EXHIBIT 10.11
REVOLVING/TERM LOAN AGREEMENT
Dated as of September 25, 1997
among
DATA PROCESSING RESOURCES CORPORATION
THE LENDERS HEREIN NAMED
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
TABLE OF CONTENTS
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PAGE
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Article 1 DEFINITIONS AND ACCOUNTING TERMS........................................... 1
1.1 Defined Terms.............................................................. 1
1.2 Use of Defined Terms....................................................... 25
1.3 Accounting Terms........................................................... 25
1.4 Rounding................................................................... 25
1.5 Exhibits and Schedules..................................................... 26
1.6 References to "Borrower and its Subsidiaries".............................. 26
1.7 Miscellaneous Terms........................................................ 26
Article 2 LOANS...................................................................... 27
2.1 Loans-General.............................................................. 27
2.2 Alternate Base Rate Loans.................................................. 28
2.3 Eurodollar Rate Loans...................................................... 28
2.4 Voluntary Reduction of Commitment.......................................... 29
2.5 Automatic Reduction of Commitment.......................................... 29
2.6 Optional Termination of Commitment......................................... 29
2.7 Administrative Agent's Right to Assume Funds Available for Advances........ 29
2.8 Term Loan Conversion....................................................... 30
2.9 Collateral and Guaranty.................................................... 30
Article 3 PAYMENTS AND FEES.......................................................... 31
3.1 Principal and Interest..................................................... 31
3.2 Arrangement Fee............................................................ 33
3.3 Commitment Fee............................................................. 33
3.4 Agency Fee................................................................. 33
3.5 Increased Commitment Costs................................................. 33
3.6 Eurodollar Costs and Related Matters....................................... 34
3.7 Late Payments.............................................................. 38
3.8 Computation of Interest and Fees........................................... 38
3.9 Non-Banking Days........................................................... 39
3.10 Manner and Treatment of Payments........................................... 39
3.11 Funding Sources............................................................ 40
3.12 Failure to Charge Not Subsequent Waiver.................................... 40
3.13 Administrative Agent's Right to Assume Payments Will be Made............... 40
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3.14 Fee Determination Detail..................................................... 41
3.15 Survivability................................................................ 41
Article 4 REPRESENTATIONS AND WARRANTIES............................................... 42
4.1 Existence and Qualification; Power; Compliance With Laws..................... 42
4.2 Authority; Compliance With Other Agreements and Instruments and
Government Regulations....................................................... 42
4.3 No Governmental Approvals Required........................................... 43
4.4 Subsidiaries................................................................. 43
4.5 Financial Statements......................................................... 44
4.6 No Other Liabilities; No Material Adverse Changes............................ 44
4.7 Title to and Location of Property............................................ 44
4.8 Intangible Assets............................................................ 45
4.9 Public Utility Holding Company Act........................................... 45
4.10 Litigation................................................................... 45
4.11 Binding Obligations.......................................................... 45
4.12 No Default................................................................... 45
4.13 ERISA........................................................................ 46
4.14 Regulations G and U; Investment Company Act.................................. 46
4.15 Disclosure................................................................... 46
4.16 Tax Liability................................................................ 47
4.17 Projections.................................................................. 47
4.18 Hazardous Materials.......................................................... 47
4.19 Security Interests........................................................... 47
Article 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING
REQUIREMENTS)................................................................ 49
5.1 Payment of Taxes and Other Potential Liens................................... 49
5.2 Preservation of Existence.................................................... 49
5.3 Maintenance of Properties.................................................... 49
5.4 Maintenance of Insurance..................................................... 49
5.5 Compliance With Laws......................................................... 50
5.6 Inspection Rights............................................................ 50
5.7 Keeping of Records and Books of Account...................................... 50
5.8 Compliance With Agreements................................................... 50
5.9 Use of Proceeds.............................................................. 50
5.10 Hazardous Materials Laws..................................................... 50
5.11 Additional Domestic Subsidiaries............................................. 51
5.12 Foreign Subsidiaries......................................................... 51
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5.13 Future Real Property......................................................... 51
5.14 Interest Rate Protection Agreements.......................................... 51
Article 6 NEGATIVE COVENANTS........................................................... 52
6.1 Payment of Subordinated Obligations.......................................... 52
6.2 Disposition of Property...................................................... 52
6.3 Mergers...................................................................... 52
6.4 Hostile Acquisitions......................................................... 53
6.5 Acquisitions................................................................. 53
6.6 Distributions................................................................ 53
6.7 ERISA........................................................................ 53
6.8 Change in Nature of Business................................................. 53
6.9 Liens and Negative Pledges................................................... 54
6.10 Indebtedness and Guaranty Obligations........................................ 54
6.11 Transactions with Affiliates................................................. 55
6.12 Current Ratio................................................................ 56
6.13 Funded Debt Ratio............................................................ 56
6.14 Minimum Trailing EBITDA...................................................... 57
6.15 Stockholders' Equity......................................................... 57
6.16 Investments.................................................................. 57
6.17 Subsidiary Indebtedness...................................................... 58
6.18 Amendments to Subordinated Obligations....................................... 58
Article 7 INFORMATION AND REPORTING REQUIREMENTS....................................... 59
7.1 Financial and Business Information........................................... 59
7.2 Compliance Certificates...................................................... 62
Article 8 CONDITIONS................................................................... 63
8.1 Initial Advances............................................................. 63
8.2 Any Advance.................................................................. 65
Article 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT......................... 67
9.1 Events of Default............................................................ 67
9.2 Remedies Upon Event of Default............................................... 69
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Article 10 THE ADMINISTRATIVE AGENT..................................................... 72
10.1 Appointment and Authorization................................................ 72
10.2 Administrative Agent and Affiliates.......................................... 72
10.3 Proportionate Interest in any Collateral..................................... 72
10.4 Lenders' Credit Decisions.................................................... 73
10.5 Action by Administrative Agent............................................... 73
10.6 Liability of Administrative Agent............................................ 74
10.7 Indemnification.............................................................. 76
10.8 Successor Administrative Agent............................................... 76
10.9 No Obligations of Borrower................................................... 77
Article 11 MISCELLANEOUS................................................................ 78
11.1 Cumulative Remedies; No Waiver............................................... 78
11.2 Amendments; Consents......................................................... 78
11.3 Costs, Expenses and Taxes.................................................... 79
11.4 Nature of Lenders' Obligations............................................... 80
11.5 Survival of Representations and Warranties................................... 80
11.6 Notices...................................................................... 80
11.7 Execution of Loan Documents.................................................. 81
11.8 Binding Effect; Assignment................................................... 81
11.9 Right of Setoff.............................................................. 84
11.10 Sharing of Setoffs........................................................... 84
11.11 Indemnity by Borrower........................................................ 85
11.12 Nonliability of the Lenders.................................................. 86
11.13 No Third Parties Benefited................................................... 87
11.14 Confidentiality.............................................................. 87
11.15 Further Assurances........................................................... 88
11.16 Integration.................................................................. 88
11.17 Governing Law................................................................ 89
11.18 Severability of Provisions................................................... 89
11.19 Headings..................................................................... 89
11.20 Time of the Essence.......................................................... 89
11.21 Foreign Lenders and Participants............................................. 89
11.22 Hazardous Material Indemnity................................................. 90
11.23 Waiver of Right to Trial by Jury............................................. 91
11.24 Purported Oral Amendments.................................................... 91
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Exhibits
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A - Commitment Assignment and Acceptance
B - Compliance Certificate
C - Note
D - Opinion of Counsel
E - Pledge Agreement
F - Pricing Certificate
G - Request for Loan
H - Security Agreement
I - Subsidiary Guaranty
Schedules
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1.1 Lender Commitments
4.4 Subsidiaries
4.7A Existing Liens, Negative Pledges and Rights of Others
4.7B Location of Property
4.10 Material Litigation
4.17 Hazardous Materials Matters
6.10 Existing Indebtedness and Guaranty Obligations
6.16 Existing Investments
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REVOLVING/TERM LOAN AGREEMENT
-----------------------------
Dated as of September 25, 1997
This REVOLVING/TERM LOAN AGREEMENT ("Agreement") is entered into by
and among Data Processing Resources Corporation, a California corporation
("Borrower"), each lender whose name is set forth on the signature pages of this
Agreement and each lender which may hereafter become a party to this Agreement
pursuant to Section 11.8 (collectively, the "Lenders" and individually, a
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"Lender"), and ▇▇▇▇▇ Fargo Bank, National Association, as Administrative Agent.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
Article 1
DEFINITIONS AND ACCOUNTING TERMS
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1.1 Defined Terms. As used in this Agreement, the following
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terms shall have the meanings set forth below:
"Acquisition" means any transaction, or any series of related
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transactions, consummated after the Closing Date, by which Borrower and/or
any of its Subsidiaries directly or indirectly (a) acquires any ongoing
business or all or substantially all of the assets of any Person engaged in
any ongoing business, whether through purchase of assets, merger or
otherwise, (b) acquires control of securities of a Person engaged in an
ongoing business representing more than 50% of the ordinary voting power
for the election of directors or other governing position if the business
affairs of such Person are managed by a board of directors or other
governing body or (c) acquires control of more than 50% of the ownership
interest in any partnership, joint venture, limited liability company,
business trust or other Person engaged in an ongoing business that is not
managed by a board of directors or other governing body.
"Administrative Agent" means ▇▇▇▇▇ Fargo Bank, National Association,
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when acting in its capacity as the Administrative Agent under any of the
Loan Documents, or any successor Administrative Agent.
"Administrative Agent's Office" means the Administrative Agent's
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address as set forth on the signature pages of this Agreement, or such
other
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address as the Administrative Agent hereafter may designate by written
notice to Borrower and the Lenders.
"Advance" means any advance made or to be made by any Lender to
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Borroweras provided in Article 2, and includes each Alternate Base Rate
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Advance and Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person which directly
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or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (and the correlative
terms, "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); provided that, in any event, any Person that owns, directly or
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indirectly, 10% or more of the securities having ordinary voting power for
the election of directors or other governing body of a corporation that has
more than 100 record holders of such securities, or 10% or more of the
partnership or other ownership interests of any other Person that has more
than 100 record holders of such interests, will be deemed to be an
Affiliate of such corporation, partnership or other Person.
"Agreement" means this Revolving/Term Loan Agreement, either as
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originally executed or as it may from time to time be supplemented,
modified, amended, restated or extended.
"Alternate Base Rate" means, as of any date of determination, the rate
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per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the higher of (a) the Prime Rate in effect on such date and (b) the Federal
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Funds Rate in effect on such date plus 1/2 of 1% (50 basis points).
"Alternate Base Rate Advance" means an Advance made hereunder and
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specified to be an Alternate Base Rate Advance in accordance with Article
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2.
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"Alternate Base Rate Loan" means a Loan made hereunder and specified
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to be an Alternate Base Rate Loan in accordance with Article 2.
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"Amortization Amount" means the result obtained by dividing (a) the
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aggregate principal balance outstanding under the Notes on the Revolver
Termination Date by (b) eight (8).
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"Amortization Date" means December 31, 2000 and each Quarterly Payment
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Date thereafter through and including the Maturity Date.
"Applicable Alternate Base Rate Margin" means, for each Pricing
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Period,the interest rate margin set forth below (expressed in basis points
per annum) opposite the Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Margin
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I 0
II 0
III 0
IV 50
V 100
"Applicable Commitment Fee Rate" means, for each Pricing Period, the
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rate set forth below (expressed in basis points per annum) opposite the
Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Commitment Fee
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I 20
II 20
III 30
IV 40
V 45
"Applicable Eurodollar Rate Margin" means, for each Pricing Period,
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the interest rate margin set forth below (expressed in basis points per
annum) opposite the Applicable Pricing Level for that Pricing Period:
Applicable
Pricing Level Margin
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I 75
II 100
III 125
IV 175
V 225
"Applicable Pricing Level" means (a) for the Pricing Period commencing
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on the Closing Date and ending on the date that is six (6) months after the
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Closing Date, Pricing Level II and (b) for each subsequent Pricing Period,
the pricing level set forth below opposite the Funded Debt Ratio as of the
last day of the Fiscal Quarter most recently ended prior to the
commencement of that Pricing Period:
Pricing Level Funded Debt Ratio
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I Less than 1.00 to 1.00
II Equal to or greater than 1.00 to 1.00, but
less than 1.50 to 1.00
III Equal to or greater than 1.50 to 1.00,
but less than 2.00 to 1.00
IV Equal to or greater than 2.00 to 1.00,
but less than 2.50 to 1.00
V Equal to or greater than 2.50 to 1.00;
provided that (i) in the event that Borrower does not deliver a Pricing
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Certificate with respect to any Pricing Period prior to the commencement of
such Pricing Period, then until (but only until) such Pricing Certificate
is delivered the Applicable Pricing Level for that Pricing Period shall be
Pricing Level V and (ii) if any Pricing Certificate is subsequently
determined to be in error, then any resulting change in the Applicable
Pricing Level shall be made retroactively to the beginning of the relevant
Pricing Period.
"Banking Day" means any Monday, Tuesday, Wednesday, Thursday or
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Friday, other than a day on which banks are authorized or required to be
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closed in California.
"Capital Lease Obligations" means all monetary obligations of a Person
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under any leasing or similar arrangement which, in accordance with GAAP, is
classified as a capital lease.
"Cash" means, when used in connection with any Person, all monetary
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and non-monetary items owned by that Person that are treated as cash in
accordance with GAAP, consistently applied.
"Cash Equivalents" means the "appropriate investments" subject to the
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"investment concentration limits" and "maturity limits" set forth in
Borrower's Investment Policy as adopted by its Board of Directors and in
effect on the Closing Date.
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"Cash Income Taxes" means, with respect to any fiscal period, taxes on
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or measured by the income of Borrower that are paid or currently payable in
Cash by Borrower during that fiscal period.
"Cash Interest Expense" means Interest Expense that is paid or
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currently payable in Cash.
"Certificate" means a certificate signed by a Senior Officer or
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Responsible Official (as applicable) of the Person providing the
certificate.
"Change in Control" means (a) any transaction or series of related
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transactions in which any Unrelated Person or two or more Unrelated Persons
acting in concert acquire beneficial ownership (within the meaning of Rule
13d-3(a)(1) under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of 25% or more of the outstanding Common Stock, (b)
Borrower consolidates with or merges into another Person or conveys,
transfers or leases its properties and assets substantially as an entirety
to any Person or any Person consolidates with or merges into Borrower, in
either event pursuant to a transaction in which the outstanding Common
Stock is changed into or exchanged for cash, securities or other property,
with the effect that any Unrelated Person becomes the beneficial owner,
directly or indirectly, of 25% or more of Common Stock or that the Persons
who were the holders of Common Stock immediately prior to the transaction
hold less than 75% of the common stock of the surviving corporation after
the transaction, (c) during any period of 24 consecutive months,
individuals who at the beginning of such period constituted the board of
directors of Borrower (together with any new or replacement directors whose
election by the board of directors, or whose nomination for election, was
approved by a vote of at least a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for reelection was previously so approved) cease for
any reason to constitute a majority of the directors then in office or (d)
a "change in control" as defined in any document governing Indebtedness of
Borrower in excess of $5,000,000 which gives the holders of such
Indebtedness the right to accelerate or otherwise require payment of such
Indebtedness prior to the maturity date thereof. For purposes of the
foregoing, the term "Unrelated Person" means any Person other than (i) a
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Subsidiary of Borrower, (ii) an employee stock ownership plan or other
employee benefit plan covering the employees of Borrower and its
Subsidiaries or (iii) any Person that held Common Stock on the day prior to
the effective date of Borrower's registration statement under the
Securities Act of 1933 covering the initial public offering of Common
Stock.
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"Closing Date" means the time and Banking Day on which the conditions
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set forth in Section 8.1 are satisfied or waived. The Administrative Agent
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shall notify Borrower and the Lenders of the date that is the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended or replaced
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and as in effect from time to time.
"Collateral" means all of the collateral covered by the Collateral
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Documents.
"Collateral Documents" means, collectively, the Security Agreement,
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the Pledge Agreement and any other security agreement, pledge agreement,
deed of trust, mortgage, notice to or acknowledgment of a registrar or
depositary institution, control agreement or other collateral security
agreement executed and delivered by Borrower or the Subsidiary Guarantors
(and executed by any third party whose signature is necessary) to secure
the Obligations.
"Commitment" means, subject to Sections 2.4 and 2.5, $60,000,000. The
---------- --- ---
respective Pro Rata Shares of the Lenders with respect to the Commitment
are set forth in Schedule 1.1.
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"Commitment Assignment and Acceptance" means a commitment assignment
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and acceptance substantially in the form of Exhibit A .
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"Common Stock" means the common stock of Borrower or its successor.
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"Compliance Certificate" means a certificate in the form of Exhibit B,
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properly completed and signed by a Senior Officer of Borrower.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
outstanding security issued by that Person or of any material agreement,
instrument or undertaking to which that Person is a party or by which it or
any of its Property is bound.
"Current Ratio" means, as of any date of determination, the ratio of
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(a) the consolidated current assets of Borrower and its Subsidiaries on
that date to (b) the sum of (i) the consolidated current liabilities of
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Borrower and its Subsidiaries on that date plus (ii) to the extent not
----
included under clause (i), the aggregate Indebtedness evidenced by the
Notes on that date, in each case as determined in accordance with GAAP,
consistently applied.
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"Debtor Relief Laws" means the Bankruptcy Code of the United States of
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America, as amended from time to time, and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws
from time to time in effect affecting the rights of creditors generally.
"Default" means any event that, with the giving of any applicable
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notice or passage of time specified in Section 9.1, or both, would be an
---
Event of Default.
"Default Rate" means the interest rate prescribed in Section 3.7.
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"Designated Deposit Account" means a deposit account to be maintained
--------------------------
by Borrower with ▇▇▇▇▇ Fargo Bank, National Association or one of its
Affiliates, as from time to time designated by Borrower by written
notification to the Administrative Agent.
"Designated Eurodollar Market" means, with respect to any Eurodollar
----------------------------
Rate Loan, the London Eurodollar Market.
"Disqualified Stock" means any capital stock, warrants, options or
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other rights to acquire capital stock (but excluding any debt security
which is conver tible, or exchangeable, for capital stock), which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the Maturity Date.
"Disposition" means the sale, transfer or other disposition in any
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single transaction or series of related transactions of any asset, or group
of related assets, of Borrower or any of its Subsidiaries (a) which asset
or assets constitute a line of business or substantially all the assets of
Borrower or the Subsidiary or (b) the aggregate amount of the Net Cash
Sales Proceeds of such assets is more than $100,000, other than (i)
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inventory or other assets sold or otherwise disposed of in the ordinary
course of business of Borrower or its Subsidiary and (ii) equipment sold or
otherwise disposed of where substantially similar equipment in replacement
thereof has theretofore been acquired, or thereafter within 90 days is
acquired, by Borrower or its Subsidiary.
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"Distribution" means, with respect to any shares of capital stock or
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any warrant or option to purchase an equity security or other equity
security issued by a Person, (a) the retirement, redemption, purchase or
other acquisition for Cash or for Property by such Person of any such
security, (b) the declaration or (without duplication) payment by such
Person of any dividend in Cash or in Property on or with respect to any
such security, (c) any Investment by such Person in the holder of 5% or
more of any such security if a purpose of such Investment is to avoid
characterization of the transaction as a Distribution and (d) any other
payment in Cash or Property by such Person constituting a distribution
under applicable Laws with respect to such security.
"Dollars" or "$" means United States of America dollars.
