1
EXHIBIT 10.1
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CLIENTLOGIC HOLDING CORPORATION
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 25, 1999
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ONEX CUSTOMERONE FINANCE LLC
as Lender
TORONTO DOMINION (TEXAS), INC.
as Agent
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
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Section 1. Definitions and Accounting Matters.................................2
1.01. Certain Defined Terms...........................................2
1.02. Tunes of Loans.................................................17
Section 2. Commitments, Loans, Note and Prepayments..........................17
2.01. Term Loans.....................................................17
2.02. Borrowing the Loan.............................................18
2.03. Note...........................................................18
2.04. Optional Prepayments and Conversions or Continuations of
Loans..........................................................18
2.05. Mandatory Prepayments and Reductions of Commitments............19
2.06. Limited Partnership Credit Agreement...........................19
Section 3. Payments of Principal and Interest................................20
3.01. Repayment of Loans.............................................20
3.02. Interest.......................................................20
Section 4. Payments; Computations; Etc.......................................21
4.01. Payments.......................................................21
4.02. Computations...................................................21
4.03. Minimum Amounts................................................22
4.04. Certain Notices................................................22
4.05. Non-Receipt of Funds by the Agent..............................23
4.06. Set-off, Etc...................................................23
Section 5. Yield Protection, Etc.............................................24
5.01. Additional Costs...............................................24
5.02. Limitation on Types of Loans...................................24
5.03. Compensation...................................................25
Section 6. Guarantee.........................................................25
6.01. The Guarantee..................................................25
6.02. Obligations Unconditional......................................25
6.03. Reinstatement..................................................26
6.04. Subrogation....................................................26
6.05. Remedies.......................................................26
6.06. Continuing Guarantee...........................................27
6.07. Rights of Contribution.........................................27
6.08. General Limitation on Guarantee Obligations....................28
Section 7. Conditions Precedent..............................................28
7.01. Documentary Conditions Precedent...............................28
7.02. Non-documentary Conditions Precedent...........................29
Section 8. Representations and Warranties....................................29
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8.01. Corporate Existence............................................29
8.02. Financial Condition............................................30
8.03. Litigation.....................................................30
8.04. No Breach......................................................30
8.05. Action.........................................................31
8.06. Approvals......................................................31
8.07. Use of Credit..................................................31
8.08. ERISA..........................................................31
8.09. Taxes..........................................................31
8.10. Investment Company Act.........................................32
8.11. Public Utility Holding Company Act.............................32
8.12. Environmental Matters..........................................32
8.13. Capitalization.................................................32
8.14. True and Complete Disclosure...................................32
8.15. Year 2000......................................................33
Section 9. Covenants of the Company..........................................33
9.01. Financial Statements, Etc......................................33
9.02. Litigation.....................................................35
9.03. Existence, Etc.................................................35
9.04. Insurance......................................................36
9.05. Prohibition of Fundamental Chances.............................36
9.06. Limitation on Liens............................................38
9.07. Indebtedness...................................................39
9.08. Investments....................................................41
9.09. Dividend Payments..............................................42
9.10. Capital Expenditures...........................................43
9.11. Lines of Business..............................................44
9.12. Transactions with Affiliates...................................44
9.13. Use of Proceeds................................................44
9.14. Holding Company; Subsidiaries; Etc.............................45
9.15. Total Debt to Cash Flow Ratio..................................45
9.16. Cash Flow to Debt Service Ratio................................46
9.17. Cash Flow to Interest Expense Ratio............................46
9.18. Management Fee Payments........................................46
9.19. Holding Company; Subsidiaries; Etc.............................46
Section 10. Events of Default................................................47
Section 11. The Agent........................................................50
11.01. Appointment, Powers and Immunities............................50
11.02. Reliance by Agent.............................................50
11.03. Defaults......................................................50
11.04. Indemnification...............................................51
11.05. Non-Reliance on Agent.........................................51
11.06. Failure to Act................................................51
11.07. Resignation or Removal of Agent...............................52
11.08. Consents under Other Basic Documents..........................52
Section 12. Miscellaneous....................................................52
12.01. Waiver........................................................52
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12.02. Notices.......................................................52
12.03. Expenses, Etc.................................................53
12.04. Amendments, Etc...............................................53
12.05. Successors and Assigns........................................54
12.06. Assignments and Participations................................54
12.07. Survival......................................................54
12.08. Captions......................................................54
12.09. Counterparts..................................................54
12.10. Governing Law; Submission to Jurisdiction.....................54
12.11. Waiver of Jury Trial..........................................55
12.12. Confidentiality...............................................55
12.13. Release.......................................................55
SCHEDULE 8.02 - Matters Not Disclosed in December 31, 1998 Financials
SCHEDULE 8.04 - Required Consents
SCHEDULE 8.09 - Certain Tax Matters
SCHEDULE 8.13 - Capitalization
SCHEDULE 8.15 - Year 2000 Compliance Costs
SCHEDULE 9.06(b) - Existing Liens
SCHEDULE 9.07(b) - Existing Indebtedness
SCHEDULE 9.08 - Existing Investments
EXHIBIT A-1 - Form of Tranche 1 Note
EXHIBIT A-2 - Form of Tranche 2 Note
EXHIBIT B - Form of Opinion of Counsel to the Obligors
EXHIBIT C - Form of Opinion of Special Counsel to TD
EXHIBIT D - Form of Assignment Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 25, 1999 among:
(a) CLIENTLOGIC HOLDING CORPORATION, a corporation duly
organized and validly existing under the laws of the State of Delaware
(the "Company");
(b) Each of the Subsidiaries of the Company identified under
the caption "Subsidiary Guarantors" on the signature pages hereto
(together with each Subsidiary of the Company that becomes a Subsidiary
Guarantor pursuant to Section 9.18(b) hereof, individually, a
"Subsidiary Guarantor" and, collectively, the "Subsidiary Guarantors",
and the Subsidiary Guarantors collectively with the Company, the
"Obligors");
(c) ONEX CUSTOMERONE FINANCE LLC, a limited liability company
duly organized and validly existing under the laws of the State of
Wyoming (the "Lender"); and
(d) TORONTO DOMINION (TEXAS), INC., as agent for the Lender
(in such capacity, together with its successors in such capacity, the
"Agent").
WHEREAS, ClientLogic Corporation ("ClientLogic") and the Lender entered
into a Credit Agreement dated as of December 31, 1998 (the "Existing Credit
Agreement") pursuant to which the Lender made a 530,000,000 term loan to
ClientLogic (the "Existing Term Loan");
WHEREAS, ClientLogic is a wholly-owned subsidiary of the Company;
WHEREAS, the Company desires to refinance certain indebtedness of its
Subsidiaries (as that term is hereinafter defined), including ClientLogic;
WHEREAS, in consideration for a 530,000,000 promissory note executed by
ClientLogic in favor of the Company, and pursuant to that certain Assignment and
Assumption Agreement dated as of the date hereof, ClientLogic assigned, and the
Company assumed, all of ClientLogic's rights, duties and obligations under the
Existing Credit Agreement;
WHEREAS, the Obligors have requested that the Lender make an additional
loan of $30,000,000 to the Company (the "New Term Loan");
WHEREAS, to induce the Lender to make the New Term Loan to the Company,
the Obligors desire to amend and restate the Existing Credit Agreement, to
guarantee the New Term Loan and to affirm their respective obligations with
respect to the Existing Term Loan, and to execute and deliver security
agreements providing for security interests and liens to be granted by the
Obligors on the Collateral (as that term is hereinafter defined) as collateral
security for the obligations of the Obligors to the Lender to the Lender and the
Agent hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants therein contained, the parties hereto hereby agree that, effective on
the Closing Date, the Existing Credit Agreement shall be and hereby is amended
and restated in its entirety to read as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall
have the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Additional Costs" shall have the meaning set forth in Section 5.01 (a)
hereof.
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"Adjusted Cash Flow" shall mean, for any period, Gross Cash Flow for
such period, reduced by the excess (if any) of:
(a) the aggregate amount of Gross Cash Flow generated by all
Foreign Subsidiaries of the Company for such period, over
(b) an amount equal to 20% of Gross Cash Flow for such period.
"Advance Date" shall have the meaning set forth in Section 4.05 hereof.
"Affiliate" shall mean any Person that directly or indirectly controls,
or is under common control with, or is controlled by, the Company and, if such
Person is an individual, any member of the immediate family (including parents,
spouse, children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise). Notwithstanding the foregoing, (a) no individual shall
be an Affiliate solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries; (b) none of the Subsidiaries
of the Company shall be Affiliates; and (c) the Agent shall not be an Affiliate.
"Agent" shall have the meaning given to that term in the preamble to
this Agreement.
"Agreement" shall mean this Amended and Restated Credit Agreement as
amended, modified and supplemented and in effect from time to time.
"Applicable Margin" shall mean, for each Type of Loan, the rate
calculated by reference to the Total Debt to Cash Flow Ratio as at the last day
of the most recently ended fiscal quarter of the Company (a "Testing Date"),
which if such Total Debt to Cash Flow Ratio shall fall within any of the ranges
set forth in the Schedule below, then, the "Applicable Margin" for such Type of
Loan shall be the respective percentage per annum set forth opposite such range
in such Schedule during the period commencing on the Margin Change Date for such
Testing Date to but not including the Margin Change Date for the next succeeding
Testing Date (except that notwithstanding the foregoing, the Applicable Margin
for any Type of Loan shall not be reduced for any period during which an Event
of Default shall have occurred and be continuing):
Schedule
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Total Debt to Cash Flow Ratio Eurodollar Loans Base Rate Loans
----------------------------- ---------------- ---------------
<= 3.00 to 1 1.75% 0.75%
<= 4.00 to 1 2.25% 1.25%
<= 5.00 to 1 2.75% 1.75%
<= 5.00 to 1 3.25% 2.25%
For purposes of this definition, "Margin Change Date" shall mean, for any
Testing Date, the earlier of (a) the second Business Day after the date the
Agent receives the Company's consolidated financial statements pursuant to
Section 9.01 hereof for such Testing Date (except that for any Testing Date that
is a fiscal year end (and prior to the delivery of the audited financial
statements for such fiscal year pursuant to Section 9.01 (b) hereof), the Total
Debt to Cash Flow Ratio may be determined on the basis of a statement delivered
by the Company setting forth a
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calculation of the Total Debt to Cash Flow Ratio for such fiscal year, certified
by a Responsible Officer of the Company (and the Applicable Margin shall be
adjusted accordingly in the event that the Total Debt to Cash Flow Ratio as set
forth in any such statement differs from the Total Debt to Cash Flow Ratio
calculated based on such audited financial statements for such fiscal year)) and
(b) the second Business Day after the date on which such financial statements
are required to be delivered pursuant to said Section 9.01.
"Bank Group Credit Agreement" shall mean the Credit Agreement, dated as
of May 25, 1999 among the Company, the Subsidiary Guarantors, the Lenders
referred to therein, and Toronto Dominion (Texas), Inc., as agent for said
Lenders, as the same shall be modified and supplemented and in effect from time
to time.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect as of the opening of business on the date on which such change in the
Base Rate became effective.
"Base Rate Loans" shall mean Loans that bear interest at rates based
upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement, the Notes
and the Security Documents.
"Business Day" shall mean (a) any day on which commercial banks are not
authorized or required to close in New York City and (b) if such day relates to
the giving of notices in connection with a borrowing of, a payment or prepayment
of principal of or interest on, a Conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures
(including, without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period) made by the Company or any of its
Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals and improvements, but excluding replacements and repairs to
the extent expensed in accordance with GAAP) during such period computed in
accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"Cash Flow to Interest Expense Ratio" shall mean, as at any date for
the calculation thereof, the ratio of:
(a) for the following calculation dates:
(i) March 31, 1999, the product of (A) Adjusted Cash
Flow for the period of two consecutive fiscal quarters ending
on March 31, 1999 multiplied by (B) 2;
(ii) June 30, 1999, the product of (A) Adjusted Cash
Flow for the period of three consecutive fiscal quarters
ending on June 30, 1999 multiplied by (B) 4/3; and
(iii) for any calculation date thereafter, Adjusted
Cash Flow for the period of four consecutive fiscal quarters
ending on, or most recently ended prior to, such date; to
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(b) Interest Expense for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to, such calculation
date.
"Cash Flow to Debt Service Ratio" shall mean, as at any date of the
calculation thereof, the ratio of:
(a) for the following calculation dates:
(i) March 31, 1999, the product of (A) Adjusted Cash
Flow for the period of two consecutive fiscal quarters ending
March 31, 1999 multiplied by (B) 2;
(ii) June 30, 1999, the product of (A) Adjusted Cash
Flow for the period of three consecutive fiscal quarters
ending June 30, 1999 multiplied by (B) 4/3; and
(iii) for any calculation date thereafter, Adjusted
Cash Flow for the four consecutive fiscal quarters ending on,
or most recently ended prior to, such date; to
(b) Prospective Debt Service for such calculation date.
