaries shall incur
any Indebtedness (including Guarantees) with respect thereto. Notwithstanding
anything to the contrary contained in the immediately preceding sentence, an
acquisition shall be a Permitted Acquisition only if all requirements of Section
9.02(j) with respect to Permitted Acquisitions are met with respect thereto.
"Permitted Acquisition Capital Expenditures" shall be an amount equal
to 115% of the Capital Expenditures made by the Person (or in the case of an
asset acquisition, the Capital Expenditures relating to the assets) being
acquired as a part of a Permitted Acquisition prior to the time of such
Permitted Acquisition measured by the amount reported in the quarterly
financials for the four immediately preceding fiscal quarters. Such full 115%
amount shall be available for Capital Expenditures in each succeeding fiscal
year, beginning the next full fiscal year after the date of such Permitted
Acquisition, and a pro rata amount for the year in which such Permitted
--- ----
Acquisition is consummated shall be available.
"Permitted Acquisition Cost-Savings" shall mean certain cost-savings
adjustments reasonably anticipated by the Borrower to be achieved in connection
with Permitted Acquisitions and upon the Agents' request shall be (i) made in
accordance with Regulation S-X; (ii) verified by Ernst & Young L.L.P., or
another nationally recognized accounting firm or as otherwise agreed to by the
Agents; and (iii) not in excess of 10% of pro forma actual Consolidated EBITDA
--- -----
without regard to such cost-savings; provided, however, that all such Permitted
-------- -------
Acquisition Cost-Savings shall be estimated on a good-faith basis by the
Borrower and shall be reduced by (i) one half, six months following each such
Permitted Acquisition, (ii) an additional one quarter, nine months following
each such Permitted Acquisition and (iii) an additional one quarter, twelve
months following each such Permitted Acquisition.
"Permitted Acquisition Notice" shall mean a notice which notice shall
contain (I) the date such Permitted Acquisition is scheduled to be consummated,
(II) the estimated purchase price of such Permitted Acquisition, (III) a
description of the stock and/or assets to be acquired in connection with such
Permitted Acquisition, (IV) the sources of cash to be paid in respect of such
Permitted Acquisition and (V) in the case of Holdings Common Stock issued as
consideration to the seller in connection with a Permitted Acquisition, a
description of the Holdings Common Stock to be issued in
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connection with the consummation of such Permitted Acquisition and the estimated
fair market value thereof.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of), the Borrower or a Subsidiary
of the Borrower or an ERISA Affiliate, and each such plan for the five year
period immediately following the latest date on which the Borrower, a Subsidiary
of the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreements" shall mean the Holdings Pledge Agreement and the
Borrower Pledge Agreement.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in each of the Pledge Agreements.
"Pledged Securities" shall mean "Pledged Securities" as defined in
each of the Holdings Pledge Agreement and the Borrower Pledge Agreement.
"Pledged Stock" shall mean "Pledged Stock" as defined in each of the
Holdings Pledge Agreement and the Borrower Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Prior Liens" shall have the meaning provided in the Security
Agreement.
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"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Indebtedness at such time
to (y) Consolidated EBITDA for the Test Period then last ended, with such Pro
Forma Leverage Ratio to be determined on a pro forma basis as if any Permitted
--- -----
Acquisition that occurred during or subsequent to such Test Period (and the
incurrence, assumption and/or repayment of any Indebtedness in connection with
any such Permitted Acquisition), as the case may be, had occurred on the first
day of such Test Period (and such Indebtedness, if any, had remained outstanding
(or had not been outstanding, as the case may be) throughout such Test Period)
it being understood that in calculating the Pro Forma Leverage Ratio in
connection with each and every Permitted Acquisition, Consolidated EBITDA shall
include the results of operations of the Person or assets acquired pursuant to
each such Permitted Acquisition on a pro forma basis as if such acquisition had
--- -----
occurred on the first day of the respective Test Period and shall include any
conforming accounting adjustments made in connection therewith. On the date of
any Permitted Acquisition pursuant to which the Pro Forma Leverage Ratio is to
be calculated and on each date of calculation of Pro Forma Leverage Ratio,
Holdings shall deliver to the Agent a certificate of an Authorized Officer of
Holdings setting forth in reasonable detail the pro forma calculations required
--- -----
to establish the Pro Forma Leverage Ratio (with such pro forma calculations to
--- -----
be made on a basis reasonably satisfactory to the Agent and to assume that the
interest expense attributable to any Indebtedness (whether existing or being
incurred) bearing a floating interest rate shall be computed as if the rate in
effect on the date of such Permitted Acquisition (taking into account any
Interest Rate Protection Agreement applicable to such Indebtedness if such
Interest Rate Protection Agreement has a remaining term in excess of 12 months)
had been the applicable rate for the entire period).
"Projections" shall have the meaning provided in Section 7.05(h).
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December, occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
-- ---
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any
Subsidiary Guarantor of any cash insurance proceeds or condemnation award
payable (i) by reason of theft, loss, physical destruction or damage or any
other similar event with respect to any property or assets of the Borrower or
any Subsidiary Guarantor and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Register" shall have the meaning provided in Section 13.16.
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"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation S-X" shall mean Regulation S-X, Title 17, Code of Federal
Regulations as from time to time in effect and any successor to all or a portion
thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Banks" means (i) at any time prior to the Effective Date,
Non-Defaulting Banks holding at least a majority of the Total Commitments held
by Non-Defaulting Banks and (ii) after the Effective Date, Non-Defaulting Banks
holding at least a majority of the outstanding Loans (after giving effect to
each Non-Defaulting Bank's Percentage of Swingline Loans), Letter of Credit
Outstandings (after giving effect to each Participant's Adjusted Percentage) and
Total Unutilized Revolving Loan Commitments held by Non-Defaulting Banks.
"Returns" shall have the meaning provided in Section 7.09.
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"Revolving Loan" shall have the meaning provided in Section 1.01(c).
"Revolving Loan Banks" shall have the meaning provided in Section
1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Revolving Loan Maturity Date" shall mean December 31, 2002.
"Revolving Loan Percentage" of any Bank at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Revolving
Loan Commitment of such Bank at such time and the denominator of which is the
Total Revolving Loan Commitment at such time.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Rollover Amount" shall have the meaning provided in Section 9.07(b).
"Scheduled Repayments" shall mean Tranche A Scheduled Repayments and
Tranche B Scheduled Repayments.
"SEC" shall have the meaning provided in Section 8.01(h).
"SEC Reports" shall have the meaning provided in Section 8.01(h).
"Section 4.04(f) Certificate" shall have the meaning provided in
Section 4.04(f).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall mean the Security Agreement, substantially
in the form of Exhibit J hereto, made by the Borrower and the Subsidiary
---------
Guarantors in favor of the Collateral Agent, as such agreement may be amended,
modified or supplemented from time to time.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
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"Security Document" shall mean each Pledge Agreement, the Security
Agreement, each Mortgage, each Collateral Assignment of Leases, each Collateral
Assignment of Location Leases and, after the execution and delivery thereof,
each Additional Mortgage and each Subsidiary Security Document.
"Semi-Annual Payment Date" shall mean the last day of each June and
December occurring after the Effective Date.
"Senior Indebtedness" shall mean, as to any Person, at any date all
Indebtedness that would be required to be reflected on a consolidated balance
sheet of such Person at such date (including, without limitation, all Capital
Leases) exclusive of subordinated Indebtedness.
"Start Date" shall have the meaning provided in the definition of
Leverage Pricing Adjustment.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met).
"Stock Purchase Agreement" shall mean the Stock Purchase Agreement
dated as of November 25, 1996, among the Borrower, KWIK Wash and the selling
shareholders named therein, pursuant to which the Borrower shall purchase all
the capital stock of the partners of KWIK Wash.
"Strategic Investor" shall mean a person engaged in a business which
supplies service or equipment to Holdings or its subsidiaries or is otherwise
engaged in a related or complementary business.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean (i) each Subsidiary of the Borrower
which is a party hereto or (ii) each Subsidiary of Holdings which is a party
hereto.
"Super Laundry" shall mean Super Laundry Equipment Corp., a New York
corporation and a Wholly-Owned Subsidiary of the Borrower.
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"Supermajority Banks" means (i) at any time prior to the Initial
Funding Date, Non-Defaulting Banks holding at least 66 2/3% of the Total
Commitments held by the Non-Defaulting Banks and (ii) after the Effective Date,
shall mean (x) in the case of Tranche A Term Loans, shall mean Non-Defaulting
Banks holding at least 66 2/3% of the outstanding Tranche A Term Loans, (y) in
the case of Tranche B Term Loans, shall mean Non-Defaulting Banks holding at
least 66 2/3% of the outstanding Tranche B Term Loans, and (z) in the case of
Revolving Loans, Non-Defaulting Banks holding at least 66 2/3% of the
outstanding Revolving Loans (after giving effect to each Non-Defaulting Bank's
Percentage of Swingline Loans), Letter of Credit Outstanding (after giving
effect to each Participant's Adjusted Percentage) and Total Unutilized Revolving
Loan Commitments held by the Non-Defaulting Banks.
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(d).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean First Union National Bank of North
Carolina, in its capacity as Syndication Agent for the Banks hereunder, and
shall include any successor to the Syndication Agent.
"Syndication Date" shall mean that date upon which the Agents
determine in their collective sole discretion (and notify the Borrower) that the
primary syndication (and resultant addition of institutions as Banks pursuant to
Section 13.04) has been completed.
"Tax Sharing Agreements" shall have the meaning provided in Section
5.05.
"Taxes" shall mean any present or future tax, levy, stamp, impost,
duty, deduction, assessment or other charge or withholding (including any
intangible, documentary or excise tax), and all liabilities with respect thereto
(including penalties, interest and expenses) imposed, levied, collected,
withheld or assessed by or on behalf of any Governmental Authority.
"Term Loan" shall mean the Tranche A Term Loan and the Tranche B Term
Loan.
"Term Loan Commitment" shall mean each Tranche A Term Loan Commitment
and each Tranche B Term Loan Commitment, with the Term Loan Commitment of any
Bank at any time to equal the sum of its Tranche A Term Loan Commitment and
Tranche B Term Loan Commitment as then in effect.
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"Term Note" shall have the meaning provided in Section 1.05(a).
"Test Date" shall have the meaning provided in the definition of
Leverage Pricing Adjustment.
"Test Period" shall mean for any determination the four consecutive
fiscal quarters of Holdings (taken as one accounting period), ended, in the case
of any determination of Leverage Pricing Adjustment on the applicable Test Date
and, in all other cases, ended on the date indicated in the applicable Section
hereof.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the then Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Total Tranche A Term Loan Commitment and Total Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any time, the
sum of the Tranche A Term Loan Commitments of each of the Banks.
"Total Tranche B Term Loan Commitment" shall mean, at any time, the
sum of the Tranche B Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less (y) the sum of the aggregate principal amount of Revolving
Loans and Swingline Loan then outstanding plus the then aggregate amount of
Letter of Credit Outstandings.
"Tranche" shall mean the respective facility and commitments utilized
in making Loans hereunder, with there being four separate Tranches; i.e.,
---
Tranche A Term Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Scheduled Repayment" shall have the meaning provided in
Section 4.02(c).
"Tranche A Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(c).
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
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"Tranche A Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Tranche A Term Loan Commitment", as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04.
"Tranche A Term Loan Maturity Date" shall mean December 31, 2002.
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche B Scheduled Repayment" shall have the meaning provided in
Section 4.02(d).
"Tranche B Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(d).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
"Tranche B Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Tranche B Term Loan Commitment", as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.13 or 13.04(b).
"Tranche B Term Loan Maturity Date" shall mean June 30, 2004.
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"12 3/4% Notes" shall mean the 12 3/4% Senior Notes due 2001 issued
pursuant to an indenture between the Borrower and Shawmut Bank Connecticut as in
effect on the Effective Date.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto; i.e., whether a Base Rate Loan or a
---
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
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"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated benefits under the Plan as
of the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.04(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Bank (plus, in the case of BTCo, the aggregate outstanding principal amount
of Swingline Loans made by BTCo, and (ii) such Bank's Adjusted Percentage of the
Letter of Credit Outstandings in respect of Letters of Credit issued under this
Agreement.
"Voting Stock" means any class or classes of capital stock of Holdings
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors of
Holdings.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Administrative Agent.
------------------------
12.01 Appointment. The Banks hereby designate Bankers Trust Company
-----------
as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include BTCo in its capacity as Collateral Agent
pursuant to the Security Documents) to act as specified herein and in the other
Credit Documents. Each Bank hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are
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reasonably incidental thereto. The Administrative Agent may perform any of its
duties hereunder by or through its respective officers, directors, agents,
employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement
and the Security Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently
--------------------------------------------
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of Holdings and its Subsidiaries in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of
Holdings and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings and its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the Agent shall
------------------------------------------
request instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Administrative Agent shall be entitled to refrain from such act or
taking
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such action unless and until the Administrative Agent shall have received
instructions from the Required Banks; and the Administrative Agent shall not
incur liability to any Person by reason of so refraining. Without limiting the
foregoing, no Bank or the holder of any Note shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
12.05 Reliance. The Administrative Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
12.06 Indemnification. To the extent the Administrative Agent is not
---------------
reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks (with such "percentages"
to be determined as if there are no Defaulting Banks), for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document, except to the extent such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements are
finally judicially determined to have resulted from the Administrative Agent's
gross negligence or willful misconduct.
12.07 The Administrative Agent in Its Individual Capacity. With
---------------------------------------------------
respect to its obligation to make Loans under this Agreement, the Administrative
Agent shall have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Banks," "Required Banks," "holders of Notes" or
any similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity. The Administrative Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Credit Party or any Affiliate of any
Credit Party as if they were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower or any other Credit Party
for services in connection with this Agreement and otherwise without having to
account for the same to the Banks.