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"Domestic Subsidiary" means a Subsidiary of Borrower that is not a
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Foreign Subsidiary.
"EBITDA" means, with respect to any fiscal period, the sum of (a) Net
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Income for that period, plus (b) any non-operating non-recurring loss
----
reflected in such Net Income, minus (c) any non-operating non-recurring
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gain reflected in such Net Income, plus (d) Interest Expense of Borrower
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and its Subsidiaries for that period, plus (e) the aggregate amount of
----
federal and state taxes on or measured by income of Borrower and its
Subsidiaries for that period (whether or not payable during that period),
plus (f) depreciation, amortization and all other non-cash expenses of
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Borrower and its Subsidiaries for that period, in each case as determined
in accordance with GAAP, consistently applied.
"Eligible Assignee" means (a) another Lender, (b) with respect to any
-----------------
Lender, any Affiliate of that Lender, (c) any commercial bank having total
assets of $10,000,000,000 or more, (d) any (i) savings bank, savings and
loan association or similar financial institution or (ii) insurance company
engaged in the business of writing insurance which, in either case (A) has
total assets of $10,000,000,000 or more, (B) is engaged in the business of
lending money and extending credit under credit facilities substantially
similar to those extended under this Agreement and (C) is operationally and
procedurally able to meet the obligations of a Lender hereunder to the same
degree as a commercial bank and (e) any other financial institution
(including a mutual fund or other fund) having total assets of
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$10,000,000,000 or more which meets the requirements set forth in
subclauses (B) and (C) of clause (d) above; provided that each Eligible
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Assignee must either (aa) be organized under the Laws of the United States
of America, any State thereof or the District of Columbia or (bb) be
organized under the Laws of the Cayman Islands or any country which is a
member of the
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Organization for Economic Cooperation and Development, or a political
subdivision of such a country, and (i) act hereunder through a branch,
agency or funding office located in the United States of America and (ii)
be exempt from withholding of tax on interest and deliver the documents
related thereto pursuant to Section 11.21.
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"ERISA" means the Employee Retirement Income Security Act of 1974, and
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any regulations issued pursuant thereto, as amended or replaced and as in
effect from time to time.
"ERISA Affiliate" means each Person (whether or not incorporated)
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which is required to be aggregated with Borrower pursuant to Section 414 of
the Code.
"Eurodollar Banking Day" means any Banking Day on which dealings in
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Dollar deposits are conducted by and among banks in the Designated
Eurodollar Market.
"Eurodollar Lending Office" means, as to each Lender, its office or
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branch so designated by written notice to Borrower and the Administrative
Agent as its Eurodollar Lending Office. If no Eurodollar Lending Office is
designated by a Lender, its Eurodollar Lending Office shall be its office
at its address for purposes of notices hereunder.
"Eurodollar Market" means a regular established market located outside
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the United States of America by and among banks for the solicitation, offer
and acceptance of Dollar deposits in such banks.
"Eurodollar Obligations" means eurocurrency liabilities, as defined in
----------------------
Regulation D or any comparable regulation of any Governmental Agency having
jurisdiction over any Lender.
"Eurodollar Period" means, as to each Eurodollar Rate Loan, the period
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commencing on the date specified by Borrower pursuant to Section 2.1(b) and
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ending 1, 2, 3 or 6 months (or, with the written consent of all of the
Lenders, any other period) thereafter, as specified by Borrower in the
applicable Request for Loan; provided that:
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(a) The first day of any Eurodollar Period shall be a Eurodollar
Banking Day;
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(b) Any Eurodollar Period that would otherwise end on a day that
is not a Eurodollar Banking Day shall be extended to the immediately
succeeding Eurodollar Banking Day unless such Eurodollar Banking Day
falls in another calendar month, in which case such Eurodollar Period
shall end on the immediately preceding Eurodollar Banking Day;
(c) Borrower may not specify a Eurodollar Period that extends
beyond the next Amortization Date unless the aggregate principal
amount of the Eurodollar Loans having a Eurodollar Period ending after
such Amortization Date does not exceed the Commitment (after giving
effect to any reduction thereto scheduled to be made on such
Amortization Date pursuant to Section 2.5); and
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(d) No Eurodollar Period shall extend beyond the Maturity Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan, the
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average of the interest rates per annum (rounded upward, if necessary, to
the next 1/16 of 1%) at which deposits in Dollars are offered to the
Administrative Agent in the Designated Eurodollar Market at or about 11:00
a.m. local time in the Designated Eurodollar Market, two (2) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period in an
aggregate amount approximately equal to the amount of the Advance to be
made by the Administrative Agent with respect to such Eurodollar Rate Loan
and for a period of time comparable to the number of days in the applicable
Eurodollar Period.
"Eurodollar Rate Advance" means an Advance made hereunder and
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specified to be a Eurodollar Rate Advance in accordance with Article 2.
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"Eurodollar Rate Loan" means a Loan made hereunder and specified to
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be a Eurodollar Rate Loan in accordance with Article 2.
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"Event of Default" shall have the meaning provided in Section 9.1.
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"Federal Funds Rate" means, as of any date of determination, the rate
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set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such date opposite the caption
"Federal Funds (Effective)". If for any relevant date such rate is not yet
published in H.15(519),
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the rate for such date will be the rate set forth in the daily statistical
release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the
Federal Reserve Lender of New York (including any such successor, the
"Composite 3:30 p.m. Quotation") for such date under the caption "Federal
Funds Effective Rate". If on any relevant date the appropriate rate for
such date is not yet published in either H.15(519) or the Composite 3:30
p.m. Quotations, the rate for such date will be the arithmetic mean of the
rates for the last transaction in overnight Federal funds arranged prior to
9:00 a.m. (New York City time) on that date by each of three leading
brokers of Federal funds transactions in New York City selected by the
Administrative Agent. For purposes of this Agreement, any change in the
Alternate Base Rate due to a change in the Federal Funds Rate shall be
effective as of the opening of business on the effective date of such
change.
"Fiscal Quarter" means the fiscal quarter of Borrower ending on each
--------------
October 31, January 31, April 30 and July 31.
"Fiscal Year" means the fiscal year of Borrower ending on each July 31.
-----------
"Foreign Subsidiary" means a Subsidiary of Borrower that (a) is
------------------
organized under the Laws of a jurisdiction other than the United States of
----------
America, any State thereof or the District of Columbia and (b) conducts all
or substantially all of its business outside the United States of America.
"Funded Debt Ratio" means, as of the last day of each Fiscal Quarter,
-----------------
the ratio of (a) the sum of (i) all Indebtedness of Borrower and its
-------- ------
Subsidiaries on that date other than Indebtedness evidenced by the Notes
----------
plus (ii) the average daily balance of Indebtedness evidenced by the Notes
----
for the period consisting of the four (4) Fiscal Quarters ended on that
date (or, if such period extends prior to the Closing Date, for the period
commencing on the Closing Date and ended on that date) to (b) EBITDA for
--
the fiscal period consisting of the four (4) Fiscal Quarters ended on that
date.
"GAAP" means, as of any date of determination, accounting principles (a)
----
set forth as generally accepted in then currently effective Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (b) set forth as generally accepted in then currently
effective Statements of the Financial Accounting Standards Board or (c)
that are then approved by such other entity as may be approved by a
significant segment of the accounting profession in the United States of
America. The term
-11-
"consistently applied," as used in connection therewith,
--------------------
means that the accounting principles applied are consistent in all material
respects with those applied at prior dates or for prior periods.
"Government Securities" means readily marketable (a) direct full faith
---------------------
and credit obligations of the United States of America or obligations
guaranteed by the full faith and credit of the United States of America and
(b) obligations of an agency or instrumentality of, or corporation owned,
controlled or sponsored by, the United States of America that are generally
considered in the securities industry to be implicit obligations of the
United States of America.
"Governmental Agency" means (a) any international, foreign, federal,
-------------------
state, county or municipal government, or political subdivision thereof,
(b) any governmental or quasi-governmental agency, authority, board,
bureau, commission, department, instrumentality or public body or (c) any
court or administrative tribunal of competent jurisdiction.
"Guaranty Obligation" means, as to any Person, any (a) guarantee by that
-------------------
Person of Indebtedness of, or other obligation performable by, any other
Person or (b) assurance given by that Person to an obligee of any other
Person with respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
---------
obligation or any collateral security therefor, any agreement to provide
funds (by means of loans, capital contributions or otherwise) to such other
Person, any agreement to support the solvency or level of any balance sheet
item of such other Person or any "keep-well" or other arrangement of
whatever nature given for the purpose of assuring or holding harmless such
obligee against loss with respect to any obligation of such other Person;
provided, however, that the term Guaranty Obligation shall not include
-------- -------
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guaranty Obligation in respect of
Indebtedness shall be deemed to be an amount equal to the stated or
determinable amount of the related Indebtedness (unless the Guaranty
Obligation is limited by its terms to a lesser amount, in which case to
the extent of such amount) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
Person in good faith. The amount of any other Guaranty Obligation shall be
deemed to be zero unless and until the amount thereof has been (or in
accordance with Financial Accounting Standards Board Statement No. 5
should be) quantified and reflected or disclosed in the consolidated
financial statements (or notes thereto) of Borrower.
-12-
"Hazardous Materials" means substances defined as "hazardous substances"
-------------------
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. (S) 9601 et seq., or as "hazardous",
"toxic" or "pollutant" substances or as "solid waste" pursuant to the
Hazardous Materials Transportation Act, 49 U.S.C. (S) 1801, et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901, et seq., or as
"friable asbestos" pursuant to the Toxic Substances Control Act, 15 U.S.C.
(S) 2601 et seq. or any other applicable Hazardous Materials Law, in each
case as such Laws are amended from time to time.
"Hazardous Materials Laws" means all Laws governing the treatment,
------------------------
transportation or disposal of Hazardous Materials applicable to any of the
Real Property.
"Indebtedness" means, as to any Person (without duplication), (a)
------------
indebtedness of such Person for borrowed money or for the deferred purchase
price of Property (excluding trade and other accounts payable in the
---------
ordinary course of business in accordance with ordinary trade terms),
including any Guaranty Obligation for any such indebtedness, (b)
---------
indebtedness of such Person of the nature described in clause (a) that is
-
non-recourse to the credit of such Person but is secured by assets of such
Person, to the extent of the fair market value of such assets as determined
in good faith by such Person, (c) Capital Lease Obligations of such Person,
(d) indebtedness of such Person arising under bankers' acceptance
facilities or under facilities for the discount of accounts receivable of
such Person, (e) any direct or contingent obligations of such Person under
letters of credit issued for the account of such Person and (f) any net
obligations of such Person under Interest Rate Protection Agreements.
"Intangible Assets" means assets that are considered intangible assets
-----------------
under GAAP, including customer lists, goodwill, covenants not to compete,
---------
copyrights, trade names, trademarks and patents.
"Interest Expense" means, with respect to any Person and as of the last
----------------
day of any fiscal period, the sum of (a) all interest, fees, charges and
------
related expenses paid or payable (without duplication) for that fiscal
period by that Person to a lender in connection with borrowed money
(including any obligations for fees, charges and related expenses payable
---------
to the issuer of any letter of credit) or the deferred purchase price of
assets that are considered "interest expense" under GAAP plus (b) the
----
portion of rent paid or payable (without duplication) for that fiscal
period by that Person under Capital Lease
-13-
Obligations that should be treated as interest in accordance with Financial
Accounting Standards Board Statement No. 13.
"Interest Rate Protection Agreement" means a written agreement between
----------------------------------
Borrower and one or more financial institutions providing for "swap",
"cap", "collar" or other interest rate protection with respect to any
Indebtedness.
"Investment" means, when used in connection with any Person, any
----------
investment by or of that Person, whether by means of purchase or other
acquisition of stock or other securities of any other Person or by means of
a loan, advance creating a debt, capital contribution, guaranty or other
debt or equity participation or interest in any other Person, including any
---------
partnership and joint venture interests of such Person. The amount of any
Investment shall be the amount actually invested (minus any return of
-----
capital with respect to such Investment which has actually been received in
Cash or has been converted into Cash), without adjustment for subsequent
increases or decreases in the value of such Investment.
"Laws" means, collectively, all international, foreign, federal, state
----
and local statutes, treaties, rules, regulations, ordinances, codes and
administrative or judicial precedents.
"Lender" means each lender whose name is set forth in the signature
------
pages of this Agreement and each lender which may hereafter become a party
to this Agreement pursuant to Section 11.8.
----
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
----
assignment for security, security interest, encumbrance, lien or charge of
any kind, whether voluntarily incurred or arising by operation of Law or
otherwise, affecting any Property, including any conditional sale or other
---------
title retention agreement, any lease in the nature of a security interest,
and/or the filing of any financing statement (other than a precautionary
----- ----
financing statement with respect to a lease that is not in the nature of a
security interest) under the Uniform Commercial Code or comparable Law of
any jurisdiction with respect to any Property.
"Loan" means the aggregate of the Advances made at any one time by the
----
Lenders pursuant to Section 2.1.
---
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Collateral Documents, any Secured Interest Rate Protection Agreement and
any
-14-
other agreements of any type or nature hereafter executed and delivered
by Borrower to the Administrative Agent or to any Lender in any way
relating to or in furtherance of this Agreement, in each case either as
originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation G or U.
"Material Adverse Effect" means any set of circumstances or events which
-----------------------
(a) has had or could reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document,
(b) has been or could reasonably be expected to be material and adverse to
the business or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole or (c) has materially impaired or could
reasonably be expected to materially impair the ability of Borrower to
perform the Obligations.
"Maturity Date" means September 30, 2002.
-------------
"Monthly Payment Date" means the last day of each calendar month.
--------------------
"Multiemployer Plan" means any employee benefit plan of the type
------------------
described in Section 4001(a)(3) of ERISA to which Borrower or any of its
ERISA Affiliates contributes or is obligated to contribute.
"Negative Pledge" means a Contractual Obligation which contains a
---------------
covenant binding on Borrower or any of its Subsidiaries that prohibits
Liens on any of its Property, other than (a) any such covenant contained in
----- ----
a Contractual Obligation granting or relating to a particular Lien which
affects only the Property that is the subject of such Lien and (b) any such
covenant that does not apply to Liens securing the Obligations.
"Net Cash Issuance Proceeds" means, with respect to the issuance of any
--------------------------
debt security or equity security by Borrower or any of its Subsidiaries,
the Cash proceeds received by or for the account of Borrower or such
Subsidiary in consideration of such issuance net of (a) underwriting
--- --
discounts and commissions actually paid to any Person not an Affiliate of
Borrower and (b) professional fees and disbursements actually paid in
connection therewith.
"Net Cash Sales Proceeds" means, with respect to any Disposition, the
-----------------------
sum of (a) the Cash proceeds received by or for the account of Borrower and
------
its
-15-
Subsidiaries from such Disposition plus (b) the amount of Cash received
----
by or for the account of Borrower and its Subsidiaries upon the sale,
collection or other liquidation of any proceeds that are not Cash from such
Disposition, in each case net of (i) any amount required to be paid to any
------
Person owning an interest in the assets disposed of, (ii) any amount
applied to the repayment of Indebtedness secured by a Lien permitted under
Section 6.9 on the asset disposed of, (iii) any transfer, income or other
---
taxes payable as a result of such Disposition, (iv) professional fees and
expenses, fees due to any Governmental Agency, broker's commissions and
other out-of-pocket costs of sale actually paid to any Person that is not
an Affiliate of Borrower attributable to such Disposition and (v) any
reserves established in accordance with GAAP in connection with such
Disposition.
"Net Income" means, with respect to any fiscal period, the consolidated
----------
net income of Borrower and its Subsidiaries for that period, determined in
accordance with GAAP, consistently applied.
"Note" means any of the promissory notes made by Borrower to a Lender
----
evidencing Advances under that Lender's Pro Rata Share of the Commitment,
substantially in the form of Exhibit C, either as originally executed or as
---------
the same may from time to time be supplemented, modified, amended, renewed,
extended or supplanted.
"Obligations" means all present and future obligations of every kind or
-----------
nature of Borrower at any time and from time to time owed to the
Administrative Agent or the Lenders or any one or more of them, under any
one or more of the Loan Documents, whether due or to become due, matured or
unmatured, liquidated or unliquidated, or contingent or noncontingent,
including obligations of performance as well as obligations of payment, and
---------
including interest that accrues after the commencement of any proceeding
---------
under any Debtor Relief Law by or against Borrower.
"Opinion of Counsel" means the favorable written legal opinion of
------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to Borrower, substantially in the form
of Exhibit D, together with copies of all factual certificates and legal
---------
opinions delivered to such counsel in connection with such opinion upon
which such counsel has relied.
"Party" means any Person other than the Administrative Agent and the
-----
Lenders, which now or hereafter is a party to any of the Loan Documents.
-16-
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
thereof established under ERISA.
"Pension Plan" means any "employee pension benefit plan" (as such term
------------
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan,
----- ----
which is subject to Title IV of ERISA and is maintained by Borrower or to
which Borrower contributes or has an obligation to contribute.
"Permitted Acquisition" means an Acquisition by Borrower or one of its
---------------------
Subsidiaries (a) of a Person engaged in the same or a closely-related line
of business as Borrower and (b) that, taken together with all transactions
related thereto, does not involve (i) Cash payments by Borrower or any of
its Subsidiaries (other than for customary transactional expenses) in
----------
excess of $15,000,000 or (ii) total payments (including Cash, Seller
---------
Subordinated Notes, capital stock and other Property) by Borrower or any of
its Subsidiaries (other than for customary transactional expenses) in
----- ----
excess of $20,000,000; provided that (A) the amount of the payments
--------
described in clauses (b)(i) and (b)(ii) above shall include Borrower's best
- - - --
estimate at the time of the Permitted Acquisition of future potential or
contingent payments, which estimate shall remain applicable notwithstanding
actual payments in excess of such best estimate and (B) all Cash payments
or prepayments payable under any Seller Subordinated Note during the
eighteen (18) months immediately following the Permitted Acquisition shall
be treated as Cash for purposes of clause (b)(i).