"Closing Date" shall mean the date upon which the Loans hereunder are
made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall have the meaning given to that term in the Security
Agreement.
"Collateral Account" shall have the meaning given to that term in the
Security Agreement.
"Commitment" shall mean the obligation of the Lender to (i) make the
New Term Loan and (ii) maintain its Existing Term Loan.
"Commitment Termination Date" shall mean May 28, 1999.
"Company" shall have the meaning given to that term in the preamble to
this Agreement.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.04 hereof of a Eurodollar Loan as a
Eurodollar Loan from one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.04 hereof of one Type of Loans into another Type of Loans.
"CRI Earn-out" shall mean, as at any time, the present value of the
deferred purchase price payable by LCS Industries, Inc. under the Agreement of
Purchase and Stock Sale dated April 1, 1993 (as amended), as such amount may be
reduced from time to time pursuant to the terms of said Agreement.
"Debt for Borrowed Money" shall mean, for any Person: (a) obligations
created, issued, assumed or incurred by such Person for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person, and including, without
limitation, all obligations evidenced by a note, bond, debenture or other
similar instrument); and (b) Capital Lease Obligations of such Person.
"Default" shall mean an Event of Default or an event that with notice
or lapse of time or both would become an Event of Default.
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"Disposition" shall mean any sale, assignment, transfer or other
disposition of any Property (whether now owned or hereafter acquired) of the
Company or any of its Subsidiaries to any other Person, provided that any
transfer of the $805,411 promissory note of Life Cycle Systems, Inc. to Softbank
Holdings, Inc. as a working capital adjustment shall not constitute a
"Disposition."
"Dividend Payment" shall mean dividends (in cash, Property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any shares of any
class of stock of the Company or of any warrants, options or other rights to
acquire the same (or to make any payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market or equity value of the Company or any of its Subsidiaries), but excluding
dividends payable solely in shares of capital stock of the Company.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Environmental Claim" shall mean, with respect to any Person, any
written notice, claim, demand or other communication (collectively, a "claim")
by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation, or
alleged violation, of any Environmental Law. The term "Environmental Claim"
shall include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.
"Environmental Laws" shall mean, to the extent applicable, any and all
present and future federal, state, local and foreign laws, rules or regulations,
and any orders or decrees, in each case as now or hereafter in effect, relating
to the regulation or protection of the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes into the environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes.
"Equipment" shall have the meaning given to that term in the Security
Agreement.
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of capital stock of any class, or
partnership or other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of ,which the
Company is a member.
"Eurodollar Loans" shall mean Loans that bear interest at rates based
on the Eurodollar Rate.
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"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for
any Interest Period therefor, a rate per annum determined by the Agent to be
equal to:
(a) the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) quoted at approximately 11:00 a.m. London time (or
as soon thereafter as practicable) on the date two Business Days prior
to the first day of such Interest Period on Dow ▇▇▇▇▇ Telerate Service
Page 3750 as the London interbank offered rate for Dollar deposits
having a term comparable to such Interest Period and in an amount equal
to or greater than S 1,000,000, divided by
(b) (1) minus the Reserve Requirement (if any) for such
Eurodollar Loan for such Interest Period.
"Event of Default" shall have the meaning given to that term in Section
10 hereof.
"Excess Cash Flow" shall mean, for any period, the sum of the following
for the Company and its Subsidiaries:
(a) the sum of (i) Gross Cash Flow for such period plus (ii)
decreases in working capital for such period, minus
(b) the sum of the following:
(i) Capital Expenditures made during such period,
plus
(ii) Retrospective Debt Service for such period, plus
(iii) Management Fees paid during such period, plus
(iv) taxes paid in cash during such period, plus
(v) increases in working capital during such period.
For purposes of this definition, "working capital" shall have the meaning given
to that term by GAAP, but shall not include (x) any of the Loans, (y) any
current maturities of long-term debt or (z) any cash balances.
"Excess Funding Guarantor" shall have the meaning given to that term in
Section 6.07 hereof.
"Excess Payment" shall have the meaning given to that term in Section
6.07 hereof.
"Existing Term Loan" shall have the meaning given to that term in the
recitals to this Agreement.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average of the rates quoted to the Agent by three federal funds
brokers of recognized standing selected by it.
"Foreign Subsidiary" shall have the meaning given to that term in
Section 9.17(b) hereof.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Global Tax Restructuring" shall mean one or more transactions entered
into by the Company and one or more of its Subsidiaries which may involve
creating new Subsidiaries of the Company, changing the jurisdiction of the
Company or of a Subsidiary of the Company from one State to another State, and
changing the form of the Company or of a Subsidiary from a corporation to any
other Person, so long as such transactions are otherwise permitted under Section
9.05 or do not in the sole opinion of the Agent, materially and adversely affect
the Agent's Lien on any of the Collateral, materially and adversely affect the
Agent's remedies under this Agreement and the other Basic Documents, or
otherwise have a Material Adverse Effect.
"Gross Cash Flow" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP, and adjusted on a pro form basis as if the Company had
acquired LCS and its Subsidiaries on October 1, 1998), of the following:
(a) net operating income (calculated before taxes, Interest
Expense, extraordinary and unusual items and income or loss
attributable to equity in Affiliates) for such period plus
(b) depreciation and amortization (to the extent deducted in
determining net operating income) for such period.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning
"Guaranteed Obligations" shall have the meaning given to that term in
Section 6.01 hereof.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCB's") at concentrations in excess of
50 parts per million, (b) any chemicals or other materials or substances that
are now or hereafter become defined as "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
"Indebtedness" shall mean, for any Person: (a) obligations created,
issued, assumed or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person, and including, without limitation,
all obligations evidenced by a note, bond, debenture or other similar
instrument); (b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses incurred, in the
ordinary course of business; (c) Indebtedness of others secured by a Lien on the
Property of such Person, whether or not the respective indebtedness so secured
has been assumed by such Person; (d) obligations of such Person in
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12
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for account of such Person; (e) Capital Lease
Obligations of such Person; (f) Indebtedness of others Guaranteed by such
Person; and (g) Redeemable Stock.
"Interest Expense" shall mean, for any period, the sum, for the Company
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest and fees paid in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Lease Obligations, but excluding all fees
payable on the Closing Date in connection with the execution and delivery of
this Agreement and the other Basic Documents) accrued or capitalized during such
period (whether or not actually paid during such period) plus (b) the net amount
payable (or minus the net amount receivable) under any Interest Rate Protection
Agreement during such period (whether or not actually paid or received during
such period).
"Interest Period" shall mean, with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted from a
Loan of another Type or the last day of the next preceding Interest Period for
such Loan and ending on the numerically corresponding day in the first, second,
third, sixth, or, subject to availability, twelfth calendar month thereafter, as
the Company may select as provided in Section 4.04 hereof, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a) no
Interest Period for any Loan may commence before and end after any Principal
Payment Date if the aggregate principal amount of the Loans having Interest
Periods ending after such Principal Payment Date would be greater than the
principal amount of the Loans scheduled to be outstanding on such date after
giving effect to the principal payment scheduled to be made on such Principal
Payment Date; (b) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next preceding Business Day; and (c)
notwithstanding paragraphs (a) and (b) above, no Interest Period for any Loan
shall have a duration of less than one month and, if the Interest Period for any
Eurodollar Loan would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Investment" shall mean, for any Person: (a) the acquisition (whether
for cash, Property, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person (including, without limitation, any "short sale"
or any sale of any securities at a time when such securities are not owned by
the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of Property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such Property to such Person), but
excluding (x) any such advance, loan or extension of credit having a term not
exceeding 90 days representing the purchase price of inventory or supplies sold
by such Person in the ordinary course of business and (y) payment terms granted
to customers of, and in connection with, List Brokerage Services not exceeding
140 days); (c) the entering into of any Guarantee of, or other contingent
obligation with respect to, Indebtedness or other liability of any other Person
and (without duplication) any amount committed to be advanced, lent or extended
to such Person; (d) the acquisition by such Person of all or substantially all
of the Property of another Person, or of a line of business of another Person;
or (e) the entering into of any Interest Rate Protection Agreement.
"LCS" shall mean LCS Industries, Inc., a Delaware corporation.
"Lender" shall have the meaning given to that term in the preamble to
this Agreement.
-8- U.S./Onex Finance Credit Agreement
13
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a Person
shall be deemed to own subject to a Lien any Property (hat it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Limited Partnership Agent" shall mean Toronto Dominion (Texas), Inc.,
as agent under the Limited Partnership Credit Agreement, and its successors in
such capacity.
"Limited Partnership Borrower" shall mean Onex CustomerONE Limited
Partnership, a Nevada limited partnership.
"Limited Partnership Interest Period" shall mean an "Interest Period"
under the Limited Partnership Credit Agreement.
"Limited Partnership Loan" shall mean a "Loan" under the Limited
Partnership Credit Agreement.
"Limited Partnership Credit Agreement" shall mean the Credit Agreement
dated as of May 25, 1999 among Onex CustomerONE Limited Partnership, the
Guarantors referred to therein, the Lenders referred to therein and Toronto
Dominion (Texas), Inc., as agent for said Lenders, as the same shall be modified
and supplemented and in effect from time to time.
"Limited Partnership Obligations" shall mean all of the obligations of
the Limited Partnership Borrower and its affiliates under the Limited
Partnership Credit Agreement.
"List Brokerage Services" shall mean the business of selling lists
prepared by third parties for a commission.
"Loans" shall mean, collectively, the Existing Term Loan and the New
Term Loan provided for in Section 2.01 hereof, which may be Base Rate Loans
and/or Eurodollar Loans.
"Management Fee" shall mean any management or similar fee paid directly
or indirectly by the Company or any of its Subsidiaries.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the Property, business, operations, financial condition or prospects of the
Company and its Subsidiaries taken as a whole, (b) the ability of any Obligor to
perform its obligations under any of the Basic Documents to which it is a party,
and (c) the validity or enforceability of any of the provisions of the Basic
Documents (including the rights and remedies of the Lender and the Agent
thereunder).
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Cash Payments" shall mean the aggregate amount of all cash
payments received by the Company and its Subsidiaries directly or indirectly in
connection with a Disposition of Property; provided that (a) Net Cash Payments
shall be net of (i) the amount of any legal, title and recording tax expenses,
commissions and other fees and expenses paid by the Company and its Subsidiaries
in connection with such Disposition and (ii) any federal,
-9- U.S./Onex Finance Credit Agreement
14
state and local income or other taxes estimated to be payable by the Company and
its Subsidiaries as a result of such Disposition (but only to the extent that
such estimated taxes are in fact paid to the relevant federal, state or local
governmental authority within the time permitted by law) and (b) Net Cash
Payments shall be net of any repayments by the Company or any of its
Subsidiaries of Indebtedness to the extent that such Indebtedness is secured by
a Lien on the Property that is the subject of such Disposition.
"New Term Loan" shall have the meaning given to that term in the
recitals to this Agreement.
"Note" shall mean the amended and restated promissory note provided for
by Section 2.03 hereof and all promissory notes delivered in substitution or
exchange therefor, in each case as the same shall be modified and supplemented
and in effect from time to time.
"Obligors" shall have the meaning given to that term in the preamble to
this Agreement.
"Onex" shall mean Onex Corporation, a Canadian corporation.
"Payor" shall have the meaning given to that term in Section 4.05
hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Acquisitions" shall mean acquisitions of all or
substantially all of the capital stock or other equity interests of a Person, or
all or substantially all of the assets of, or of a line of business of, a
Person, so long as (a) after giving effect thereto, no Default or Event of
Default shall be continuing and (b) the aggregate consideration for such
acquisitions (including the amount of any Indebtedness assumed but excluding any
consideration the ultimate source of which is an equity contribution made by any
Person other than an Obligor) shall not exceed $15,000,000.
"Permitted Investments" shall mean: (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed as
to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than one year from the date of
acquisition thereof; (b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of America or any state
thereof and having capital, surplus and undivided profits of at least
$500,000,000, maturing not more than one year from the date of acquisition
thereof; (c) commercial paper rated A- I or better or P- I by Standard & Poor's
Corporation or ▇▇▇▇▇'▇ Investors Services, Inc., respectively, maturing not more
than one year from the date of acquisition thereof; (d) with respect to
Subsidiaries of the Company that are organized under the laws of England and
Wales, direct obligations of the United Kingdom of Great Britain and Northern
Ireland, or any agency thereof, or obligations guaranteed as to principal and
interest by the United Kingdom, or of any agency thereof, in either case
maturing not more than one year from the date of acquisition thereof; (e) with
respect to Subsidiaries of the Company that are organized under the laws of the
Republic of Ireland, direct obligations of the Republic of Ireland, or any
agency thereof, or obligations guaranteed as to principal and interest by the
Republic of Ireland, or of any agency thereof, in either case maturing not more
than one year from the date of acquisition thereof and (f) with respect to
Subsidiaries of the Company that are organized under the laws of Canada or any
Province thereof, direct obligations of the federal government of Canada, or any
agency thereof, or obligations guaranteed as to principal and interest by the
federal government of Canada, or of any agency thereof, in either case maturing
not more than one year from the date of acquisition thereof.