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12.08 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The
---------------------------------------
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Banks shall appoint a
successor Administrative Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to the Borrower, except after an
Event of Default.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, except after an Event of Default, shall then appoint a
successor Administrative Agent who shall serve as Administrative Agent hereunder
or thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
------------------------
not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agents (including, without limitation,
the reasonable fees and disbursements of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and local
counsel) in connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein and any
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amendment, waiver or consent relating hereto or thereto, and in connection with
the initial syndication efforts with respect to this Agreement and of the Agents
and, following an Event of Default, each of the Banks in connection with the
enforcement of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein (including, without limitation,
the reasonable fees and disbursements of counsel for the Agents and, following
an Event of Default, for each of the Banks); (ii) pay and hold each of the Banks
harmless from and against any and all present and future stamp, excise and other
similar taxes with respect to the foregoing matters and save each of the Banks
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay such taxes; and (iii) indemnify each of the
Agents and each Bank, and each of their Affiliates and each of them and their
respective officers, directors, trustees, employees, representatives and agents
from and hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any transactions contemplated herein
(including, without limitation, the Acquisition) or in any other Credit Document
or the exercise of any of their rights or remedies provided herein or in the
other Credit Documents, or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property owned or at any time operated by Holdings or any
of its Subsidiaries, the generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or not owned or
operated by Holdings or any of its Subsidiaries, the non-compliance of any Real
Property with foreign, federal, state and local laws, regulations, and
ordinances (including applicable permits thereunder) applicable to any Real
Property, or any Environmental Claim asserted against Holdings, any of its
Subsidiaries or any Real Property owned or at any time operated by Holdings or
any of its Subsidiaries, including, in each case, without limitation, the
reasonable fees and disbursements of counsel and other consultants incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
finally judicially determined to have been incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless any Agent or any
Bank set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
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13.02 Right of Set-off. In addition to any rights now or hereafter
----------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Agent, each Letter
of Credit Issuer and each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to
Holdings or the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or owing by
such Agent, such Letter of Credit Issuer and such Bank (including, without
limitation, by branches and agencies of such Agent, such Letter of Credit Issuer
and such Bank wherever located) to or for the credit or the account of Holdings
or the Borrower or any other Guarantor against and on account of the Obligations
and liabilities of Holdings or the Borrower or any other Guarantor to such
Agent, such Letter of Credit Issuer and such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Bank pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Agent, such Letter of Credit Issuer and such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings, at
Holdings' address specified opposite its signature below; if to the Borrower, at
the Borrower's address specified opposite its signature below; if to any Bank
and any Agent (other than the Administrative Agent), at its address specified
opposite its name on Schedule II below; and if to the Administrative Agent, at
its Notice Office; or, as to any Credit Party or the Administrative Agent, at
such other address as shall be designated by such party in a written notice to
the other parties hereto and, as to each Bank or any other Agent, at such other
address as shall be designated by such Bank in a written notice to the Borrower
and the Administrative Agent. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrower shall not be effective until received by
the Administrative Agent or the Borrower, as the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, no Credit Party may assign
-------- -------
or transfer any of its rights, obligations or interest hereunder or under any
other Credit Document without the prior written consent of the Banks; and
provided further, that, although any
-------- -------
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Bank may transfer, assign or grant participations in its rights hereunder, such
Bank shall remain a "Bank" for all purposes hereunder (and may not transfer or
assign all or any portion of its Commitments hereunder except as provided in
Section 13.04(b)) and the transferee, assignee or participant, as the case may
be, shall not constitute a "Bank" hereunder; and provided further, that no Bank
-------- -------
shall transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the Final Scheduled Maturity of the Facility or Tranche in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates) or reduce the principal amount
thereof, or increase the amount of the participant's participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default or of a mandatory reduction in the Total Commitment shall
not constitute a change in the terms of such participation, and that an increase
in any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release (x) the
Guarantee of Holdings or (y) all or substantially all of the Collateral under
all of the Security Documents (except as expressly provided in the Security
Documents) or in connection with a sale otherwise permitted hereby), supporting
the Loans hereunder in which such participant is participating. In the case of
any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such Bank
which is at least 50% owned by such Bank or its parent company or to one or more
Banks or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of such
Revolving Loan Commitments and/or outstanding principal amount of Term Loans
hereunder to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement; provided that, (i) at such time Schedule I shall be deemed
--------
modified to reflect the Commitments (and/or outstanding Term Loans, as the case
may be) of such new Bank and of the existing Banks, (ii) new Notes will be
issued, at the Borrower's expense, to such new Bank and to the assigning Bank
upon the request of such new Bank or assigning Bank, such new Notes to be in
conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments (and/or
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outstanding Term Loans, as the case may be), (iii) the consent of BTCo shall be
required in connection with any such assignment (which consent shall not be
unreasonably withheld) and (iv) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500. To the extent of any assignment
pursuant to this Section 13.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. At the time of
each assignment pursuant to this Section 13.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Bank shall, to the extent legally entitled to do so,
provide to the Borrower in the case of a Bank described in clause (ii) or (iv)
of Section 4.04(b), the forms described in such clause (ii) or (iv), as the
case may be. To the extent that an assignment of all or any portion of a Bank's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 1.11 or 4.04 from those being charged by the
respective assigning Bank prior to such assignment, then the Borrower shall not
be obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Administrative Agent or any Bank or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any other Credit Party
and the Agent, the Syndication Administrative Agent or any Bank or the holder of
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Administrative Agent or any Bank or the holder of any Note would otherwise have.
No notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Administrative Agent or any Bank or
the holder of any Note to any other or further action in any circumstances
without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
-----------------
Agreement, the Administrative Agent agrees that promptly after its receipt of
each
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payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
--- ----
pro rata based upon their respective shares, if any, of the Obligations with
--- ----
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Party to such Banks
in such amount as shall result in a proportional participation by all the Banks
in such amount; provided that if all or any portion of such excess amount is
--------
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
consistently applied throughout the periods involved (except as set forth in the
notes thereto or as otherwise disclosed in writing by the Borrower to the
Banks); provided that, except as otherwise specifically provided herein, all
--------
computations of Excess Cash Flow and all computations determining compliance
with Sections 9.08 through 9.10, inclusive, shall utilize accounting principles
and policies in conformity with those used to prepare the financial statements
of Holdings for the fiscal year ended September 30, 1996 delivered to the Banks
pursuant to Section 7.05(a) (with the foregoing generally accepted accounting
principles, subject to the preceding proviso, herein called "GAAP").
(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day (determined in
accordance with the terms hereof) occurring in the period for which such
interest, Commitment Commission or Fees are payable (except for interest payable
in respect of Base Rate
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Loans based on the Prime Lending Rate, which shall be computed on the bases of a
365/66 day year).
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
-----------------------------------------------------------
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
----------
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE
DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ AS ITS DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF,
AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF
FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO
ACT AS SUCH, EACH CREDIT PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH OF HOLDINGS AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
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(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and each of
the Agents.
13.10 Effectiveness. (a) This Agreement shall become effective on
-------------
the date (the "Effective Date") on which (i) Holdings, the Borrower, each
--------------
Subsidiary Guarantor, each of the Banks, the Required Banks (determined
immediately before the occurrence of the Effective Date) (or the consent of the
Required Banks is obtained) and each of the Agents shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered (including by way of facsimile device) the same to the Administrative
Agent at its Notice Office and (ii) the conditions contained in Sections 5, 6
and 13.10(b) are met to the satisfaction of the Agents and the Required Banks
(determined immediately after the occurrence of the Effective Date). Unless the
Administrative Agent has received actual notice from any Bank that the
conditions contained in Sections 5 and 6 have not been met to its satisfaction,
upon the satisfaction of the condition described in clause (i) of the
immediately preceding sentence and upon the Agents good faith determination that
the conditions described in clause (ii) of the immediately preceding sentence
have been met, then the Effective Date shall have been deemed to have occurred,
regardless of any subsequent determination that one or more of the conditions
thereto had not been met (although the occurrence of the Effective Date shall
not release the Borrower, Holdings or any Subsidiary Guarantor from any
liability for failure to satisfy one or more of the applicable conditions
contained in Section 5 or 6). The Administrative Agent will give the Borrower
and each Bank prompt written notice of the occurrence of the Effective Date.
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(b) On the Effective Date, each Bank shall have delivered to the
Administrative Agent for the account of the Borrower an amount equal to the Term
Loans and Revolving Loans to be made by such Bank on the Effective Date.
Notwithstanding anything to the contrary contained in this Section 13.10(b), in
satisfying the foregoing condition, unless the Agent shall have been notified by
any Bank prior to the occurrence of the Effective Date that such Bank does not
intend to make available to the Administrative Agent such Bank's Term Loans and
Revolving Loans required to be made by it on such date, then the Administrative
Agent may, in reliance on such assumption, make available to the Borrower the
corresponding amounts in accordance with the provisions of Section 1.04, and the
making available by the Agent of such amounts shall satisfy the condition
contained in this Section 13.10(b).
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the Final Scheduled Maturity Dates of or extend the stated maturity of
any Letter of Credit beyond the Revolving Loan Maturity Date, or reduce the rate
or extend the time of payment of interest or Fees thereon, or reduce the
principal amount thereof (except to the extent repaid in cash), (ii) release (x)
the Guarantee of Holdings or a Subsidiary Guarantor or (y) all or substantially
all of the Collateral (except as expressly provided in the Security Documents in
connection with a sale otherwise permitted hereby), (iii) amend, modify or waive
any provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments are
included on the Effective Date) or (v) consent to the assignment or transfer by
the Borrower or Holdings of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
-------- -------
termination shall (u) increase the Commitments of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications of conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment shall not
constitute an increase of the Commitment of any Bank, and that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment of such Bank), (v) without the consent of BTCo,
amend, modify or waive any provision of Section 2 or alter its rights or
obligations
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with respect to Letters of Credit, (w) without the consent of the Administrative
Agent, amend, modify or waive any provision of Section 12 as same applies to
such Administrative Agent or any other provision as same relates to the rights
or obligations of such Administrative Agent, (x) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent, (y) without the consent of the
Supermajority Banks of each Tranche which is being allocated a lesser
prepayment, repayment or commitment reduction as a result of the actions
described below (or without the consent of the Supermajority Banks of each
Tranche in the case of an amendment to the definition of Supermajority Banks),
amend the definition of Supermajority Banks or alter the required application of
any prepayments or repayments (or commitment reductions), as between the various
Tranches, pursuant to Section 4.01 or 4.02 (excluding Sections 4.02(c) and (d))
(although the Required Banks may waive, in whole or in part, any such
prepayment, repayment or commitment reduction, so long as the application, as
amongst the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered) or (z) without the
consent of the Supermajority Banks of the respective Tranche, amend, modify or
waive any Tranche A Scheduled Repayment or Tranche B Scheduled Repayment.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks (or, at the option
of the Borrower if the respective Bank's consent is required with respect to
less than all Tranches of Loans (or related Commitments), to replace only the
respective Tranche or Tranches of Commitments and/or Loans of the respective
non-consenting Bank which gave rise to the need to obtain such Bank's individual
consent) with one or more Replacement Banks pursuant to Section 1.13 so long as
at the time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination or (B) terminate such non-
consenting Bank's Revolving Loan Commitment (if such Bank's consent is required
as a result of its Revolving Loan Commitment) and/or repay each Tranche of
outstanding Term Loans of such Bank which gave rise to the need to obtain such
Bank's consent, in accordance with Sections 3.02(b) and/or 4.01(v); provided
--------
that, unless the Commitments are terminated, and Loans repaid, pursuant to
preceding clause (B) are immediately replaced in full at such time through the
addition of new Banks or the increase of the Commitments and/or outstanding
Loans of existing Banks (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B) the Required
Banks (determined before giving effect to the proposed action) shall
specifically consent thereto; provided further, that in any event the Borrower
-------- -------
shall not have the right to replace a Bank, terminate its Revolving Loan
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Commitment or repay its Loans solely as a result of the exercise of such Bank's
rights (and the withholding of any required consent by such Bank) pursuant to
the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including,
--------
without limitation, in Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06 shall,
subject to Section 13.15 (to the extent applicable), survive the execution,
delivery and termination of this Agreement and the Notes and the making and
repayment of the Loans (it being understood and agreed that all such indemnities
shall also survive as to any Bank that has assigned all of its obligations
hereunder pursuant to Section 13.04(b) with respect to the period of time in
which such Bank was a "Bank" hereunder).
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.05 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as the Borrower's agent, solely for purposes of this Section
13.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each of
the Banks and each repayment in respect of the principal amount of the Loans of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the Commitments of such Bank
and the rights to the principal of, and interest on, any Loan made pursuant to
such Commitments shall not be effective unless and until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of
any Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the Administrative
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Agent from and against any and all losses, claims, damages and liabilities of
whatsoever nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.15.
13.16 Confidentiality. (a) Subject to the provisions of clause (b)
---------------
of this Section 13.16, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of Holdings or the Borrower (other than to
its employees, auditors, advisors or counsel or to another Bank if the Bank or
such Bank's holding or parent company in its sole discretion determines that any
such party should have access to such information; provided such Persons shall
--------
be subject to the provisions of this Section 13.16 to the same extent as such
Bank) any information with respect to Holdings or any of its Subsidiaries which
is now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by Holdings to the Banks in writing as
confidential; provided that any Bank may disclose any such information (a) as
--------
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (d) in order to comply
with any law, order, regulation or ruling applicable to such Bank, (e) to the
Agent or the Collateral Agent and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Bank; provided that
--------
such prospective transferee or participant agrees to be bound by the provisions
of this Section.
(b) Each of Holdings and the Borrower hereby acknowledge and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Bank).
SECTION 14. Guaranty.
--------
14.01 The Guaranty. In order to induce the Banks to enter into this
------------
Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by each Guarantor from the proceeds of the Loans and the
issuance of the Letters of Credit and to induce the Banks or any of their
respective Affiliates to enter into Interest Rate Protection Agreements, each
Guarantor hereby agrees with the Banks as follows: Each Guarantor hereby
unconditionally and irrevocably, jointly and severally, guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and
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all of the Guaranteed Obligations of the Borrower to the Secured Creditors. If
any or all of the Guaranteed Obligations of the Borrower to the Secured
Creditors becomes due and payable hereunder, each Guarantor, jointly and
severally, unconditionally promises to pay such indebtedness to the Secured
Creditors, or order, on demand, together with any and all reasonable expenses
which may be incurred by the Agent or the Secured Creditors in collecting any of
the Guaranteed Obligations. If claim is ever made upon any Secured Creditor for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Obligations and any of the aforesaid payees repays all
or part of said amount by reason of (i) any judgment, decree or order of any
court or administrative body having jurisdiction over such payee or any of its
property or (ii) any settlement or compromise of any such claim effected by such
payee with any such claimant (including the Borrower), then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon such Guarantor, notwithstanding any revocation
of this Guaranty or any other instrument evidencing any liability of the
Company, and each other Guarantor shall be and remain jointly and severally
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee. This is a guaranty of payment and not of collection.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited
to a maximum aggregate amount equal to the largest amount that would not render
its Obligations and/or the grant of security interests in Collateral to secure
its obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of the Bankruptcy Code or any applicable provisions
of comparable state law (collectively, the "Fraudulent Transfer Laws"), in each
------------------------
case after giving effect to all other liabilities of such Guarantor, contingent
or otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liabilities of such Guarantor in respect of intercompany
Indebtedness to the Borrower or other Affiliates of the Borrower to the extent
that such Indebtedness would be discharged in an amount equal to the amount paid
by such Guarantor hereunder, and after giving effect (x) to the direct and
indirect benefits received by such Guarantor as a result of the Credit Documents
and the Loans and (y) as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Guarantor pursuant to
applicable law or pursuant to the terms or any agreement (including without
limitation any such right of contribution under Section 13.01(c)).