- -
"Permitted Encumbrances" means:
----------------------
(a) Inchoate Liens incident to construction on or maintenance of
Property; or Liens incident to construction on or maintenance of
Property now or hereafter filed of record for which adequate reserves
have been set aside (or deposits made pursuant to applicable Law) and
which are being contested in good faith by appropriate proceedings and
have not proceeded to judgment, provided that, by reason of nonpayment
--------
of the obligations secured by such Liens, no such Property is subject
to a material impending risk of loss or forfeiture;
(b) Liens for taxes and assessments on Property which are not yet
past due; or Liens for taxes and assessments on Property for which
adequate reserves have been set aside and are being contested in good
faith by appropriate proceedings and have not proceeded to judgment,
provided that, by reason of nonpayment of the obligations secured by
--------
-17-
such Liens, no such Property is subject to a material impending risk
of loss or forfeiture;
(c) defects and irregularities in title to any Property which in
the aggregate do not materially impair the fair market value or use of
the Property for the purposes for which it is or may reasonably be
expected to be held;
(d) easements, exceptions, reservations, or other agreements for
the purpose of pipelines, conduits, cables, wire communication lines,
power lines and substations, streets, trails, walkways, drainage,
irrigation, water, and sewerage purposes, dikes, canals, ditches, the
removal of oil, gas, coal, or other minerals, and other like purposes
affecting Property which in the aggregate do not materially burden or
impair the fair market value or use of such Property for the purposes
for which it is or may reasonably be expected to be held;
(e) easements, exceptions, reservations, or other agreements for
the purpose of facilitating the joint or common use of Property in or
adjacent to a shopping center or similar project affecting Property
which in the aggregate do not materially burden or impair the fair
market value or use of such Property for the purposes for which it is
or may reasonably be expected to be held;
(f) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, the use of any Property;
(g) rights reserved to or vested in any Governmental Agency to
control or regulate, or obligations or duties to any Governmental
Agency with respect to, any right, power, franchise, grant, license,
or permit;
(h) present or future zoning laws and ordinances or other laws and
ordinances restricting the occupancy, use, or enjoyment of Property;
(i) statutory Liens, other than those described in clauses (a) or
-
(b) above, arising in the ordinary course of business with respect to
--
obligations which are not delinquent or are being contested in good
faith, provided that, if delinquent, adequate reserves have been set
--------
aside with
-18-
respect thereto and, by reason of nonpayment, no Property
is subject to a material impending risk of loss or forfeiture;
(j) covenants, conditions, and restrictions affecting the use of
Property which in the aggregate do not materially impair the fair
market value or use of the Property for the purposes for which it is
or may reasonably be expected to be held;
(k) rights of tenants under leases and rental agreements covering
Property entered into in the ordinary course of business of the Person
owning such Property;
(l) Liens consisting of pledges or deposits to secure obligations
under workers' compensation laws or similar legislation, including
Liens of judgments thereunder which are not currently dischargeable;
(m) Liens consisting of pledges or deposits of Property to secure
performance in connection with operating leases made in the ordinary
course of business, provided the aggregate value of all such pledges
--------
and deposits in connection with any such lease does not at any time
exceed 20% of the annual fixed rentals payable under such lease;
(n) Liens consisting of deposits of Property to secure bids made
with respect to, or performance of, contracts (other than contracts
----- ----
creating or evidencing an extension of credit to the depositor);
(o) Liens consisting of any right of offset, or statutory bankers'
lien, on bank deposit accounts maintained in the ordinary course of
business so long as such bank deposit accounts are not established or
maintained for the purpose of providing such right of offset or
bankers' lien;
(p) Liens consisting of deposits of Property to secure statutory
obligations of Borrower;
(q) Liens consisting of deposits of Property to secure (or in lieu
of) surety, appeal or customs bonds;
(r) Liens created by or resulting from any litigation or legal
proceeding in the ordinary course of business which is currently being
-19-
contested in good faith by appropriate proceedings, provided that,
--------
adequate reserves have been set aside and no material Property is
subject to a material impending risk of loss or forfeiture; and
(s) other non-consensual Liens incurred in the ordinary course of
business but not in connection with the incurrence of any
Indebtedness, which do not in the aggregate, when taken together with
all other Liens, materially impair the fair market value or use of the
Property for the purposes for which it is or may reasonably be
expected to be held.
"Permitted Right of Others" means a Right of Others consisting of (a)
-------------------------
an interest (other than a legal or equitable co-ownership interest, an option
----- ----
or right to acquire a legal or equitable co-ownership interest and any interest
of a ground lessor under a ground lease), that does not materially impair the
fair market value or use of Property for the purposes for which it is or may
reasonably be expected to be held, (b) an option or right to acquire a Lien that
would be a Permitted Encumbrance, (c) the subordination of a lease or sublease
in favor of a financing entity and (d) a license, or similar right, of or to
Intangible Assets granted in the ordinary course of business.
"Person" means any individual or entity, including a trustee,
------ ---------
corporation, limited liability company, general partnership, limited
partnership, joint stock company, trust, estate, unincorporated organization,
business association, firm, joint venture, Governmental Agency, or other entity.
"Pledge Agreement" means the pledge agreement to be executed and
----------------
delivered pursuant to Article 8 by Borrower in the form of Exhibit E,
--------- ---------
either as originally executed or as it may from time to time be supplemented,
modified, amended, extended or supplanted.
"Pledged Collateral" means the certificates evidencing (a) all of the
------------------
shares of capital stock and other equity interests held by Borrower in all
Domestic Subsidiaries and (b) sixty-five percent (65%) of the shares of capital
stock and other equity interests held by Borrower in all Foreign Subsidiaries.
"Pricing Certificate" means a certificate in the form of Exhibit F,
------------------- ---------
properly completed and signed by a Senior Officer of Borrower.
"Pricing Period" means (a) the period commencing on the Closing Date
--------------
and ending on the date that is six (6) months after the Closing Date, (b) the
-20-
period commencing on the date that is immediately after the date that is
six (6) months after the Closing Date and ending on June 15, 1998, (c) the
period commencing on June 16, 1998, and each subsequent June 16, and ending
on the next following September 15, (d) the period commencing on September
16, 1998, and each subsequent September 16, and ending on the next
following December 15, (e) the period commencing on December 16, 1998, and
each subsequent December 16, and ending on the next following March 15 and
(f) the period commencing on March 15, 1999, and each subsequent March 15,
and ending on the next following June 16.
"Prime Rate" means the rate of interest publicly announced from time to
----------
time by the Administrative Agent in San Francisco, California (or other
headquarters city of the Administrative Agent), as its "prime rate." The
"prime rate" is one of several base rates used by the Administrative Agent
and serves as the basis upon which effective rates of interest are
calculated for loans and other credits making reference thereto. The
"prime rate" is evidenced by the recording thereof after its announcement
in such internal publication or publications as the Administrative Agent
may designate. Any change in the Prime Rate announced by the
Administrative Agent shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Prior Credit Agreement" means that certain Credit Agreement dated as of
----------------------
October 25, 1996 between Borrower and ▇▇▇▇▇ Fargo Bank, National
Association.
"Projections" means the projected financial information dated August 14,
-----------
1997 prepared by Borrower and contained in the Confidential Offering
Memorandum dated August 1997 furnished to the Lenders.
"Property" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, or tangible or intangible.
"Pro Rata Share" means, with respect to each Lender, the percentage of
--------------
the Commitment set forth opposite the name of that Lender on Schedule 1.1,
------------
as such percentage may be increased or decreased pursuant to a Commitment
Assignment and Acceptance executed in accordance with Section 11.8.
----
"Quarterly Payment Date" means each September 30, December 31, March 31
----------------------
and June 30.
-21-
"Real Property" means, as of any date of determination, all real
-------------
property then or theretofore owned, leased or occupied by any of Borrower.
"Regulation D" means Regulation D, as at any time amended, of the Board
------------
of Governors of the Federal Reserve System, or any other regulation in
substance substituted therefor.
"Regulations G and U" means Regulations G and U, as at any time amended,
-------------------
of the Board of Governors of the Federal Reserve System, or any other
regulations in substance substituted therefor.
"Request for Loan" means a written request for a Loan substantially in
----------------
the form of Exhibit G, signed by a Responsible Official of Borrower, on
---------
behalf of Borrower, and properly completed to provide all information
required to be included therein.
"Requirement of Law" means, as to any Person, the articles or
------------------
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any Law, or judgment, award,
decree, writ or determination of a Governmental Agency, in each case
applicable to or binding upon such Person or any of its Property or to
which such Person or any of its Property is subject.
"Requisite Lenders" means (a) as of any date of determination if the
-----------------
Commitment is then in effect, Lenders having in the aggregate 66-2/3% or
more of the Commitment then in effect and (b) as of any date of
determination if the Commitment has then been suspended or terminated and
there is then any Indebtedness evidenced by the Notes, Lenders holding
Notes evidencing in the aggregate 66-2/3% or more of the aggregate
Indebtedness then evidenced by the Notes.
"Responsible Official" means (a) any Senior Officer of Borrower and (b)
--------------------
any other responsible official of Borrower so designated in a written
notice thereof from a Senior Officer to the Administrative Agent. The
Lenders shall be entitled to conclusively rely upon any document or
certificate that is signed or executed by a Responsible Official of
Borrower or any of its Subsidiaries as having been authorized by all
necessary corporate, partnership and/or other action on the part of
Borrower or such Subsidiary.
"Revolver Termination Date" means September 30, 2000.
-------------------------
-22-
"Right of Others" means, as to any Property in which a Person has an
---------------
interest, any legal or equitable right, title or other interest (other than
a Lien) held by any other Person in that Property, and any option or right
held by any other Person to acquire any such right, title or other interest
in that Property, including any option or right to acquire a Lien;
---------
provided, however, that (a) no covenant restricting the use or disposition
--------
of Property of such Person contained in any Contractual Obligation of such
Person and (b) no provision contained in a contract creating a right of
payment or performance in favor of a Person that conditions, limits,
restricts, diminishes, transfers or terminates such right shall be deemed
to constitute a Right of Others.
"Secured Interest Rate Protection Agreement" means an Interest Rate
------------------------------------------
Protection Agreement between Borrower and a Lender (or an Affiliate of a
Lender).
"Security Agreement" means the security agreement to be executed and
------------------
delivered pursuant to Article 8 by Borrower and the Subsidiary Guarantors,
---------
in the form of Exhibit H, either as originally executed or as it may from
---------
time to time be supplemented, modified, amended, extended or supplanted.
"Seller Subordinated Notes" means promissory notes of Borrower payable
-------------------------
to the sellers of a business issued in connection with a Permitted
Acquisition that meet the requirements of subclauses (ii) through (vi) of
-- --
clause (b) of the definition of Subordinated Obligations.
-
"Senior Officer" means (a) the chief executive officer, (b) the
--------------
president, (c) any executive vice president, (d) the chief financial
officer or (e) the treasurer, in each case of Borrower.
"Special Eurodollar Circumstance" means the application or adoption
-------------------------------
after the Closing Date of any Law or interpretation, or any change therein
or thereof, or any change in the interpretation or administration thereof
by any Governmental Agency, central bank or comparable authority charged
with the interpretation or administration thereof, or compliance by any
Lender or its Eurodollar Lending Office with any request or directive
(whether or not having the force of Law) of any such Governmental Agency,
central bank or comparable authority.
"Stockholders' Equity" means, as of any date of determination and with
--------------------
respect to any Person, the consolidated stockholders' equity of the Person
as of that date determined in accordance with GAAP; provided that there
--------
shall be
-23-
excluded from Stockholders' Equity any amount attributable to
Disqualified Stock.
"Subordinated Obligations" means (a) any Seller Subordinated Notes and
------------------------
(b) any other Indebtedness of Borrower that (i) does not have any scheduled
principal payment, mandatory principal prepayment or sinking fund payment
due prior to September 30, 2003, (ii) is not secured by any Lien on any
Property of Borrower or any of its Subsidiaries, (iii) is not guarantied by
any Subsidiary of Borrower, (iv) is subordinated by its terms in right of
payment to the Obligations pursuant to provisions acceptable to the
Requisite Lenders, (v) is subject to such financial and other covenants and
events of defaults as may be acceptable to the Requisite Lenders and (vi)
is subject to customary interest blockage and delayed acceleration
provisions as may be acceptable to the Requisite Lenders.
"Subsidiary" means, as of any date of determination and with respect to
----------
any Person, any corporation, limited liability company or partnership
(whether or not, in any case, characterized as such or as a "joint
venture"), whether now existing or hereafter organized or acquired: (a) in
the case of a corporation or limited liability company, of which a majority
of the securities having ordinary voting power for the election of
directors or other governing body (other than securities having such power
only by reason of the happening of a contingency) are at the time
beneficially owned by such Person and/or one or more Subsidiaries of such
Person, or (b) in the case of a partnership, of which a majority of the
partnership or other ownership interests are at the time beneficially owned
by such Person and/or one or more of its Subsidiaries.
"Subsidiary Guarantors" means all Subsidiaries of Borrower except for
--------------------- ------
any Subsidiary not engaged in an active business that has total assets of
$10,000 or less.
"Subsidiary Guaranty" means the continuing guaranty of the Obligations
-------------------
to be executed and delivered pursuant to Article 8 by each Subsidiary
---------
Guarantor, in the form of Exhibit I, either as originally executed or as it
---------
may from time to time be supplemented, modified, amended, extended or
supplanted.
"to the best knowledge of" means, when modifying a representation,
------------------------
warranty or other statement of any Person, that the fact or situation
described therein is known by the Person (or, in the case of a Person other
than a natural Person, known by a Responsible Official of that Person)
making the representation, warranty or other statement, or with the
exercise of reasonable
-24-
due diligence under the circumstances (in accordance with the standard of
what a reasonable Person in similar circumstances would have done) would
have been known by the Person (or, in the case of a Person other than a
natural Person, would have been known by a Responsible Official of that
Person).
"Trailing EBITDA" means, as of the last day of each Fiscal Quarter,
---------------
EBITDA for the fiscal period consisting of the four (4) Fiscal Quarters
ended on that date.
"type", when used with respect to any Loan or Advance, means the
----
designation of whether such Loan or Advance is an Alternate Base Rate Loan
or Advance, or a Eurodollar Rate Loan or Advance.
"Wholly-Owned Subsidiary" means a Subsidiary of Borrower, 100% of the
-----------------------
capital stock or other equity interest of which is owned, directly or
indirectly, by Borrower, except for director's qualifying shares required
------
by applicable Laws.
1.2 Use of Defined Terms. Any defined term used in the plural shall
--------------------
refer to all members of the relevant class, and any defined term used in the
singular shall refer to any one or more of the members of the relevant class.
1.3 Accounting Terms. All accounting terms not specifically defined
----------------
in this Agreement shall be construed in conformity with, and all financial data
required to be submitted by this Agreement shall be prepared in conformity with,
GAAP applied on a consistent basis, except as otherwise specifically prescribed
------
herein. In the event that GAAP changes during the term of this Agreement such
that the covenants contained in Sections 6.12 through 6.15, inclusive, would
---- ----
then be calculated in a different manner or with different components, (a)
Borrower and the Lenders agree to amend this Agreement in such respects as are
necessary to conform those covenants as criteria for evaluating Borrower's
financial condition to substantially the same criteria as were effective prior
to such change in GAAP and (b) Borrower shall be deemed to be in compliance with
the covenants contained in the aforesaid Sections if and to the extent that
Borrower would have been in compliance therewith under GAAP as in effect
immediately prior to such change, but shall have the obligation to deliver each
of the materials described in Article 7 to the Administrative Agent and the
---------
Lenders, on the dates therein specified, with financial data presented in a
manner which conforms with GAAP as in effect immediately prior to such change.
1.4 Rounding. Any financial ratios required to be maintained by
--------
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate
-25-
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed in this Agreement and rounding
the result up or down to the nearest number (with a round-up if there is no
nearest number) to the number of places by which such ratio is expressed in this
Agreement.
1.5 Exhibits and Schedules. All Exhibits and Schedules to this
----------------------
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.6 References to "Borrower and its Subsidiaries". Any reference
--------------------------------------------
herein to "Borrower and its Subsidiaries" or the like shall refer solely to
Borrower during such times, if any, as Borrower shall have no Subsidiaries.
1.7 Miscellaneous Terms. The term "or" is disjunctive; the term "and"
-------------------
is conjunctive. The term "shall" is mandatory; the term "may" is permissive.
Masculine terms also apply to females; feminine terms also apply to males. The
term "including" is by way of example and not limitation.
-26-
Article 2
LOANS
-----
2.1 Loans-General.
-------------
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time from the Closing Date through
the Revolver Termination Date, each Lender shall, pro rata according to
that Lender's Pro Rata Share of the then applicable Commitment, make
Advances to Borrower under the Commitment in such amounts as Borrower may
request that do not result in the aggregate principal amount outstanding
under the Notes to exceed the Commitment. Subject to the limitations set
forth herein, Borrower may borrow, repay and reborrow under the Commitment
without premium or penalty.
(b) Subject to the next sentence, each Loan shall be made
pursuant to a Request for Loan which shall specify the requested (i) date
of such Loan, (ii) type of Loan, (iii) amount of such Loan, and (iv) in the
case of a Eurodollar Rate Loan, the Eurodollar Period for such Loan. Unless
the Administrative Agent has notified, in its sole and absolute discretion,
Borrower to the contrary, a Loan may be requested by telephone by a
Responsible Official of Borrower, in which case Borrower shall confirm such
request by promptly delivering a Request for Loan (conforming to the
preceding sentence) in person or by telecopier to the Administrative Agent.
Administrative Agent shall incur no liability whatsoever hereunder in
acting upon any telephonic request for Loan purportedly made by a
Responsible Official of Borrower, and Borrower hereby agrees to indemnify
the Administrative Agent from any loss, cost, expense or liability as a
result of so acting.
(c) Promptly following receipt of a Request for Loan, the
Administrative Agent shall notify each Lender by telephone or telecopier
(and if by telephone, promptly confirmed by telecopier) of the date and
type of the Loan, the applicable Eurodollar Period, and that Lender's Pro
Rata Share of the Loan. Not later than 10:00 a.m., California time, on the
date specified for any Loan (which must be a Banking Day), each Lender
shall make its Pro Rata Share of the Loan in immediately available funds
available to the Administrative Agent at the Administrative Agent's Office.
Upon satisfaction or waiver of the applicable conditions set forth in
Article 8, all Advances shall be credited on that date in immediately
---------
available funds to the Designated Deposit Account.
-27-
(d) Unless the Requisite Lenders otherwise consent, each
Alternate Base Rate Loan shall be not less than $1,000,000, each Eurodollar
Rate Loan shall be not less than $1,000,000 and all Loans shall be in an
integral multiple of $500,000.
(e) The Advances made by each Lender under the Commitment shall
be evidenced by that Lender's Note.
(f) A Request for Loan shall be irrevocable upon the
Administrative Agent's first notification thereof.
(g) If no Request for Loan (or telephonic request for Loan
referred to in the second sentence of Section 2.1(b), if applicable) has
------
been made within the requisite notice periods set forth in Section 2.2 or
---
2.3 prior to the end of the Eurodollar Period for any outstanding
---
Eurodollar Rate Loan, then on the last day of such Eurodollar Period, such
Eurodollar Rate Loan shall be automatically converted into an Alternate
Base Rate Loan in the same amount.
2.2 Alternate Base Rate Loans. Each request by Borrower for an
-------------------------
Alternate Base Rate Loan shall be made pursuant to a Request for Loan (or
telephonic or other request for loan referred to in the second sentence of
Section 2.1(b), if applicable) received by the Administrative Agent, at the
------
Administrative Agent's Office, not later than 11:00 a.m. California time, on the
date (which must be a Banking Day) immediately prior to the date of the
requested Alternate Base Rate Loan. All Loans shall constitute Alternate Base
Rate Loans unless properly designated as a Eurodollar Rate Loan pursuant to
Section 2.3.
---
2.3 Eurodollar Rate Loans.
---------------------
(a) Each request by Borrower for a Eurodollar Rate Loan shall be
made pursuant to a Request for Loan (or telephonic or other request for
Loan referred to in the second sentence of Section 2.1(b), if applicable)
------
received by the Administrative Agent, at the Administrative Agent's Office,
not later than 9:00 a.m., California time, at least three (3) Eurodollar
Banking Days before the first day of the applicable Eurodollar Period.
(b) On the date which is two (2) Eurodollar Banking Days before
the first day of the applicable Eurodollar Period, the Administrative Agent
shall confirm its determination of the applicable Eurodollar Rate (which
determination shall be conclusive in the absence of manifest error) and
promptly
-28-
shall give notice of the same to Borrower and the Lenders by telephone or
telecopier (and if by telephone, promptly confirmed by telecopier).
(c) Unless the Administrative Agent and the Requisite Lenders
otherwise consent, no more than six (6) Eurodollar Rate Loans shall be out
standing at any one time.
(d) No Eurodollar Rate Loan may be requested during the
continuation of a Default or Event of Default.
(e) Nothing contained herein shall require any Lender to fund
any Eurodollar Rate Advance in the Designated Eurodollar Market.