"Person" shall mean any individual, corporation, company, limited
liability company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
-10- U.S./Onex Finance Credit Agreement
15
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan
or any other amount under this Agreement, any Note or any other Basic Document
that is not paid when due (whether at stated maturity, by acceleration, by
mandatory prepayment or otherwise), a rate per annum equal to 2% plus the Base
Rate as in effect from time to time plus the Applicable Margin for Base Rate
Loans (provided that, if the amount so in default is principal of a Eurodollar
Loan and the due date thereof is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall be, for the
period from and including such due date to but excluding the last day of such
Interest Period, 2% plus the interest rate for such Loan as provided in Section
3.02 hereof and, thereafter, the rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time to time
announced by The Toronto-Dominion Bank, New York Branch, as its prime commercial
lending rate for loans to made in the United States of America and denominated
in Dollars.
"Principal Office" shall mean the principal office of TD, currently
located at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"Principal Payment Dates" shall mean each of the fourth, fifth, sixth
and seventh anniversary of the Closing Date.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Pro Rata Share" shall have the meaning given to that term in Section
6.07 hereof.
"Prospective Debt Service" shall mean, as at any date of the
calculation thereof, the sum, for the Company and its Subsidiaries (determined
on a consolidated basis without duplication in accordance with GAAP), of the
following:
(a) the sum of all Interest Expense for the period of four
consecutive fiscal quarters ending on such date, plus
(b) all payments of principal of Debt for Borrowed Money
(including, without limitation, the principal component of any payments
in respect of Capital Lease Obligations but excluding any mandatory
prepayments made pursuant to Section 2.05 hereof) scheduled to be made
during the period of four consecutive fiscal quarters commencing on the
day next following such date.
"Quarterly Dates" shall mean the last Business Day of March, June,
September and December in each year, the first of which shall be the first such
day after the date of this Agreement.
"Redeemable Stock" shall mean, for any Person, any capital stock of
such Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (including upon the
occurrence of an event) matures or is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or is convertible into or exchangeable for
Indebtedness or is redeemable at the option of the holder thereof, in whole or
in part, at any time on or prior to the Principal Payment Date.
"Regulations A, D, U and X" shall mean, respectively, Regulations A, D,
U and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
-11- U.S./Onex Finance Credit Agreement
16
"Regulatory Change" shall mean any change after the date of this
Agreement in Federal, state or foreign law or regulations (including, without
limitation, Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks including the
Lender of or under any Federal, state or foreign law or regulations (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata.
"Relevant Parties" shall have the meaning given to that term in Section
10(b) hereof.
"Required Payment" shall have the meaning given to that term in Section
4.05 hereof.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as that term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Rate is to be
determined as provided in the definition of "Eurodollar Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets that includes
Eurodollar Loans.
"Responsible Officer" shall mean, with respect to any Person, the Chief
Executive Officer, the Chief Financial Officer, the Treasurer, the Controller,
the Chief Operating Officer or any Vice President, of such Person.
"Retrospective Debt Service" shall mean, for any period, the sum, for
the Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) all Interest Expense for such period plus
(b) all payments of principal of Debt for Borrowed Money
(including, without limitation, the principal component of any payments
in respect of Capital Lease Obligations but excluding any mandatory
prepayments made pursuant to Section 2.05 hereof) scheduled to be made
during such period.
"Security Agreement" shall mean a Security Agreement substantially in
the form of Exhibit B hereto between the Obligors and the Agent, as the same
shall be modified and supplemented and in effect from time to time.
"Security Documents" shall mean, collectively, the Security Agreement
and all Uniform Commercial Code financing statements required by this Agreement
or the Security Agreement to be filed with respect to the security interests in
personal Property and fixtures created pursuant to the Security Agreement.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by
-12- U.S./Onex Finance Credit Agreement
17
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
"Subsidiary Dividend Payment" shall mean, with respect to any
Subsidiary of the Company, dividends (in cash, Property or obligations) on, or
other payments or distributions on account of, or the setting apart of money for
a sinking or other analogous fund for, or the purchase, redemption, retirement
or other acquisition of, any shares of any class of stock of such Subsidiary, or
any other equity or ownership interest in such Subsidiary, or of any warrants,
options or other rights to acquire the same (or to make any payments to any
Person, such as "phantom stock" payments, where the amount thereof is calculated
with reference to the fair market or equity value of the Company or any of its
Subsidiaries).
"Subsidiary Guarantor" shall have the meaning given to that term in the
preamble to this Agreement.
"TD" shall mean Toronto Dominion (Texas), Inc.
"Total Debt to Cash Flow Ratio" shall mean, as at any date of the
calculation thereof, the ratio of:
(a) the excess of the following:
(i) all Indebtedness of the Company and its
Subsidiaries on such date (including, solely for purposes of
the definition of "Applicable Margin" in this Section 1.01,
the CRI Earn-out), over
(ii) the lesser of (x) $1,000,000 and (y) the
aggregate amount of cash on hand and in bank accounts of the
Company and its Subsidiaries on such date; to
(b) for any date occurring:
(i) on and after the Closing Date but prior to June
30, 1999, the product of (A) Adjusted Cash Flow for the period
of two consecutive fiscal quarters ending March 31, 1999
multiplied by (B) 2;
(ii) on and after June 30, 1999 but prior to
September 30, 1999, the product of (A) Adjusted Cash Flow for
the period of three consecutive fiscal quarters ending June
30, 1999 multiplied by (B) 4,/3; and
(iii) for any period thereafter, Adjusted Cash Flow
for the period of four consecutive fiscal quarters ending on,
or most recently ended prior to, such date.
"Type" shall have the meaning given to that term in Section 1.02
hereof.
"Wholly Owned Subsidiary" shall mean, with respect to any Person, any
other Person of which all of the equity securities or other ownership interests
(other than directors' qualifying or nominee shares) are directly or indirectly
owned or controlled by such Person or one or more Wholly Owned Subsidiaries of
such Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.02 Tunes of Loans. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar
Loan, each of which constitutes a Type.
-13- U.S./Onex Finance Credit Agreement
18
Section 2. Commitments, Loans, Note and Prepayments.
2.01 Term Loans. (a) Company's Confirmation. The Company acknowledges
and confirms that the Lender has previously made the Existing Term Loan to, or
which has been assumed by, it in an aggregate principal amount of $30,000,000.
The Company hereby represents, warrants, agrees, covenants and reaffirms that:
(i) it has no (and it permanently and irrevocably waives, and releases the
Lender from, any, to the extent arising on or prior to the Closing Date)
defense, setoff, claim or counterclaim against the Lender in regard to its
Obligations in respect of the Existing Term Loan and (ii) reaffirms its
obligation to pay the Existing Term Loan in accordance with the terms and
provisions of this Agreement and the other Basic Documents.
(b) Lender's Commitments. Subject to the terms and conditions of this
Agreement, the Lender agrees to (i) maintain its Existing Term Loan and (ii)
make the New Term Loan to the Company in Dollars during the period from and
including the date hereof to but not including the Commitment Termination Date
in a principal amount not to exceed the Commitment. The Company may Convert
Loans of one Type into Loans of another Type (as provided in Section 2.04
hereof) or Continue Loans of one Type as Loans of the same Type (as provided in
Section 2.04 hereof). No more than eight separate Interest Periods in respect of
Eurodollar Loans may be outstanding at any one time.
2.02 Borrowing the Loan. The Company shall give the Agent notice of the
borrowing hereunder as provided in Section 4.04 hereof. Not later than 1:00 p.m.
New York time on the date specified for the borrowing of the New Term Loan
hereunder, the Lender shall make available the amount of the New Term Loan to be
made by it on such date to the Agent, at an account (designated by the Agent)
maintained by the Agent with TD at the Principal Office, in immediately
available funds, for account of the Company. The amount so received by the Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Company by depositing the same, in immediately available funds, in an
account of the Company maintained with TD at the Principal Office designated by
the Company.
2.03 Note.
(a) The Loans made by the Lender may be evidenced by a single
amended and restated promissory note of the Company substantially in
the form of Exhibit A hereto, dated the date hereof, payable to the
Lender in a principal amount equal to the amount of its Commitment and
otherwise duly completed.
(b) The date, amount, Type, interest rate and duration of
Interest Period (if applicable) of each Loan, and each payment made on
account of the principal thereof, shall be recorded by the Lender on
its books and, prior to any transfer of the Note, endorsed by the
Lender on the Schedule attached to the Note or any continuation
thereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing hereunder or
under the Note in respect of the Loans to be evidenced by the Note.
2.04 Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.03 hereof, the Company shall have the right to prepay
Loans, or to Convert Loans of one Type into Loans of another Type or Continue
Loans of one Type as Loans of the same Type, at any time or from time to time,
provided that the Company shall give the Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 4.04 hereof.
2.05 Mandatory Prepayments and Reductions of Commitments.
(a) Excess Cash Flow. Not later than the date which is 90 days
after the end of each fiscal year of the Company, the Company shall
prepay the Loans in an aggregate amount equal to 50% of the Excess
-14- U.S./Onex Finance Credit Agreement
19
Cash Flow for such fiscal year (less any portion of such Excess Cash
Flow required to be used to prepay outstanding "Tranche 2 Loans" under
the Bank Group Credit Agreement), such prepayment to be applied to the
installments of the Loans in the inverse order of the maturity thereof.
(b) Sale of Assets. Without limiting the obligation of the
Company to obtain the consent of the Agent pursuant to Section 9.05 of
the Bank Group Credit Agreement (as incorporated in this Agreement by
reference) to any Disposition not otherwise permitted hereunder, in the
event that the Net Cash Payments of any Disposition (other than a
Disposition permitted under clauses (i) through (ix) of Section 9.05(b)
of the Bank Group Credit Agreement) are not reinvested in the business
operations of the Company within six months of such Disposition, then
on the Business Day immediately subsequent to the last day of such
six-month period, the Company shall deliver to the Agent a statement,
certified by a Responsible Officer of the Company, in form and detail
reasonably satisfactory to the Agent, of the amount of such Net Cash
Payments, and three Business Days after delivering such statement to
the Agent, shall prepay the Loans (or cash collateralize Loans in an
account maintained with the Agent until the last day(s) of the Interest
Periods to end soonest thereafter and then to be used to prepay Loans),
in an aggregate amount equal to 100(degree)/0 of the Net Cash Payments
(less any portion of such Net Cash Payments required to be used to
prepay outstanding "Tranche 2 Loans" under the Bank Group Credit
Agreement), such prepayment to be applied to the installments of the
Loans in the inverse order of the maturity thereof.
(c) Avoidance of Broken-funding Costs. If the prepayment of
any Loan pursuant to this Section 2.05 would result in an obligation of
the Company to pay compensation pursuant to Section 5.03 hereof,
instead of making such prepayment, the Company may cash collateralize
Loans in an account maintained with the Agent until the last day(s) of
the Interest Period(s) to end soonest thereafter and then to be used to
prepay Loans.
2.06 Limited Partnership Credit Agreement. If, as a result any Limited
Partnership Loan not corresponding with a Loan hereunder and the duration of the
Limited Partnership Interest Period for such Limited Partnership Loan not being
identical to the Interest Period for the corresponding Loan hereunder, the rate
of interest on the Limited Partnership Loan is greater than the rate of interest
on the corresponding Loan hereunder (or if there is not corresponding Loan
hereunder), the Company shall pay to the Agent, on each day on which interest on
such Limited Partnership Loan is payable under the Limited Partnership Credit
Agreement, an amount equal to the difference between the amount of interest
payable on such in respect of such Limited Partnership Loan and the amount of
interest payable on such day hereunder.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company hereby promises to pay to the
Agent for account of the Lender the principal amount of the Loans in five
installments on the Principal Payment Dates, in the following respective
amounts:
Principal Payment Date Amount of Installment
---------------------- ---------------------
May 25, 2003 $ 500,000
May 25, 2004 $17,000,000
May 25, 2005 $17,000,000
May 25, 2006 $25,500,000
-15- U.S./Onex Finance Credit Agreement
20
3.02 Interest. The Company hereby promises to pay to the Agent for
account of the Lender interest on the unpaid principal amount of each Loan made
by the Lender for the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time) plus the Applicable Margin;
and
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such
Loan for such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the Agent
for account of the Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by the Lender and on any other amount payable by the
Company hereunder or under the Notes held by the Lender to or for account of the
Lender, that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise), for the period from and including the due date
thereof to but excluding the date the same is paid in full. Accrued interest on
each Loan shall be payable (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of a Eurodollar Loan on the last day of each
Interest Period therefor (and if such Interest Period has a duration of longer
than three months, at three-month intervals following the first day of such
Interest Period), and (iii) in the case of any Loan, upon the payment or
prepayment thereof or the Conversion of such Loan to a Loan of another Type (but
only on the principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from time to time on
demand. Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall give notice thereof to the Lender
to which such interest is payable and to the Company.