(b) Guarantors under this Guaranty together desire to allocate among
themselves in a fair and equitable manner their obligations arising under this
Guaranty. Accordingly, in the event any payment or distribution is made on any
date by any Guarantor under this Guaranty (a "Funding Guarantor") that exceeds
-----------------
its Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a
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contribution from each of the other Guarantors in the amount of such other
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such date. "Fair
----
Share" means, with respect to a Guarantor as of any date of determination, an
-----
amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Guarantor to (y) the aggregate of the Adjusted
Maximum Amounts with respect to all Guarantors, multiplied by (ii) the aggregate
---------- --
amount paid or distributed on or before such date by all Funding Guarantors
under this Guaranty in respect of the obligations guarantied. "Fair Share
----------
Shortfall" means, with respect to a Guarantor as of any date of determination,
---------
the excess, if any, of the Fair Share of such Guarantor over the Aggregate
Payments of such Guarantor. "Adjusted Maximum Amount" means, with respect to a
-----------------------
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Guarantor under this Guaranty, determined as of such date in
accordance with this Section 13.01; provided that, solely for purposes of
--------
calculating the "Adjusted Maximum Amount" with respect to any Guarantor for
purposes of this Section 13.01(b), any assets or liabilities of such Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Guarantor. "Aggregate Payments"
------------------
means, with respect to a Guarantor as of any date of determination, an amount
equal to (i) the aggregate amount of all payments and distributions made on or
before such date by such Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 13.01(b)) minus (ii) the
-----
aggregate amount of all payments received on or before such date by such
Guarantor from the other Guarantors as contributions under this Section
13.01(b). The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this Section 13.01(b) shall not be construed in any
way to limit the liability of any Guarantor hereunder.
14.02 Bankruptcy. Additionally, each Guarantor unconditionally and
----------
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Secured Creditors whether or not then due or payable by
the Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 10.05, and unconditionally and irrevocably promises to pay
such Guaranteed Obligations to the Secured Creditors, or order, on demand, in
lawful money of the United States. If claim is ever made upon any Secured
Creditor for repayment or recovery of any amount or amounts received in payment
or on account of any of the Guaranteed Obligations and any of the aforesaid
payees repays all or part of said amount by reason of (i) any judgment, decree
or order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including the Borrower), then and
in such event each Guarantor agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon such
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Guarantor, notwithstanding any revocation of this Guaranty or any other
instrument evidencing any liability of the Company, and each other Guarantor
shall be and remain jointly and severally liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee. This is a guaranty
of payment and not of collection.
14.03 Nature of Liability. The liability of each Guarantor hereunder
-------------------
is exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by such Guarantor, any
other guarantor or by any other party, and the liability of each Guarantor
hereunder shall not be affected or impaired by (a) any direction as to
application of payment by the Borrower or by any other party, or (b) any other
continuing or other guaranty, undertaking or maximum liability of a guarantor or
of any other party as to the Guaranteed Obligations of the Borrower, or (c) any
payment on or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Administrative Agent or the Secured
Creditors on the indebtedness which the Administrative Agent or such Secured
Creditors repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of each Guarantor
----------------------
hereunder are independent of the obligations of any other guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other guarantor or
the Borrower and whether or not any other guarantor or the Borrower be joined in
any such action or actions. Each Guarantor waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to each Guarantor.
14.05 Authorization. Each Guarantor authorizes the Administrative
-------------
Agent and the Secured Creditors without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the Guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
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(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors
regardless of what liability or liabilities of any Guarantor or the
Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
any Guarantor from its liabilities under this Section 14.
14.06 Reliance. It is not necessary for the Administrative Agent or
--------
the Secured Creditors to inquire into the capacity or powers of the Borrower or
its Subsidiaries or the officers, directors, partners or agents acting or
purporting to act on its behalf, and any Guaranteed Obligations made or created
in reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower
-------------
relating to the Guaranteed Obligations now or hereafter owing to any Guarantor
is hereby subordinated to the Guaranteed Obligations of the Borrower owing to
the Agent and the Secured Creditors; and if the Administrative Agent so requests
at a time when an Event of Default exists, all such indebtedness relating to the
Guaranteed Obligations of the Borrower to any Guarantor shall be collected,
enforced and received by such Guarantor
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for the benefit of the Secured Creditors and be paid over to the Agent on behalf
of the Secured Creditors on account of the Guaranteed Obligations of the
Borrower to the Secured Creditors, but without affecting or impairing in any
manner the liability of any Guarantor under the other provisions of this
Guaranty. Prior to the transfer by any Guarantor of any note or negotiable
instrument evidencing any of the indebtedness relating to the Guaranteed
Obligations of the Borrower to such Guarantor, such Guarantor shall ▇▇▇▇ such
note or negotiable instrument with a legend that the same is subject to this
subordination.
14.08 Waiver. (a) Each Guarantor waives any right (except as shall
------
be required by applicable statute and cannot be waived) to require the
Administrative Agent or the Secured Creditors to (i) proceed against the
Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any other
party or (iii) pursue any other remedy in the Administrative Agent's or the
Secured Creditors' power whatsoever. Each Guarantor waives any defense based on
or arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Administrative
Agent and the Secured Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or the Secured
Creditors by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such sale is
permitted by applicable law), or exercise any other right or remedy the
Administrative Agent and the Secured Creditors may have against the Borrower or
any other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Guaranteed
Obligations have been paid. Each Guarantor waives any defense arising out of
any such election by the Administrative Agent and the Secured Creditors, even
though such election operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of such Guarantor against any Borrower
or any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which each Guarantor
assumes and incurs hereunder, and agrees that the Administrative Agent and the
Secured Creditors shall have no duty to advise each Guarantor of information
known to them regarding such circumstances or risks.
-131-
(c) Each Guarantor waives all rights of subrogation until all
Guaranteed Obligations have been paid in full in cash.
-132-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
-------
55 Lumber Road COINMACH LAUNDRY CORPORATION
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
55 Lumber Road COINMACH CORPORATION
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
-133-
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA,
Individually and as Syndication Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.,
Individually and as Documentation Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
BANK OF BOSTON
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Division Executive
BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇
Title: Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Manager
-134-
PRIME INCOME TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: V.P. Portfolio Manager
THE ING CAPITAL SENIOR
SECURED HIGH INCOME FUND, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P. & Portfolio Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
-135-
ANNEX 1
-------
COMMITMENTS
-----------
Tranche A Term Tranche B Term
Loan Loan Revolving Loan
Bank Commitment Commitment Commitment
---- -------------- -------------- --------------
Bankers Trust
Company $ 4,000,000 $ 39,250,000 $ 9,500,000
First Union National
Bank of North
Carolina $ 4,000,000 $ 3,250,000 $ 9,500,000
▇▇▇▇▇▇ Commercial
Paper Inc. $ 3,750,000 $ 3,000,000 $ 9,000,000
Fleet National Bank $ 3,500,000 $ 2,750,000 $ 8,500,000
▇▇▇▇▇▇ Financial $ 3,500,000 $ 2,750,000 $ 8,500,000
The Nippon Credit
Bank, Ltd. $ 3,250,000 $ 1,500,000 $ 7,500,000
Credit Lyonnais New
York Branch $ 3,250,000 $ 0 $ 7,500,000
Bank of Scotland $ 2,375,000 $ 1,250,000 $ 5,000,000
Bank of Boston $ 2,375,000 $ 1,250,000 $ 5,000,000
Massachusetts Mutual
Life Insurance
Company $ 9,000,000
Pilgrim America
Prime Rate Trust $ 9,000,000
Prime Income
Trust $ 9,000,000
ING Capital Senior
Secured High Income
Fund, L.P. $ 9,000,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior
Floating Rate Fund,
Inc. $ 9,000,000
TOTAL: $30,000,000 $100,000,000 $70,000,000
ANNEX II
--------
BANK ADDRESSES
--------------
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Prior
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
First Union National Bank of
North Carolina
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Bank of Boston
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mail Stop: 01-09-01
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Bank of Scotland
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇▇▇▇▇▇
Credit Lyonnais New York Branch
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
ANNEX II
Page 2
Prime Income Trust
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Fleet National Bank
One Federal Street
Mail Stop: MA OF DO3C
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Vandermal
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ Financial
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
ING Capital Senior Secured High
Income Fund, L.P. Advisors, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
ANNEX II
Page 3
▇▇▇▇▇▇ Brothers
▇▇▇▇▇▇ Commerical Paper Inc.
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: 212-528-0819
Massachusetts Mutual Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior Floating Rate Fund, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
The Nippon Credit Bank, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
ANNEX II
Page 4
Pilgrim America Prime Rate Trust
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
SCHEDULE 2.01
EXISTING LETTERS OF CREDIT
1. See item 8 of Schedule 7.22.
SCHEDULE 5.10
LEASES
See Attached Schedules.
SCHEDULE 5.11
REAL PROPERTY
1. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
2. ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
SCHEDULE 7.04
GOVERNMENTAL APPROVALS
None.
SCHEDULE 7.05
FINANCIALS
None.
SCHEDULE 7.07
TRUE AND COMPLETE DISCLOSURE
1. Part I. Selected Historical Consolidated Financial Data set forth in the
Confidential Memorandum, dated November 1996, of Holdings, Bankers Trust
Company, First Union Capital Markets, as Syndication Agent, and ▇▇▇▇▇▇
Brothers, as Documentation Agent (the "Memorandum")
2. Part VII. Historical Financial Information set forth in the Memorandum
3. Part VIII. Projected Financial Information set forth in the Memorandum
4. Exhibit I. Financial Model set forth in the Memorandum
5. Audited financial statements for Solon Automated Services, Inc. ("Solon")
for 1992, 1993 and 1994.
6. Audited financial statements for CIC I Acquisition Corp. for 1992, 1993 and
1994.
7. Schedule of gross revenues by regional business unit for various periods
ended in 1993 through June 1996 for Borrower, Solon, Super Laundry
Equipment Corp. and Allied Laundry Equipment Company ("Allied").
8. Top 15 customers of Borrower based on gross revenues for the twelve months
ended August 1996.
9. Top 25 current laundry location contracts for Borrower based on gross
revenues for the twelve months ended September 1996.
10. Schedule on post acquisition cost savings for the Solon and Allied
acquisitions.
11. Audited financial statements for Kwik Wash for the years ended December 31,
1995 and 1994; and unaudited financial statements for the eight months
ended August 31, 1996 and 1995, and the nine months ended September 30,
1996 and 1995.
12. Schedule of gross revenues from routes, stores and other sources by branch
for Kwik Wash for the years ended December 31, 1995 and 1994 and the eight
months ended August 31, 1996 and 1995.
13. Top 15 customers for Kwik Wash based on gross revenues for the eight months
ended August 31, 1996.
14. Schedule of Kwik Wash capital expenditures, including the number of washers
and dryers purchased, for the year ended December 31, 1995.
15. Detailed internal monthly management report (financial statements and
reports) for Kwik Wash for the eight months ended August 31, 1996 and 1995.
16. Schedule of the projected annual cost savings for the Kwik Wash
acquisition.
17. Schedule showing the number of machines on location by region for Solon as
of September 30, 1993, 1994 and 1995; March 31, 1995 and 1996; and June 30,
1995 and 1996.
SCHEDULE 7.15
SUBSIDIARIES
1. Super Laundry Equipment Corp.
2. Grand Wash & Dry Launderette, Inc.
SCHEDULE 7.19
ENVIRONMENTAL MATTERS
1. None.
SCHEDULE 7.20
LABOR RELATIONS
1. On June 5, 1996, the International Union of Electrical Workers filed a
petition with the National Labor Relations Board ("NLRB") seeking to
represent a unit of approximately 55 of Borrower's employees based in
Elkridge, Maryland. The petition failed but the union could seek a new
election next year.
2. Borrower's employees in the New York region are members of the Local 966
International Brotherhood of Teamsters. The contract between Borrower and
the Teamsters is currently being negotiated.
SCHEDULE 7.21
PATENTS, LICENSES, FRANCHISES AND FORMULAS
1. Borrower and each of its Subsidiaries have developed computer software
programs, formulae, routines and other processes in connection with the
conduct of their respective businesses, none of which have been registered
with the United States Copyright Office.
SCHEDULE 7.22
INDEBTEDNESS
1. All indebtedness reflected in the financial statements described in Section
7.05(b) of the Credit Agreement.
2. Approximately $196.7 million face amount of issued and outstanding 11 3/4%
Senior Notes due 2005
3. $5.0 million face amount of issued and outstanding 12 3/4% Senior Notes due
2001
4. Promissory Note in the aggregate principal amount of $15.0 million, payable
by Coinmach Laundry Corporation to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, as agent for and on
behalf of each of the individuals listed on Schedule A attached thereto
5. Note Payable in the aggregate principal amount of $437,000 payable by
Coinmach Corporation to ▇▇▇ ▇▇▇▇▇▇▇ pursuant to the Consulting Agreement by
and between ▇▇▇ ▇. ▇▇▇▇▇▇▇, Carefree Capital Co. and Coinmach Corporation,
dated as of February 4, 1994
6. Contingent Obligations:
(a) Sebco Corporation v. Cross Bay Cooperative, Inc., et al. (Supreme
--------------------------------------------------------
Court, New York County, New York) This action commenced on or about
November 4, 1985 seeks damages against the owner and managing agent of
certain premises in the amount of $50,000, plus interest and
attorney's fees, for alleged breach of contract and breach of warranty
for allegedly preventing Sebco from installing laundry equipment in
certain premises. Borrower is not a defendant herein but its
potential liability arises from an indemnity agreement whereby
Borrower agreed to hold defendants harmless. This matter is still in
the discovery stage of litigation and has not been actively pursued by
plaintiff.
(b) ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ v. ▇▇▇ ▇▇▇▇▇▇▇, et al. (Supreme Court, County of New
--------------------------------------
York, New York). This action was commenced against ▇▇▇ ▇▇▇▇▇▇▇ and
three other individual defendants on or about January 11, 1989.
Plaintiff seeks damages of $300,000 plus interest at a rate of 15% per
annum from July 22, 1986 arising out of a loan he made to the other
defendants which was to be secured by certain equipment. The
complaint alleges, among other things, fraud against the other
defendants and breach of fiduciary duty and a wrongful defeat of an
"equitable lien" in certain equipment against ▇▇▇▇▇▇▇. Borrower has
agreed to indemnify ▇▇▇▇▇▇▇ against this claim. ▇▇▇▇▇▇▇ answered the
complaint,
denying any liability thereunder and raising certain affirmative
defenses. Plaintiff moved for an order dismissing ▇▇▇▇▇▇▇'▇
affirmative defenses. This motion was granted and affirmed on appeal.