2.4 Voluntary Reduction of Commitment. Borrower shall have the right,
---------------------------------
at any time and from time to time, without penalty or charge, upon at least five
(5) Banking Days' prior written notice by a Responsible Official of Borrower to
the Administrative Agent, voluntarily to reduce, permanently and irrevocably, in
aggregate principal amounts in an integral multiple of $500,000 but not less
than $2,500,000, or to terminate, all or a portion of the then undisbursed
portion of the Commitment. The Administrative Agent shall promptly notify the
Lenders of any reduction or termination of the Commitment under this Section.
2.5 Automatic Reduction of Commitment. On each Amortization Date, the
---------------------------------
Commitment shall automatically be reduced by the applicable Amortization Amount.
2.6 Optional Termination of Commitment. Following the occurrence of a
----------------------------------
Change in Control, the Requisite Lenders may in their sole and absolute
discretion elect, during the thirty (30) day period immediately subsequent to
the later of (a) such occurrence or (b) the earlier of (i) receipt of Borrower's
-------- -------
written notice to the Administrative Agent of such occurrence or (ii) if no such
notice has been received by the Administrative Agent, the date upon which the
Administrative Agent has actual knowledge thereof, to terminate the Commitment,
in which case the Commitment shall be terminated effective on the date which is
thirty (30) days subsequent to written notice from the Administrative Agent to
Borrower thereof.
2.7 Administrative Agent's Right to Assume Funds Available for
----------------------------------------------------------
Advances. Unless the Administrative Agent shall have been notified by any
--------
Lender no later than 10:00 a.m. on the Banking Day of the proposed funding by
the Administrative Agent of any Loan that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of the total amount
of such Loan,
-29-
the Administrative Agent may assume that such Lender has made such amount avail
able to the Administrative Agent on the date of the Loan and the Administrative
Agent may, in reliance upon such assumption, make available to Borrower a
corresponding amount. If the Administrative Agent has made funds available to
Borrower based on such assumption and such corresponding amount is not in fact
made available to the Administrative Agent by such Lender, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent promptly shall
notify Borrower and Borrower shall pay such corresponding amount to the
Administrative Agent. The Administrative Agent also shall be entitled to recover
from such Lender interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to the daily Federal Funds Rate.
Nothing herein shall be deemed to relieve any Lender from its obligation to
fulfill its share of the Commitment or to prejudice any rights which the
Administrative Agent or Borrower may have against any Lender as a result of any
default by such Lender hereunder.
2.8 Term Loan Conversion. On the Revolver Termination Date, the
--------------------
aggregate principal Indebtedness evidenced by the Notes shall automatically be
converted to a term loan, payable on each Amortization Date by the Amortization
Amount. The Notes will continue to evidence the outstanding Indebtedness
incurred under the Commitment subsequent to such conversion.
2.9 Collateral and Guaranty. The Obligations shall be guarantied
-----------------------
pursuant to the Subsidiary Guaranty and secured by a first priority perfected
Lien on the Collateral pursuant to the Collateral Documents.
-30-
Article 3
PAYMENTS AND FEES
-----------------
3.1 Principal and Interest.
----------------------
(a) Interest shall be payable on the outstanding daily unpaid
principal amount of each Advance from the date thereof until payment in
full is made and shall accrue and be payable at the rates set forth or
provided for herein before and after Default, before and after maturity,
before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law, with interest on overdue interest
at the Default Rate to the fullest extent permitted by applicable Laws.
(b) Interest accrued on each Alternate Base Rate Loan shall be
due and payable on each Monthly Payment Date. Except as otherwise provided
------
in Section 3.7, the unpaid principal amount of any Alternate Base Rate Loan
---
shall bear interest at a fluctuating rate per annum equal to the Alternate
Base Rate plus the Applicable Alternate Base Rate Margin. Each change in
----
the interest rate under this Section 3.1(b) due to a change in the
------
Alternate Base Rate shall take effect simultaneously with the corresponding
change in the Alternate Base Rate.
(c) Interest accrued on each Eurodollar Rate Loan which is for a
term of three months or less shall be due and payable on the last day of
the related Eurodollar Period. Interest accrued on each other Eurodollar
Rate Loan shall be due and payable on the date which is three months after
the date such Eurodollar Rate Loan was made (and, in the event that all of
the Lenders have approved a Eurodollar Period of longer than six months,
every three months thereafter through the last day of the Eurodollar
Period) and on the last day of the related Eurodollar Period. Except as
------
otherwise provided in Section 3.7, the unpaid principal amount of any
---
Eurodollar Rate Loan shall bear interest at a rate per annum equal to the
Eurodollar Rate for that Eurodollar Rate Loan plus the Applicable
----
Eurodollar Rate Margin.
(d) If not sooner paid, the principal Indebtedness evidenced by
the Notes shall be payable as follows:
(i) the amount, if any, by which the principal Indebtedness
evidenced by the Notes at any time exceeds the then applicable
Commitment shall be payable immediately;
-31-
(ii) the principal Indebtedness evidenced by the Notes
shall be payable on each Amortization Date by the Amortization Amount;
and
(iii) the principal Indebtedness evidenced by the Notes
shall in any event be payable on the Maturity Date.
(e) The principal Indebtedness evidenced by the Notes shall be
prepaid on or before the third Banking Day following the receipt by
Borrower or any of its Subsidiaries on or after the Revolver Termination
Date of (i) Net Cash Sales Proceeds from Dispositions in excess of $250,000
in any Fiscal Year, by an amount equal to the amount of such Net Cash Sales
Proceeds in excess of $250,000, (ii) Net Cash Issuance Proceeds from the
issuance of debt securities of Borrower or any of its Subsidiaries (except
------
an issuance of debt securities to Borrower or to a Wholly-Owned
Subsidiary), by an amount equal to 100% of such Net Cash Issuance Proceeds
and (iii) Net Cash Issuance Proceeds from the issuance of equity securities
of Borrower or any of its Subsidiaries (except an issuance of equity
------
securities to Borrower or to a Wholly-Owned Subsidiary or to employees or
former employees of Borrower pursuant to an employee stock option plan
maintained by Borrower), by an amount equal to 50% of such Net Cash
Issuance Proceeds. Any mandatory prepayments under this Subsection shall
be applied equally against all remaining Amortization Amounts.
(f) The principal Indebtedness evidenced by the Notes may, at
any time and from time to time, voluntarily be paid or prepaid in whole or
in part without premium or penalty, except that with respect to any
------
voluntary prepayment under this Subsection, (i) any partial prepayment
shall be not less than $1,000,000 and shall be an integral multiple of
$500,000, (ii) the Administrative Agent shall have received written notice
of any prepayment by 9:00 a.m. California time on the date that is one (1)
Banking Day before the date of prepayment (which must be a Banking Day) in
the case of an Alternate Base Rate Loan, and, in the case of a Eurodollar
Rate Loan, three (3) Banking Days before the date of prepayment, which
notice shall identify the date and amount of the prepayment and the Loan(s)
being prepaid, (iii) each prepayment of principal on any Eurodollar Rate
Loan shall be accompanied by payment of interest accrued to the date of
payment on the amount of principal paid and (iv) any payment or prepayment
of all or any part of any Eurodollar Rate Loan on a day other than the last
day of the applicable Eurodollar Period shall be subject to Section 3.6(e).
------
Any voluntary prepayment under this Subsection made subsequent to the
Revolver Termination Date shall be applied as follows:
-32-
50% of such prepayment shall be applied to Amortization Amounts due on the
most remote Amortization Dates in reverse order of maturity and 50% of such
prepayment shall be applied to Amortization Amounts due on the next
Amortization Dates in order of maturity.
3.2 Arrangement Fee. On the Closing Date, Borrower shall pay to the
---------------
Administrative Agent the balance of the arrangement fee as heretofore agreed
upon by letter agreement dated July 21, 1997 between Borrower and the
Administrative Agent. The arrangement fee paid to the Administrative Agent is
solely for its own account and is nonrefundable.
3.3 Commitment Fee. From the Closing Date through the Revolver
--------------
Termination Date, Borrower shall pay to the Administrative Agent, for the
ratable accounts of the Lenders pro rata according to their Pro Rata Share of
the Commitment, a commitment fee equal to the daily Applicable Commitment Fee
Rate per annum times the average daily amount by which the Commitment exceeds
-----
the aggregate daily principal Indebtedness evidenced by the Notes. The
commitment fee shall be payable quarterly in arrears on each Quarterly Payment
Date and on the Revolver Termination Date.
3.4 Agency Fee. Borrower shall pay to the Administrative Agent an
----------
agency fee in such amounts and at such times as heretofore agreed upon by letter
agreement dated July 21, 1997 between Borrower and the Administrative Agent.
The agency fee paid to the Administrative Agent is solely for its own account
and is nonrefundable.
3.5 Increased Commitment Costs. If any Lender shall determine in good
--------------------------
faith that the introduction after the Closing Date of any applicable law, rule,
regulation or guideline regarding capital adequacy, or any change therein or any
change in the interpretation or administration thereof by any central bank or
other Governmental Agency charged with the interpretation or administration
thereof, or compliance by such Lender (or its Eurodollar Lending Office) or any
corporation controlling such Lender, with any request, guideline or directive
regarding capital adequacy (whether or not having the force of Law) of any such
central bank or other authority not imposed as a result of such Lender's or such
corporation's failure to comply with any other Laws, affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy and such
Lender's desired return on capital) determines in good faith that the amount of
such capital is increased, or the rate of return on capital is reduced, as a
consequence of its obligations under this Agreement, then, within five (5)
Banking Days after demand of
-33-
such Lender, Borrower shall pay to such Lender, from time to time as specified
in good faith by such Lender, additional amounts sufficient to compensate such
Lender in light of such circumstances, to the extent reasonably allocable to
such obligations under this Agreement, provided that Borrower shall not be
--------
obligated to pay any such amount which arose prior to the date which is ninety
(90) days preceding the date of such demand or is attributable to periods prior
to the date which is ninety (90) days preceding the date of such demand. Each
Lender's determination of such amounts shall be conclusive in the absence of
manifest error.
3.6 Eurodollar Costs and Related Matters.
------------------------------------
(a) In the event that any Governmental Agency imposes on any
Lender any reserve or comparable requirement (including any emergency,
---------
supplemental or other reserve) with respect to the Eurodollar Obligations
of that Lender, Borrower shall pay that Lender within five (5) Banking Days
after demand all amounts necessary to compensate such Lender (determined as
though such Lender's Eurodollar Lending Office had funded 100% of its
Eurodollar Rate Advance in the Designated Eurodollar Market) in respect of
the imposition of such reserve requirements (provided, that Borrower shall
--------
not be obligated to pay any such amount which arose prior to the date which
is ninety (90) days preceding the date of such demand or is attributable to
periods prior to the date which is ninety (90) days preceding the date of
such demand). The Lender's determination of such amount shall be conclusive
in the absence of manifest error.
(b) If, after the date hereof, the existence or occurrence of
any Special Eurodollar Circumstance:
(1) shall subject any Lender or its Eurodollar Lending
Office to any tax, duty or other charge or cost with respect to any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make Eurodollar Rate Advances, or shall
change the basis of taxation of payments to any Lender attributable to
the principal of or interest on any Eurodollar Rate Advance or any
other amounts due under this Agreement in respect of any Eurodollar
Rate Advance, any of its Notes evidencing Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Advances, excluding (i) taxes
---------
imposed on or measured in whole or in part by its overall net income
by (A) any jurisdiction (or political subdivision thereof) in which it
is orga nized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in
which it is "doing
-34-
business" and (ii) any withholding taxes or other taxes based on gross
income imposed by the United States of America for any period with
respect to which it has failed to provide Borrower with the
appropriate form or forms required by Section 11.21, to the extent
-----
such forms are then required by applicable Laws;
(2) shall impose, modify or deem applicable any reserve not
applicable or deemed applicable on the date hereof (including any
---------
reserve imposed by the Board of Governors of the Federal Reserve
System, special deposit, capital or similar requirements against
assets of, deposits with or for the account of, or credit extended by,
any Lender or its Eurodollar Lending Office); or
(3) shall impose on any Lender or its Eurodollar Lending
Office or the Designated Eurodollar Market any other condition
affecting any Eurodollar Rate Advance, any of its Notes evidencing
Eurodollar Rate Loans, its obligation to make Eurodollar Rate Advances
or this Agreement, or shall otherwise affect any of the same;
and the result of any of the foregoing, as determined in good faith by such
Lender, increases the cost to such Lender or its Eurodollar Lending Office
of making or maintaining any Eurodollar Rate Advance or in respect of any
Eurodollar Rate Advance, any of its Notes evidencing Eurodollar Rate Loans
or its obligation to make Eurodollar Rate Advances or reduces the amount of
any sum received or receivable by such Lender or its Eurodollar Lending
Office with respect to any Eurodollar Rate Advance, any of its Notes
evidencing Eurodollar Rate Loans or its obligation to make Eurodollar Rate
Advances (assuming such Lender's Eurodollar Lending Office had funded 100%
of its Eurodollar Rate Advance in the Designated Eurodollar Market), then,
within five (5) Banking Days after demand by such Lender (with a copy to
the Administrative Agent), Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
increased cost or reduction (determined as though such Lender's Eurodollar
Lending Office had funded 100% of its Eurodollar Rate Advance in the
Designated Eurodollar Market); provided, that Borrower shall not be
--------
obligated to pay any such amount which arose prior to the date which is
ninety (90) days preceding the date of such demand or is attributable to
periods prior to the date which is ninety (90) days preceding the date of
such demand. A statement of any Lender claiming compensation under this
subsection shall be conclusive in the absence of manifest error.
-35-
(c) If, after the date hereof, the existence or occurrence of any
Special Eurodollar Circumstance shall, in the good faith opinion of any
Lender, make it unlawful or impossible for such Lender or its Eurodollar
Lending Office to make, maintain or fund its portion of any Eurodollar Rate
Loan, or materially restrict the authority of such Lender to purchase or
sell, or to take deposits of, Dollars in the Designated Eurodollar Market,
or to determine or charge interest rates based upon the Eurodollar Rate,
and such Lender shall so notify the Administrative Agent, then such
Lender's obligation to make Eurodollar Rate Advances shall be suspended for
the duration of such illegality or impossibility and the Administrative
Agent forthwith shall give notice thereof to the other Lenders and
Borrower. Upon receipt of such notice, the outstanding principal amount of
such Lender's Eurodollar Rate Advances, together with accrued interest
thereon, automatically shall be converted to Alternate Base Rate Advances
on either (1) the last day of the Eurodollar Period(s) applicable to such
Eurodollar Rate Advances if such Lender may lawfully continue to maintain
and fund such Eurodollar Rate Advances to such day(s) or (2) immediately if
such Lender may not lawfully continue to fund and maintain such Eurodollar
Rate Advances to such day(s), provided that in such event the conversion
--------
shall not be subject to payment of a prepayment fee under Section 3.6(e).
------
Each Lender agrees to endeavor promptly to notify Borrower of any event of
which it has actual knowledge, occurring after the Closing Date, which will
cause that Lender to notify the Administrative Agent under this Section,
and agrees to designate a different Eurodollar Lending Office if such
designation will avoid the need for such notice and will not, in the good
faith judgment of such Lender, otherwise be materially disadvantageous to
such Lender. In the event that any Lender is unable, for the reasons set
forth above, to make, maintain or fund its portion of any Eurodollar Rate
Loan, such Lender shall fund such amount as an Alternate Base Rate Advance
for the same period of time, and such amount shall be treated in all
respects as an Alternate Base Rate Advance. Any Lender whose obligation to
make Eurodollar Rate Advances has been suspended under this Section shall
promptly notify the Administrative Agent and Borrower of the cessation of
the Special Eurodollar Circumstance which gave rise to such suspension.
(d) If, with respect to any proposed Eurodollar Rate Loan:
(1) the Administrative Agent reasonably determines that, by
reason of circumstances affecting the Designated Eurodollar Market
generally that are beyond the reasonable control of the Lenders,
deposits in Dollars (in the applicable amounts) are not being offered
to
-36-
any Lender in the Designated Eurodollar Market for the applicable
Eurodollar Period; or
(2) the Requisite Lenders advise the Administrative Agent
that the Eurodollar Rate as determined by the Administrative Agent (i)
does not represent the effective pricing to such Lenders for deposits
in Dollars in the Designated Eurodollar Market in the relevant amount
for the applicable Eurodollar Period, or (ii) will not adequately and
fairly reflect the cost to such Lenders of making the applicable Euro
dollar Rate Advances;
then the Administrative Agent forthwith shall give notice thereof to
Borrower and the Lenders, whereupon until the Administrative Agent notifies
Borrower that the circumstances giving rise to such suspension no longer
exist, the obligation of the Lenders to make any future Eurodollar Rate
Advances shall be suspended.
(e) Upon payment or prepayment of any Eurodollar Rate Advance
(other than as the result of a conversion required under Section 3.6(c) on
----- ---- ------
a day other than the last day in the applicable Eurodollar Period (whether
voluntarily, involuntarily, by reason of acceleration, or otherwise), or
upon the failure of Borrower (for a reason other than the breach by a
Lender of its obligation pursuant to Section 2.1(a) to make an Advance) to
------
borrow on the date or in the amount specified for a Eurodollar Rate Loan in
any Request for Loan, Borrower shall pay to the appropriate Lender within
five (5) Banking Days after demand a prepayment fee or failure to borrow
fee, as the case may be (determined as though 100% of the Eurodollar Rate
Advance had been funded in the Designated Eurodollar Market) equal to the
sum of:
---
(1) $250; plus
----
(2) the amount, if any, by which (i) the additional
interest would have accrued on the amount prepaid or not borrowed at
the Eurodollar Rate plus the Applicable Eurodollar Rate Margin if that
----
amount had remained or been outstanding through the last day of the
applicable Eurodollar Period exceeds (ii) the interest that the Lender
-------
could recover by placing such amount on deposit in the Designated
Eurodollar Market for a period beginning on the date of the prepayment
or failure to borrow and ending on the last day of the applicable
Eurodollar Period (or, if no deposit rate quotation is available for
such
-37-
period, for the most comparable period for which a deposit rate
quotation may be obtained); plus
----
(3) all out-of-pocket expenses incurred by the Lender
reasonably attributable to such payment, prepayment or failure to
borrow.
Each Lender's determination of the amount of any prepayment fee payable
under this Section shall be conclusive in the absence of manifest error.
(f) Each Lender agrees to endeavor promptly to notify Borrower
of any event of which it has actual knowledge, occurring after the Closing
Date, which will entitle such Lender to compensation pursuant to clause (a)
-
or clause (b) of this Section, and agrees to designate a different
-
Eurodollar Lending Office if such designation will avoid the need for or
reduce the amount of such compensation and will not, in the good faith
judgment of such Lender, otherwise be materially disadvantageous to such
Lender. Any request for compensation by a Lender under this Section shall
set forth the basis upon which it has been determined that such an amount
is due from Borrower, a calculation of the amount due, and a certification
that the corresponding costs have been incurred by the Lender.
3.7 Late Payments. If any installment of principal or interest or
-------------
any fee or cost or other amount payable under any Loan Document to the
Administrative Agent or any Lender is not paid when due, it shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
sum of the Alternate Base Rate plus the Applicable Alternate Base Rate Margin
------ ----
plus 2%, to the fullest extent permitted by applicable Laws. Accrued and unpaid
----
interest on past due amounts (including, without limitation, interest on past
---------
due interest) shall be compounded monthly, on the last day of each calendar
month, to the fullest extent permitted by applicable Laws.