Section 4. Payments; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the
Company under this Agreement and the Note, and, except to the extent
otherwise provided therein, all payments to be made by the Obligors
under any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction (other than any
deduction for withholding taxes required by applicable law, provided
that such withholding arises from a Lender's failure or inability to
comply with the requirements of Section 5.08 hereof), set-off or
counterclaim, to the Agent at an account (designated by the Agent)
maintained by the Agent with TD at the Principal Office, not later than
1:00 p.m. New York time on the date on which such payment shall become
due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
(b) The Lender may (but shall not be obligated to) debit the
amount of any such payment that is not made by such time to any
ordinary deposit account of the Company with the Lender (with notice to
the Company and the Agent).
(c) The Company shall, at the time of making each payment
under this Agreement or any Note for account of the Lender, specify to
the Agent (which shall so notify the intended recipient(s) thereof) the
Loans or other amounts payable by the Company hereunder to which such
payment is to be applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is continuing, the
Agent shall distribute such payment to the Lender for application,
first to the payment of fees, expenses, indemnities and other amounts
(other than principal and interest) then due and payable hereunder and
-16- U.S./Onex Finance Credit Agreement
21
under the other Basic Documents, then to interest on the Loans then due
and payable, ratably in accordance with the unpaid amounts thereof, and
finally to principal of the Loans then due and payable.
(d) Each payment received by the Agent under this Agreement or
any Note for account of the Lender shall be paid by the Agent promptly
to the Lender, in immediately available funds, for account of the
Lender.
(e) If the due date of any payment under this Agreement or any
Note would otherwise fall on a day that is not a Business Day, such
date shall be extended to the next succeeding Business Day, and
interest shall be payable for any principal so extended for the period
of such extension.
4.02 Computations. Interest on Eurodollar Loans shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which payable. Interest
on Base Rate Loans shall be computed on the basis of a year of 365 days or 366
days (as the case may be) and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
4.03 Minimum Amounts. Except for Conversions or prepayments made
pursuant to Section 5.03 hereof, and except for prepayments made pursuant
Section 2.05, 9.05(b)(viii) or 9.05(b)(x) hereof, the borrowing, and each
Conversion and partial prepayment of principal of Loans shall be in an aggregate
amount at least equal to $1,000,000 or a larger multiple of $500,000:
Conversions or prepayments of or into Loans of different Types or, in the case
of Eurodollar Loans, having different Interest Periods at the same time
hereunder to be deemed separate Conversions and prepayments for purposes of the
foregoing, one for each Type or Interest Period; provided that the aggregate
principal amount of Eurodollar Loans of each Type having the same Interest
Period shall be in an amount at least equal to $1,000,000 or a larger multiple
of $500,000 and, if any Eurodollar Loans would otherwise be in a lesser
principal amount for any period, such Loans shall be Base Rate Loans during such
period.
4.04 Certain Notices. Notices by the Company to the Agent of the
borrowing, Conversions, Continuations and optional prepayments of Loans and of
Types of Loans and of the duration of Interest Periods shall be irrevocable and
shall be effective only if received by the Agent not later than 10:00 a.m, New
York time on the number of Business Days prior to the date of the borrowing or
the relevant Conversion, Continuation or prepayment or the first day of such
Interest Period specified below:
Number of Business
Notice Days Prior
------ -------------------
Borrowing or prepayment of Base Rate Loans one
Borrowing or prepayment of, Conversions into, three
Continuations as, or duration of Interest Period
for, Eurodollar Loans
Conversions into Base Rate Loans three
Each such notice of borrowing, Conversion, Continuation or optional prepayment
shall specify the amount (subject to Section 4.03 hereof) and Type of each Loan
to be borrowed, Converted, Continued or prepaid (and, in the case of a
Conversion, the Type of Loan to result from such Conversion) and the date of
borrowing, Conversion, Continuation or optional prepayment (which shall be a
Business Day). Each such notice of the duration of an Interest Period shall
specify the Loans to which such Interest Period is to relate. The Agent shall
promptly notify the Lender of the contents of each such notice. In the event
that the Company fails to select the Type of Loan, or
-17- U.S./Onex Finance Credit Agreement
22
the duration of any Interest Period for any Eurodollar Loan, within the time
period and otherwise as provided in this Section 4.04, such Loan (if outstanding
as a Eurodollar Loan) will be automatically Converted into a Base Rate Loan on
the last day of the then current Interest Period for such Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan.
4.05 Non-Receipt of Funds by the Agent. Unless the Agent shall have
been notified by the Lender or the Company (the "Payor") prior to the date on
which the Payor is to make payment to the Agent of (in the case of the Lender)
the proceeds of a Loan to be made by the Lender hereunder or (in the case of the
Company) a payment to the Agent for account of the Lender hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient(s) on such date;
and, if the Payor has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date (the "Advance Date") such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such day and, if such recipient(s)
shall fail promptly to make such payment, the Agent shall be entitled to recover
such amount, on demand, from the Payor, together with interest as aforesaid,
provided that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Agent within three Business Days of the Advance Date,
then, retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:
(a) if the Required Payment shall represent a payment to be
made by the Company to the Lender, the Company and the recipients)
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the Post-Default Rate
(and, in case the recipient(s) shall return the Required Payment to the
Agent, without limiting the obligation of the Company under Section
3.02 hereof to pay interest to such recipient(s) at the Post-Default
Rate in respect of the Required Payment) and
(b) if the Required Payment shall represent proceeds of a Loan
to be made by the Lender to the Company, the Payor and the Company
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the rate of interest
provided for such Required Payment pursuant to Section 3.02 hereof
(and, in case the Company shall return the Required Payment to the
Agent, without limiting any claim the Company may have against the
Payor in respect of the Required Payment).
4.06 Set-off, Etc. The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim the Lender
may otherwise have, the Lender shall be entitled, at its option, to offset
balances held by it for account of the Company at any of its offices, in Dollars
or in any other currency, against any principal of or interest on any of the
Lender's Loans or any other amount payable to the Lender hereunder, that is not
paid when due (regardless of whether such balances are then due to the Company),
in which case it shall promptly notify the Company and the Agent thereof,
provided that the Lender's failure to give such notice shall not affect the
validity thereof.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to the Agent (for account
of the Lender) from time to time an amount equal to all "Additional
Costs" (as such term is defined in the Limited Partnership Credit
Agreement), and an amount equal to all other amounts that are payable
to the holders of the Limited Partnership Obligations under Section 5
of the Limited Partnership Credit Agreement, as the Limited
-18- U.S./Onex Finance Credit Agreement
23
Partnership Borrower may be obligated to pay to the holders of the
Limited Partnership Obligations under the Limited Partnership Credit
Agreement.
(b) In the event that the obligation of the holders of the
Limited Partnership Obligations under the Limited Partnership Credit
Agreement to make or continue Eurodollar Loans, or to convert Base Rate
Loans into Eurodollar Loans is suspended, the obligation of the Lender
to make or Continue Eurodollar Loans, or to Convert Base Rate Loans
into Eurodollar Loans, shall be suspended for the duration of such
suspension under the Limited Partnership Credit Agreement.
5.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate for
any Interest Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in Section 1.01
hereof are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining rates of interest for
any Eurodollar Loans as provided herein; or
(b) the "Majority Lenders" under the Limited Partnership
Credit Agreement determine, which determination shall be conclusive,
and notify the Agent that the relevant rates of interest referred to in
the definition of "Eurodollar Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined do not adequately cover the cost to
such Lenders of making or maintaining such Type of Loans for such
Interest Period;
then the Agent shall give the Company and the Lender prompt notice thereof and,
so long as such condition remains in effect, the Lender shall be under no
obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or
to Convert Base Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then current Interest Period(s) for the outstanding Loans,
either prepay such Loans or Convert such Loans into Base Loans in accordance
with Section 2.04 hereof.
5.03 Compensation. The Company shall pay to the Agent for account of
the Lender, promptly after the request of the Lender through the Agent, an
amount equal to the amounts payable by the Limited Partnership Borrower under
Section 5.05 of the Limited Partnership Credit Agreement.
Section 6. Guarantee.
6.01 The Guarantee. The Subsidiary Guarantors hereby jointly and
severally guarantee to the Lender and the Agent and their respective successors
and assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lender to, and the Note held by the Lender of, the Company, and all other
amounts from time to time owing to the Lender or the Agent by the Company under
this Agreement and under the Note and by any Obligor under any of the other
Basic Documents, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Company shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
6.02 Obligations Unconditional. The obligations of the Subsidiary
Guarantors under Section 6.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or
-19- U.S./Onex Finance Credit Agreement
24
instrument referred to herein or therein, or any substitution, release or
exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor
(other than the defense of payment in full of all of the Guaranteed
Obligations), it being the intent of this Section 6.02 that the obligations of
the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint
and several, under any and ail circumstances. Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Subsidiary Guarantors
hereunder which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or the Notes or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of,
the Agent or the Lender as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Agent or the Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or the Note or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
6.03 Reinstatement. The obligations of the Subsidiary Guarantors under
this Section 6 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly
and severally agree that they will indemnify the Agent and the Lender on demand
for all reasonable costs and expenses (including, without limitation, reasonable
fees of counsel in accordance with Section 12.03(a) hereof) incurred by the
Agent or the Lender in connection with such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
6.04 Subrogation. The Subsidiary Guarantors hereby jointly and
severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lender under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 6.01
hereof, whether by subrogation or otherwise, against the Company or any other
guarantor of any of the Guaranteed Obligations or any security for any of the
Guaranteed Obligations.
6.05 Remedies. The Subsidiary Guarantors jointly and severally agree
that, as between the Subsidiary Guarantors and the Lender, the obligations of
the Company under this Agreement and the Notes may be declared to be forthwith
due and payable as provided in Section 10 hereof (and shall be deemed to have
become automatically due and payable in the circumstances provided in said
Section 10(f) hereof or Section 10(g) hereof) for purposes of
-20- U.S./Onex Finance Credit Agreement
25
Section 6.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against the Company and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
6.01.
6.06 Continuing Guarantee. The guarantee in this Section 6 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
6.07 Rights of Contribution. The Subsidiary Guarantors hereby agree, as
between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the Properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 6.07 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 6 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.
For purposes of this Section 6.07, (a) "Excess Funding Guarantor" shall mean, in
respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (b)
"Excess Payment" shall mean, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guaranteed Obligations and (c) "Pro Rata Share" shall mean, for any
Subsidiary Guarantor, the ratio (expressed as a percentage) of (i) the amount by
which the aggregate present fair saleable value of all Properties of such
Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (ii) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this Section 6.07 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Closing Date and the aggregate present fair saleable value
of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such
value and amount on the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.
6.08 General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.07 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, the Lender, the Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
-21- U.S./Onex Finance Credit Agreement
26
Section 7. Conditions Precedent.
7.01 Documentary Conditions Precedent. The obligation of the Lender to
make the Loans hereunder is subject to the conditions precedent that the Agent
shall have received the following documents, each of which shall be reasonably
satisfactory to the Agent in form and substance:
(a) Corporate Documents. Certified copies of the charter and
by-laws (or equivalent documents) of each Obligor and of all corporate
authority for each Obligor (including, without limitation, board of
director resolutions and evidence of the incumbency of officers) with
respect to the execution, delivery and performance of such of the Basic
Documents to which such Obligor is intended to be a party and each
other document to be delivered by such Obligor from time to time in
connection herewith and the extensions of credit hereunder (and the
Agent and the Lender may conclusively rely on such certificate until
the Agent or the Lender receives notice from such Obligor to the
contrary).
(b) Officer's Certificates. The following:
(i) A certificate of a Responsible Officer of the
Company, dated the Closing Date, to the effect set forth in
the first sentence of Section 7.02 hereof; and
(ii) A certificate of a Responsible Officer of the
Company, dated the Closing Date, to the effect that no Event
of Default has occurred and is continuing (or, if any Event of
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Company
has taken or proposes to take with respect thereto).
(c) Opinion of Counsel to the Obligors. An opinion, dated the
Closing Date, of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to the Obligors,
substantially in the form of Exhibit C hereto and covering such other
matters as the Agent or the Lender may reasonably request (and each
Obligor hereby instructs such counsel to deliver such opinion to the
Lender and the Agent).
(d) Opinion of Special New York Counsel to TD. An opinion,
dated the Closing Date, of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, special New York
counsel to TD, substantially in the form of Exhibit D hereto (and TD
hereby instructs such counsel to deliver such opinion to the Lender).
(e) Notes. The Notes requested by the Lender, duly completed
and executed.