The action, which was marked off the active calendar on March 6, 1992,
has been restored to the active calendar. Discovery has recommenced.
(c) Tax indemnity letter, dated February 4, 1994, executed by CIC I
Acquisition Corp. ("CIC") in favor of MCS Capital, Inc. and assumed by
The Coinmach Corporation.
7. In connection with the acquisition of substantially all of the assets of
Allied Laundry Equipment Company:
(a) The Borrower owes to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $625,000.00, payable in five equal
annual installments of $125,000.00 each, beginning on the first day of
the first month after the first anniversary of April 1, 1996 and
continuing on the four succeeding annual anniversary dates.
(b) Borrower has assumed certain motor vehicle obligations as set forth on
the attached schedule.
8. Letters of Credit
AMOUNT BENEFICIARY BANK
------ ----------- ----
$ 300,000.00 Reliance National Indemnity Company Chase
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Bank-New York
$1,200,000.00 National Union Fire Insurance Company Chase
of Pittsburgh, PA and American Manhattan
Home Assurance Company Bank-New York
The Insurance Company of the State of PA
Commerce and Industry Insurance Company
AIU Insurance Company
Birmingham Fire Insurance Company of PA
Illinois National Insurance Company
American Global Insurance Company
National Union Fire Insurance Company of LA
Landmark Insurance Company as their
interests may appear
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
$1,432,000.00 National Union Fire Insurance Company Chase
of Pittsburgh, PA and American Manhattan
Home Assurance Company Bank-New York
The Insurance Company of the State of PA
Commerce and Industry Insurance Company
AIU Insurance Company
Birmingham Fire Insurance Company of PA
Illinois National Insurance Company
American Global Insurance Company
National Union Fire Insurance Company of LA
Landmark Insurance Company
as their interests may appear
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
9. Capital Lease Obligations as of September 27, 1996:
(a) Vehicles: $997.063
(b) IBM Computer Equipment: $153,622
10. Loan from Borrower to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, dated August, 1996, in the
principal amount of $500,000.00
11. Loan from Borrower to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated August, 1996, in the principal
amount of $50,000.00
SCHEDULE 8.03
INSURANCE
1. See attached Schedule of Insurance Policies in force as of November 14,
1996.
SCHEDULE 9.01
EXISTING LIENS
1. Kwik Wash Laundries L.P. has provided seller financing in connection with
six laundromat store locations (three in Austin, three in Dallas and one in
Houston, Texas). All such financings are secured by liens on such
laundromat stores.
2. Borrower's computer system and related equipment are pledged as security
under capital leases pursuant to a rollover agreement with IBM Credit
Corporation, Master Agreement Number HR11512, dated August 28, 1995.
3. The Inter-Tel 36 Telephone System including all substitutions,
modifications and proceeds thereof are covered by a UCC-1 Financing
statement which states that the property rental property and that the UCC-1
was filed only to make the rental a matter of public record. The secured
party was Inter-Tel Leasing, Inc. before assigned to ▇▇▇▇▇▇ Financial, Inc.
4. The Tie Ultracom AT Telephone System including all substitutions,
modifications and proceeds thereof are covered by a UCC-1 Financing
statement which states that the property rental property and that the UCC-1
was filed only to make the rental a matter of public record. The secured
party was Inter-Tel Leasing, Inc.
5. Orix Credit Alliance, Inc., as Secured Party, UCC-1, File Number: 93-2920,
File Date: June 21, 1993
6. Yale Financial Services, Inc., as Secured Party, UCC-1, File Number: 94-
144, File Date: January 1, 1994
7. Associates Leasing, Inc., as Secured Party, UCC-1, File Number: 219142,
File Date: November 2, 1992
8. Orix Credit Alliance, Inc., as Secured Party, UCC-1, File Number 119466,
File Date: June 18, 1993
9. ▇▇▇▇▇▇ United Bank, as Secured Party, UCC-1, File Number 94-1030, File
Date: April 14, 1994 (Borrower will have this lien removed after the
Closing Date)
SCHEDULE 9.05
ADVANCES, INVESTMENTS AND LOANS
1. Promissory Notes*, dated as of January 31, 1995, in favor of Borrower (as
successor in interest to TCC) by each of:
a. MCS Capital, Inc. (face amount $140,000)
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (face amount $140,000)
c. ▇▇▇▇▇ ▇▇▇▇▇▇ (face amount $11,666.80)
d. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (face amount $23,333.60)
e. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (face amount $5,833.40)
f. ▇▇▇▇▇▇▇ ▇▇▇▇▇ (face amount $17,500.20)
* On June 25, 1996, the first of the four annual installments of
indebtedness evidenced by such Promissory Notes was forgiven.
2. Promissory Notes*, dated as of July 26, 1995, in favor of SAS from each of:
a. MCS Capital, Inc. (face amount $52,369.52)
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (face amount $52,369.52)
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (face amount $26,184.80)
d. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (face amount $19,638.56)
* On July 23, 1996, the first of the eight annual installments of
indebtedness evidenced by such Promissory Notes was forgiven.
3. $21,794.96 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
favor of Holdings together with the Stock Subscription Agreement, dated as
of May 10, 1996, by and between ▇▇▇▇▇ and Holdings in respect of the
purchase of 1,415 shares of Class B Common Stock, $.01 par value, of
Holdings
4. $9,226.28 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in
favor of Holdings together with the Stock Subscription Agreement, dated as
of May 10, 1996, by and between ▇▇▇▇▇ and Holdings in respect of the
purchase of 599 shares of Class B Common Stock, $.01 par value, of Holdings
5. $21,794.96 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ in favor of Holdings together with the Stock Subscription
Agreement, dated as of May 10, 1996, by and between ▇▇▇▇▇▇▇▇ and Holdings
in respect of the purchase of 1,415 shares of Class B Common Stock, $.01
par value, of Holdings
6. Kwik Wash Laundries L.P. has provided seller financing in connection with
six laundromat store locations (three in Austin, three in Dallas and one in
Houston, Texas). All such financings are secured by liens on such
laundromat stores. The outstanding notes receivable in connection with
such laundromat stores was $139,267.14 as of December 5, 1996.
7. Loan from Borrower to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, dated August, 1996, in the
principal amount of $500,000.00
8. Loan from Borrower to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated August, 1996, in the principal
amount of $50,000.00
SCHEDULE 7.01
CORPORATE STATUS
1. Coinmach Corporation is not in good standing in the State of New Jersey.
SCHEDULE 7.06
LITIGATION
1. ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - Docket ▇▇. ▇▇, ▇▇▇-▇▇▇ (▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
------------------
Texas; 361st Judicial District). EEOC charge dropped after Solon responded
to Texas Commission on Human Rights. Citation was issued to Solon on
September 1, 1995 charging Solon in violation of Texas Labor Code, Section
21.051 in discharging ▇▇▇▇▇▇▇▇▇ because of his disability and age. Solon
has denied all charges. The case is in the pre-trial discovery stage.
2. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ - Charge No:15A950373, EEOC, Miami District Office. Notice
---------------
of discrimination was issued to Solon on July 12, 1995 on behalf of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇. The cause cited was discrimination based on religion and
disability. Solon denies all charges. A response was submitted to the
EEOC on November 6, 1995 after an attempt at a negotiated settlement was
rejected by the claimant. The case is in the pre-trial discovery stage.
3. Listed below are certain legal actions, to Borrower's knowledge, that have
arisen against Borrower, Holdings and any of their respective Subsidiaries
which will exceed (i) $1,000,000 in the aggregate, or (ii) $250,000
individually, and which in each case are not adequately covered by
insurance.
(a) Superior Laundries, Inc. v. Coinmach Industries Corp., et al. This
-------------------------------------------------------------
action was commenced on or about February 18, 1986, by a commercial
laundry equipment leasing company against Coinmach Industries Corp.,
Opel On-Premises Equipment Leasing Corporation ("OPEL"), and certain
individual employees of OPEL, and an unrelated group of defendants
known as ▇▇▇▇-▇▇▇▇▇▇ defendants. The complaint seeks compensatory
damages of $592,889.78 and punitive damages of $3,600,000, based upon
various allegations of tortious interference with business relations,
wrongful filing of UCC financing statements, unfair competition,
conspiracy, and breach of an alleged agreement to sell, deliver and
service laundry equipment. The complaint also seeks a permanent
injunction and an accounting and imposition of a constructive trust on
the profits and proceeds from certain laundry service accounts.
Coinmach/OPEL vigorously defended the action and successfully defeated
the motion for preliminary injunction. Plaintiff has not pursued the
case since approximately 1987 or 1988, the date of the denial of the
preliminary injunction.
The following are not quantifiable:
(b) Assurance and Discontinuance Agreement between Solon and the State of
Maryland dated and approved on december 5, 1985.
(c) Final Judgment and Consent to Entry of Final Judgment By Solon
Automated Services, Inc., dated April 21, 1977, in SEC ▇. ▇▇▇▇▇, Civil
------------
▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ District Court for the District of
Columbia.
SCHEDULE 7.13
PROPERTIES
1. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
SCHEDULE 7.16
COMPLIANCE WITH STATUTES, ETC.
1. Certain of Borrower's multi-family sites are located in townships that
require licenses or permits. Borrower is not aware of any such expired
licenses or permits. Borrower also believes that the lapse of any of such
licenses or permits would not result in a Material Adverse Effect.
2. As disclosed in the Environmental Site Assessment prepared by Environ
Corporation, dated December 1994, regarding the facilities Coinmach
Industries and Selected Subsidiaries located in the State of New York. In
addition, according to such Assessment, Coinmach Industries Co., L.P. was
referred in 1991 to the Legal Department of the New York Department of
Environmental Conservation in connection with its former air permit.
Borrower has requested that the permit be updated and reissued based on
laboratory test performed on samples taken by Nassau County Department of
Health. Borrower was told in May 1996 that a permit would be issued but
has not received it yet.
3. As disclosed in the Environmental Site Assessment prepared by Environ
Corporation, dated January, 1996, regarding the facility located at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
4. As disclosed in the Phase I Environmental Site Assessment prepared by KEI
for Kwik Wash Laundries, L.P., dated December 19, 1996, regarding the
facility located at ▇▇▇▇/▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇.
SCHEDULE 9.06
TRANSACTIONS WITH AFFILIATES
1. Tax indemnity letter, dated February 4, 1994, executed by CIC in favor of
MCS Capital, Inc. and assumed by The Coinmach Corporation ("TCC").
2. Agreement, dated as of November 30, 1995, among SAS Acquisitions Inc.
("SAS"), Solon, TCC and the signatories thereto (the "Omnibus Agreement").
3. Executive Stock Purchase Agreements, dated as of January 31, 1995, as
amended by the Omnibus Agreement, between Borrower as successor in interest
to TCC, Golder, Thoma, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Fund IV L.P. ("GTCR") and each of:
a. ▇▇▇▇▇▇▇ ▇▇▇▇▇
b. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
c. ▇▇▇▇▇ ▇▇▇▇▇▇
4. Investor Purchase Agreements, dated as of January 31, 1995, as amended by
the Omnibus Agreement, by and among Borrower (as successor in interest to
TCC), GTCR and each of:
▇. ▇▇▇▇▇▇ Financial, Inc.
▇. ▇▇▇▇▇▇▇ National Life Insurance Company
▇. ▇▇▇▇▇▇▇ National Life Insurance Company of Michigan
d. President and Fellows of Harvard College
e. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
f. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
g. MCS Capital, Inc.
h. MCS Capital Management, Inc.
i. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
5. Equity Purchase Agreement, dated as of January 31, 1995, as amended by the
Omnibus Agreement, between Borrower (as successor in interest to TCC) and
GTCR.
6. Promissory Notes*, dated as of January 31, 1995, as amended by the Omnibus
Agreement, in favor of Borrower (as successor in interest to TCC) by each
of:
a. MCS Capital, Inc.
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c. ▇▇▇▇▇ ▇▇▇▇▇▇
d. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
e. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
f. ▇▇▇▇▇▇▇ ▇▇▇▇▇
* On June 25, 1996, the first of the four annual installments of
indebtedness evidenced by such Promissory Notes was forgiven.
7. Stock Pledge Agreements, dated as of January 31, 1995, between Borrower (as
successor in interest to TCC) and each of:
a. MCS Capital, Inc.
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
d. ▇▇▇▇▇ ▇▇▇▇▇▇
e. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
f. ▇▇▇▇▇▇▇ ▇▇▇▇▇
8. Equity Purchase Agreement, dated as of July 26, 1995, as amended by the
Omnibus Agreement, by and between GTCR and SAS.
9. Investor Purchase Agreements, dated as of July 26, 1995, as amended by the
Omnibus Agreement, by and among SAS, GTCR and the Purchasers listed on the
signature page attached thereto.
10. Executive Stock Agreements, dated as of July 26, 1995, as amended by the
Omnibus Agreement, by and among SAS, GTCR and each of:
a. MCS Capital, Inc.
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
d. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
11. Promissory Notes*, dated as of July 26, 1995, as amended by the Omnibus
Agreement, in favor of SAS from each of:
a. MCS Capital, Inc. (including guaranty of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
d. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
* On July 23, 1996, the first of the eight annual installments of
indebtedness evidenced by such Promissory Notes was forgiven.
12. Stock Pledge Agreements, dated as of July 26, 1995, between SAS and each
of:
a. MCS Capital, Inc.
b. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
d. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
13. Amended and Restated Stockholders Agreement, dated as of November 30, 1995,
among SAS, GTCR and each of (collectively, the "Stockholders"):
▇. ▇▇▇▇▇▇ Financial, Inc.
▇. ▇▇▇▇▇▇▇ National Life Insurance Company
▇. ▇▇▇▇▇▇▇ National Life Insurance Company of Michigan
d. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
e. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
f. President and Fellows of Harvard College
g. MCS Capital, Inc.
h. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
i. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
j. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
k. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
l. ▇▇▇▇▇▇▇ ▇▇▇▇▇
m. ▇▇▇▇▇ ▇▇▇▇▇▇
n. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
o. MCS Capital Management, Inc.
14. Registration Agreement, dated as of July 26, 1995, as amended by the
Omnibus Agreement, among the Company and each of the Stockholders.
15. Option Agreements, dated July 23, 1996, and as amended by the Omnibus
Amendment to Option Agreements, dated September 27, 1996, by and between
Holdings and each of the following persons or entities,
a. MCS Capital, Inc.
b. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
c. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
d. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
e. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
f. R. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
g. ▇▇▇▇ ▇. ▇▇▇▇▇▇
h. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
16. Option Agreements, dated September 17, 1996, by and between Holdings and
each of ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
17. Grant of non-qualified options on August 8, 1996 to purchase up to 181,250
shares of Common Stock, par value $.01 per share pursuant to Borrower's
Second Amended and Restated 1996 Employee Stock Option Plan to certain
members of management and other employees of Borrower.