3.8 Computation of Interest and Fees. Computation of interest and
--------------------------------
fees under this Agreement shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed. Interest shall accrue on each Loan for
the day on which the Loan is made; interest shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid. Any
Loan that is repaid on the same day on which it is made shall bear interest for
one day. Notwithstanding anything in this Agreement to the contrary, interest
in excess of the maximum amount permitted by applicable Laws shall not accrue or
be payable hereunder or under the Notes, and any amount paid as interest
hereunder or under the Notes which would
-38-
otherwise be in excess of such maximum permitted amount shall instead be treated
as a payment of principal.
3.9 Non-Banking Days. If any payment to be made by Borrower or any
----------------
other Party under any Loan Document shall come due on a day other than a Banking
Day, payment shall instead be considered due on the next succeeding Banking Day
and the extension of time shall be reflected in computing interest and fees.
3.10 Manner and Treatment of Payments.
--------------------------------
(a) Each payment hereunder (except payments pursuant to
------
Sections 3.5, 3.6, 11.3, 11.11 and 11.22) or on the Notes or under any
--- --- ---- ----- -----
other Loan Document shall be made to the Administrative Agent at the
Administrative Agent's Office for the account of each of the Lenders
or the Administrative Agent, as the case may be, in immediately
available funds not later than 11:00 a.m. California time, on the day
of payment (which must be a Banking Day). All payments received after
such time, on any Banking Day, shall be deemed received on the next
succeeding Banking Day. The amount of all payments received by the
Administrative Agent for the account of each Lender shall be
immediately paid by the Administrative Agent to the applicable Lender
in immediately available funds and, if such payment was received by
the Administrative Agent by 11:00 a.m., California time, on a Banking
Day and not so made available to the account of a Lender on that
Banking Day, the Administrative Agent shall reimburse that Lender for
the cost to such Lender of funding the amount of such payment at the
Federal Funds Rate. All payments shall be made in lawful money of the
United States of America.
(b) Each payment or prepayment on account of any Loan shall be
applied pro rata according to the outstanding Advances made by each
Lender comprising such Loan.
(c) Each Lender shall use its best efforts to keep a record (in
writing or by an electronic data entry system) of Advances made by it
and payments received by it with respect to each of its Notes and,
subject to Section 10.6(g), such record shall, as against Borrower, be
-------
presumptive evidence of the amounts owing. Notwithstanding the
foregoing sentence, the failure by any Lender to keep such a record
shall not affect Borrower's obligation to pay the Obligations.
(d) Each payment of any amount payable by Borrower or any other
Party under this Agreement or any other Loan Document shall be made
-39-
free and clear of, and without reduction by reason of, any taxes,
assessments or other charges imposed by any Governmental Agency,
central bank or comparable authority, excluding (i) taxes imposed on
---------
or measured in whole or in part by its overall net income by (A) any
jurisdiction (or political subdivision thereof) in which it is
organized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in
which it is "doing business" and (ii) any withholding taxes or other
taxes based on gross income imposed by the United States of America
for any period with respect to which it has failed to provide Borrower
with the appropriate form or forms required by Section 11.21, to the
-----
extent such forms are then required by applicable Laws (all such non-
excluded taxes, assessments or other charges being hereinafter
referred to as "Taxes"). To the extent that Borrower is obligated by
applicable Laws to make any deduction or withholding on account of
Taxes from any amount payable to any Lender under this Agreement,
Borrower shall (i) make such deduction or withholding and pay the same
to the relevant Governmental Agency and (ii) pay such additional
amount to that Lender as is necessary to result in that Lender's
receiving a net after-Tax amount equal to the amount to which that
Lender would have been entitled under this Agreement absent such
deduction or withholding. If and when receipt of such payment results
in an excess payment or credit to that Lender on account of such
Taxes, that Lender shall promptly refund such excess to Borrower.
3.11 Funding Sources. Nothing in this Agreement shall be deemed
---------------
to obligate any Lender to obtain the funds for any Loan or Advance in any
particular place or manner or to constitute a representation by any Lender that
it has obtained or will obtain the funds for any Loan or Advance in any
particular place or manner.
3.12 Failure to Charge Not Subsequent Waiver. Any decision by
---------------------------------------
the Administrative Agent or any Lender not to require payment of any interest
including interest arising under Section 3.7), fee, cost or other amount payable
--------- ---
under any Loan Document, or to calculate any amount payable by a particular
method, on any occasion shall in no way limit or be deemed a waiver of the
Administrative Agent's or such Lender's right to require full payment of any
interest (including interest arising under Section 3.7), fee, cost or other
--------- ---
amount payable under any Loan Document, or to calculate an amount payable by
another method that is not inconsistent with this Agreement, on any other or
subsequent occasion.
3.13 Administrative Agent's Right to Assume Payments Will be
-------------------------------------------------------
Made. Unless the Administrative Agent shall have been notified by Borrower prior
----
to the date on which any payment to be made by Borrower hereunder is due that
Borrower does
-40-
not intend to remit such payment, the Administrative Agent may, in
its discretion, assume that Borrower has remitted such payment when so due and
the Administrative Agent may, in its discretion and in reliance upon such
assumption, make available to each Lender on such payment date an amount equal
to such Lender's share of such assumed payment. If Borrower has not in fact
remitted such payment to the Administrative Agent, each Lender shall forthwith
on demand repay to the Administrative Agent the amount of such assumed payment
made available to such Lender, together with interest thereon in respect of each
day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent at the Federal Funds Rate.
3.14 Fee Determination Detail. The Administrative Agent, and any
------------------------
Lender, shall provide reasonable detail to Borrower regarding the manner in
which the amount of any payment to the Administrative Agent and the Lenders, or
that Lender, under Article 3 has been determined, concurrently with demand for
---------
such payment.
3.15 Survivability. All of Borrower's obligations under Sections 3.5
------------- ---
and 3.6 shall survive for the ninety (90) day period following the date on which
---
the Commitment is terminated and all Loans hereunder are fully paid, and
Borrower shall remain obligated thereunder for all claims under such Sections
made by any Lender to Borrower prior to the expiration of such period.
-41-
Article 4
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Lenders that:
4.1 Existence and Qualification; Power; Compliance With Laws.
--------------------------------------------------------
Borrower is a corporation duly formed, validly existing and in good standing
under the Laws of California. Borrower is duly qualified or registered to
transact business and is in good standing in each other jurisdiction in which
the conduct of its business or the ownership or leasing of its Properties makes
such qualification or registration necessary, except where the failure so to
------
qualify or register and to be in good standing would not constitute a Material
Adverse Effect. Borrower has all requisite power and authority to conduct its
business, to own and lease its Properties and to execute and deliver each Loan
Document to which it is a Party and to perform its Obligations. All outstanding
shares of capital stock of Borrower are duly authorized, validly issued, fully
paid and non-assessable, and no holder thereof has any enforceable right of
rescission under any applicable state or federal securities Laws. Borrower is in
compliance with all Laws and other legal requirements applicable to its
business, has obtained all authorizations, consents, approvals, orders, licenses
and permits from, and has accomplished all filings, registrations and
qualifications with, or obtained exemptions from any of the foregoing from, any
Governmental Agency that are necessary for the transaction of its business,
except where the failure so to comply, obtain authorizations, etc., file,
------
register, qualify or obtain exemptions does not constitute a Material Adverse
Effect.
4.2 Authority; Compliance With Other Agreements and Instruments and
---------------------------------------------------------------
Government Regulations. The execution, delivery and performance by Borrower and
----------------------
the Subsidiary Guarantors of the Loan Documents to which each is a Party have
been duly authorized by all necessary corporate action, and do not and will not:
(a) Require any consent or approval not heretofore obtained
of any partner, director, stockholder, security holder or creditor of such
Party;
(b) Violate or conflict with any provision of such Party's
charter, articles of incorporation or bylaws, as applicable;
(c) Result in or require the creation or imposition of any
Lien (other than pursuant to the Loan Documents) or Right of Others upon or
----- ----
with respect to any Property now owned or leased or hereafter acquired by
such Party;
-42-
(d) Violate any Requirement of Law applicable to such Party;
(e) Result in a breach of or constitute a default under, or
cause or permit the acceleration of any obligation owed under, any
indenture or loan or credit agreement or any other Contractual Obligation
to which such Party is a party or by which such Party or any of its
Property is bound or affected;
and such Party is not in violation of, or default under, any Requirement of Law
or Contractual Obligation, or any indenture, loan or credit agreement described
in Section 4.2(e), in any respect that constitutes a Material Adverse Effect.
------
4.3 No Governmental Approvals Required. Except as previously obtain
---------------------------------- ------
or made, no authorization, consent, approval, order, license or permit from, or
filing, registration or qualification with, any Governmental Agency is or will
be required to authorize or permit under applicable Laws the execution, delivery
and performance by Borrower or any Subsidiary Guarantor of the Loan Documents to
which it is a Party.
4.4 Subsidiaries.
------------
(a) Schedule 4.4 hereto correctly sets forth the names, form
------------
of legal entity, number of shares of capital stock (or other applicable
unit of equity interest) issued and outstanding, and the record owner
thereof and jurisdictions of organization of all Subsidiaries of Borrower.
Unless otherwise indicated in Schedule 4.4, all of the outstanding shares
------------
of capital stock, or all of the units of equity interest, as the case may
be, of each such Subsidiary are owned of record and beneficially by
Borrower, there are no outstanding options, warrants or other rights to
purchase capital stock of any such Subsidiary, and all such shares or
equity interests so owned are duly authorized, validly issued, fully paid
and non-assessable, and were issued in compliance with all applicable state
and federal securities and other Laws, and are free and clear of all Liens
and Rights of Others, except for Permitted Encumbrances and Permitted
------
Rights of Others.
(b) Each Subsidiary Guarantor is a corporation duly formed,
validly existing and in good standing under the Laws of its jurisdiction of
organization, is duly qualified to do business as a foreign organization
and is in good standing as such in each jurisdiction in which the conduct
of its business or the ownership or leasing of its Properties makes such
qualification necessary (except where the failure to be so duly qualified
------
and in good standing does not constitute a Material Adverse Effect), and
has all requisite power and authority to conduct its business and to own
and lease its Properties.
-43-
(c) Each Subsidiary Guarantor is in compliance with all Laws
and other requirements applicable to its business and has obtained all
authorizations, consents, approvals, orders, licenses, and permits from,
and each such Subsidiary Guarantor has accomplished all filings,
registrations, and qualifications with, or obtained exemptions from any of
the foregoing from, any Governmental Agency that are necessary for the
transaction of its business, except where the failure to be in such
------
compliance, obtain such authorizations, consents, approvals, orders,
licenses, and permits, accomplish such filings, registrations, and
qualifications, or obtain such exemptions, does not constitute a Material
Adverse Effect.
4.5 Financial Statements. Borrower has furnished to the Lenders (a)
--------------------
the audited consolidated financial statements of Borrower and its Subsidiaries
for the Fiscal Year ended July 31, 1996 and (b) the unaudited consolidated
balance sheet and statement of operations of Borrower and its Subsidiaries for
the Fiscal Quarter ended April 30, 1997. The financial statements described in
clause (a) fairly present in all material respects the financial condition,
-
results of operations and changes in financial position, and the balance sheet
and statement of operations described in clause (b) fairly present the financial
-
condition and results of operations of Borrower and its Subsidiaries as of such
dates and for such periods in conformity with GAAP consistently applied, subject
only to normal year-end accruals and audit adjustments.
4.6 No Other Liabilities; No Material Adverse Changes. Borrower and
-------------------------------------------------
its Subsidiaries do not have any material liability or material contingent
liability required under GAAP to be reflected or disclosed, and not reflected or
disclosed, in the balance sheet described in Section 4.5(b), other than
------ ----- ----
liabilities and contingent liabilities arising in the ordinary course of
business since the date of such financial statements. As of the Closing Date,
no circumstance or event has occurred that constitutes a Material Adverse Effect
since April 30, 1997.
4.7 Title to and Location of Property. Borrower and its Subsidiaries
---------------------------------
have valid title to the Property (other than assets which are the subject of a
----- ----
Capital Lease Obligation) reflected in the balance sheet described in Section
4.5(b), other than items of Property or exceptions to title which are in each
------ ----- ----
case immaterial and Property subsequently sold or disposed of in the ordinary
course of business. Such Property is free and clear of all Liens and Rights of
Others, other than Liens or Rights of Others described in Schedule 4.7A and
----- ---- -------------
Permitted Encumbrances and Permitted Rights of Others. All Property of Borrower
and its Subsidiaries is located at one of the locations described in Schedule
--------
4.7B.
----
-44-
4.8 Intangible Assets. Borrower and its Subsidiaries own, or possess
-----------------
the right to use to the extent necessary in their respective businesses, all
material trade marks, trade names, copyrights, patents, patent rights, computer
software, licenses and other Intangible Assets that are used in the conduct of
their businesses as now operated, and no such Intangible Asset, to the best
knowledge of Borrower, conflicts with the valid trademark, trade name,
copyright, patent, patent right or Intangible Asset of any other Person to the
extent that such conflict constitutes a Material Adverse Effect.
4.9 Public Utility Holding Company Act. Neither Borrower nor any of
----------------------------------
its Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.10 Litigation. Except for (a) any matter fully covered as to
---------- ------
subject matter and amount (subject to applicable deductibles and retentions) by
insurance for which the insurance carrier has not asserted lack of subject
matter coverage or reserved its right to do so, (b) any matter, or series of
related matters, involving a claim against Borrower or any of its Subsidiaries
of less than $2,000,000, (c) matters of an administrative nature not involving
a claim or charge against Borrower or any of its Subsidiaries and (d) matters
set forth in Schedule 4.10, there are no actions, suits, proceedings or
-------------
investigations pending as to which Borrower or any of its Subsidiaries have been
served or have received notice or, to the best knowledge of Borrower, threatened
against or affecting Borrower or any of its Subsidiaries or any Property of any
of them before any Governmental Agency.
4.11 Binding Obligations. Each of the Loan Documents to which
-------------------
Borrower or any of the Subsidiary Guarantors is a Party will, when executed and
delivered by Borrower or such Subsidiary Guarantor, constitute the legal, valid
and binding obligation of Borrower or such Subsidiary Guarantor, enforceable
against Borrower or such Subsidiary Guarantor in accordance with its terms,
except as enforcement may be limited by Debtor Relief Laws or equitable
------
principles relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion.
4.12 No Default. No event has occurred and is continuing that is a
----------
Default or Event of Default.
-45-
4.13 ERISA.
-----
(a) With respect to each Pension Plan:
(i) such Pension Plan complies in all material respects
with ERISA and any other applicable Laws to the extent that
noncompliance could reasonably be expected to have a Material Adverse
Effect;
(ii) such Pension Plan has not incurred any "accumulated
funding deficiency" (as defined in Section 302 of ERISA) that could
reasonably be expected to have a Material Adverse Effect;
(iii) no "reportable event" (as defined in Section 4043
of ERISA, but excluding such events as to which the PBGC has by
---------
regulation waived the requirement therein contained that it be
notified within thirty days of the occurrence of such event) has
occurred that could reasonably be expected to have a Material Adverse
Effect; and
(iv) neither Borrower nor any of its Subsidiaries has
engaged in any non-exempt "prohibited transaction" (as defined in
Section 4975 of the Code) that could reasonably be expected to have a
Material Adverse Effect.
(b) Neither Borrower nor any of its Subsidiaries has incurred
or expects to incur any withdrawal liability to any Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.
4.14 Regulations G and U; Investment Company Act. No part of the
-------------------------------------------
proceeds of any Loan hereunder will be used to purchase or carry, or to extend
credit to others for the purpose of purchasing or carrying, any Margin Stock in
violation of Regulations G and U. Neither Borrower nor any of its Subsidiaries
is or is required to be registered as an "investment company" under the
Investment Company Act of 1940.
4.15 Disclosure. No written statement made by a Senior Officer to
----------
the Administrative Agent or any Lender in connection with this Agreement, or in
connection with any Loan, as of the date thereof contained any untrue statement
of a material fact or omitted a material fact necessary to make the statement
made not misleading in light of all the circumstances existing at the date the
statement was made.
-46-
4.16 Tax Liability. Borrower and its Subsidiaries have filed all tax
-------------
returns which are required to be filed, and have paid, or made provision for the
payment of, all taxes with respect to the periods, Property or transactions
covered by said returns, or pursuant to any assessment received by Borrower or
any of its Subsidiaries, except (a) such taxes, if any, as are being contested
------
in good faith by appropriate proceedings and as to which adequate reserves have
been established and maintained and (b) immaterial taxes so long as no material
Property of Borrower or any of its Subsidiaries is at impending risk of being
seized, levied upon or forfeited.
4.17 Projections. As of the Closing Date, to the best knowledge of
-----------
Borrower, the assumptions set forth in the Projections are reasonable and
consistent with each other and with all facts known to Borrower, and the
Projections are reasonably based on such assumptions. Nothing in this Section
4.17 shall be construed as a representation or covenant that the Projections in
----
fact will be achieved.
4.18 Hazardous Materials. Except as described in Schedule 4.18, as of
------------------- -------------
the Closing Date (a) neither Borrower nor any of its Subsidiaries (from and
after the Acquisition of any Subsidiary by Borrower) at any time has disposed
of, discharged, released or threatened the release of any Hazardous Materials
on, from or under the Real Property in violation of any Hazardous Materials Law
that would individually or in the aggregate constitute a Material Adverse
Effect, (b) to the best knowledge of Borrower, no condition exists that violates
any Hazardous Material Law affecting any Real Property except for such
violations that would not individually or in the aggregate constitute a Material
Adverse Effect, (c) no Real Property or any portion thereof is or has been
utilized by Borrower or any of its Subsidiaries (from and after the Acquisition
of any Subsidiary by Borrower) as a site for the manufacture of any Hazardous
Materials and (d) to the extent that any Hazardous Materials are used, generated
or stored by Borrower or any of its Subsidiaries on any Real Property, or
transported to or from such Real Property by Borrower or any of its
Subsidiaries, such use, generation, storage and transportation are in compliance
with all Hazardous Materials Laws except for such non-compliance that would not
constitute a Material Adverse Effect or be materially adverse to the interests
of the Lenders.
4.19 Security Interests. Upon the execution and delivery of the
------------------
Security Agreement, the Security Agreement will create a valid first priority
security interest in the Collateral described therein securing the Obligations
(subject only to Permitted Encumbrances, Permitted Rights of Others and matters
disclosed in Schedule 4.7 and to such qualifications and exceptions as are
------------
contained in the Uniform Commercial Code with respect to the priority of
security interests perfected by means other than the filing of a financing
statement or with respect to the creation of security interests in Property to
which Division 9 of the Uniform Commercial Code does not apply) and all
-47-
actions necessary to perfect the security interests so created, other than
filing of the UCC-1 financing statements delivered to the Administrative Agent
pursuant to Section 8.1 with the appropriate Governmental Agency, have been
---
taken and completed. Upon the execution and delivery of the Pledge Agreement,
the Pledge Agreement will create a valid first priority security interest in the
Pledged Collateral and upon delivery of the Pledged Collateral to the
Administrative Agent (or its designee) all actions necessary to perfect the
security interest so created have been taken and completed.