(f) Security Agreement. The Security Agreement, and other
documents required to be delivered pursuant to Section 7.01(f) of the
Bank Group Credit Agreement.
(g) Other Documents. Such other documents as the Agent or the
Lender or special New York counsel to TD may reasonably request.
The obligation of the Lender to make the Loans is also subject to the payment by
the Company of such fees as the Company shall have agreed in writing to pay or
deliver to the Lender or the Agent in connection herewith.
7.02 Non-documentary Conditions Precedent. The obligation of the Lender
to make any Loan or extend any credit hereunder on the occasion of each
borrowing is subject to the further conditions precedent that, both immediately
prior to the making of such Loan or extension of credit and also after giving
effect thereto: (a) no Default shall have occurred and be continuing; and (b)
the representations and warranties made by the Company in Section 8 hereof, and
by each Obligor in each of the other Basic Documents to which such Obligor is a
party, shall be true and complete on and as of the date of the making of such
extension of credit with the same force and effect
-22- U.S./Onex Finance Credit Agreement
27
as if made on and as of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date).
Section 8. Representations and Warranties. The Company represents and
warrants to the Agent and the Lender that:
8.01 Corporate Existence. Each of the Company and its Subsidiaries: (a)
is a corporation duly incorporated or formed and validly existing under the laws
of the jurisdiction of its organization; (b) is in good standing under the laws
of the jurisdiction of its organization or formation, except to the extent that
the failure to be in good standing could not reasonably be expected to have a
Material Adverse Effect; (c) has all requisite corporate power or other
requisite power, and has all material governmental licenses, authorizations,
consents and approvals necessary to own its assets and carry on its business as
now being or as proposed to be conducted, other than those governmental
licenses, authorizations, consents and approvals the failure of which to obtain
could not reasonably be expected to have a Material Adverse Effect; and (d) is
qualified to do business and is in good standing in all jurisdictions in which
the nature of the business conducted by it makes such qualification necessary
and where failure so to qualify could (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
8.02 Financial Condition. The Company has heretofore furnished to the
Lender a consolidated balance sheet of the Company and its Subsidiaries as at
December 31, 1998 and the related consolidated statements of income, retained
earnings and cash flow of the Company and its Subsidiaries for the fiscal year
ended on said date, with the opinion thereon of PricewaterhouseCoopers. All such
financial statements are complete and correct in all material respects and
fairly present the consolidated financial condition of the Company and its
Subsidiaries as at said date and the consolidated results of their operations
for the fiscal year ended on said date, all in accordance with generally
accepted accounting principles and practices applied on a consistent basis
(except to the extent disclosed therein). Neither the Company nor any of its
Subsidiaries has on the date hereof any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments (in each case, as determined
in accordance with GAAP), except as referred to or reflected or provided for in
said balance sheet as at December 31, 1998 or except as set forth on Schedule
8.02 hereto. Since December 31, 1998 there has been no material adverse change
in the consolidated financial condition, operations, business or prospects taken
as a whole of the Company and its Subsidiaries from that set forth in said
financial statements as at said date.
8.03 Litigation. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of any Obligor) threatened against the Company or
any of its Subsidiaries that, if adversely determined, could reasonably be
expected (either individually or in the aggregate) to have a Material Adverse
Effect.
8.04 No Breach. None of the execution and delivery of this Agreement,
the Notes, and the other Basic Documents, the consummation of the transactions
herein and therein contemplated or compliance with the terms and provisions
hereof and thereof, will:
(a) conflict with or result in a breach of, or (except as set
forth in Schedule 8.04 hereto) require any consent (except to the
extent such consent is immaterial or has already been obtained) under
(i) the charter or by-laws of any Obligor, (ii) any material applicable
law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or (iii) any material
agreement or instrument to which the Company and any of its
Subsidiaries is a party or by which any of them or any of their
Property is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or
-23- U.S./Onex Finance Credit Agreement
28
(b) except for the Liens created pursuant to the Security
Documents or Liens permitted by Section 9.06 hereof, result in the
creation or imposition of any Lien upon any material Property of the
Company and any of its Subsidiaries pursuant to the terms of any such
agreement or instrument.
8.05 Action. Each Obligor has all necessary corporate or other
requisite power and authority to execute, deliver and perform its obligations
under each of the Basic Documents to which it is a party; the execution,
delivery and performance by each Obligor of each of the Basic Documents to which
it is a party have been duly authorized by all necessary corporate or other
requisite action on its part (including, without limitation, any required
shareholder approvals); and this Agreement has been duly and validly executed
and delivered by each Obligor and constitutes, and each of the Notes and the
other Basic Documents to which each Obligor is a party when executed and
delivered by such Obligor (in the case of the Notes, for value) will constitute,
its legal, valid and binding obligation, enforceable against such Obligor and in
accordance with its terms, except as such enforceability may be limited by (a)
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditors' rights; and (b) the
application of general principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
8.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for (a)
filings and recordings in respect of the Liens created pursuant to the Security
Documents and (b) authorizations, approvals, consents, filings and registrations
that have already been obtained or completed.
8.07 Use of Credit. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. None of
the proceeds of any Loan will be used for the purpose of (or be made available
by the Company in any manner to any other Person to enable or assist such Person
in), directly or indirectly, purchasing or carrying Margin Stock.
8.08 ERISA. Each Plan, and, to the knowledge of the Obligors, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other federal or state law, other than
such non-compliance as could not reasonably be expected to have a Material
Adverse Effect.
8.09 Taxes. Except as set forth in Schedule 8.09 hereto, the Company
and its Subsidiaries have filed all federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes that are due and payable pursuant to such returns or pursuant to any
assessment received by the Company or any of its Subsidiaries (other than any
immaterial taxes), unless the same are being contested in good faith, with
adequate reserves established therefor. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of taxes and other
governmental charges are in accordance with GAAP.
8.10 Investment Company Act. Neither the Company nor any of its
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.
8.11 Public Utility Holding Company Act. Neither the Company nor any of
its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
-24- U.S./Onex Finance Credit Agreement
29
8.12 Environmental Matters. Each of the Company and its Subsidiaries
has obtained all permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization could not (either individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
in compliance with all other applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law, except to the extent failure to
comply therewith could not (either individually or in the aggregate) reasonably
be expected to have a Material Adverse Effect.
8.13 Capitalization.
(a) Schedule 8.13 hereto sets forth a list that is complete
and correct in all material respects, as of the date hereof, of all of
the holders of record of the capital stock of the Company, the class of
stock held by such holders, the numbers of shares held by such holder
and the percentage of Company's voting stock held by such holder.
(b) Except as set forth on Schedule 8.13 hereto, as of the
date hereof, there are no outstanding material Equity Rights with
respect to the Company or any of its Subsidiaries, and there are no
outstanding material obligations of the Company or any of its
Subsidiaries to repurchase, redeem, or otherwise acquire any shares of
its capital stock.
8.14 True and Complete Disclosure. The written factual information,
reports, financial statements, exhibits and schedules furnished in writing by or
on behalf of the Obligors to the Agent or the Lender in connection ,with the
negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole do not, in any material respect, contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written factual information furnished after the
date hereof by the Obligors to the Agent and the Lender in connection with this
Agreement and the other Basic Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in every material respect, or
(in the case of projections) based on reasonable estimates, assumptions or
projections, on the date as of which such information is stated or certified.
There is no fact known to the Company that could have a Material Adverse Effect
that has not been disclosed herein, in the other Basic Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Lender for use in connection with the transactions contemplated
hereby or thereby.
8.15 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the computer systems of the
Company and its Subsidiaries and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the systems of
the Company and its Subsidiaries interface) and the testing of all such systems
and equipment, as so reprogrammed, will be completed by December 31, 1999,
except to the extent such reprogramming and testing could not be reasonably
expected to have a Material Adverse Effect. Except as otherwise disclosed on
Schedule 8.15 hereto, the cost to the Company and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequence of year
2000 compliance to the Company and its Subsidiaries could not reasonably be
expected to have a Material Adverse Effect.
Section 9. Covenants of the Company. The Company covenants and agrees
with the Lender and the Agent that, so long as any Commitment or Loan is
outstanding and until payment in full of all non-contingent amounts payable by
the Company hereunder:
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30
9.01 Financial Statements, Etc. The Company shall deliver to the
Lender:
(a) As soon as available and in any event within 60 days after
the end of each of the first three fiscal quarters of the Company's
fiscal year, unaudited consolidated and consolidating statements of
income, retained earnings and cash flow of the Company and its
Subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such period, setting forth in each case
in comparative form the corresponding consolidated and consolidating
figures for the corresponding periods in the preceding fiscal year
(such consolidating statements to be in a Schedule to the consolidated
statements). The financial information to be provided under this
paragraph (a) shall be accompanied by a certificate of a Responsible
Officer of the Company, which certificate shall (i) state that said
consolidated financial statements fairly present in all material
respects the consolidated financial condition and results of operations
of the Company and its Subsidiaries, and said consolidating financial
statements fairly present the respective individual unconsolidated
financial condition and result of operations of the Company and each of
its Subsidiaries, in each case in accordance with GAAP (unless
otherwise noted therein), consistently applied, as at the end of, and
for, such period (subject to normal year-end audit adjustments), (ii)
state that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Company has taken
or proposes to take with respect thereto), and (iii) set forth in
reasonable detail the computations necessary to determine whether the
Company is in compliance with Sections 9.07, 9.08, 9.09, 9.10, 9.14,
9.15 or 9.16 hereof and information necessary to determine whether the
Company is in compliance with Sections 9.07, 9.08 or 9.09 hereof.
(b) As soon as available and in any event within 120 days
after the end of each fiscal year of the Company, audited consolidated
and unaudited consolidating statements of income, retained earnings and
cash flow of the Company and its Subsidiaries for such fiscal year and
the related audited consolidated and unaudited consolidating balance
sheet of the Company and its Subsidiaries as at the end of such fiscal
year, setting forth in each case in comparative form the corresponding
consolidated and consolidating figures for the preceding fiscal year
(such consolidating statements to be in a Schedule to the consolidated
statements). The consolidated financial information to be provided
under this paragraph (b) shall be accompanied by (i) an opinion thereon
of independent certified public accountants of recognized national
standing, which opinion shall state that said consolidated financial
statements fairly present in all material respects the consolidated
financial condition and results of operations of the Company and its
Subsidiaries as at the end of, and for, such fiscal year in accordance
with GAAP (unless otherwise noted therein), and a certificate of such
accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of
any Event of Default under Section 9.07, 9.08, 9.09, 9.10, 9.14, 9.15
or 9.16 of this Agreement, (ii) a certificate of a Responsible Officer
of the Company, which certificate shall (x) state that said
consolidating financial statements fairly present in all material
respects the consolidating financial condition and results of
operations of the Company and its Subsidiaries, in accordance with GAAP
(unless otherwise noted therein), consistently applied, as at the end
of, and for, such period (subject to normal year-end audit
adjustments), (y) state that no Default has occurred and is continuing
(or, if any Default has occurred and is continuing, describing the same
in reasonable detail and describing the action that the Company has
taken or proposes to take with respect thereto), and (z) set forth in
reasonable detail the computations necessary to determine whether the
Company is in compliance with Sections 9.07, 9.08, 9.09, 9.10, 9.14,
9.15 or 9.16 of this Agreement;
(c) Promptly after the Company knows or has reason to believe
that any Default has occurred, a notice of such Default describing the
same in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company,
as the case may be, has taken or proposes to take with respect thereto;
-26- U.S./Onex Finance Credit Agreement
31
(d) Upon the acquisition after the date hereof by the Company
and its Subsidiaries of any Equipment, if such Equipment's purchase
price exceeds $75,000 and such Equipment is covered by a certificate of
title or ownership, cause the Agent to be listed as the lienholder on
such certificate of title and within 120 days of the acquisition
thereof deliver evidence of the same to the Agent; and
(e) From time to time such other information regarding the
financial condition, operations, business or prospects of the Company
or any of its Subsidiaries as the Lender or the Agent may reasonably
request.
The Company will furnish to the Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
Responsible Officer of the Company to the effect that no Default has occurred
and is continuing (or, if any Default has occurred and is continuing, describing
the same in reasonable detail and describing the action that the Company has
taken or proposes to take with respect thereto).
9.02 Litigation. The Company will promptly give to the Lender notice of
all legal or binding arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings that, if adversely determined, could not
reasonably be expected (either individually or in the aggregate) to have a
Material Adverse Effect.