18. $21,794.96 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ in
favor of Holdings together with the Stock Subscription Agreement, dated as
of May 10, 1996, by and between ▇▇▇▇▇ and Holdings in respect of the
purchase of 1,415 shares of Class B Common Stock, $.01 par value, of
Holdings
19. $9,226.28 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ in
favor of Holdings together with the Stock Subscription Agreement, dated as
of May 10, 1996, by and between ▇▇▇▇▇ and Holdings in respect of the
purchase of 599 shares of Class B Common Stock, $.01 par value, of Holdings
20. $21,794.96 Promissory Note, dated May 10, 1996, issued by ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ in favor of Holdings together with the Stock Subscription
Agreement, dated as of May 10, 1996, by and between ▇▇▇▇▇▇▇▇ and Holdings
in respect of the purchase of 1,415 shares of Class B Common Stock, $.01
par value, of Holdings
21. Voting Agreement, dated as of July 23, 1996, by and among Holdings and the
shareholders of Holdings set forth on the signature pages thereto
22. Loan from Borrower to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, dated August, 1996, in the
principal amount of $500,000.00
23. Loan from Borrower to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, dated August, 1996, in the principal
amount of $50,000.00
24. Amendment to Investor Purchase Agreements, dated January, 1997, by and
among Holdings, GTCR, Borrower, ▇▇▇▇▇▇ Financial, Inc., ▇▇▇▇▇▇▇ National
Life Insurance Company, individually and as successor by merger with
▇▇▇▇▇▇▇ National Life Insurance Company of Michigan, President and Fellows
of Harvard College, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
25. Amendment to Investor Purchase Agreements, dated January, 1997, by and
among Holdings, GTCR, ▇▇▇▇▇▇ Financial, Inc., ▇▇▇▇▇▇▇ National Life
Insurance Company, individually and as successor by merger with ▇▇▇▇▇▇▇
National Life Insurance Company of Michigan, President and Fellows of
Harvard College, MCS Capital, Inc., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
EXHIBIT A
---------
[FORM OF NOTICE OF BORROWING]
_______________, 1997
Bankers Trust Company, as
Administrative Agent for the
Banks party to the
Credit Agreement
referred to below
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Gentlemen:
The undersigned, Coinmach Corporation (the "Borrower"), refers to the
Credit Agreement, dated as of January 8, 1997 (the "Credit Agreement", the terms
defined therein being used herein as therein defined), among Coinmach Laundry
Corporation, the Borrower, various Banks from time to time party thereto, First
Union National Bank of North Carolina, as Syndication Agent, ▇▇▇▇▇▇ Commercial
Paper, Inc., as Documentation Agent, and you, as Administrative Agent for such
Banks, and hereby gives you notice, irrevocably, pursuant to Section 1.03 of the
Credit Agreement, that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _________, 19__./1/
(ii) The aggregate principal amount of the Proposed Borrowing is
$___________.
(iii) The Proposed Borrowing is to consist of [Tranche A Term Loans]
[Tranche B Term Loans] [Revolving Loans].
----------
/1/ Shall be a Business Day at least three Business Days in the case of
Eurodollar Rate Loans after the date hereof.
(iv) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Eurodollar Loans]./2/
(v) The initial Interest Period for the Proposed Borrowing is ___
month(s)./3/
The undersigned hereby certifies that the following statements are
true and correct on the date hereof, and will be true and correct on the date of
the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Documents are and will be true and correct in all material respects, both
before and after giving effect to the Proposed Borrowing and to the
application of the proceeds thereof, as though made on such date (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date); and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
COINMACH CORPORATION
By
----------------------------
Name:
Title:
----------
/2/ Eurodollar Loans may not be incurred prior to the earlier of (x) the 60th
day after the Initial Borrowing Date and (y) the Syndication Date.
/3/ To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT B-1
Tranche A Term Notes
(See Exhibit 10.60 filed herewith)
EXHIBIT B-2
Tranche B Term Notes
(See Exhibit 10.61 filed herewith)
EXHIBIT B-3
Revolving Notes
(See Exhibit 10.62 filed herewith)
EXHIBIT B-4
Swing Line Note
(See Exhibit 10.63 filed herewith)
EXHIBIT C
---------
[FORM OF LETTER OF CREDIT REQUEST]
No. (1) Dated (2)
----- ---------
Bankers Trust Company, individually and as Administrative Agent
under the Credit Agreement (as amended, modified or supplemented from time
to time, the "Credit Agreement"), dated as of January 8, 1997, among
Coinmach Laundry Corporation, Coinmach Corporation, the Subsidiary
Guarantors named therein, the lenders from time to time party thereto,
First Union National Bank of North Carolina, as Syndication Agent, ▇▇▇▇▇▇
Commercial Paper, Inc., as Documentation Agent, and Bankers Trust Company,
as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
We hereby request that [Name of Proposed Issuing Bank], in its
individual capacity, issue a [Standby] Letter of Credit for the account of the
undersigned on (3) (the "Date of Issuance") in the aggregate stated amount
-----
of (4) .
---------
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
----------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least 2 Business Days (or, in each case
such shorter period as is acceptable to such Issuing Bank).
(4) Aggregate initial stated amount of Letter of Credit.
The beneficiary of the requested Letter of Credit will be (5) ,
---------
and such Letter of Credit will be in support of (6) and will have a stated
-------
expiration date of (7) .
---------
We hereby certify that:
(1) The representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date of
Issuance, both before and after giving effect to the issuance of the Letter
of Credit requested hereby (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date).
(2) No Default or Event of Default has occurred and is continuing
nor, after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or Event of Default occur.
Copies of all documentation with respect to the supported transaction
are attached hereto.
COINMACH CORPORATION
By
------------------------------
Title:
----------
(5) Insert name and address of beneficiary.
(6) Insert description of L/C Supportable Indebtedness and describe obligation
to which it relates in the case of Standby Letters of Credit.
(7) Insert last date upon which drafts may be presented which may not be later
than 12 months after the Date of Issuance or 30 days prior to the Revolving
Loan Maturity Date, whichever is the earliest for Standby Letters of
Credit.
EXHIBIT D
---------
[Form of Section 4.04(b)(ii) Certificate]
-----------------------------------------
Reference is hereby made to the Credit Agreement, dated as of January
8, 1997, among Coinmach Laundry Corporation, Coinmach Corporation, various
Banks, First Union National Bank of North Carolina, as Syndication Agent, ▇▇▇▇▇▇
Commercial Paper, Inc., as Documentation Agent, and Bankers Trust Company, as
Administrative Agent (the "Credit Agreement"). Pursuant to the provisions of
Section 4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies
that it is not a "bank" as such term is used in Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By:
------------------------
Title:
EXHIBIT E
January 8, 1997
To Bankers Trust Company, as Administrative Agent,
and each of the Banks party to the Credit Agreement
referred to below
c/o Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Coinmach Corporation
--------------------
Ladies and Gentlemen:
We have acted as special counsel to Coinmach Corporation, a Delaware
corporation (the "Company"), and Coinmach Laundry Corporation, Delaware
-------
corporation ("CLC" together with the Company, the "Credit Parties"), in
--- --------------
connection with the negotiation, execution and delivery of, and the consummation
of the transactions contemplated by, that certain Credit Agreement, dated as of
even date herewith, among the Company, CLC, First Union National Bank of North
Carolina, as Syndication Agent, ▇▇▇▇▇▇ Commercial Paper, Inc., as Documentation
Agent, Bankers Trust Company, as Administrative Agent, and the Banks party
thereto (the "Credit Agreement"). Capitalized terms used herein without
----------------
definition shall have the meanings assigned to such terms in the Credit
Agreement.
Throughout this opinion, the term "Collateral" shall mean and refer
only to Collateral (as defined in the Credit Agreement), which Collateral is
located in the State of New York and is of a type in which a security interest
is perfected under the Uniform Commercial Code as enacted in the State of New
York (the "UCC") solely by filing a financing statement in the Filing Office (as
---
defined below), and shall not include fixtures of any kind or nature, any real
property, any patents, trademarks, copyrights or any other intellectual property
or the Securities (as defined in the Holdings Pledge Agreement and the Borrower
Pledge Agreement).
This opinion is delivered to each of you pursuant to Section 5.03 of
the Credit Agreement.
We have reviewed the Credit Agreement, the financing statements (the
"Financing Statements") to be filed by Agent (as defined below) in the Filing
---------------------
Office (as defined below), the
January 8, 1997
Page 2
Notes, Security Agreement, Holdings Pledge Agreement, Borrower Pledge Agreement,
Assignment and Assumption Agreement, Collateral Assignment of Leases, and
Collateral Assignment of Location Leases, in each case, dated as of even date
herewith (collectively, the "Loan Documents").
--------------
We have also examined originals or copies, certified or otherwise,
identified to our satisfaction as being true copies, of Certificates of
Incorporation and bylaws of each of the Credit Parties and such certificates or
comparable documents of public officials and of officers and representatives of
each of the Credit Parties with respect to good standing or qualifications for
each of the Credit Parties, in each case in the respective states in which the
Credit Parties are qualified.
In our capacity as special counsel, we have made such legal and
factual examinations and inquiries, including an examination of originals or
copies certified to our satisfaction as being true copies, of such records,
documents or other instruments as in our judgment are necessary and appropriate
to enable us to render the opinions expressed below. We have also made such
inquiries of such officers and representatives as we have deemed relevant and
necessary as a basis for the opinions hereinafter set forth.
In rendering the opinions expressed below, we have been furnished
with, and, without independent investigation but with your consent have relied
upon, (i) certificates of officers, directors and representatives of the Credit
Parties with respect to certain factual matters, (ii) certificates, documents,
instruments and assurances of public officials as we have deemed appropriate or
advisable, and (iii) representations and warranties as to factual matters made
in the Loan Documents.
In addition, we have assumed, with your permission and without
independent verification:
(a) all signatures of all persons signing all documents in connection
with which this opinion is rendered are genuine and authorized (other than the
persons signing on behalf of the Credit Parties);
(b) all documents submitted to us as true copies, whether certified
or not, conform to authentic original documents;
(c) your corporate and regulatory power and authority to enter into
and perform your obligations relating to the Loan Documents to which you are a
party;
January 8, 1997
Page 3
(d) the due authorization, execution and delivery by, and
enforceability against, you of the Loan Documents to which you are a party;
(e) each of the Credit Parties has "rights in the Collateral"
existing on the date hereof, as such phrase is used in Section 9-203(1)(c) of
the UCC, and will have rights in the Collateral arising after the date hereof;
(f) value (as defined in Section 1-201(44) of the UCC) has been given
by you to the Credit Parties for the security interests and other rights in and
assignments of Collateral and Securities described in or contemplated by the
Loan Documents; and
(g) the descriptions of Collateral in the Loan Documents reasonably
describe the property intended to be described as Collateral, and the
description of the Collateral in the Financing Statements is substantially the
same as that described in the applicable Loan Document, and the Holdings Pledge
Agreement and the Borrower Pledge Agreement accurately describe the Securities
pledged thereunder.
In rendering the opinions expressed below, we have made no independent
investigation with respect to any matter in connection with which we did not
represent the Credit Parties. Accordingly, any matter expressed as to our
knowledge is based solely on such actual knowledge as we have acquired in the
course of our representation of the Credit Parties. Our knowledge of the
business, records, transactions and activities of the Credit Parties is limited
to the information which has been brought to our attention by certificates
executed and delivered to us by officers of the Credit Parties in connection
with this opinion letter. Without limiting the generality of the foregoing, (i)
we have not made any search of the docket or other public records of any court
or administrative agency or governmental authority with respect to pending
suits, actions, claims, investigations, proceedings, orders or decrees or with
respect to assessments, or mortgages, and (ii) we have only made a search of the
public records with respect to security interests or encumbrances on personal
property in the jurisdictions and for the entities set forth on Schedule I
----------
attached hereto.
To render this opinion we have relied upon the actual knowledge of the
attorneys in our firm who have devoted substantive attention to the transactions
contemplated by the Loan Documents, and not to the knowledge of the firm
generally. All references in this opinion to the "knowledge" of this firm or
January 8, 1997
Page 4
to matters with respect to which it is "aware" are subject to this limitation.
On the basis of and subject to the foregoing, and subject to the
limitations, qualifications, assumptions and exceptions hereinafter set forth,
we are of the opinion that as of the date hereof:
1. Each of the Credit Parties is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, except as set forth on Schedule II attached hereto.
-----------
2. Each of the Credit Parties has the corporate power and authority
to own, lease and operate its properties and conduct its business as presently
conducted.
3. Each of the Credit Parties has the corporate power and authority
to execute and deliver the Loan Documents to which each is a party, to perform
its respective obligations thereunder and to consummate the transactions
contemplated thereby. The execution, delivery and performance by each of the
Credit Parties of the Loan Documents to which it is a party and the consummation
by each such Credit Party of the transactions contemplated thereby have been
duly authorized by all necessary corporate action on the part of each such
Credit Party.
4. The Loan Documents have been duly and validly executed and
delivered by each of the Credit Parties party thereto, and assuming the due
authorization, execution and delivery of the Loan Documents by each of you, each
Loan Document constitutes a legal, valid and binding obligation of each
respective Credit Party party thereto enforceable against such Credit Party in
accordance with the terms thereof subject to the qualifications contained
herein.
5. The authorized, issued and outstanding capital stock of each of
the Credit Parties is as described on Schedule III attached hereto. All such
------------
issued and outstanding capital stock is validly issued, fully paid and
nonassessable.
6. To our knowledge, based solely upon the inquiries of officers of
the Credit Parties and other than as disclosed in the Loan Documents, there are
no judgments outstanding with respect to the Credit Parties nor is there now
pending any action, suit or proceeding before any court or any governmental or
regulatory authority with respect to the Credit Parties which would reasonably
be expected to result in any material adverse
January 8, 1997
Page 5
change in the business or financial condition of the Credit Parties, taken as a
whole.
7. To our knowledge, no consent or waiver of, filing with,
authorization, approval or other action by any federal or New York State
governmental or regulatory authority, which has not already been obtained or
done (collectively, the "Consents"), is required in connection with the
--------
execution, delivery and performance by any Credit Party of any of the Loan
Documents to which such Credit Party is a party or the consummation by each
Credit Party of the transactions contemplated thereby or compliance by each
Credit Party with the provisions thereof pertaining to such party, except (i)
certain filings necessary to perfect the Liens of Bankers Trust Company, as
Administrative Agent, created by certain of the Loan Documents, (ii) those
required by federal and state securities and blue sky laws, as to which we
express no opinion, and (iii) for such Consents for which the failure to so do
or obtain would not have a material adverse effect on the business or financial
condition of the Credit Parties, taken as a whole.