-48-
Article 5
AFFIRMATIVE COVENANTS
---------------------
(OTHER THAN INFORMATION AND
--------------------------
REPORTING REQUIREMENTS)
----------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains in force, Borrower shall, and
shall cause its Subsidiaries to, unless the Administrative Agent (with the
written approval of the Requisite Lenders) otherwise consents:
5.1 Payment of Taxes and Other Potential Liens. Pay and discharge
------------------------------------------
promptly all taxes, assessments and governmental charges or levies imposed upon
any of them, upon their respective Property or any part thereof and upon their
respective income or profits or any part thereof, except that Borrower and its
------
Subsidiaries shall not be required to pay or cause to be paid (a) any tax,
assessment, charge or levy that is not yet past due, or is being contested in
good faith by appropriate proceedings so long as the relevant entity has
established and maintains adequate reserves for the payment of the same or (b)
any immaterial tax so long as no material Property of Borrower or its
Subsidiaries is at impending risk of being seized, levied upon or forfeited.
5.2 Preservation of Existence. Preserve and maintain their respective
-------------------------
existences in the jurisdiction of their formation and all material
authorizations, rights, franchises, privileges, consents, approvals, orders,
licenses, permits, or registrations from any Governmental Agency that are
necessary for the transaction of their respective business and qualify and
remain qualified to transact business in each jurisdiction in which such
qualification is necessary in view of their respective business or the ownership
or leasing of their respective Properties except (a) a merger permitted by
------
Section 6.3 or as otherwise permitted by this Agreement and (b) where the
failure to so qualify or remain qualified would not constitute a Material
Adverse Effect.
5.3 Maintenance of Properties. Maintain, preserve and protect all of
-------------------------
their respective Properties in good order and condition, subject to wear and
tear in the ordinary course of business, and not permit any waste of their
respective Properties, except that the failure to maintain, preserve and protect
a particular item of Property that is at the end of its useful life or that is
not of significant value, either intrinsically or to the operations of Borrower,
shall not constitute a violation of this covenant.
5.4 Maintenance of Insurance. Maintain liability, casualty and other
------------------------
insurance (subject to customary deductibles and retentions) with responsible
insurance
-49-
companies in such amounts and against such risks as is carried by responsible
companies engaged in similar businesses and owning similar assets in the general
areas in which Borrower and its Subsidiaries operate.
5.5 Compliance With Laws. Comply with all Requirements of Law
--------------------
noncompliance with which constitutes a Material Adverse Effect, except that
------
Borrower and its Subsidiaries need not comply with a Requirement of Law then
being contested by any of them in good faith by appropriate proceedings.
5.6 Inspection Rights. Upon reasonable notice, at any time during
-----------------
regular business hours and as often as reasonably requested (but not so as to
materially interfere with the business of Borrower or any of its Subsidiaries)
permit the Administrative Agent or any Lender, or any authorized employee, agent
or representative thereof, to examine, audit and make copies and abstracts from
the records and books of account of, and to visit and inspect the Properties of,
Borrower and its Subsidiaries and to discuss the affairs, finances and accounts
of Borrower and its Subsidiaries with any of their officers, key employees or
accountants.
5.7 Keeping of Records and Books of Account. Keep adequate records
---------------------------------------
and books of account reflecting all financial transactions in conformity with
GAAP, consistently applied, and in material conformity with all applicable
requirements of any Governmental Agency having regulatory jurisdiction over
Borrower and its Subsidiaries.
5.8 Compliance With Agreements. Promptly and fully comply with all
--------------------------
Contractual Obligations to which any one or more of them is a party, except for
------
any such Contractual Obligations (a) the performance of which would cause a
Default or (b) then being contested by any of them in good faith by appropriate
proceedings or (c) if the failure to comply does not constitute a Material
Adverse Effect.
5.9 Use of Proceeds. Use the proceeds of all Loans for working
---------------
capital and general corporate purposes of Borrower, including repayment of the
---------
Prior Credit Facility, funding of Permitted Acquisitions and the making of
Distributions permitted by Section 6.6.
---
5.10 Hazardous Materials Laws. Keep and maintain all Real Property
------------------------
and each portion thereof in compliance in all material respects with all
applicable Hazardous Materials Laws and promptly notify the Administrative Agent
in writing (attaching a copy of any pertinent written material) of (a) any and
all material enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened in writing by a Governmental Agency
pursuant to any
-50-
applicable Hazardous Materials Laws, (b) any and all material claims made
or threat ened in writing by any Person against Borrower relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials and (c) discovery by any Senior Officer of any of Borrower
of any material occurrence or condition on any real Property adjoining or in the
vicinity of such Real Property that could reasonably be expected to cause such
Real Property or any part thereof to be subject to any restrictions on the
ownership, occupancy, transferability or use of such Real Property under any
applicable Hazardous Materials Laws.
5.11 Additional Domestic Subsidiaries. Pledge all of the capital
--------------------------------
stock of any Domestic Subsidiary formed or acquired after the Closing Date as
additional Pledged Collateral under the Pledge Agreement, and cause each such
Domestic Subsidiary (other than a Subsidiary not engaged in an active business
----- ----
that has total assets of $10,000 or less) to execute and deliver an appropriate
joinder to the Subsidiary Guaranty and the Security Agreement.
5.12 Foreign Subsidiaries. Pledge sixty-five percent (65%) of the
--------------------
capital stock of any Foreign Subsidiary formed or acquired after the Closing
Date as additional Pledged Collateral under the Pledge Agreement.
5.13 Future Real Property. Promptly following its acquisition of
--------------------
any real property (including a leasehold estate in real property), execute and
---------
deliver to the Administrative Agent a deed of trust or mortgage in a form
reasonably acceptable to the Administrative Agent creating a first priority Lien
on such real property securing the Obligations, and provide to the
Administrative Agent such customary lender's title insurance policies,
appraisals, environmental reports and other related documents as the
Administrative Agent may reasonably request.
5.14 Interest Rate Protection Agreements. Enter into one or more
-----------------------------------
Interest Rate Protection Agreements (in form and substance reasonably acceptable
to the Administrative Agent) on or before the date that is ninety (90) days
after the Revolver Termination Date such that, giving effect thereto, the
effective interest rate on at least 50% of the Indebtedness evidenced by the
Notes as of the Revolver Termination Date is fixed through the Maturity Date.
-51-
Article 6
NEGATIVE COVENANTS
------------------
So long as any Advance remains unpaid, or any other Obligation remains
unpaid, or any portion of the Commitment remains in force, Borrower shall not,
and shall not permit any of its Subsidiaries to, unless the Administrative Agent
(with the written approval of the Requisite Lenders or, if required by Section
11.2, of all of the Lenders) otherwise consents:
----
6.1 Payment of Subordinated Obligations. Pay any (a) principal
-----------------------------------
(including sinking fund payments) or any other amount (other than scheduled
---------- ----------
interest payments) with respect to any Subordinated Obligation, or purchase or
redeem (or offer to purchase or redeem) any Subordinated Obligation, or deposit
any monies, securities or other Property with any trustee or other Person to
provide assurance that the principal or any portion thereof of any Subordinated
Obligation will be paid when due or otherwise to provide for the defeasance of
any Subordinated Obligation or (b) scheduled interest on any Subordinated
Obligation unless the payment thereof is then permitted pursuant to the terms of
------
the indenture or other agreement governing such Subordinated Obligation;
provided, that payments of principal and interest may be made under any Senior
--------
Subordinated Notes so long as no Event of Default then exists or would result
therefrom.
6.2 Disposition of Property. Make any Disposition of its Property,
-----------------------
whether now owned or hereafter acquired, (a) except a Disposition by Borrower to
------
a Wholly-Owned Subsidiary, or by a Subsidiary to Borrower or a Wholly-Owned
Subsidiary and (b) a Disposition for which the Net Cash Sales Proceeds, when
added to the aggregate Net Cash Sales Proceeds of all Dispositions made after
the Closing Date, does not exceed $500,000.
6.3 Mergers. Merge or consolidate with or into any Person, except (a)
------- ------
mergers and consolidations of a Subsidiary of Borrower into Borrower or a
Wholly-Owned Subsidiary or of Subsidiaries with each other and (b) a merger or
consolidation of a Person into Borrower or with or into a Wholly-Owned
Subsidiary of Borrower which constitutes a Permitted Acquisition; provided that
--------
i) Borrower or a Wholly-Owned Subsidiary is the surviving entity, (ii) no Change
in Control results therefrom, (iii) no Default or Event of Default then exists
or would result therefrom and (iv) Borrower and each of its Subsidiaries execute
such amendments to the Loan Documents as the Administrative Agent may reasonably
determine are appropriate as a result of such merger .
-52-
6.4 Hostile Acquisitions. Directly or indirectly use the proceeds
--------------------
of any Loan in connection with the acquisition of part or all of a voting
interest of five percent (5%) or more in any corporation or other business
entity if such acquisition is opposed by the board of directors of such
corporation or business entity.
6.5 Acquisitions. Make any Acquisition, except a Permitted
------------ ------
Acquisition; provided that no Default or Event of Default then exists or would
--------
result therefrom.
6.6 Distributions. Make any Distribution, whether from capital,
-------------
income or otherwise, and whether in Cash or other Property, except:
(a) Distributions by any Subsidiary of Borrower to Borrower or
any Wholly-Owned Subsidiary;
(b) dividends payable solely in Common Stock or rights to
purchase Common Stock;
(c) repurchases or redemptions of Common Stock owned by
sellers of a business which was previously the subject of an Acquisition in
accordance with terms binding on Borrower and such sellers at the time of
such Acquisition; and
(d) repurchases or redemptions of Common Stock, provided that
(i) no Default or Event of Default then exists or would result therefrom
and (ii) the aggregate repurchase/redemption price does not exceed
$5,000,000 for all such repurchases and redemptions during the term of this
Agreement.
6.7 ERISA. At any time, permit any Pension Plan to: (i) engage
-----
in any non-exempt "prohibited transaction" (as defined in Section 4975 of the
Code); (ii) fail to comply with ERISA or any other applicable Laws; (iii) incur
any material "accumulated funding deficiency" (as defined in Section 302 of
ERISA); or (iv) terminate in any manner, which, with respect to each event
listed above, could reasonably be expected to result in a Material Adverse
Effect or (b) withdraw, completely or partially, from any Multiemployer Plan if
to do so could reasonably be expected to result in a Material Adverse Effect.
6.8 Change in Nature of Business. Make any material change in the
----------------------------
nature of the business of Borrower and its Subsidiaries, taken as a whole.
-53-
6.9 Liens and Negative Pledges. Create, incur, assume or suffer to
--------------------------
exist any Lien or Negative Pledge of any nature upon or with respect to any of
their respective Properties, or engage in any sale and leaseback transaction
with respect to any of their respective Properties, whether now owned or
hereafter acquired, except:
------
(a) Liens and Negative Pledges existing on the Closing Date
and disclosed in Schedule 4.7 and any renewals/extensions or amendments
------------
thereof, provided that the obligations secured or benefited thereby are
--------
not increased;
(b) Liens and Negative Pledges under the Loan Documents;
(c) Permitted Encumbrances;
(d) Liens on Property acquired by Borrower or any of its
Subsidiaries that were in existence at the time of the acquisition of such
Property and were not created in contemplation of such acquisition; and
(e) Liens securing Indebtedness permitted by Section 6.10(d)
-------
on and limited to the capital assets acquired, constructed or financed with
the proceeds of such Indebtedness or with the proceeds of any Indebtedness
directly or indirectly refinanced by such Indebtedness.
6.10 Indebtedness and Guaranty Obligations. Create, incur or assume
-------------------------------------
any Indebtedness or Guaranty Obligation except:
(a) Indebtedness and Guaranty Obligations existing on the
Closing Date and disclosed in Schedule 6.10, and refinancings, renewals,
-------------
extensions or amendments that do not increase the amount thereof;
(b) Indebtedness and Guaranty Obligations under the Loan
Documents;
(c) Indebtedness and Guaranty Obligations owed to Borrower or
any of its Subsidiaries;
(d) Indebtedness consisting of Capital Lease Obligations, or
otherwise incurred to finance the purchase or construction of capital
assets (which shall be deemed to exist if the Indebtedness is incurred at
or within 90 days before or after the purchase or construction of the
capital asset), or to
-54-
refinance any such Indebtedness, provided that the aggregate principal
--------
amount of such Indebtedness incurred in any Fiscal Year does not exceed
$500,000;
(e) Seller Subordinated Notes issued in connection with a
Permitted Acquisition;
(f) Subordinated Obligations (other than Seller Subordinated
----- ----
Notes) in such amount as may be approved in writing by the Requisite
Lenders;
(g) Indebtedness consisting of debt securities for which the
Net Cash Issuance Proceeds will be applied as a mandatory prepayment
pursuant to Section 3.1(e);
------
(h) Indebtedness consisting of the Interest Rate Protection
Agreements required by Section 5.14;
----
(i) Indebtedness in addition to that described above, provided
--------
that no more than $250,000 of such Indebtedness is incurred in any Fiscal
Year; and
(j) Guaranty Obligations in support of the obligations of a
Wholly-Owned Subsidiary, provided that such obligations are not prohibited
--------
by this Agreement.
6.11 Transactions with Affiliates. Enter into any transaction of any
----------------------------
kind with any Affiliate of Borrower other than (a) salary, bonus, employee stock
----------
option and other compensation arrangements with directors or officers in the
ordinary course of business or with individuals in connection with a Permitted
Acquisition, (b) transactions that are fully disclosed to the board of directors
(or executive committee thereof) of Borrower and expressly authorized by a
resolution of the board of directors (or executive committee) of Borrower which
is approved by a majority of the directors (or executive committee) not having
an interest in the transaction, (c) transactions between or among Borrower and
its Subsidiaries and (d) transactions on overall terms at least as favorable to
Borrower or its Subsidiaries as would be the case in an arm's-length transaction
between unrelated parties of equal bargaining power.
-55-
6.12 Current Ratio. Permit the Current Ratio, as of the last day of
-------------
any Fiscal Quarter, to be less than the ratio set forth below opposite the
period during which such Fiscal Quarter ends:
Period Ratio
------ -----
July 31, 1997 through
July 31, 1998 0.75 to 1.00
August 1, 1998 through
July 31, 1999 1.00 to 1.00
August 1, 1999
and thereafter 1.10 to 1.00
6.13 Funded Debt Ratio. Permit the Funded Debt Ratio, as of the last
-----------------
day of any Fiscal Quarter, to be greater than the ratio set forth below opposite
the period during which such Fiscal Quarter ends:
Period Ratio
------ -----
July 31, 1997 through
July 30, 1998 3.25 to 1.00
July 31, 1998 through
July 30, 1999 2.75 to 1.00
July 31, 1999 through
July 30, 2000 2.00 to 1.00
July 31, 2000 and
thereafter 1.75 to 1.00
-56-
6.14 Minimum Trailing EBITDA. Permit Trailing EBITDA, as of the last day
-----------------------
of any Fiscal Quarter, to be less than the amount set forth below opposite such
Fiscal Quarter:
Fiscal Quarter
Ending Amount
------ ------
July 31, 1997 $10,000,000
October 31, 1997 12,000,000
January 31, 1998 15,000,000
April 30, 1998 18,000,000
July 31, 1998 20,000,000
October 31, 1998 23,000,000
January 31, 1999 25,000,000
April 30, 1999 25,000,000
July 31, 1999 25,000,000
October 31, 1999 and
thereafter 28,600,000
6.15 Stockholders' Equity. Permit Stockholders' Equity, as of the last day
--------------------
of any Fiscal Quarter ending after the Closing Date, to be less than the sum of
------
(a)$90,000,000, plus (b) 100% of Net Income in the Fiscal Quarter ending July
----
31, 1997 and each Fiscal Quarter thereafter (with no deduction for a net loss in
any such Fiscal Quarter) plus (c) 100% of the proceeds of any issuance by
----
Borrower of equity securities (except to employees or former employees of
------
Borrower pursuant to an employee stock option plan maintained by Borrower)
subsequent to the Closing Date.
6.16 Investments. Make or suffer to exist any Investment, other than:
----------- ----- ----
(a) Investments in existence on the Closing Date and disclosed on
Schedule 6.16;
-------------
(b) Investments consisting of Cash Equivalents;
(c) Investments in a Person that is the subject of a Permitted
Acquisition;
(d) Investments consisting of advances to officers, directors and
employees of Borrower and its Subsidiaries for travel, entertainment,
relocation, anticipated bonus and analogous ordinary business purposes;
-57-
(e) Investments of Borrower in any Subsidiary of Borrower and
Investments of any such Subsidiary in another Subsidiary;
(f) Investments consisting of the extension of credit to customers
or suppliers of Borrower and its Subsidiaries in the ordinary course of
business and any Investments received in satisfaction or partial
satisfaction thereof;
(g) Investments received in connection with the settlement of a
bona fide dispute with another Person; and
(h) Investments representing all or a portion of the sales price of
Property sold or services provided to another Person.
6.17 Subsidiary Indebtedness. Permit (whether or not otherwise permitted
-----------------------
under Section 6.10) any Subsidiary to create, incur, assume or suffer to exist
----
any Indebtedness or Guaranty Obligation, except (a) Indebtedness and Guaranty
------
Obligations in existence on the Closing Date, (b) the Subsidiary Guaranty, (c)
Indebtedness owed to Borrower or another Subsidiary of Borrower and (d) Capital
Lease Obligations and purchase money obligations of a Subsidiary in respect of
Property used by that Subsidiary.
6.18 Amendments to Subordinated Obligations. Amend or modify any term or
--------------------------------------
provision of any indenture, agreement or instrument evidencing or governing any
Subordinated Obligation in any respect that will or may adversely affect the
interests of the Lenders.
-58-
Article 7
INFORMATION AND REPORTING REQUIREMENTS
--------------------------------------
7.1 Financial and Business Information. So long as any Advance
----------------------------------
remains unpaid, or any other Obligation remains unpaid, or any portion of the
Commitment remains in force, Borrower shall, unless the Administrative Agent
(with the written approval of the Requisite Lenders) otherwise consents, at
Borrower's sole expense, deliver to the Administrative Agent for distribution by
it to the Lenders, a sufficient number of copies for all of the Lenders of the
following:
(a) As soon as practicable, and in any event within 45 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter in any
----- ----
Fiscal Year), the consolidated balance sheet of Borrower and its
Subsidiaries as at the end of such Fiscal Quarter and the consolidated
statements of operations and cash flows for such Fiscal Quarter, and the
portion of the Fiscal Year ended with such Fiscal Quarter, all in
reasonable detail. Such financial statements shall be certified by the
chief financial officer of Borrower as fairly presenting the financial
condition, results of operations and cash flows of Borrower and its
Subsidiaries in accordance with GAAP (other than footnote disclosures),
consistently applied, as at such date and for such periods, subject only to
normal year-end accruals and audit adjustments;
(b) As soon as practicable, and in any event within 45 days after
the end of each Fiscal Quarter, a Pricing Certificate setting forth a
calculation of the Funded Debt Ratio as of the last day of such Fiscal
Quarter, and providing reasonable detail as to the calculation thereof,
which calculations in the case of the fourth Fiscal Quarter in any Fiscal
Year shall be based on the preliminary unaudited financial statements of
Borrower and its Subsidiaries for such Fiscal Quarter, and as soon as
practicable thereafter, in the event of any material variance in the actual
calculation of the Funded Debt Ratio from such preliminary calculation, a
revised Pricing Certificate setting forth the actual calculation thereof;
(c) As soon as practicable, and in any event within 90 days after
the end of each Fiscal Year, the consolidated balance sheet of Borrower and
its Subsidiaries as at the end of such Fiscal Year and the consolidated
statements of operations, stockholders' equity and cash flows, in each case
of Borrower and its Subsidiaries for such Fiscal Year, all in reasonable
detail. Such financial statements shall be prepared in accordance with
GAAP, consistently applied, and shall be accompanied by a report of
Deloitte &
-59-
Touche LLP or other independent public accountants of recognized standing
selected by Borrower and reasonably satisfactory to the Requisite Lenders,
which report shall be prepared in accordance with generally accepted
auditing standards as at such date, and shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any other
qualification or exception determined by the Requisite Lenders in their
good faith business judgment to be adverse to the interests of the Lenders.