9.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) except to the extent permitted by Section 9.05 hereof;
preserve and maintain (i) its legal existence and (ii) except to the
extent that failure to maintain the same could not reasonably be
expected to have a Material Adverse Effect, all of its rights,
privileges, licenses and franchises;
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements could not reasonably be
expected to (either individually or in the aggregate) have a Material
Adverse Effect;
(c) pay and discharge all federal and all other material
taxes, assessments and governmental charges or levies imposed on it or
on its income or profits or on any of its Property prior to the date on
which penalties (other than interest at an increased rate) attach
thereto, except for any such tax, assessment, charge or levy the
payment of which is being contested in good faith and by proper
proceedings and against which adequate reserves are being maintained;
(d) maintain all of its material Properties used or useful in
its business in good working order and condition, ordinary wear and
tear excepted;
(e) keep adequate records and books of account, in which
complete entries will be made in accordance with generally accepted
accounting principles consistently applied; and
(f) permit representatives of the Lender or the Agent, during
normal business hours (and upon reasonable advance notice), to examine,
copy and make extracts from its books and records, to inspect any of
its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by the Lender or the
Agent (as the case may be).
To enable the ready and consistent determination of compliance with the
covenants set forth in this Section 9, the Company will not change the last day
of its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
-27- U.S./Onex Finance Credit Agreement
32
9.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by Persons engaged in the same or similar business in the
locales where the Company or such Subsidiary conducts business, against loss,
damage and liability of the kinds and in the amounts customarily maintained by
such Persons.
9.05 Prohibition of Fundamental Chances.
(a) The Company will not, nor will it permit any of its
Subsidiaries to, enter into any transaction of merger or consolidation
or amalgamation, or liquidate, wind up or dissolve itself (or suffer
any liquidation or dissolution), provided that the Company and its
Subsidiaries may (x) effect a Global Tax Restructuring and (y) enter
into the following transactions so long as, both immediately prior to
such transaction and after giving effect thereto, no Event of Default
shall be continuing:
(i) any Subsidiary of the Company may be merged with
or into:
(A) the Company if the Company shall be the
continuing or surviving corporation, or
(B) any other such Subsidiary provided that
(1) if any such transaction shall be between a
Subsidiary that is not a Wholly Owned Subsidiary and
a Wholly Owned Subsidiary, the continuing or
surviving Person shall be a Wholly Owned Subsidiary,
and (2) if any such transaction shall be between a
Subsidiary Guarantor and a Subsidiary not a
Subsidiary Guarantor, the continuing or surviving
Person shall be or shall become a Subsidiary
Guarantor hereunder,
(ii) any Subsidiary of the Company may sell, lease,
transfer or otherwise dispose of any or all of its Property
(upon voluntary liquidation or otherwise) to the Company or
any Wholly Owned Subsidiary of the Company; provided that if
any such sale is by a Subsidiary Guarantor to a Subsidiary
that is not a Subsidiary Guarantor, then such Subsidiary shall
become a Subsidiary Guarantor, and
(iii) in connection with any Permitted Acquisition
the Company or any Subsidiary of the Company may merge or
consolidate with any other Person if, in the case of a merger
or consolidation of the Company, the surviving Person assumes
all of the Company's obligations hereunder and under the other
Basic Documents.
(b) The Company will not, nor will it permit any of its
Subsidiaries to, effect any Disposition, other than the following:
(i) obsolete or worn-out Property, tools or equipment
no longer used or useful in its business;
(ii) any inventory or other Property sold or disposed
of in the ordinary course of business and on then customary
terms;
(iii) transfers resulting from any casualty or
condemnation of Property (so long as the proceeds are used to
repair or replace the respective Property);
(iv) transfers among the Company and the Subsidiary
Guarantors;
-28- U.S./Onex Finance Credit Agreement
33
(v) transfers by (x) the Company or any Subsidiary
Guarantor to any other Subsidiary of the Company, so long as
the aggregate book value of the Property so transferred,
together with the aggregate amount of Investments trade
pursuant to Section 9.08(f) hereof, does not exceed
55,000,000, and (y) any Subsidiary of the Company not a
Subsidiary Guarantor to any other Subsidiary;
(vi) licenses or sublicenses of intellectual property
and general intangibles and licenses, and leases or subleases
of other Property in the ordinary course of business, to the
extent such license, sublicense, lease or sublease does not
materially and adversely affect the business of the Company
and its Subsidiaries (taken as a whole);
(vii) any consignment arrangement or similarly
arrangement for the sale of Property in the ordinary course of
business;
(viii) the sale or discount of overdue accounts
receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof
and only so long as the Net Cash Payments thereof are used to
prepay Tranche 2 Loans (without any requirement for any
reduction of the Tranche 2 Commitments);
(ix) Dispositions permitted by Section 9.05(a)
hereof; and
(x) Dispositions of fixed assets (for a consideration
of which at least 75% thereof consists of cash) to the extent
that:
(A) the net book value of the Property
disposed of in any such Disposition made in any
fiscal year (together with the net book value of all
Property theretofore or concurrently disposed of in
such fiscal year, such net book value determined as
of the time of the relevant Disposition), does not
exceed 5% of the aggregate net book value of all of
the fixed assets of the Obligors at the time of such
Disposition, and
(B) the aggregate net book value of the
Property disposed of in all Dispositions (such net
book value determined as of the time of the relevant
Disposition) made during the period commencing on the
Closing Date does not exceed 20% of the aggregate net
book value of the fixed assets of the Obligors at the
time of the most recent such Disposition.
9.06 Limitation on Liens. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its Property, whether now owned or hereafter acquired, except:
(a) Liens created pursuant to the Basic Documents (as defined
herein and in the Bank Group Credit Agreement);
(b) Liens in existence on the date hereof and listed in
Schedule 9.06(b) hereto, and extensions, renewals and refinancings
thereof so long as such Lien is not spread to cover any additional
Property and the principal amount of Indebtedness secured thereby is
not increased;
(c) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or the affected
Subsidiaries, as the case may be, in accordance with GAAP;
-29- U.S./Onex Finance Credit Agreement
34
(d) carriers', landlords', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens (including Liens in
favor of landlords securing subleases or leases permitted hereunder)
arising in the ordinary course of business and for amounts that are not
overdue for a period of more than 60 days or that are being contested
in good faith and by appropriate proceedings;
(e) Liens securing judgments but only to the extent, for an
amount and for a period not resulting in an Event of Default under
Section 10(h) hereof;
(f) Liens consisting of licenses, leases and subleases
permitted hereunder granted to others and not interfering in any
material respect in the business of the Company and its Subsidiaries;
(g) Liens consisting of precautionary Uniform Commercial Code
financing statements filed with respect to operating leases or
consignment arrangements entered into by the Company and its
Subsidiaries in the ordinary course of business;
(h) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(i) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business;
(j) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor imperfections in title
thereto that, in the aggregate, are not material in amount, and that do
not in any case materially detract from the value of the Property
subject thereto or interfere with the ordinary conduct of the business
of the Company or any of its Subsidiaries;
(k) Liens in favor of banking institutions arising by
operation of law (including rights of set-off) encumbering deposits
held by such banking institutions incurred in the ordinary course of
business, within the general parameters customary in the banking
industry and not securing Indebtedness;
(l) Liens upon Property acquired after the date hereof (by
purchase, construction or otherwise) by the Company or any of its
Subsidiaries, each of which Liens either (i) existed on such Property
before the time of its acquisition and was not created in anticipation
thereof or (ii) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund,
the cost (including the cost of construction) of such Property;
,provided that no such Lien shall extend to or cover any Property of
the Company or such Subsidiary other than the Property so acquired and
improvements thereon and the principal amount of Indebtedness secured
by any such Lien shall not exceed the purchase price of such Property;
and
(m) additional Liens on Property created after the date
hereof, provided that the aggregate Indebtedness secured thereby and
incurred on and after the date hereof shall not exceed $15,000,000 in
the aggregate at any one time outstanding.
9.07 Indebtedness. The Company will not, nor will it permit any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness except:
(a) Indebtedness to the Lender hereunder and under the other
Basic Documents (as defined herein and in the Bank Group Credit
Agreement);
-30- U.S./Onex Finance Credit Agreement
35
(b) Indebtedness outstanding on the date hereof and listed in
Schedule 9.07(b) hereto and extensions, renewals and refinancings
thereof so long as the principal amount thereof at the time of such
extension, renewal or refinancing is not increased;
(c) Indebtedness consisting of (i) Interest Rate Protection
Agreements, (ii) the endorsement of negotiable instruments in the
ordinary course of business, (iii) indemnities and performance
guarantees (not constituting guarantees of Indebtedness) made in the
ordinary course of business that could not individually or in the
aggregate be reasonably expected to have a Material Adverse Effect, and
(iv) obligations with respect to surety bonds permitted pursuant to
Section 9.06(f) hereof;
(d) Guarantees of Indebtedness otherwise permitted by this
Section 9.07 hereof;
(e) Indebtedness among the Company and the Subsidiary
Guarantors arising in the ordinary course of business, so long as such
Indebtedness is subordinated to the prior payment in full of the
Obligors' obligations hereunder and such Indebtedness is subject to the
Lien of the Security Agreement (without any requirement that such
Indebtedness be evidenced by any instrument);
(f) Indebtedness of Subsidiaries of the Company that are not
Subsidiary Guarantors representing Investments made pursuant to Section
9.08(f) hereof;
(g) additional Indebtedness of the Company and its
Subsidiaries (including, without limitation, Capital Lease Obligations
and other Indebtedness secured by Liens permitted under Sections
9.06(1) or 9.06(m) hereof) up to but not exceeding 515,000,000 at any
one time outstanding;
(h) additional Indebtedness in an aggregate amount not to
exceed $7,500,000 consisting of (i) unsecured Indebtedness of
Subsidiaries of the Company to the seller in any Permitted Acquisition,
or (ii) Indebtedness assumed by any Subsidiary of the Company in
connection with any Permitted Acquisition;
(i) Indebtedness of any Subsidiary organized under the laws of
a jurisdiction outside of the United States of America for working
capital purposes in an aggregate amount not to exceed 55,000,000 (or
the equivalent in other currencies) at any one time outstanding, so
long as either (i) each such working capital facility is supported by a
Letter of Credit or (ii) the Tranche 2 Commitments shall be reduced by
the amount of each such working capital facility;
(j) Indebtedness of any Subsidiary organized under the laws of
a jurisdiction outside of the United States of America under unsecured
overdraft facilities incurred in the ordinary course of business in an
aggregate amount not to exceed 5250,000 (or the equivalent in other
currencies) at any one time outstanding; and
(k) subject to the prior consent of the Lender, unsecured
Indebtedness of any Obligor that is subordinated to the prior payment
in full of the obligations of the Obligors hereunder and under the
other Basic Documents.
9.08 Investments. The Company will not, nor will it permit any of its
Subsidiaries to, make or permit to remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified
in Schedule 9.08 hereto, and extensions and renewals thereof that do
not require the Company or any of its Subsidiaries to made additional
Investments;
(b) operating deposit accounts with banks;
-31- U.S./Onex Finance Credit Agreement
36
(c) Permitted Investments and Investments permitted by Section
9.05, 9.06, 9.07, 9.09 or 9.10 hereof;
(d) Permitted Acquisitions, provided that prior to any
Permitted Acquisition a Responsible Officer of the Company shall
deliver to the Agent a certificate containing financial projections
evidencing pro forma compliance with Sections 9.14, 9.15 and 9.16
hereof;
(e) Investments by the Company and its Subsidiaries in
Subsidiary Guarantors in the ordinary course of business;
(f) Investments by the Company and/or the Subsidiary
Guarantors in Subsidiaries of the Company that are not Subsidiary
Guarantors, so long as the aggregate amount of such Investments,
together with the aggregate book value all Property transferred to such
Subsidiaries pursuant to Section 9.05(b)(v) hereof, does not exceed
$5,000,000 and (y) Investments by any Subsidiary of the Company which
is not a Subsidiary Guarantor in any other Subsidiary of the Company;
(g) loans and advances made by the Company and its
Subsidiaries to their respective directors, officers and employees in
an aggregate principal amount not to exceed $2,000,000 at any one time
outstanding, and (y) advances for business expenses made in the
ordinary course of business;
(h) Interest Rate Protection Agreements;
(i) promissory notes and other similar non-cash consideration
received by the Company and its Subsidiaries in connection with
Dispositions permitted by Section 9.05 hereof;
(j) Investments (including debt obligations and capital stock)
received in connection with the 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;
(k) Guarantees (other than Guarantees of Indebtedness) entered
into in the ordinary course of business, and Guarantees of Indebtedness
permitted under Section 9.07 hereof;
(l) Investments consisting of the granting of trade terms in
connection with the List Brokerage Services in the ordinary course of
business and in accordance with past practice; and
(m) additional Investments (or Subsidiary Dividend Payments)
in an aggregate amount not to exceed $2,000,000.
In addition to the Investments permitted pursuant to clauses (a) through (m) of
this Section 9.08, the Company and its Subsidiaries may make Investments (to the
extent not used to finance Capital Expenditures pursuant to the last sentence of
Section 9.10) and Subsidiary Dividend Payments: (x) with the proceeds of
Dispositions to the extent not required to be used to make prepayments of Loans
pursuant to Section 2.10 (c) hereof, (y) with the proceeds of insurance and
condemnation awards, and (z) in an aggregate amount not to exceed the sum of (1)
the aggregate amount of Excess Cash Flow for any fiscal year (commencing with
the fiscal year ending December 31, 1999) theretofore ended minus (2) the
aggregate amount of prepayments required to be made pursuant to Section 2.10(b)
hereof with respect to Excess Cash Flow for each such fiscal year.