8. The execution and delivery of the Loan Documents by each of the
Credit Parties to which it is a party and the consummation of the transactions
contemplated thereby will not: (a) violate any existing order or decree
applicable to any of the Credit Parties of any Federal or New York court or
governmental authority of which we are aware; (b) result in a breach or
violation of the certificates of incorporation or bylaws of each of the Credit
Parties as in effect on the date hereof; (c) to our knowledge, result in the
creation of any Lien on any of the Collateral, except as contemplated by the
Loan Documents or as otherwise disclosed on the schedules to the Credit
Agreement; or (d) to our knowledge, conflict with, constitute a default (with or
without notice or lapse of time or both) under, or result in a breach or
violation of the provisions of any material agreement under which any Credit
Party has incurred Indebtedness. In connection with the foregoing, we express
no opinion as to: (i) any agreement, the violation of which would not have any
material adverse effect on the Credit Parties, taken as a whole; (ii) any
agreement which might be violated by a misrepresentation or omission or a
fraudulent act; or (iii) any law, rule, order or agreement to which such Credit
Party may be subject as a result of your legal or regulatory status, the
syndication of Loans by you, or the involvement by you in any of the
transactions contemplated by the Loan Documents.
9. The Security Agreement creates a valid security interest for the
benefit of the secured parties named therein, in all of the Company's right,
title and interest in the Collateral
January 8, 1997
Page 6
to the extent that a security interest therein can be created under Article 9 of
the UCC, and, to the extent provided in Section 9-306 of the UCC, all proceeds
thereof. Assuming that the Financing Statements as executed by the Credit
Parties have been duly filed in the office of the Secretary of State of the
State of New York (the "Filing Office") in the form reviewed by us, the security
-------------
interests of Bankers Trust Company, as Administrative Agent (the "Agent") on
-----
behalf of the Agents and Banks, in the Collateral, to the extent such Collateral
is located, or deemed located, in the State of New York, and based solely upon
the representations and warranties of each of the Credit Parties to us
concerning the nature and location of its assets and the location of its chief
executive office, will be perfected to the extent such security interests can be
perfected solely by filing a financing statement under the UCC, and, upon the
due filing thereof, no further filing of any document or instrument or other
action will be required to so perfect such security interests, except that:
(a) continuation statements with respect to each Financing
Statement must be filed within the period of six months prior to the
expiration of five years from the date of the original filings
thereof, and within like periods thereafter, in order to maintain the
effectiveness of such filings;
(b) additional filings may be necessary if either Credit Party
changes its name, identity, corporate structure or the jurisdiction in
which its places of business, its chief executive office or the
Collateral are located;
(c) we express no opinion as to the perfection of, or need for
further filings to perfect, such security interests in goods now or
hereafter located in any jurisdiction other than the jurisdictions in
which the Filing Office is located;
(d) although the filing of a UCC-1 Financing Statement will
perfect a security interest in chattel paper and instruments, the
perfected security interest therein is subject to the rights of
subsequent holders or purchasers (including secured parties) without
actual knowledge of Agent's security interest as provided in Sections
9-308 and 9-309 of the UCC;
(e) a perfected security interest in Collateral located in one
state may become unperfected:
January 8, 1997
Page 7
(i) if the Collateral is removed from such state, and
appropriate steps are not taken by Agent in a timely fashion in
such other jurisdiction to which such Collateral is moved; or
(ii) if the Financing Statements become misleading, and
appropriate steps are not taken by Agent in a timely fashion to
file new Financing Statements or amendments thereto;
(f) the Agent's security interest, to the extent it secures
future advances, may be subject to the prior rights of a lien creditor
pursuant to Section 9-301(4) of the UCC;
(g) as provided in Sections 9-312 and 9-313 of the UCC, holders
of purchase money security interests created after the date hereof may
have rights in the Collateral subject thereto superior to Agent's
rights under certain circumstances;
(h) as provided in Section 9-310 of the UCC, persons who provide
materials or services with respect to the Collateral on or after the
date hereof may under certain circumstances obtain liens on such
Collateral prior to Agent's;
(i) the Agent's security interest in accessions and products is
subject to the limitations set forth in Sections 9-313, 9-314 and 9-
315 of the UCC;
(j) as provided in Section 9-318 of the UCC, the Collateral may
be subject to any rights, defenses or claims of an account debtor to
which the rights of an assignee would be subject; and
(k) the perfection of the Agent's security interests in the
Collateral will be terminated as to Collateral disposed of by the
Credit Parties in a manner authorized by Agent in the Credit Agreement
or otherwise.
10. Assuming (a) the continued exclusive possession within the State
of New York by the Agent ("Pledgee") of all stock certificates (the "Pledged
------- -------
Shares") listed on Part I of Annex A to each of the Holdings Pledge Agreement
------
and the Borrower Pledge Agreement (each a "Pledge Agreement"), each of which
----------------
Pledge Agreement was executed pursuant to the Credit Agreement, together with
stock powers properly executed in blank with
January 8, 1997
Page 8
respect thereto and (b) that the Pledgee was without notice of any adverse claim
(as such term is used in Section 8-302 of the UCC) with respect to the Pledged
Shares, the Holdings Pledge Agreement and the Borrower Pledge Agreement,
together with the delivery of the certificates representing the Pledged Shares
thereunder to Agent in the State of New York, creates in Agent's favor a
perfected security interest under the UCC in such Pledged Shares. Assuming
Agent acquired Agent's interest in such Pledged Shares in good faith and without
notice of any adverse claims and that each such certificate is either in bearer
or registered form issued or endorsed in Agent's name or in blank, Agent will
acquire Agent's security interest in such Pledged Shares free of adverse claims.
Our opinions set forth above are subject to the following additional
qualifications:
(a) we express no opinion as to, or the effect or applicability
of, any laws other than the laws of the State of New York, the Federal
law of the United States of America and the General Corporation Law of
the State of Delaware; further, our security interest opinions in
paragraphs 9 and 10 are limited to Articles 8 and 9 of the UCC, and
therefore those opinion paragraphs do not address (i) laws of
jurisdictions other than that of the State of New York, except for
Articles 8 and 9 of the UCC, and (ii) collateral of a type not subject
to Articles 8 and 9 of the UCC, and (iii) under Section 9-103 of the
UCC what law governs perfection of the security interests granted in
the Collateral covered herein. We assume no responsibility with
respect to the application to the subject transactions, or the effect
thereon, of the laws of any other jurisdiction;
(b) we express no opinion regarding the perfection of security
interests with respect to collateral or transactions which are
excluded from Article 9 of the UCC, subject to opinion paragraph 10
above, including, without limitation, any item or transaction excluded
from the coverage of the UCC by Section 9-104 thereof;
(c) we express no opinion with respect to the perfection of any
security interests in any accounts, chattel paper, documents,
instruments or general intangibles with respect to which the account
debtor or obligor is the United States of America, any state, county,
city, municipality or other governmental body, or any department,
agency or instrumentality thereof,
January 8, 1997
Page 9
unless the same has been assigned to Agent pursuant to the Assignment
of Claims Act of 1940, as amended, and all similar laws and
regulations relating to the assignment or pledge thereof;
(d) with respect to opinion paragraphs 4, 9 and 10, our opinion
is subject to the effect of bankruptcy, insolvency, reorganization,
arrangements for the benefit of creditors and remedies, preferential
transfer, moratorium, fraudulent conveyance or other similar laws and
rules, whether now or hereafter in effect, relating to or affecting
creditors and remedies generally or the effects of general principles
of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforceability thereof
is considered in a proceeding in equity or law), and except to the
extent that rights to indemnification hereunder may be limited by
federal or state securities laws or public policy relating thereto,
and by the discretion of the court before which any proceeding
therefor may be brought, including, without limitation, the effect of
such laws and rules, general principles or court discretion on the
legality, validity or enforceability of a guaranty of a subsidiary of
the obligations of its parent;
(e) any purported assignment of, or any transfer of any interest
in, any agreement, lease or governmental or regulatory approval,
license or permit may be subject to restrictions upon assignment or
transfer which, although not necessarily applicable to assignments
intended as security, will be required to be satisfied before Agent or
Agent's successor(s) or assign(s) will be treated as an assignee
thereof, except to the extent that consents to or approvals of such
assignment have been obtained from the appropriate governmental or
regulatory body or third party;
(f) we express no opinion with respect to the priority of any
Lien, the existence of any of the Collateral or other property of the
Credit Parties or the validity or condition of the title of the Credit
Parties thereto;
(g) our opinions are limited to the specific issues addressed
herein and are limited in all respects to laws and facts existing on
the date hereof, and, by rendering our opinion, we do not undertake to
advise
January 8, 1997
Page 10
Agent of any changes in such laws or facts which may occur after the
date hereof;
(h) that Agent retain exclusive possession of the Securities
under the Holdings Pledge Agreement and the Borrower Pledge Agreement
(as defined in such agreements) at all times; as to any hereafter-
arising Securities thereunder as to which the UCC requires possession
in order to perfect Agent's security interest therein, that Agent are
in exclusive possession thereof at the time that Agent's security
interest therein attaches; the Pledged Shares are "certificated
securities" (as defined in Section 8-102(1)(a) of the UCC) and none of
the Pledged Shares now owned or hereafter arising are "uncertificated
securities" (as defined in Section 8-102(1)(b) of the UCC); when Agent
takes possession of any portion of such Securities which constitutes a
"security" (as defined by Section 8-102(1)(a) of the UCC) Agent shall
be a "bona fide purchaser" (as defined in Section 8-302(1) of the UCC)
---- ----
of the security; Section 8-302(4) of the UCC is inapplicable to Agent;
and further, the perfected security interest in the Securities is
subject to the rights of subsequent holders or purchasers (including
secured parties) as provided in Sections 8-301 and 8-302 of the UCC;
(i) we express no opinion as to the enforceability of provisions:
(i) to the effect that failure to exercise or delay in
exercising a right or remedy will not operate as a waiver of the right
or remedy;
(ii) indemnifying or prospectively releasing a creditor
against liability for its own wrongful or negligent acts or where the
release or indemnification is contrary to public policy;
(iii) purporting to preclude the modification of the Loan
Documents or any of the other agreements through conduct, custom, or
course of performance, action, or dealing;
(iv) requiring the payment or reimbursement of fees, costs,
expenses, or other amounts without regard to whether they are
reasonable in nature or amount;
January 8, 1997
Page 11
(v) respecting various self-help or summary remedies,
particularly if their operation would work a substantial forfeiture,
impose a substantial penalty upon the burdened party, or result in a
breach of the peace, or which permit the appointment of a receiver
without notice and an opportunity for a hearing; and
(vi) due-on-lease, due-on-encumbrance, or due-on-sale
clauses;
(j) we express no opinion regarding the effect of statutory
rights of debtors to reinstate, redeem or cure defaults;
(k) with respect to the guaranty by Holdings as set forth in
Section 14 of the Credit Agreement (each a "Guaranty"), we express no
--------
opinion as to: (i) the effect of any failure to provide a guarantor
under the Loan Documents with written notice of any default under the
Loan Documents that would require a payment under the Loan Documents
and with an opportunity to cure the default; (ii) the effect of any
modification or amendments to the Notes or Credit Agreement that
materially affects a guarantor's obligations without the consent of
any guarantor under the Credit Agreement; or (iii) the possible
ineffectiveness of any waiver under a Guaranty that is too vague;
(l) with respect to each Guaranty our opinion is limited by the
substantial body of case law which treats guarantors as "debtors"
under the UCC thereby affording guarantors rights and remedies of
debtors established by the UCC; additionally, we express no opinion as
to the enforceability of guaranties by subsidiaries of parent
obligations or of cross-corporate guaranties by guarantors of common
corporate parents and the limiting effect of the substantial body of
case law with respect to such matters;
(m) since there has been no filing of the Collateral Assignment
of Leases and the Collateral Assignment of Location Leases, we express
no opinion as the perfection of any security interests or liens on the
leases subject to the Collateral Assignment of Leases or the location
contracts subject to the Collateral Assignment of Location Leases;
(n) to the extent the parties to the Credit Agreement have agreed
not to file a Financing Statement
January 8, 1997
Page 12
in a certain location, we express no opinion as the perfection of any
security interests or liens on the Collateral located in such
location; and
(o) with respect to (i) federal tax liens accorded priority under
law and (ii) liens created under Title IV of the Employee Retirement
Income Security Act of 1974 which are properly filed after the date
hereof, we express no opinion as to the relative priority of such
liens and the security interests created by the Loan Documents;
(p) with respect to any claim (including for taxes) in favor of
any state or any of its respective agencies, authorities,
municipalities or political subdivisions which claim is given lien
status and/or priority under any law of such state, we express no
opinion as to the relative priority of such liens and the security
interests created by the Loan Documents;
(q) Agent's security interest in the "proceeds" of the Collateral
is subject to the limitations set forth in Sections 9-306 and 8-321(1)
of the UCC;
(r) as provided in Sections 8-301, 8-302, 9-306, 9-307, 9-308 and
9-309 of the UCC, buyers and purchasers of the Collateral may, in
certain circumstances, acquire the Collateral free of Agent's security
interest;
(s) Agent's security interest relating to the time of attachment
and perfection of a security interest in the items of Collateral in
which each Credit Party does not now have rights and of which it does
not now have possession is limited by Section 9-204 of the UCC; and
(t) Agent's security interest with respect to any Collateral
acquired by either Credit Party subsequent to the commencement of a
case against either Credit Party under Title 11 of the United States
Code is limited by Section 552 of such Code.
Additionally, the opinions expressed herein are qualified to the
extent that enforceability of any of the terms of the Loan Documents may be
limited by or otherwise affected by:
(a) compliance with, and limitations imposed by, procedural
requirements relating to the exercise of
January 8, 1997
Page 13
remedies by Agent, but which requirements do not in our opinion make
Agent's remedies inadequate for the practical realization of the
benefits intended to be provided thereby;
(b) provisions of applicable law limiting a person's right to
waive the benefits or vary provisions of law, rules or regulations or
at common law; and
(c) limitations on the rights of a creditor to exercise rights
and remedies or impose penalties if it is determined that the defaults
are not material or the penalties bear no reasonable relation to the
damage suffered as a result of delinquencies or defaults or a
creditor's enforcement of covenants or provisions under circumstances
which would violate such creditor's implied covenant of good faith and
fair dealing.
This opinion is being issued to Agent for Agent's exclusive benefit
and is intended to be relied upon by Agent in connection with the transactions
contemplated by the Credit Agreement. This opinion may not be used for any
other purpose, or relied on by any other person, firm or entity, without our
express written consent.