Such accountants' report shall be accompanied by a certificate stating
that, in making the examination pursuant to generally accepted auditing
standards necessary for the certification of such financial statements and
such report, such accountants have obtained no knowledge of any Default
then existing or, if, in the opinion of such accountants, any such Default
shall exist, stating the nature and status of such Default, and stating
that such accountants have reviewed Borrower's financial calculations as at
the end of such Fiscal Year (which shall accompany such certificate) under
Sections 6.12 through 6.17, have read such Sections (including the
---- ----
definitions of all defined terms used therein) and that nothing has come to
the attention of such accountants in the course of such examination that
would cause them to believe that the same were not calculated by Borrower
in the manner prescribed by this Agreement;
(d) As soon as practicable, and in any event within thirty (30)
days after the commencement of each Fiscal Year, a budget and projection by
Fiscal Quarter for that Fiscal Year and by Fiscal Year for the next two
succeeding Fiscal Years, including for the first such Fiscal Year,
---------
projected consolidated balance sheets, statements of operations and
statements of cash flow and, for the second and third such Fiscal Years,
projected consolidated condensed balance sheets and statements of
operations and cash flows of Borrower and its Subsidiaries, all in
reasonable detail;
(e) Promptly after request by the Administrative Agent or any
Lender, copies of any detailed audit reports, management letters or recom
mendations submitted to the board of directors (or the audit committee of
the board of directors) of Borrower by independent accountants in
connection with the accounts or books of Borrower or any of its
Subsidiaries, or any audit of any of them;
(f) Promptly after the same are available, and in any event within
five (5) Banking Days after filing with the Securities and Exchange
Commission, copies of each annual report, proxy or financial statement or
other report or communication sent to the stockholders of Borrower, and
copies of all annual, regular, periodic and special reports and
registration statements which
-60-
Borrower may file or be required to file with the Securities and Exchange
Commission under Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, and not otherwise required to be delivered to the Lenders
pursuant to other provisions of this Section 7.1;
---
(g) Promptly after request by the Administrative Agent or any
Lender, copies of any other report or other document that was filed by
Borrower with any Governmental Agency;
(h) Promptly upon a Senior Officer becoming aware, and in any event
within five (5) Banking Days after becoming aware, of the occurrence of any
(i) "reportable event" (as such term is defined in Section 4043 of ERISA,
but excluding such events as to which the PBGC has by regulation waived the
---------
requirement therein contained that it be notified within thirty days of the
occurrence of such event) or (ii) non-exempt "prohibited transaction" (as
such term is defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Pension Plan or any trust created thereunder, telephonic
notice specifying the nature thereof, and, no more than two (2) Banking
Days after such telephonic notice, written notice again specifying the
nature thereof and specifying what action Borrower is taking or proposes to
take with respect thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto;
(i) As soon as practicable, and in any event within two (2) Banking
Days after a Senior Officer becomes aware of the existence of any condition
or event which constitutes a Default or Event of Default, telephonic notice
specifying the nature and period of existence thereof, and, no more than
two (2) Banking Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what
action Borrower is taking or proposes to take with respect thereto;
(j) Promptly upon a Senior Officer becoming aware that (i) any
Person has commenced a legal proceeding with respect to a claim against
Borrower that is $2,000,000 or more in excess of the amount thereof that is
fully covered by insurance, (ii) any creditor under a credit agreement
involving Indebtedness of $1,000,000 or more or any lessor under a lease
involving aggregate rent of $1,000,000 or more has asserted a default
thereunder on the part of Borrower or, (iii) any Person has commenced a
legal proceeding with respect to a claim against Borrower under a contract
that is not a credit agreement or material lease with respect to a claim of
in excess of $2,000,000 or which otherwise may reasonably be expected to
result in a Material Adverse
-61-
Effect, a written notice describing the pertinent facts relating thereto
and what action Borrower is taking or proposes to take with respect
thereto; and
(k) Such other data and information as from time to time may be
reasonably requested by the Administrative Agent, any Lender (through the
Administrative Agent) or the Requisite Lenders.
7.2 Compliance Certificates. So long as any Advance remains unpaid,
-----------------------
or any other Obligation remains unpaid or unperformed, or any portion of the
Commitment remains outstanding, Borrower shall, at Borrower's sole expense,
deliver to the Administrative Agent for distribution by it to the Lenders
concurrently with the financial statements required pursuant to Sections 7.1(a)
------
and 7.1(d), a Compliance Certificate signed by a Senior Officer.
------
-62-
Article 8
CONDITIONS
----------
8.1 Initial Advances. The obligation of each Lender to make the
----------------
initial Advance to be made by it is subject to the following conditions
precedent, each of which shall be satisfied prior to the making of the initial
Advances (unless all of the Lenders, in their sole and absolute discretion,
shall agree otherwise):
(a) The Administrative Agent shall have received all of the
following, each of which shall be originals unless otherwise specified,
each properly executed by a Responsible Official of each party thereto,
each dated as of the Closing Date and each in form and substance
satisfactory to the Administrative Agent and its legal counsel (unless
otherwise specified or, in the case of the date of any of the following,
unless the Administrative Agent otherwise agrees or directs):
(1) at least one (1) executed counterpart of this Agreement,
together with arrangements satisfactory to the Administrative Agent
for additional executed counterparts, sufficient in number for
distribution to the Lenders and Borrower;
(2) Notes executed by Borrower in favor of each Lender, each in a
principal amount equal to that Lender's Pro Rata Share of the
Commitment;
(3) the Subsidiary Guaranty executed by each Subsidiary
Guarantor;
(4) the Security Agreement executed by Borrower and each
Subsidiary Guarantor;
(5) such financing statements on Form UCC-1 executed by Borrower
and each Subsidiary Guarantor with respect to the Security Agreement
as the Administrative Agent may request;
(6) the Pledge Agreement executed by Borrower, together with the
Pledged Collateral accompanied by appropriate stock powers and
promissory note endorsements endorsed in blank;
-63-
(7) with respect to Borrower and the Subsidiary Guarantors, such
documentation as the Administrative Agent may reasonably require to
establish the due organization, valid existence and good standing of
Borrower and the Subsidiary Guarantors, their qualification to engage in
business in each material jurisdiction in which they are engaged in
business or required to be so qualified, their authority to execute,
deliver and perform the Loan Documents to which it is a Party, the
identity, authority and capacity of each Responsible Official thereof
authorized to act on their behalf, including certified copies of articles
---------
of incorporation and amendments thereto, bylaws and amendments thereto,
certificates of good standing and/or qualification to engage in business,
tax clearance certificates, certificates of corporate resolutions,
incumbency certificates, Certificates of Responsible Officials, and the
like;
(8) the Opinion of Counsel;
(9) a Certificate of the chief financial officer of Borrower
certifying that the representation contained in Section 4.17 is, to the
----
best of his or her knowledge, true and correct;
(10) a Certificate of the chief financial officer of Borrower
certifying that the conditions specified in Sections 8.1(g) and 8.1(h) have
----- ------
been satisfied; and
(11) such other assurances, certificates, documents, consents or
opinions as the Administrative Agent or the Requisite Lenders reasonably
may require.
(b) The arrangement fee payable pursuant to Section 3.2 shall have
---
been paid.
(c) Any agency fees payable on the Closing Date pursuant to Section
3.4 shall have been paid.
---
(d) All Indebtedness outstanding under the Prior Credit Agreement
shall have been (or shall concurrently be) paid and the same shall have been (or
shall concurrently be) terminated.
(e) The Administrative Agent shall be reasonably satisfied that, upon
the filing of the financing statements described in Section 8.1(a)(5)
---------
-64-
with the appropriate Governmental Agencies, the Lenders will hold a first
priority perfected Lien in the Collateral subject only to Permitted
Encumbrances.
(f) The reasonable costs and expenses of the Administrative Agent
in connection with the preparation of the Loan Documents payable pursuant
to Section 11.3, and invoiced to Borrower prior to the Closing Date, shall
----
have been paid.
(g) The representations and warranties of Borrower contained in
Article 4 shall be true and correct in all material respects.
---------
(h) Borrower and any other Parties shall be in compliance with all
the terms and provisions of the Loan Documents, and giving effect to the
initial Advance, no Default or Event of Default shall have occurred and be
continuing.
(i) All legal matters relating to the Loan Documents shall be
satisfactory to Sheppard, Mullin, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel to
the Administrative Agent.
(j) The Closing Date shall have occurred on or before November 30,
1997.
8.2 Any Advance. The obligation of each Lender to make any Advance is
-----------
subject to the following conditions precedent (unless the Requisite Lenders or,
in any case where the approval of all of the Lenders is required pursuant to
Section 11.2, all of the Lenders, in their sole and absolute discretion, shall
----
agree otherwise):
(a) except (i) for representations and warranties which expressly
------
speak as of a particular date or are no longer true and correct as a result
of a change which is permitted by this Agreement or (ii) as disclosed by
Borrower and approved in writing by the Requisite Lenders, the
representations and warranties contained in Article 4 (other than Sections
--------- ----------
4.4(a), 4.6 (first sentence), 4.10 and 4.17) shall be true and correct in
------ --- ---- ----
all material respects on and as of the date of the Advance as though made
on that date;
(b) no circumstance or event shall have occurred that constitutes a
Material Adverse Effect since the Closing Date;
-65-
(c) other than matters described in Schedule 4.10 or not required
-------------
as of the Closing Date to be therein described, there shall not be then
pending or threatened any action, suit, proceeding or investigation against
or affecting Borrower or any of its Subsidiaries or any Property of any of
them before any Governmental Agency that constitutes a Material Adverse
Effect;
(d) the Administrative Agent shall have timely received a Request
for Loan in compliance with Article 2 (or telephonic or other request for
---------
Loan referred to in the second sentence of Section 2.1(b), if applicable),
------
in compliance with Article 2; and
---------
(e) the Administrative Agent shall have received, in form and
substance satisfactory to the Administrative Agent, such other assurances,
certificates, documents or consents related to the foregoing as the
Administrative Agent or Requisite Lenders reasonably may require.
-66-
Article 9
EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT
----------------------------------------------------
9.1 Events of Default. The existence or occurrence of any one or more
-----------------
of the following events, whatever the reason therefor and under any
circumstances whatsoever, shall constitute an Event of Default:
(a) Borrower fails to pay any principal on any of the Notes, or any
portion thereof, on the date when due; or
(b) Borrower fails to pay any interest on any of the Notes, or any
fees under Sections 3.4 or 3.5, or any portion thereof, within two (2)
--- ---
Banking Days after the date when due; or fails to pay any other fee or
amount payable to the Lenders under any Loan Document, or any portion
thereof, within two (2) Banking Days after demand therefor; or
(c) Borrower fails to comply with any of the covenants contained in
Article 6; or
---------
(d) Borrower fails to comply with Section 7.1(i) in any respect
------
that is materially adverse to the interests of the Lenders; or
(e) Borrower or any other Party fails to perform or observe any
other covenant or agreement (not specified in clause (a), (b), (c) or (d)
- - - -
above) contained in any Loan Document on its part to be performed or
observed within twenty (20) Banking Days after the giving of notice by the
Administrative Agent on behalf of the Requisite Lenders of such Default or,
if such Default is not reasonably susceptible of cure within such period,
within such longer period as is reasonably necessary to effect a cure so
long as such Borrower or such Party continues to diligently pursue cure of
such Default but not in any event in excess of forty (40) Banking Days; or
(f) Any representation or warranty of Borrower or a Subsidiary
Guarantor made in any Loan Document, or in any certificate or other writing
delivered by Borrower or such Subsidiary Guarantor pursuant to any Loan
Document, proves to have been incorrect when made or reaffirmed in any
respect that is materially adverse to the interests of the Lenders; or
(g) Borrower (i) fails to pay the principal, or any principal
installment, of any present or future Indebtedness of $5,000,000 or more,
or any
-67-
guaranty of present or future Indebtedness of $5,000,000 or more, on its
part to be paid, when due (or within any stated grace period), whether at
the stated maturity, upon acceleration, by reason of required prepayment or
otherwise or (ii) fails to perform or observe any other term, covenant or
agreement on its part to be performed or observed, or suffers any event of
default to occur, in connection with any present or future Indebtedness of
$5,000,000 or more, or of any guaranty of present or future Indebtedness of
$5,000,000 or more, if as a result of such failure or sufferance any holder
or holders thereof (or an agent or trustee on its or their behalf) has the
right to declare such Indebtedness due before the date on which it
otherwise would become due or the right to require Borrower to redeem or
purchase, or offer to redeem or purchase, all or any portion of such
Indebtedness; or
(h) Any Loan Document, at any time after its execution and delivery
and for any reason other than the agreement or action (or omission to act)
----- ----
of the Administrative Agent or the Lenders or satisfaction in full of all
the Obligations, ceases to be in full force and effect or is declared by a
court of competent jurisdiction to be null and void, invalid or
unenforceable in any respect which is materially adverse to the interests
of the Lenders; or any Collateral Document ceases (other than by action or
inaction of the Administrative Agent or any Lender) to create a valid and
effective Lien in any material portion of the Collateral; or any Party
thereto denies in writing that it has any or further liability or
obligation under any Loan Document, or purports to revoke, terminate or
rescind same; or
(i) A final judgment against Borrower or any Subsidiary Guarantor
is entered for the payment of money in excess of $1,000,000 (not covered by
insurance or for which an insurer has reserved its rights) and, absent
procurement of a stay of execution, such judgment remains unsatisfied for
thirty (30) calendar days after the date of entry of judgment, or in any
event later than five (5) days prior to the date of any proposed sale
thereunder; or any writ or warrant of attachment or execution or similar
process is issued or levied against all or any material part of the
Property of any such Person and is not released, vacated or fully bonded
within thirty (30) calendar days after its issue or levy; or
(j) Borrower or any Subsidiary Guarantor institutes or consents to
the institution of any proceeding under a Debtor Relief Law relating to it
or to all or any material part of its Property, or is unable or admits in
writing its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any
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receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer for it or for all or any material part of its Property; or
any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of that
Person and the appointment continues undischarged or unstayed for sixty
(60) calendar days; or any proceeding under a Debtor Relief Law relating to
any such Person or to all or any part of its Property is instituted without
the consent of that Person and con tinues undismissed or unstayed for sixty
(60) calendar days; or
(k) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any
other Loan Document; or
(l) Any holder of a Subordinated Obligation asserts in writing that
such Subordinated Obligation is not subordinated to the Obligations in
accordance with its terms and Borrower does not promptly deny in writing
such assertion and contest any attempt by such holder to take action based
on such assertion; or
(m) Any Pension Plan maintained by Borrower is finally determined
by the PBGC to have a material "accumulated funding deficiency" as that
term is defined in Section 302 of ERISA in excess of an amount equal to 5%
of the consolidated total assets of Borrower as of the most-recently ended
Fiscal Quarter; or
(n) The Requisite Lenders determine in good faith that a
circumstance or event has occurred that constitutes a Material Adverse
Effect.
9.2 Remedies Upon Event of Default. Without limiting any other rights
------------------------------
or remedies of the Administrative Agent or the Lenders provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law, or in equity,
or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default other than an Event of Default described in Section 9.1(j):
----- ---- ------
(1) the Commitment to make Advances and all other obligations of
the Administrative Agent or the Lenders and all rights of Borrower and
any other Parties under the Loan Documents shall be suspended without
notice to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Lenders or the
------
-69-
Requisite Lenders (as the case may be, in accordance with Section
11.2) may waive an Event of Default or, without waiving, determine,
----
upon terms and conditions satisfactory to the Lenders or Requisite
Lenders, as the case may be, to reinstate the Commitment and such
other obligations and rights and make further Advances, which waiver
or determination shall apply equally to, and shall be binding upon,
all the Lenders; and
(2) the Requisite Lenders may request the Administrative
Agent to, and the Administrative Agent thereupon shall, terminate the
Commitment and/or declare all or any part of the unpaid principal of
all Notes, all interest accrued and unpaid thereon and all other
amounts payable under the Loan Documents to be forthwith due and
payable, whereupon the same shall become and be forthwith due and
payable, without protest, presentment, notice of dishonor, demand or
further notice of any kind, all of which are expressly waived by
Borrower.
(b) Upon the occurrence of any Event of Default described in
Section 9.1(j):
------
(1) the Commitment to make Advances and all other
obligations of the Administrative Agent or the Lenders and all rights of
Borrower and any other Parties under the Loan Documents shall termi nate
without notice to or demand upon Borrower, which are expressly waived by
Borrower, except that all of the Lenders may waive the Event of Default or,
------
without waiving, determine, upon terms and conditions satisfactory to all
the Lenders, to reinstate the Commitment and such other obligations and
rights and make further Advances, which determi nation shall apply equally
to, and shall be binding upon, all the Lenders; and
(2) the unpaid principal of all Notes, all interest accrued
and unpaid thereon and all other amounts payable under the Loan Documents
shall be forthwith due and payable, without protest, present ment, notice
of dishonor, demand or further notice of any kind, all of which are
expressly waived by Borrower.
(c) Upon the occurrence of any Event of Default, the Lenders and
the Administrative Agent, or any of them, without notice to (except as
------
expressly provided for in any Loan Document) or demand upon Borrower, which
are expressly waived by Borrower (except as to notices expressly
------
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provided for in any Loan Document), may proceed (but only with the consent
of the Requisite Lenders) to protect, exercise and enforce their rights and
remedies under the Loan Documents against Borrower and any other Party and
such other rights and remedies as are provided by Law or equity.
(d) The order and manner in which the Lenders' rights and remedies
are to be exercised shall be determined by the Requisite Lenders in their
sole discretion, and all payments received by the Administrative Agent and
the Lenders, or any of them, shall be applied first to the costs and
expenses (including reasonable attorneys' fees and disbursements and the
reasonably allocated costs of attorneys employed by the Administrative
Agent or by any Lender) of the Administrative Agent and of the Lenders, and
thereafter paid pro rata to the Lenders in the same proportions that the
aggregate Obligations owed to each Lender under the Loan Documents bear to
the aggregate Obligations owed under the Loan Documents to all the Lenders,
without priority or preference among the Lenders. Regardless of how each
Lender may treat payments for the purpose of its own accounting, for the
purpose of computing Borrower' Obligations hereunder and under the Notes,
payments shall be applied first, to the costs and expenses of the
-----
Administrative Agent and the Lenders, as set forth above, second, to the
------
payment of accrued and unpaid interest due under any Loan Documents to and
including the date of such application (ratably, and without duplication,
according to the accrued and unpaid interest due under each of the Loan
Documents), and third, to the payment of all other amounts (including
-----
principal and fees) then owing to the Administrative Agent or the Lenders
under the Loan Documents. No applica tion of payments will cure any Event
of Default, or prevent acceleration, or continued acceleration, of amounts
payable under the Loan Documents, or prevent the exercise, or continued
exercise, of rights or remedies of the Lenders hereunder or thereunder or
at Law or in equity.
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Article 10
THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment and Authorization. Subject to Section 10.8, each
----------------------------- ----
Lender hereby irrevocably appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms thereof
or are reasonably incidental, as determined by the Administrative Agent,
thereto. This appointment and authorization is intended solely for the purpose
of facilitating the servicing of the Loans and does not constitute appointment
of the Administrative Agent as trustee for any Lender or as representative of
any Lender for any other purpose and, except as specifically set forth in the
------
Loan Documents to the contrary, the Administrative Agent shall take such action
and exercise such powers only in an administrative and ministerial capacity.