9.09 Dividend Payments.
(a) The Company will not, nor will it permit any of its
Subsidiaries to, declare or make any Dividend Payment at any time,
provided that the Company and its Subsidiaries may make Dividend
Payments so long as:
-32- U.S./Onex Finance Credit Agreement
37
(i) both immediately prior to making such Dividend Payment and
after giving effect thereto, no Default or Event of Default shall be
continuing; and
(ii) such Dividend Payment consists of the repurchase capital
stock or other securities of the Company (A) from outside directors,
employees or members of the management of the Company or any of the
Company's Subsidiaries, or (B) to fulfill obligations of the Company or
any of the Company's Subsidiaries under employee stock purchase or
similar plans covering employees from time to time, so long as the
aggregate amount used for such repurchases under this Section
9.09(a)(ii) does not exceed $1,000,000 (net of the proceeds received by
the Company or any of its Subsidiaries as a result of the resale of
such capital stock or other security).
(b) The Company will not, nor will it permit any of its Subsidiaries
to, declare or make any Subsidiary Dividend Payment with respect to any
Subsidiary at any time, provided that:
(i) each Wholly Owned Subsidiary may make Subsidiary Dividend
Payments with respect to itself;
(ii) each of The SpeciaLISTS Ltd. and Computer Marketing
Systems, Inc. may make Subsidiary Dividend Payments with respect to
itself so long as both immediately prior to making such Subsidiary
Dividend Payment and after giving effect thereto, no Default or Event
of Default shall be continuing;
(iii) each other Subsidiary may make Subsidiary Dividend
Payments so long as:
(x) both immediately prior to making such Subsidiary
Dividend Payment and after giving effect thereto, no Default
or Event of Default shall be continuing; and
(y) the aggregate amount of Subsidiary Dividend
Payments made with respect to any such Subsidiary during the
period commencing on January 1, 1999 through and including the
last day of the fiscal quarter most recently ended prior to
the date of such Subsidiary Dividend Payment shall not exceed
an amount equal to 50% of the consolidated net income of such
Subsidiary and its Subsidiaries for such period (treated for
these purposes as a single accounting period); and
(iv) Subsidiary Dividend Payments may be made to the extent
permitted by Section 9.08 hereof.
9.10 Capital Expenditures. The Company will not, nor will it permit any
of its Subsidiaries to, make Capital Expenditures, provided, however, that:
(a) (i) in the fiscal year ending December 31, 1999, the
Company and its Subsidiaries may make Capital Expenditures in an
aggregate amount not to exceed $20,000,000 and (ii) during each fiscal
year thereafter the Company and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed the sum of (x)
$15,000,000 plus (y) an amount, not to exceed the lesser of $6,000,000
and the amount of Capital Expenditures permitted to be made by the
Company and its Subsidiaries in the immediately prior fiscal year
pursuant to Section 9.10(a)(i) hereof or Section 9.10(a)(ii)(x) hereof,
as the case may be, but not so made;
(b) in addition, the Company and its Subsidiaries may make
Capital Expenditures in any amount to the extent that the ultimate
source of the funding for any such Capital Expenditure is an equity
contribution made by any Person other than an Obligor;
-33- U.S./Onex Finance Credit Agreement
38
(c) in addition, the Company and its Subsidiaries may
consummate Permitted Acquisitions (and any capital assets acquired in
any such Permitted Acquisition are not subject to the restrictions set
forth in Section 9.10(a) hereof); and
(d) in addition, the Company and its Subsidiaries may make
Capital Expenditures (to the extent not used to finance Investments
pursuant to the last sentence of Section 9.08 hereof: (x) with the
proceeds of Dispositions to the extent not required to be used to make
prepayments of Loans pursuant to Section 2.10(c) hereof, (y) with the
proceeds of insurance and condemnation awards, and (z) in an aggregate
amount not to exceed the aggregate amount of prepayments made pursuant
to Section 2.10(b) hereof.
Prior to the making by the Company or any Subsidiary of a Capital Expenditure in
an amount in excess of S 10,000,000, a Responsible Officer of the Company shall
deliver to the Agent a certificate containing financial projections evidencing
pro forma compliance with Sections 9.15, 9.16 and 9.17 hereof.
9.11 Lines of Business. Neither the Company nor any of its Subsidiaries
will engage to any substantial extent in any line or lines of business activity
other than the businesses engaged in by them on the Closing Date and business
activities ancillary to any of the foregoing.
9.12 Transactions with Affiliates. Except as expressly permitted by
this Agreement, the Company will not, nor will it permit any of its Subsidiaries
to, directly or indirectly: (a) make any Investment in an Affiliate; (b)
transfer, sell, lease, assign or otherwise dispose of any Property to an
Affiliate; (c) merge into or consolidate with or purchase or acquire Property
from an Affiliate; or (d) enter into any other transaction directly or
indirectly with or for the benefit of an Affiliate (including, without
limitation, Guarantees and assumptions of obligations of an Affiliate); unless
such transaction is (x) otherwise expressly permitted under this Agreement or
any other Basic Document, or (y) is upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than it would obtain in a comparable
arm's-length transaction with a Person that is not an Affiliate. Notwithstanding
the foregoing, the Company and its Subsidiaries shall be entitled to make the
following payments and/or enter into the following transactions: (i) the payment
of reasonable and customary fees and reimbursement of expenses payable to
directors of the Company, (ii) the payment of Management Fees permitted under
Section 9.16 hereof, and the reimbursement of reasonable expenses under the
management agreements relating thereto, and (iii) the employment arrangements
with respect to the procurement of services of directors, officers and employees
in the ordinary course of business and the payment of reasonable fees in
connection therewith.
9.13 Use of Proceeds. The Company will use the proceeds of the Loans
solely to refinance existing Indebtedness and for the Obligors' working capital
purposes; in each case in compliance with all applicable legal and regulatory
requirements, provided that neither the Agent nor the Lender shall have any
responsibility as to the use of any of such proceeds.
9.14 Holding Company; Subsidiaries; Etc..
(a) The Company will not at any time own at material Property
other than the capital stock of its Subsidiaries. The Company will not
at any time conduct any business other than acting as a holding company
and other activities ancillary thereto.
(b) The Company will take such action, and will cause each of
its Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Subsidiaries of the Company (other than
Subsidiaries that are organized under the laws of a jurisdiction
outside of the United States of America (each, a "Foreign Subsidiary"))
are "Subsidiary Guarantors" and "Obligors" hereunder and under the
other Basic Documents. Without limiting the generality of the
foregoing, in the event that the Company or any of its Subsidiaries
shall form or acquire any such new Subsidiary, the Company or the
respective Subsidiary will (i) cause such new Subsidiary to become a
"Subsidiary Guarantor" hereunder and under the other Basic Documents
pursuant to a written instrument in form
-34- U.S./Onex Finance Credit Agreement
39
and substance reasonably satisfactory to the Agent, (ii) cause the
capital stock of, or other equity interests in, such new Subsidiary to
be subject to the Lien of the Security Agreement, (iii) cause such new
Subsidiary to take the actions specified in the Security Agreement to
perfect the Lien of the Collateral Agent (as defined in the Security
Agreement) on the Property of such new Subsidiary, and (iv) cause such
new Subsidiary to deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is reasonably
requested by the Agent.
9.15 Total Debt to Cash Flow Ratio. The Company will not permit the
Total Debt to Cash Flow Ratio as at the last day of any fiscal quarter of the
Company occurring during any of the periods set forth below to exceed the ratio
set forth below opposite such period:
Period Total Debt to Cash Flow Ratio
------ -----------------------------
March 31, 1999 to September 30, 1999 6.50 to 1
October 1, 1999 to March 31, 2000 6.00 to 1
April 1, 2000 to December 31, 2001 5.00 to 1
January 1, 2002 and thereafter 4.00 to 1
9.16 Cash Flow to Debt Service Ratio. The Company will not permit the
Cash Flow to Debt Service Ratio as at the last day of any fiscal quarter of the
Company, beginning with the fiscal quarter ending on March 31, 1999, to be less
than 1.25 to 1.
9.17 Cash Flow to Interest Expense Ratio. The Company will not permit
the Cash Flow to Interest Expense Ratio as at the last day of any fiscal quarter
of the Company, beginning with the fiscal quarter ending on March 31, 1999, to
be less than 2.50 to 1.
9.18 Management Fee Payments. The Company will not, nor will it permit
any of its Subsidiaries to, pay any Management Fee except for the following:
(a) a payment to ECM Partners, L.P. not to exceed $1,000,000
to be made on the Closing Date, and
(b) additional payments to the extent that:
(i) such payment (x) is made on or after December 31,
1999, (ii) is made only once a year, and (iii) the amount of
each such annual payment does not exceed $600,000; and
(ii) both immediately prior to making such payment
and after giving effect thereto, no Event of Default shall
have occurred and be continuing.
9.19 Holding Company; Subsidiaries; Etc..
(a) The Company will not at any time own at material Property
other than the capital stock of its Subsidiaries. The Company will not
at any time conduct any business other than acting as a holding
company.
(b) The Company will take such action, and will cause each of
its Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Subsidiaries of the Company (other than
Subsidiaries that are organized under the laws of a jurisdiction
outside of the United States of America and whose principal place of
business is outside of the United States of America (each, a "Foreign
Subsidiary")) are "Subsidiary Guarantors" and
-35- U.S./Onex Finance Credit Agreement
40
"Obligors" hereunder and under the other Basic Documents. Without
limiting the generality of the foregoing, in the event that the Company
or any of its Subsidiaries shall form or acquire any such new
Subsidiary, the Company or the respective Subsidiary will (i) cause
such new Subsidiary to become a "Subsidiary Guarantor" hereunder and
under the other Basic Documents pursuant to a written instrument in
form and substance reasonably satisfactory to the Agent, (ii) cause the
capital stock of, or other equity interests in, such new Subsidiary to
be subject to the Lien of the Security Agreement, (iii) cause such new
Subsidiary to take the actions specified in the Security Agreement to
perfect the Agent's Lien on the Property of such new Subsidiary , and
(iv) cause such new Subsidiary to deliver such proof of corporate
action, incumbency of officers, opinions of counsel and other documents
as is reasonably satisfactory to the Agent.