Very truly yours,
▇▇▇▇▇▇▇▇ KILL & OLICK, P.C.
By: ________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
a Member of the Firm
SCHEDULE I
UCC FINANCING STATEMENT SEARCHES
1. COINMACH CORPORATION
--------------------
Alabama - Secretary of State
▇▇▇▇▇▇▇
Mobile
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Arkansas - Secretary of State
Chicot
▇▇▇▇▇
▇▇▇▇▇▇▇
Jefferson
Connecticut - Secretary of State
Bridgeport
Stamford
Hamden
New Haven
District of Columbia
Delaware - Secretary of State
Kent
New Castle
Sussex
Florida - Secretary of State
Broward
Dade
▇▇▇▇▇
Orange
Georgia - ▇▇▇▇
Dodge
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
Illinois - Secretary of State
Champaign
▇▇▇▇▇▇▇
▇▇▇▇▇
St. Clair
Indiana - Secretary of State
Marion
Iowa - Secretary of State
Iowa
Linn
▇▇▇▇
▇▇▇▇▇
Kansas - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇
Kentucky - Secretary of State
▇▇▇▇
▇▇▇▇▇▇▇
Louisiana - East Baton Rouge
Jefferson
Lafayette
Orleans
St. ▇▇▇▇
Maryland - Secretary of State
▇▇▇▇ Arundel
Baltimore
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Prince George's
Michigan - Secretary of State
Mississippi - Secretary of State
▇▇▇▇▇▇▇▇ (1st and 2nd District)
▇▇▇▇▇
▇▇▇▇▇▇▇
Washington
Missouri - Secretary of State
St. Louis
Nebraska - Secretary of State
▇▇▇▇▇▇▇
▇▇▇▇▇
New Jersey - Secretary of State
Atlantic
Camden
Cape May
Salem
New York - Secretary of State
Bronx
Kings
New York
Queens
North Carolina - Secretary of State
Durham
Halifax
Mecklenberg
Wake
Ohio - Secretary of State
Cuyahoga
▇▇▇▇▇
Oklahoma - Oklahoma County Clerk
Pennsylvania - Secretary of the Commonwealth
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Philadelphia
South Carolina - Secretary of State
Charleston
Greenville
Richland
Spartanburg
South Dakota - Secretary of State
▇▇▇▇
▇▇▇▇▇▇▇
Minnehaha
Tennessee - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
Washington
Texas - Secretary of State
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Virginia - Secretary of State
Alexandria City
Fairfax
Norfolk City
Virginia Beach
West Virginia - Secretary of State
Berkeley
▇▇▇▇▇▇
Mineral
Wisconsin - Secretary of State
Milwaukee
2. SOLON AUTOMATED SERVICES, INC.
-----------------------------
Alabama - Secretary of State
▇▇▇▇▇▇▇
Mobile
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Arizona - Secretary of State
Maricopa
Arkansas - Secretary of State
Chicot
▇▇▇▇▇
▇▇▇▇▇▇▇
Jefferson
California - Secretary of State
Los Angeles
Orange
San Diego
San Mateo
Connecticut - Secretary of State
Bridgeport
Stamford
Hamden
New Haven
District of Columbia
Delaware - Secretary of State
Kent
New Castle
Sussex
Florida - Secretary of State
Broward
Dade
▇▇▇▇▇
Orange
Georgia - ▇▇▇▇
Dodge
▇▇▇▇▇▇
Richmond
Kentucky - Secretary of State
▇▇▇▇
▇▇▇▇▇▇▇
Louisiana - East Baton Rouge
Jefferson
Lafayette
Orleans
Maryland - Secretary of State
▇▇▇▇ Arundel
Baltimore
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Prince George's
Minnesota - Secretary of State
Hennepin
▇▇▇▇▇▇
Mississippi - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇
Washington
New Jersey - Secretary of State
Atlantic
Camden
Cape May
Salem
New York - Secretary of State
Bronx
Kings
New York
Queens
North Carolina - Secretary of State
Durham
Halifax
Mecklenberg
Wake
Ohio - Cuyoga
▇▇▇▇▇
Oklahoma - Oklahoma County Clerk
Pennsylvania - Secretary of the Commonwealth
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
Philadelphia
South Carolina - Secretary of State
Charleston
Greenville
Richland
Spartanburg
Tennessee - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
Washington
Texas - Secretary of State
▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Virginia - Secretary of State
Alexandria City
Fairfax
Norfolk City
Virginia Beach
West Virginia - Secretary of State
Berkeley
▇▇▇▇▇▇
Mineral
3. ALLIED LAUNDRY EQUIPMENT COMPANY
--------------------------------
Illinois - Secretary of State
Champaign
▇▇▇▇▇▇▇
▇▇▇▇▇
St. Clair
Indiana - Secretary of State
Marion
Iowa - Secretary of State
Iowa
Linn
▇▇▇▇
▇▇▇▇▇
Kansas - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇
Kentucky - Secretary of State
▇▇▇▇
▇▇▇▇▇▇▇
Michigan - Secretary of State
Missouri - Secretary of State
St. Louis
Nebraska - Secretary of State
▇▇▇▇▇▇▇
▇▇▇▇▇
Ohio - Secretary of State
Cuyahoga
▇▇▇▇▇
South Dakota - Secretary of State
▇▇▇▇
▇▇▇▇▇▇▇
Minnehaha
Tennessee - Secretary of State
▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇▇
Washington
Wisconsin - Secretary of State
Milwaukee
4. HI-RISE LAUNDRY EQUIPMENT COMPANY
---------------------------------
New York - Secretary of State
Nassau
5. COINMACH LAUNDRY CORPORATION
----------------------------
Delaware - Secretary of State
New York - Secretary of State
Nassau
6. GRAND WASH & DRY LAUNDERETTE, INC.
----------------------------------
New York - Secretary of State
Nassau
7. SUPER LAUNDRY EQUIPMENT CORP.
-----------------------------
New York - Secretary of State
Nassau
Connecticut - Secretary of State
Maryland - Secretary of State
Baltimore
▇▇▇▇▇▇▇
▇▇▇▇▇▇
New Jersey - Secretary of State
8. WASCO LAUNDRY EQUIPMENT COMPANY
-------------------------------
New Jersey - Secretary of State
New York - Secretary of State
Nassau
9. LUCA LAUNDRY EQUIPMENT COMPANY
------------------------------
New York - Secretary of State
Nassau
10. WASHRITE COMPANY
----------------
New York - Secretary of State
Dutchess
Rockland
New Jersey - Secretary of State
Bergen
▇▇▇▇▇▇
Connecticut - Secretary of State
Town of Fair Haven
11. ▇▇▇▇▇▇▇ ▇▇▇▇▇ (INDIVIDUAL)
--------------------------
New York - Secretary of State
Dutchess
Rockland
New Jersey - Secretary of State
Bergen
▇▇▇▇▇▇
Connecticut - Secretary of State
Town of Fair Haven
12. KWL, INC.
---------
Nevada - Secretary of State
13. KWIK WASH LAUNDRIES (INC OR L.P.)
---------------------------------
Nevada - Secretary of State
Arkansas - Secretary of State
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇
Pulaski
Louisiana - Caddo
Calcasieu
East Baton Rouge
Jefferson
Mississippi - Secretary of State
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇ River
▇▇▇▇▇▇
Oklahoma County Clerk
Texas - Secretary of State
Bexar
▇▇▇▇▇▇
▇▇▇▇▇▇ County
▇▇▇▇▇▇
SCHEDULE II
Coinmach Corporation is not is good standing in the following states: New Jersey
and West Virginia.
SCHEDULE III
CAPITALIZATION
1. The authorized capital stock of CLC consists of 15,000,000 shares of Class
A Common Stock, par value $.01 per share (the "CLC Class A Common Stock"),
1,000,000 shares of Class B Common Stock, par value $.01 per share (the "CLC
Class B Common Stock"), and 1,000,000 shares of series preferred stock, par
value $.01 per share, of which 1,000 shares have been designated "Series A
Preferred Stock" (the "CLC Preferred Stock"). As of the date hereof, there are
10,004,278 shares of Class A Common Stock issued and outstanding, 480,648 shares
of Class B Common Stock issued and outstanding, and no shares of CLC Preferred
Stock issued and outstanding.
2. The authorized capital stock of the Company consists of 1,000 shares of
common stock, par value $.01 per share (the "Company Common Stock"). As of the
date hereof, there are 100 shares of Company Common Stock issued and
outstanding.
EXHIBIT F
OFFICER'S CERTIFICATE
---------------------
OF
COINMACH LAUNDRY CORPORATION
The undersigned, being the duly appointed and serving Senior Vice
President of Coinmach Laundry Corporation, a Delaware Corporation (the
"Corporation"), does hereby certify as follows:
------------
1. Attached hereto as Exhibit A is a true, correct and complete copy
---------
of the Third Amended and Restated Certificate of Incorporation and any
additional amendments (collectively, the "Certificates") of the Corporation as
------------
in effect on the date hereof. Such Certificates have not been amended, altered
or repealed and remain in full force and effect as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy
---------
of the Corporation's Bylaws. Such Bylaws have not been amended, altered or
repealed and remain in full force and effect as of the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy
---------
of resolutions duly adopted by a unanimous written consent of the Board of
Directors of the Corporation as of January __, 1997. Such resolutions have not
been amended, altered or repealed and remain in full force and effect as of the
date hereof.
4. Each of the persons set forth below are the duly elected and
qualified incumbents in the offices set forth below opposite his name and has
been and is duly authorized by the Board of Directors of the Corporation, in
conformity with the Corporation's Certificates and Bylaws, to execute, deliver
and perform all acts required by any certificate, instruction, notice or other
instrument, or to give oral instruction on behalf of the Corporation, including
without limitation, all Credit Documents to which the Corporation is a party (as
such term is defined in the Credit Agreement, dated as of January __, 1997, by
and among the Corporation, Coinmach Corporation, the Subsidiary Guarantors named
therein, the Banks listed therein, Bankers Trust Company, as Administrative
Agent, First Union National Bank of North Carolina, as Syndication Agent, and
▇▇▇▇▇▇ Commercial Paper, Inc., as Documentation Agent) and all Transaction
Documents to which the Corporation is a party (as such term is defined in the
Stock Purchase Agreement, dated November 25, 1996, by and among each of the
parties listed on Schedule A attached thereto, KWL, Inc., Kwik-Wash Laundries,
Inc., Kwik Wash Laundries, L.P. and Coinmach Corporation), and the signatures
set forth opposite their names on any such documents are their authentic and
genuine signatures.
Name Office Signature
-------------------------- --------------------------- ---------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chairman of the Board ____________________
and Chief Executive Officer
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ President and Chief ____________________
Operating Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President, __________________________
Chief Financial Officer,
Treasurer and Secretary
▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President __________________________
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Officer's Certificate as of the ___ day of ___________, 199_.
________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of Coinmach Laundry Corporation, a
Delaware corporation (the "Corporation"), certify that ▇▇▇▇ ▇. ▇▇▇▇▇▇ is the
duly appointed and acting Senior Vice President of the Corporation and that his
signature above is genuine.
_________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
OFFICER'S CERTIFICATE
OF
COINMACH CORPORATION
The undersigned, being the duly appointed and serving Senior Vice
President of Coinmach Corporation, a Delaware Corporation (the "Corporation"),
-----------
does hereby certify as follows:
1. Attached hereto as Exhibit A is a true, correct and complete copy
---------
of the Restated Certificate of Incorporation and any additional amendments
(collectively, the "Certificates") of the Corporation as in effect on the date
------------
hereof. Such Certificates have not been amended, altered or repealed and remain
in full force and effect as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and complete copy
---------
of the Corporation's Bylaws. Such Bylaws have not been amended, altered or
repealed and remain in full force and effect as of the date hereof.
3. Attached hereto as Exhibit C is a true, correct and complete copy
---------
of resolutions duly adopted by a unanimous written consent of the Board of
Directors of the Corporation as of January __, 1997. Such resolutions have not
been amended, altered or repealed and remain in full force and effect as of the
date hereof.
4. Each of the persons set forth below are the duly elected and
qualified incumbents in the offices set forth below opposite his name and has
been and is duly authorized by the Board of Directors of the Corporation, in
conformity with the Corporation's Certificates and Bylaws, to execute, deliver
and perform all acts required by any certificate, instruction, notice or other
instrument, or to give oral instruction on behalf of the Corporation, including
without limitation, all Credit Documents to which the Corporation is a party (as
such term is defined in the Credit Agreement, dated as of January __, 1997, by
and among the Corporation, Coinmach Laundry Corporation, the Subsidiary
Guarantors named therein, the Banks listed therein, Bankers Trust Company, as
Administrative Agent, First Union National Bank of North Carolina, as
Syndication Agent, and ▇▇▇▇▇▇ Commercial Paper, Inc., as Documentation Agent)
and all Transaction Documents to which the Corporation is a party (as such term
is defined in the Stock Purchase Agreement, dated November 25, 1996, by and
among each of the parties listed on Schedule A attached thereto, KWL, Inc.,
Kwik-Wash Laundries, Inc., Kwik Wash Laundries, L.P. and the Corporation), and
the signatures set forth opposite their names on any such documents are their
authentic and genuine signatures.
Name Office Signature
-------------------------- --------------------------- ---------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chairman of the Board ____________________
and Chief Executive Officer
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ President and Chief ____________________
Operating Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Senior Vice President, __________________________
Chief Financial Officer,
Treasurer and Secretary
▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President __________________________
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Officer's Certificate as of the ___ day of ___________, 199_.
________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of Coinmach Corporation, a Delaware
corporation (the "Corporation"), certify that ▇▇▇▇ ▇. ▇▇▇▇▇▇ is the duly
appointed and acting Senior Vice President of the Corporation and that his
signature above is genuine.
_________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
EXHIBIT G
---------
[FORM OF INTERCOMPANY NOTE]
---------------------------
New York, New York
, 1997
FOR VALUE RECEIVED, [Name of Subsidiary] (the "Borrower"), hereby
promises to pay on demand to the order of Coinmach Corporation or its assigns
(the "Payee"), in lawful money of the United States of America in immediately
available funds, at such location in the United States of America as the Payee
shall from time to time designate, the unpaid principal amount of all loans and
advances made by the Payee to the Borrower.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
such rate per annum as shall be agreed upon from time to time by the Borrower
and Payee.
Upon the commencement of any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar proceeding of any jurisdiction relating to the Borrower, the unpaid
principal amount hereof shall become immediately due and payable without
presentment, demand, protest or notice of any kind in connection with this Note.
This Note evidences certain permitted intercompany Indebtedness
referred to in the Credit Agreement, dated as of January 8, 1997, among Coinmach
Laundry Corporation, the Payee, the Subsidiary Guarantors named therein, various
banks, First Union National Bank of North Carolina, as Syndication Agent, ▇▇▇▇▇▇
Commercial Paper, Inc., as Documentation Agent, and Bankers Trust Company, as
Administrative Agent (as amended, modified or supplemented from time to time,
the "Credit Agreement"), and is subject to the terms thereof, and shall be
pledged by the Payee pursuant to the Security Documents (as defined in the
Credit Agreement). The Borrower hereby acknowledges and agrees that the
Collateral Agent pursuant to and as defined in the Security Documents, as in
effect from time to time, may exercise all rights provided therein with respect
to this Note.
The Payee is hereby authorized to record all loans and advances made
by it to the Borrower (all of which shall be evidenced by this Note), and all
repayments or prepayments thereof, in its books and records, such books and
records constituting prima facie evidence of the accuracy of the information
contained therein.
EXHIBIT G
Page 2
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
[NAME OF SUBSIDIARY]
By___________________________
Title:
COINMACH CORPORATION
By_________________________
Title:
Pay to the order of
___________________________
EXHIBIT H
---------
[FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT]
Date _______, 19__
Reference is made to the Credit Agreement described in Item 2 of Annex
I hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined
in Annex I hereto, terms defined in the Credit Agreement are used herein as
therein defined. ___________ (the "Assignor") and __________ (the "Assignee")
hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations under the Credit Agreement relating to
the facilities listed in Item 4 of Annex I hereto, including, without
limitation, [(v) in the case of any assignment of all or any portion of the
Total Tranche A Term Loan Commitment, all rights and obligations with respect to
the Assigned Share of such Total Tranche A Term Loan Commitment,]/1/ [(w) in the
case of any assignment of all or any portion of the Total Tranche B Term Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such Total Tranche B Term Loan Commitment,]/2/ (x) in the case of any assignment
of outstanding Tranche A Term Loans, all rights and obligations with respect to
the Assigned Share of such Tranche A Term Loans, (y) in the case of any
assignment of outstanding Tranche B Term Loans, all rights and obligations with
respect to the Assigned Share of such outstanding Tranche B Term Loans and (z)
in the case of any assignment of all or any portion of the Total Revolving Loan
Commitment, all rights and obligations with respect to the Assigned Share of
such Total Revolving Loan Commitment and of any outstanding Revolving Loans and
Letters of Credit. After giving effect to such sale and assignment, the
Assignee's Revolving Loan Commitment[, Tranche A Term
----------
/1/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche A Term Loan Commitment.
/2/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche B Term Loan Commitment.
EXHIBIT H
Page 2
Loan Commitment]/3/ [, Tranche B Term Loan Commitment]/4/ and the amount of the
outstanding Term Loans owing to the Assignee will be as set forth in Item 4 of
Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any of
its Subsidiaries or the performance or observance by the Borrower or any of its
Subsidiaries of any of their obligations under the Credit Agreement or the other
Credit Documents to which they are a party or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Agent, the Assignor 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 action under the Credit Agreement; (iii) confirms that it is an
Eligible Transferee under Section [13.04(b)] of the Credit Agreement; (iv)
appoints and authorizes the Agent and the Collateral Agent to take such action
as agent on its behalf and to exercise such powers under the Credit Agreement
and the other Credit Documents as are delegated to the Agent and the Collateral
Agent, as the case may be, by the terms thereof, together with such powers as
are reasonably incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank[; and (vi) to the
extent legally entitled to do so, attaches the forms described in Section
13.04(b) of the Credit Agreement]/5/.
----------
/3/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche A Term Loan Commitment.
/4/ Delete bracketed language in Assignment and Assumption Agreements executed
after the termination of the Total Tranche B Term Loan Commitment.
/5/ Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
EXHIBIT H
Page 3
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Agent. The effective
date of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee and the receipt of the consent of the
Agent and the Borrower to the extent required by Section 13.04(b) of the Credit
Agreement and receipt by the Agent of the administrative fee referred to in such
Section 13.04(b), unless otherwise specified in Item 5 of Annex I hereto (the
"Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Agent, as of the Settlement Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights and be released
from its obligations under the Credit Agreement and the other Credit Documents,
provided that all indemnities of the Credit Parties under the Credit Agreement
and the other Credit Documents for the benefit of the Assignor shall survive in
accordance with the terms thereof.
6. It is agreed that the Assignee shall be entitled to (x) all
interest on the Assigned Share of the Loans at the rates specified in Item 6 of
Annex I; (y) all Commitment Commission (if applicable) on the Assigned Share of
the Total Revolving Loan Commitment, Total Tranche A Term Loan Commitment and/or
Total Tranche B Term Loan Commitment (if not theretofore terminated) at the rate
specified in Item 7 of Annex I hereto; and (z) all Letter of Credit Fees (if
applicable) on the Assignee's participation in all Letters of Credit at the rate
specified in Item 8 of Annex I hereto, which, in each case, accrue on and after
the Settlement Date, such interest and, if applicable, Commitment Commission and
Letter of Credit Fees, to be paid by the Agent directly to the Assignee. It is
further agreed that all payments of principal made on the Assigned Share of the
Loans which occur on and after the Settlement Date will be paid directly by the
Agent to the Assignee. Upon the Settlement Date, the Assignee shall pay to the
Assignor an amount specified by the Assignor in writing which represents the
Assigned Share of the principal amount of the respective Loans made by the
Assignor pursuant to the Credit Agreement which are outstanding on the
Settlement Date, net of any closing costs, and which are being assigned
hereunder. The Assignor and the Assignee shall make all appropriate adjustments
in payments under the Credit Agreement for periods prior to the Settlement Date
directly between themselves.
EXHIBIT H
Page 4
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made
on Annex I hereto.
Accepted this 8th day [NAME OF ASSIGNOR]
of January, 1997 as Assignor
By_____________________________
Title:
[NAME OF ASSIGNEE]
as Assignee
By_____________________________
Title:
[Acknowledged and Agreed:
BANKERS TRUST COMPANY, as Agent]
By________________________
Title:/6/
----------
/6/ The consent of Bankers Trust Company is required for assignments pursuant
to Section 13.04(b)(y) of the Credit Agreement.
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: Coinmach Corporation
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of January 8, 1997, among Coinmach Laundry
Corporation, Coinmach Corporation, the Subsidiary Guarantors named therein,
various Banks from time to time party thereto, First Union National Bank of
North Carolina, as Syndication Agent, ▇▇▇▇▇▇ Commercial Paper, Inc., as
Documentation Agent, and Bankers Trust Company, as Administrative Agent, as
amended to the date hereof.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
[Tranche A [Tranche B Principal of Principal of Revolving
Term Loan Term Loan Tranche A Tranche B Loan
Commitment Commitment Term Loans Term Loans Commitment
---------------- --------------- ------------- ------------- -----------
a. Aggregate Amount $__________ $__________ $_________ $_________ $_________
for all Banks
b. Assigned Share __________% __________% _________% _________% _________%
c. Amount of $__________]/7/ $_________]/8/ $_________ $_________ $_________
Assigned Share
5. Settlement Date:
----------
/7/ This column should be deleted in the case of Assignment and Assumption
Agreements executed after the termination of the Total Tranche A Term Loan
Commitment.
/8/ This column should be deleted in the case of Assignment and Assumption
Agreements executed after the termination of the total Tranche B Term Loan
Commitment.
Annex I
Page 2
6. Rate of Interest As set forth in Section 1.08 of the Credit Agreement
to the Assignee: (unless otherwise agreed to by the Assignor and the
Assignee)/9/
7. Commitment Commission: As set forth in Sections 3.01(a) (unless otherwise
agreed to by the Assignor and the Assignee)/10/
8. Letter of Credit As set forth in Section 3.01(b) of the Credit
Fees to the Assignee: Agreement (unless otherwise agreed to by the
Assignor and the Assignee)/11/
----------
/9/ Coinmach Corporation and the Agent shall direct the entire amount of the
interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
/10/ Coinmach Corporation and the Administrative Agent shall direct the entire
amount of the Commitment Commission to the Assignee at the rate set forth
in Section 3.01(a) of the Credit Agreement, with the Assignor and the
Assignee effecting the agreed upon sharing of Commitment Commission through
payment by the Assignee to the Assignor.
/11/ Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Loan Commitment is being assigned. Otherwise, Desa International,
Inc. and the Agent shall direct the entire amount of the Letter of Credit
Fees to the Assignee at the rate set forth in Section 3.01(b) of the Credit
Agreement, with the Assignor and the Assignee effecting the agreed upon
sharing of Letter of Credit Fees through payment by the Assignee to the
Assignor.
Annex I
Page 3
9. Notice:
ASSIGNOR:
_____________________
_____________________
_____________________
_____________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
_____________________
_____________________
_____________________
_____________________
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
_____________________
_____________________
_____________________
_____________________
Attention:
Reference:
Annex I
Page 4
ASSIGNEE:
_____________________
_____________________
_____________________
_____________________
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_______________________ By______________________
_______________________ ______________________
(Print Name and Title) (Print Name and Title)
EXHIBIT I-1
Borrower Pledge Agreement
(See Exhibit 10.65 filed herewith)
EXHIBIT I-2
Holders Pledge Agreement
(See Exhibit 10.64 filed herewith)
EXHIBIT J
Security Agreement
(See Exhibit 10.66 filed herewith)
EXHIBIT K
Deed of Trust, Security Agreement, Assignment of Leases, Rents and Profits,
Financing Statement and Fixture Filing.
(See Exhibit 10.72 filed herewith)
EXHIBIT L
Collateral Assignment of Leases
(See Exhibit 10.67 filed herewith)
EXHIBIT M
Collateral Assignment of Location Leases
(See Exhibit 10.68 filed herewith)
Exhibit N
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[FORM OF LANDLORD CONSENT]
TO: BANKERS TRUST COMPANY
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Coinmach Corporation, a Delaware corporation ("Tenant") and the
undersigned ("Landlord") have entered into a lease, dated as of January 8, 1997
(as amended, the "Lease"), demising the premises located in _______, _______ and
legally (or otherwise) described on Exhibit A attached hereto and made a part
---------
hereof (the "Leased Premises"). A copy of the Lease is attached hereto as
Exhibit B.
---------
Tenant and certain affiliates of tenant intend to enter into certain
financing arrangements with Bankers Trust Company ("Collateral Agent") and
certain other lending institutions (collectively, the "Lenders") evidenced by,
among other things, a credit agreement (the "Credit Agreement"). As a condition
to the Lenders making the loans and extending other financial accommodations to
Tenant, the Lenders require, among other things, that Tenant collaterally assign
its leasehold interest in the Lease to Collateral Agent pursuant to a Collateral
Assignment of Lease (the "Assignment"), in substantially the form attached
hereto as Exhibit C.
---------
To induce the Lenders to enter into such financing arrangements, and
for other good and valuable consideration, Landlord hereby agrees that:
1. Landlord consents to the execution by Tenant of the Assignment.
Landlord agrees that, notwithstanding anything to the contrary contained in the
Lease, the execution, delivery and performance by Tenant of the Assignment will
not constitute a default under the Lease.
2. The Lease is valid and is in full force and effect and has not
been assigned, modified, supplemented or amended in any way, except as described
on Exhibit B, and represents the entire agreement between the parties thereto.
---------
Tenant is the current owner of the leasehold interest in the Lease.
3. To the best knowledge of Landlord, neither Landlord nor Tenant
is in default under the terms of the Lease and no event has occurred which with
the giving of notice or the passage of time would constitute a default under the
Lease.
- 2 -
4. None of Tenant's laundry machinery, laundry equipment, furniture,
trade fixtures, inventory or other personal property located on or about the
Leased Premises, including any additions, replacements or substitutions thereof
("Tenant's Personal Property") will be deemed by Landlord to be fixtures or to
constitute part of the Leased Premises.
5. Landlord will not assert, and hereby waives, any liens, whether
granted by the Lease, statute or otherwise (including, without limitation,
rights of levy or distraint for rent), against Tenant's Personal Property
located on the Leased Premises, including, without limitation, Tenant's
additions, replacements or substitutions therefor (collectively, the
"Property").
6. If Tenant defaults on its obligations to the Lenders, and as a
result, Collateral Agent exercises its rights under the Assignment, or otherwise
undertakes to enforce its security interest in Tenant's assets, Landlord will
permit Collateral Agent to enter and take possession of the Leased Premises
without terminating the Lease and Landlord will recognize Collateral Agent (or a
nominee of Collateral Agent) as the Tenant under the Lease, entitled to all of
the benefits thereof. Collateral Agent may cause the Leased Premises to be
leased or assigned to an entity designated by Collateral Agent whose financial
condition is reasonably acceptable to Landlord.
7. Collateral Agent may, at no expense to Landlord and in accordance
with the terms of the Credit Agreement and the other loan documents, enter onto
the Leased Premises at any time or times and take possession of, sever, or
remove the Property or any part thereof and said Property upon severance and/or
removal may be sold, transferred or otherwise disposed of free and clear of all
liens, claims, demands, rights or interests of Landlord.
8. Landlord: (a) will give copies of all notices of default sent to
Tenant under the Lease to Collateral Agent at:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. Prior
or to such other address as Collateral Agent may designate from time to time by
notice given to Landlord at the address set forth after its signature hereto and
(b) prior to exercising any of Landlord's rights and remedies under the Lease or
at law or in
- 3 -
equity, Collateral Agent shall have the right (but not the obligation) to cure
or cause to be cured such default within the following time periods from and
after receipt by Collateral Agent of notice of such default from Landlord: ten
(10) days with respect to monetary defaults and thirty (30) days with respect to
non-monetary defaults after the period of time granted to Tenant to cure such
defaults under the terms of the Lease; provided however, that if the nature of
-------- -------
any non-monetary default is such that the same cannot be cured within such
thirty (30) day period, Collateral Agent shall be given such additional period
of time as may be necessary to cure the default provided that Collateral Agent
commences the cure within such thirty (30) day period and proceeds diligently
thereafter to complete such cure.
9. Any acquisition of any interest in Tenant by Collateral Agent, in
accordance with the terms of the Credit Agreement, the Assignment or any other
loan documents, shall not create a default under, or require Landlord's consent
under, any applicable provisions of the Lease, if any, and shall be fully
effective notwithstanding any provision to the contrary contained in the Lease.
10. Landlord agrees to disclose this Landlord Consent to any
purchaser or successor to Landlord's interest in the Leased Premises.
11. The statements and agreements contained herein shall be binding
upon, and shall inure to the benefit of, Collateral Agent and Tenant, mortgagees
of the Leased Premises and the successors and assigns of all of the foregoing.
- 4 -
Dated this 8th day of January, 1997.
LANDLORD:
---------------------------------
By:
------------------------------
LANDLORD'S ADDRESS:
---------------------------------
---------------------------------