Section 10. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any
principal of any Loan when due (whether at stated maturity or at
mandatory or optional prepayment); or (ii) default in the payment of
any interest on any Loan, any fee or any other amount payable by it
hereunder or under any other Basic Document when due and such default
shall continue unremedied for more than three Business Days; or
(b) The Company or any of its Subsidiaries (the Company and
such Subsidiaries herein collectively called the "Relevant Parties")
shall default in the payment when due of any principal of or interest
on any of its other Indebtedness aggregating 52,500,000 or more, or in
the payment when due of any amount under any Interest Rate Protection
Agreement for a notional principal amount exceeding $2,500,000; or any
event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness or any event specified
in any Interest Rate Protection Agreement shall occur if the effect of
such event is to cause, or (with the giving of any notice or the lapse
of time or both) to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause,
such Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its
stated maturity or, in the case of an Interest Rate Protection
Agreement, to permit the payments owing under such Interest Rate
Protection Agreement to be liquidated; or
(c) Any representation, warranty or certification made or
deemed made herein or in any other Basic Document (or in any
modification or supplement hereto or thereto) by any Obligor, or any
certificate furnished to the Lender or the Agent pursuant to the
provisions hereof or thereof, shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
(d) Any Obligor, as applicable, shall default in the
performance of any of its obligations under any of Sections 9.01(c),
9.05, 9.06, 9.07, 9.08, 9.09, 9.10, 9.11, 9.12, 9.13, 9.14, 9.15, 9.16
or 9.17 of this Agreement; or any Obligor shall default in the
performance of any of its other obligations in this Agreement or any
other Basic Document and such default shall continue unremedied for a
period of more than 30 days after written notice thereof to the Company
by the Agent or the Lender (through the Agent); or any "Event of
Default" shall be continuing under the Bank Group Credit Agreement; or
(e) Any Relevant Party shall admit in writing its inability
to, or be generally unable to, pay its debts as such debts become due;
or
(f) Any Relevant Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the Bankruptcy
Code, (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or
-36- U.S./Onex Finance Credit Agreement
41
composition or readjustment of debts, (v) fail to controvert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the Bankruptcy Code, (vi)
take any similar action under the Canadian Bankruptcy and Insolvency
Act or the Canadian Companies Creditors Arrangements Act, or (vii) take
any corporate action to effect any of the foregoing; or
(g) A proceeding or case shall be commenced, without the
application or consent of the affected Relevant Party, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of such Relevant
Party or of all or any substantial part of its Property, or (iii)
similar relief in respect of such Relevant Party under any law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts (including, without limitation, the Canadian
Bankruptcy and Insolvency Act or the Canadian Companies Creditors
Arrangements Act), and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of more than 60 days; or an order for relief against any
Relevant Party shall be entered in an involuntary case under the
Bankruptcy Code; or
(h) A final judgment or judgments (exclusive of judgment
amounts to the extent covered by insurance where the insurer has not
denied liability in respect of such judgment) for the payment of money
in excess of 56,000,000 in the aggregate shall be rendered by one or
more courts, administrative tribunals or other bodies having
jurisdiction against any Relevant Party and the same shall not be
discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 60 days from
the date of entry thereof and such Relevant Party shall not, within
said period of 60 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) An event or condition specified in Section 9.01(c) of the
Bank Group Credit Agreement shall occur or exist with respect to any
Plan or Multiemployer Plan and, as a result of such event or condition,
together with all other such events or conditions, the Company or any
ERISA Affiliate shall incur or be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan or PBGC (or any combination
of the foregoing) that could reasonably be expected (either
individually or in the aggregate) to have a Material Adverse Effect; or
(j) A reasonable basis shall exist for the assertion against
the Company or any of its Subsidiaries, or any predecessor in interest
of the Company or any of its Subsidiaries or Affiliates for which the
Company or any of its Subsidiaries is liable, of (or there shall have
been asserted against the Company or any of its Subsidiaries) an
Environmental Claim that is reasonably likely to be determined
adversely to the Company or any of its Subsidiaries, and the amount
thereof (either individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect (insofar as such amount is
payable by the Company or any of its Subsidiaries but after deducting
any portion thereof that is reasonably expected to be paid by other
creditworthy Persons jointly and severally liable therefor); or
(k) Onex shall cease to have the right (by virtue of its
ownership, directly or indirectly, of voting shares of the capital
stock of the Company and unfettered (in respect of its control of the
board of directors of the Company) by any contractual arrangements) to
appoint a majority of the members of the board of directors of the
Company and otherwise maintain control of the Company; or
(l) The Liens created by the Security Documents shall at any
time not constitute a valid and perfected Lien on the Collateral
intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein)
in favor of the Agent, free and clear of all other Liens, other than
Liens permitted under Section 9.06 of the Bank Group Credit Agreement
(and,
-37- U.S./Onex Finance Credit Agreement
42
if such invalidity is amenable to cure without, in the sole opinion of
the Agent (exercised reasonably), materially disadvantaging the
position of the Agent and the Lender, the Obligors shall have failed to
cure such invalidity within 60 days after notice from the Agent to the
Company, or such shorter period as shall be prudent under the
circumstances) or, except for expiration in accordance with its terms,
any of the Security Documents shall for whatever reason be terminated
or cease to be in full force and effect (except with respect to any
Property that is disposed of by any Obligor in compliance with this
Agreement), or the enforceability thereof shall be contested by any
Obligor;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
paragraph (f) or (g) of this Section 10 with respect to any Obligor, the Agent
may and, upon request of the Lender shall, by notice to the Company declare the
principal amount then outstanding of, and the accrued interest on, the Loans and
all other amounts payable by the Obligors hereunder and under the Notes
(including, without limitation, any amounts payable under Section 5.03 of this
Agreement) to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor; and (2) in the case of the occurrence of an Event of Default referred
to in paragraph (f) or (g) of this Section 10 with respect to any Obligor, the
Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.03 of this Credit Agreement)
shall automatically become immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by each Obligor.
Section 11. The Agent.
11.01 Appointment, Powers and Immunities. The Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Basic Documents with such powers as are specifically delegated to the
Agent by the terms of this Agreement and of the other Basic Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 11.04 hereof shall include
reference to its affiliates and its own and its affiliates' officers, directors,
employees and agents): (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Basic Documents, and
shall not by reason of this Agreement or any other Basic Document be a trustee
for the Lender; (b) shall not be responsible to the Lender for any recitals,
statements, representations or warranties contained in this Agreement or in any
other Basic Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Basic Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for herein or therein or
for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder; (c) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or under any other
Basic Document; and (d) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other Basic Document or under any other
document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a notice of the assignment or transfer thereof shall have been filed with the
Agent.
11.02 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or cable) believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As
-38- U.S./Onex Finance Credit Agreement
43
to any matters not expressly provided for by this Agreement or any other Basic
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Lender or, if provided herein, in accordance with the instructions
given by the Lender as is required in such circumstance, and such instructions
of the Lender and any action taken or failure to act pursuant thereto shall be
binding on the Lender.
11.03 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default unless the Agent has received notice from
a Lender or the Company specifying such Default and stating that such notice is
a "Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default, the Agent shall give prompt notice thereof to the
Lender. The Agent shall (subject to Section 11.06 hereof) take such action with
respect to such Default as shall be directed by the Lender provided that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interest of
the Lender except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Lender.
11.04 Indemnification. The Lender agrees to indemnify the Agent (to the
extent not reimbursed under Section 12.03 hereof, but without limiting the
obligations of the Company under said Section 12.03) for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by the Lender)
arising out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Basic Document or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Company is obligated to pay under Section 12.03 hereof, but
excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents, provided that the Lender shall not be liable for any
of the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
11.05 Non-Reliance on Agent. The Lender agrees that it has,
independently and without reliance on the Agent, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and its Subsidiaries and decision to enter into this Agreement and that
it will, independently and without reliance upon the Agent, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or under any other Basic Document. The Agent shall not be required to
keep itself informed as to the performance or observance by any Obligor of this
Agreement or any of the other Basic Documents or any other document referred to
or provided for herein or therein or to inspect the Properties or books of the
Company or any of its Subsidiaries. Except for notices, reports and other
documents and information expressly required to be furnished to the Lender by
the Agent hereunder or under the Security Documents, the Agent shall not have
any duty or responsibility to provide the Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agent or any of its affiliates.
11.06 Failure to Act. Except for action expressly required of the Agent
hereunder and under the other Basic Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the Lender of its
indemnification obligations under Section 11.04 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
11.07 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lender. The Agent may be
-39- U.S./Onex Finance Credit Agreement
44
removed at any time with or without cause by the Lender, subject to the approval
of the Company and the "Agent" under the Bank Group Credit Agreement. Upon any
such resignation or removal, the Lender shall (subject to the approval of the
Company, such approval not to be unreasonably withheld or delayed, and the
approval of the "Agent" under the Bank Group Credit Agreement), have the right
to appoint a successor Agent. If no successor Agent shall have been so appointed
by the Lender (with the Company's consent) and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Lender's removal of the retiring Agent, then the retiring
Agent may, on behalf of the Lender, appoint a successor Agent, that shall be a
bank that has an office in New York, New York. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section 11
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
11.08 Consents under Other Basic Documents. Except as otherwise
provided in Section 12.04 hereof with respect to this Agreement, the Agent may,
with the prior consent of the Lender and the Lenders under the Limited
Partnership Credit Agreement (but not otherwise), consent to any modification,
supplement or waiver under any of the Basic Documents.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Agent or the Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under this Agreement or any Note shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement or any Note preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
12.02 Notices. All notices, requests and other communications provided
for herein and under the Security Documents (including, without limitation, any
modifications of, or waivers, requests or consents under, this Agreement) shall
be given or made in writing (including, without limitation, by telex or
telecopy), delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof (below the name of the
Company, in the case of any Subsidiary Guarantor); or, as to any party, at such
other address as shall be designated by such party in a notice to each other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telex or telecopier
(with confirmation of receipt) or personally delivered or, in the case of a
mailed notice, upon receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc.. The Company agrees to pay or reimburse the Lender
and the Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, the reasonable fees and expenses of ▇▇▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇, special New York counsel to the Agent) in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the other
Basic Documents and the Loans hereunder and (ii) the negotiation or preparation
of any modification, supplement or waiver of any of the terms of this Agreement
or any of the other Basic Documents (whether or not consummated); (b) all
reasonable out-of-pocket costs and expenses of the Lender and the Agent
(including, without limitation, the reasonable fees and expenses of legal
counsel to the Agent and one additional counsel to the Lender) in connection
with (i) any Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, (y) judicial or regulatory proceedings
and (z) workout, restructuring or other negotiations or proceedings (whether or
not the workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 12.03; (c) all transfer,
stamp, documentary or other similar taxes, assessments or
-40- U.S./Onex Finance Credit Agreement
45
charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Basic Documents or any other document referred to
herein or therein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection of
any security interest contemplated by any Basic Document or any other document
referred to therein; and (d) all reasonable out-of-pocket costs and expenses
incurred by the Agent in connection with the syndication of the Loans and the
Commitments.
The Company hereby agrees to indemnify the Agent and the Lender and
their respective directors, officers, employees, attorneys and agents from, and
hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them (including, without limitation, any
and all losses, liabilities, claims, damages or expenses incurred by the Agent
to the Lender, whether or not the Agent or the Lender is a party thereto, but
subject (in the case of fees and expenses of counsel) to the limitations set
forth in the immediately preceding paragraph) arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to the Loans
hereunder or any actual or proposed use by the Company or any of its
Subsidiaries of the proceeds of any of the Loans hereunder, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).
12.04 Amendments, Etc.. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by the Company, the Agent and the Lender, or
by the Company and the Agent acting with the consent of the Lender, and any
provision of this Agreement may be waived by the Lender or by the Agent acting
with the consent of the Lender; provided that: (a) at all times prior to the
payment in full of the Limited Partnership Obligations, no such modification,
supplement or waiver may be entered into without the consent of the Limited
Partnership Agent; (b) any modification or supplement of Section 11 hereof shall
require the consent of the Agent; and (c) any modification or supplement of
Section 6 hereof shall require the consent of each Subsidiary Guarantor.
12.05 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
12.06 Assignments and Participations.
(a) No Obligor may assign any of its rights or obligations
hereunder or under the Notes without the prior consent of the Lender
and the Agent.
(b) The Lender may not assign any of its Loans, the Notes or
the Commitment; provided that the Lender may assign all of its right,
title and interest hereunder and under the other Basic Documents to the
Limited Partnership Agent as collateral security for the Limited
Partnership Obligations, and the parties hereto agree that, until the
payment in full of the Limited Partnership Obligations, all rights,
remedies and powers of the Lender hereunder shall be exercised
exclusively by the Limited Partnership Agent for the benefit of the
holders of the Limited Partnership Obligations.
12.07 Survival. The obligations of the Company under Sections 5.01,
5.05 and 12.03 hereof, the obligations of each Guarantor under Section 6.03
hereof, and the obligations of the Lender under Section 11.05 hereof, shall
survive for one year after the repayment of the Loans and the termination of the
Commitments.
12.08 Captions. The table of contents and captions and Section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
-41- U.S./Onex Finance Credit Agreement
46
12.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
12.10 Governing Law; Submission to Jurisdiction. This Agreement and the
Note shall be governed by, and construed in accordance with, the law of the
State of New York without regard to New York conflicts of laws principles. Each
Obligor hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Agreement or the transactions contemplated hereby.
Each Obligor irrevocably waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
12.11 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE AGENT AND THE
LENDER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.12 Confidentiality. Each of the Lender and the Agent agrees (on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by any Obligor pursuant to this Agreement
that is identified by such Person as being confidential at the time the same is
delivered to the Lender or the Agent, provided that nothing herein shall limit
the disclosure of any such information (i) to the extent required by statute,
rule, regulation or judicial process, (ii) to counsel for the Lender or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) to the Agent or
the Lender, (v) in connection with any litigation to which the Lender or the
Agent is a party or (v) to any assignee or participant (or prospective assignee
or participant) so long as such assignee or participant (or prospective assignee
or participant) first agrees in writing to be bound by this Section 12.12.
12.13 Release. The Lender acknowledges and agrees that, effective on
the Closing Date, the Company is released from its obligations under the
Existing Credit Agreement.
[The remainder of this page has been left blank intentionally]
-42- U.S./Onex Finance Credit Agreement
47
Lender
ONEX CUSTOMERONE FINANCE LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Lending Office for all Loans:
[Address]
Address for Notices:
[Address]
Attention: [o]
Telecopier No.: [o]
Telephone No.: [o]
-43- U.S./Onex Finance Credit Agreement
48
CLIENTLOGIC CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
-44- U.S./Onex Finance Credit Agreement
49
Agent
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Title:
Address for Notices:
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
-45- U.S./Onex Finance Credit Agreement
50
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written
Company
CLIENTLOGIC HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Secretary
Address for Notices:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Subsidiary Guarantors
LCS INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
CATALOG LIQUIDATORS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
-46- U.S./Onex Finance Credit Agreement
51
LCS CANADA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
CATALOG RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
SPEC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
THE SPECIALISTS, LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
COMPUTER MARKETING SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President, Assistant
Treasurer & Assistant
Secretary
-47- U.S./Onex Finance Credit Agreement