10.2 Administrative Agent and Affiliates. ▇▇▇▇▇ Fargo Bank, National
-----------------------------------
Association (and each successor Administrative Agent) has the same rights and
powers under the Loan Documents as any other Lender and may exercise the same as
though it were not the Administrative Agent, and the term "Lender" or "Lenders"
includes ▇▇▇▇▇ Fargo Bank, National Association in its individual capacity.
▇▇▇▇▇ Fargo Bank, National Association (and each successor Administrative Agent)
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with Borrower, any Subsidiary
thereof, or any Affiliate of Borrower or any Subsidiary thereof, as if it were
not the Administrative Agent and without any duty to account therefor to the
Lenders. ▇▇▇▇▇ Fargo Bank, National Association (and each successor
Administrative Agent) need not account to any other Lender for any monies
received by it for reimbursement of its costs and expenses as Administrative
Agent hereunder, or (subject to Section 11.10) for any monies received by it in
-----
its capacity as a Lender hereunder. The Administrative Agent shall not be
deemed to hold a fiduciary relationship with any Lender and no implied
covenants, functions, responsi bilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Administrative
Agent.
10.3 Proportionate Interest in any Collateral. The Administrative
----------------------------------------
Agent, on behalf of all the Lenders, shall hold in accordance with the Loan
Documents all items of any collateral or interests therein received or held by
the Administrative Agent. Subject to the Administrative Agent's and the
Lenders' rights to reimbursement for their costs and expenses hereunder
(including reasonable attorneys' fees and disbursements and other professional
----------
services and the reasonably allocated costs of attorneys employed by the
Administrative Agent or a Lender) and subject to the
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application of payments in accordance with Section 9.2(d), each Lender shall
------
have an interest in the Lenders' interest in such collateral or interests
therein in the same proportions that the aggregate Obligations owed such Lender
under the Loan Documents bear to the aggregate Obligations owed under the Loan
Documents to all the Lenders, without priority or preference among the Lenders,
except that Obligations owed to any Lender under a Secured Interest Rate
------
Protection Agreement shall be secured on a pari passu basis with all other
---- -----
Obligations up to an amount equal to the Administrative Agent's then customary
credit risk factor for Interest Rate Protection Agreements times the notional
amount of Indebtedness covered by such Secured Interest Rate Protection
Agreement and shall be secured on a subordinate basis as to amounts in excess of
such amount.
10.4 Lenders' Credit Decisions. Each Lender agrees that it has,
-------------------------
independently and without reliance upon the Administrative Agent, any other
Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, and instead in reliance upon
information supplied to it by or on behalf of Borrower and upon such other
information as it has deemed appropriate, made its own independent credit
analysis and decision to enter into this Agreement. Each Lender also agrees that
it shall, independently and without reliance upon the Administrative Agent, any
other Lender or the directors, officers, agents, employees or attorneys of the
Administrative Agent or of any other Lender, continue to make its own
independent credit analyses and decisions in acting or not acting under the Loan
Documents.
10.5 Action by Administrative Agent.
------------------------------
(a) Absent actual knowledge of the Administrative Agent of the
existence of a Default, the Administrative Agent may assume that no Default
has occurred and is continuing, unless the Administrative Agent (or the
Lender that is then the Administrative Agent) has received notice from
Borrower stating the nature of the Default or has received notice from a
Lender stating the nature of the Default and that such Lender considers the
Default to have occurred and to be continuing.
(b) The Administrative Agent has only those obligations under the
Loan Documents as are expressly set forth therein.
(c) Except for any obligation expressly set forth in the Loan
------
Documents and as long as the Administrative Agent may assume that no Event
of Default has occurred and is continuing, the Administrative Agent may,
but shall not be required to, exercise its discretion to act or not act,
except that the
------
-73-
Administrative Agent shall be required to act or not act upon the
instructions of the Requisite Lenders (or of all the Lenders, to the extent
required by Section 11.2) and those instructions shall be binding upon the
----
Administrative Agent and all the Lenders, provided that the Administrative
--------
Agent shall not be required to act or not act if to do so would be contrary
to any Loan Document or to applicable Law or would result, in the
reasonable judgment of the Administrative Agent, in substantial risk of
liability to the Administrative Agent.
(d) If the Administrative Agent has received a notice specified
in clause (a), the Administrative Agent shall immediately give notice
thereof to the Lenders and shall act or not act upon the instructions of
the Requisite Lenders (or of all the Lenders, to the extent required by
Section 11.2), provided that the Administrative Agent shall not be required
---- --------
to act or not act if to do so would be contrary to any Loan Document or to
applicable Law or would result, in the reasonable judgment of the
Administrative Agent, in substantial risk of liability to the
Administrative Agent, and except that if the Requisite Lenders (or all the
------
Lenders, if required under Section 11.2) fail, for five (5) Banking Days
----
after the receipt of notice from the Administrative Agent, to instruct the
Administrative Agent, then the Administrative Agent, in its sole
discretion, may act or not act as it deems advisable for the protection of
the interests of the Lenders.
(e) The Administrative Agent shall have no liability to any
Lender for acting, or not acting, as instructed by the Requisite Lenders
(or all the Lenders, if required under Section 11.2), notwithstanding any
----
other provision hereof.
10.6 Liability of Administrative Agent. Neither the Administrative
---------------------------------
Agent nor any of its directors, officers, agents, employees or attorneys shall
be liable for any action taken or not taken by them under or in connection with
the Loan Documents, except for their own gross negligence or willful misconduct.
------
Without limitation on the foregoing, the Administrative Agent and its directors,
officers, agents, employees and attorneys:
(a) May treat the payee of any Note as the holder thereof until
the Administrative Agent receives notice of the assignment or transfer
thereof, in form satisfactory to the Administrative Agent, signed by the
payee, and may treat each Lender as the owner of that Lender's interest in
the Obligations for all purposes of this Agreement until the Administrative
Agent receives notice of the
-74-
assignment or transfer thereof, in form satisfactory to the Administrative
Agent, signed by that Lender;
(b) May consult with legal counsel (including in-house legal
---------
counsel), accountants (including in-house accountants) and other
---------
professionals or experts selected by it, or with legal counsel, accountants
or other profes sionals or experts for Borrower and/or their Subsidiaries
or the Lenders, and shall not be liable for any action taken or not taken
by it in good faith in accordance with any advice of such legal counsel,
accountants or other professionals or experts;
(c) Shall not be responsible to any Lender for any statement,
warranty or representation made in any of the Loan Documents or in any
notice, certificate, report, request or other statement (written or oral)
given or made in connection with any of the Loan Documents;
(d) Except to the extent expressly set forth in the Loan Documents,
------
shall have no duty to ask or inquire as to the performance or observance by
Borrower or its Subsidiaries of any of the terms, conditions or covenants
of any of the Loan Documents or to inspect any collateral or any Property,
books or records of Borrower or their Subsidiaries;
(e) Will not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, effectiveness, sufficiency
or value of any Loan Document, any other instrument or writing furnished
pursuant thereto or in connection therewith, or any collateral;
(f) Will not incur any liability by acting or not acting in
reliance upon any Loan Document, notice, consent, certificate, statement,
request or other instrument or writing believed in good faith by it to be
genuine and signed or sent by the proper party or parties; and
(g) Will not incur any liability for any arithmetical error in
computing any amount paid or payable by Borrower or any Subsidiary or
Affiliate thereof or paid or payable to or received or receivable from any
Lender under any Loan Document, including, without limitation, principal,
---------
interest, commitment fees, Advances and other amounts; provided that,
--------
promptly upon discovery of such an error in computation, the Administrative
Agent, the Lenders and (to the extent applicable) Borrower and/or its
Subsidiaries or Affiliates shall make such adjustments as are necessary to
correct such error and
-75-
to restore the parties to the position that they would have occupied had
the error not occurred.
10.7 Indemnification. Each Lender shall, ratably in accordance with
---------------
its Pro Rata Share of the Commitment (if the Commitment is then in effect) or in
accordance with its proportion of the aggregate Indebtedness then evidenced by
the Notes (if the Commitment has then been terminated), indemnify and hold the
Administrative Agent and its directors, officers, agents, employees and
attorneys harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever (including reasonable attorneys' fees and
---------
disbursements and allocated costs of attorneys employed by the Administrative
Agent) that may be imposed on, incurred by or asserted against it or them in any
way relating to or arising out of the Loan Documents (other than losses incurred
by reason of the failure of Borrower to pay the Indebtedness represented by the
Notes) or any action taken or not taken by it as Administrative Agent
thereunder, except such as result from its own gross negligence or willful
------
misconduct. Without limitation on the foregoing, each Lender shall reimburse
the Administrative Agent upon demand for that Lender's Pro Rata Share of any
out-of-pocket cost or expense incurred by the Administrative Agent in connection
with the negotiation, preparation, execution, delivery, amendment, waiver,
restruc turing, reorganization (including a bankruptcy reorganization),
---------
enforcement or attempted enforcement of the Loan Documents, to the extent that
Borrower or any other Party is required by Section 11.3 to pay that cost or
----
expense but fails to do so upon demand. Nothing in this Section 10.7 shall
----
entitle the Administrative Agent or any indemnitee referred to above to recover
any amount from the Lenders if and to the extent that such amount has
theretofore been recovered from Borrower or any of its Subsidiaries. To the
extent that the Administrative Agent or any indemnitee referred to above is
later reimbursed such amount by Borrower or any of its Subsidiaries, it shall
return the amounts paid to it by the Lenders in respect of such amount.
10.8 Successor Administrative Agent. The Administrative Agent may,
------------------------------
and at the request of the Requisite Lenders shall, resign as Administrative
Agent upon reasonable notice to the Lenders and Borrower effective upon
acceptance of appointment by a successor Administrative Agent. If the
Administrative Agent shall resign as Administrative Agent under this Agreement,
the Requisite Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders, which successor Administrative Agent shall
be approved by Borrower (and such approval shall not be unreasonably withheld or
delayed). If no successor Administrative Agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and
Borrower, a successor Administrative Agent from among the Lenders.
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Upon the acceptance of its appointment as successor Administrative Agent
hereunder, such successor Administrative Agent shall succeed to all the rights,
powers and duties of the retiring Administrative Agent and the term
"Administrative Agent" shall mean such successor Administrative Agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Article 10, and
----------
Sections 11.3, 11.11 and 11.22, shall inure to its benefit as to any actions
---- ----- -----
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement. Notwithstanding the foregoing, if (a) the Administrative Agent has
not been paid its agency fees under Section 3.5 or has not been reimbursed for
---
any expense reimbursable to it under Section 11.3, in either case for a period
----
of at least one (1) year and (b) no successor Administrative Agent has accepted
appointment as Administrative Agent by the date which is thirty (30) days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided for above.
10.9 No Obligations of Borrower. Nothing contained in this Article 10
--------------------------
shall be deemed to impose upon Borrower any obligation in respect of the due and
punctual performance by the Administrative Agent of its obligations to the
Lenders under any provision of this Agreement, and Borrower shall have no
liability to the Administrative Agent or any of the Lenders in respect of any
failure by the Administrative Agent or any Lender to perform any of its
obligations to the Administrative Agent or the Lenders under this Agreement.
Without limiting the generality of the foregoing, where any provision of this
Agreement relating to the payment of any amounts due and owing under the Loan
Documents provides that such payments shall be made by Borrower to the
Administrative Agent for the account of the Lenders, Borrower' obligations to
the Lenders in respect of such payments shall be deemed to be satisfied upon the
making of such payments to the Administrative Agent in the manner provided by
this Agreement.
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Article 11
MISCELLANEOUS
-------------
11.1 Cumulative Remedies; No Waiver. The rights, powers, privileges
------------------------------
and remedies of the Administrative Agent and the Lenders provided herein or in
any Note or other Loan Document are cumulative and not exclusive of any right,
power, privilege or remedy provided by Law or equity. No failure or delay on
the part of the Administrative Agent or any Lender in exercising any right,
power, privilege or remedy may be, or may be deemed to be, a waiver thereof; nor
may any single or partial exercise of any right, power, privilege or remedy
preclude any other or further exercise of the same or any other right, power,
privilege or remedy. The terms and conditions of Article 8 hereof are inserted
---------
for the sole benefit of the Administrative Agent and the Lenders; the same may
be waived in whole or in part, with or without terms or conditions, in respect
of any Loan without prejudicing the Administrative Agent's or the Lenders'
rights to assert them in whole or in part in respect of any other Loan.
11.2 Amendments; Consents. No amendment, modification, supplement,
--------------------
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by Borrower or any other Party therefrom, may in any event be
effective unless in writing signed by the Administrative Agent with the written
approval of the Requisite Lenders (and, in the case of any amendment,
modification or supplement of or to any Loan Document to which Borrower is a
Party, signed by Borrower, and, in the case of any amendment, modification or
supplement to Article 10, signed by the Administrative Agent), and then only in
----------
the specific instance and for the specific purpose given; and, without the
approval in writing of all the Lenders, no amendment, modification, supplement,
termination, waiver or consent may be effective:
(a) To amend or modify the principal of, or the amount of
principal, principal prepayments or the rate of interest payable on, any
Note, or the amount of the Commitment or the Pro Rata Share of any Lender
or the amount of any commitment fee payable to any Lender, or any other fee
or amount payable to any Lender under the Loan Documents or to waive an
Event of Default consisting of the failure of Borrower to pay when due
principal, interest or any fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of or any installment of interest on, any Note or
any installment of any fee, or to extend the term of the Commitment;
-78-
(c) To amend the provisions of the definition of "Requisite
---------
Lenders," "Revolver Termination Date" or "Maturity Date"; or
------------------------- -------------
(d) To release any Subsidiary Guarantor from its obligations
under the Subsidiary Guaranty or to release any material Collateral from
the Lien of the Collateral Documents; or
(e) To amend or waive Article 8 or this Section 11.2; or
--------- ----
(f) To amend any provision of this Agreement that expressly
requires the consent or approval of all the Lenders.
Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon, all the
----
Lenders and the Administrative Agent.
11.3 Costs, Expenses and Taxes. Borrower shall pay within five (5)
-------------------------
Banking Days after demand, accompanied by an invoice therefor, the reasonable
costs and expenses of the Administrative Agent in connection with the
negotiation, preparation, syndication, execution and delivery of the Loan
Documents and any amendment thereto or waiver thereof. Borrower shall also pay
on demand, accompanied by an invoice therefor, the reasonable costs and expenses
of the Administrative Agent and the Lenders in connection with the refinancing,
restructur ing, reorganization (including a bankruptcy reorganization) and
---------
enforcement or attempted enforcement of the Loan Documents, and any matter
related thereto. The foregoing costs and expenses shall include filing fees,
recording fees, title insurance fees, appraisal fees, search fees, and other
out-of-pocket expenses and the reasonable fees and out-of-pocket expenses of any
legal counsel (including reasonably allocated costs of legal counsel employed by
---------
the Administrative Agent or any Lender), independent public accountants and
other outside experts retained by the Administrative Agent or any Lender,
whether or not such costs and expenses are incurred or suffered by the
Administrative Agent or any Lender in connection with or during the course of
any bankruptcy or insolvency proceedings of any of Borrower or any Subsidiary
thereof. Borrower shall pay any and all documentary and other taxes, excluding
---------
(i) taxes imposed on or measured in whole or in part by a Lender's overall net
income imposed on it by (A) any jurisdiction (or political subdivision thereof)
in which it is organized or maintains its principal office or Eurodollar Lending
Office or (B) any jurisdiction (or political subdivision thereof) in which it is
"doing business" or (ii) any withholding taxes or other taxes based on gross
income imposed by the United States of America for any period with respect to
which it has failed to provide Borrower with the appropriate form or forms
required by Section 11.21, to the extent
-----
-79-
such forms are then required by applicable Laws, and all costs, expenses, fees
and charges payable or determined to be payable in connection with the filing or
recording of this Agreement, any other Loan Document or any other instrument or
writing to be delivered hereunder or thereunder, or in connection with any
transaction pursuant hereto or thereto, and shall reimburse, hold harmless and
indemnify on the terms set forth in 11.11 the Administrative Agent and the
-----
Lenders from and against any and all loss, liability or legal or other expense
with respect to or resulting from any delay in paying or failure to pay any such
tax, cost, expense, fee or charge or that any of them may suffer or incur by
reason of the failure of any Party to perform any of its Obligations. Any amount
payable to the Administrative Agent or any Lender under this Section 11.3 shall
----
bear interest from the fifth Banking Day following the date of demand for
payment at the Default Rate.
11.4 Nature of Lenders' Obligations. The obligations of the Lenders
------------------------------
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by the
Administrative Agent or the Lenders or any of them pursuant hereto or thereto
may, or may be deemed to, make the Lenders a partnership, an association, a
joint venture or other entity, either among themselves or with the Borrower or
any Affiliate of any of Borrower. A default by any Lender will not increase the
Pro Rata Share of the Commitment attributable to any other Lender. Any Lender
not in default may, if it desires, assume in such proportion as the
nondefaulting Lenders agree the obligations of any Lender in default, but is not
obligated to do so. The Administrative Agent agrees that it will use its best
efforts either to induce promptly the other Lenders to assume the obligations of
a Lender in default or to obtain promptly another Lender, reasonably
satisfactory to Borrower, to replace such a Lender in default.
11.5 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties contained herein or in any other Loan Document, or in any
certificate or other writing delivered by or on behalf of any one or more of the
Parties to any Loan Document, will survive the making of the Loans hereunder and
the execution and delivery of the Notes, and have been or will be relied upon by
the Administrative Agent and each Lender, notwithstanding any investigation made
by the Administrative Agent or any Lender or on their behalf.
11.6 Notices. Except as otherwise expressly provided in the Loan
------- ------
Documents, all notices, requests, demands, directions and other communications
provided for hereunder or under any other Loan Document must be in writing and
must be mailed, telegraphed, telecopied, dispatched by commercial courier or
delivered to the appropriate party at the address set forth on the signature
pages of this Agreement or other applicable Loan Document or, as to any party to
any Loan Document, at any
-80-
other address as may be designated by it in a written notice sent to all other
parties to such Loan Document in accordance with this Section. Except as
------
otherwise expressly provided in any Loan Document, if any notice, request,
demand, direction or other communication required or permitted by any Loan
Document is given by mail it will be effective on the earlier of receipt or the
fourth Banking Day after deposit in the United States mail with first class or
airmail postage prepaid; if given by telegraph or cable, when delivered to the
telegraph company with charges prepaid; if given by telecopier, when sent; if
dispatched by commercial courier, on the scheduled delivery date; or if given by
personal delivery, when delivered.
11.7 Execution of Loan Documents. Unless the Administrative Agent
---------------------------
otherwise specifies with respect to any Loan Document, (a) this Agreement and
any other Loan Document may be executed in any number of counterparts and any
party hereto or thereto may execute any counterpart, each of which when executed
and delivered will be deemed to be an original and all of which counterparts of
this Agreement or any other Loan Document, as the case may be, when taken
together will be deemed to be but one and the same instrument and (b) execution
of any such counterpart may be evidenced by a telecopier transmission of the
signature of such party. The execution of this Agreement or any other Loan
Document by any party hereto or thereto will not become effective until
counterparts hereof or thereof, as the case may be, have been executed by all
the parties hereto or thereto.
11.8 Binding Effect; Assignment.
--------------------------
(a) This Agreement and the other Loan Documents to which
Borrower is a Party will be binding upon and inure to the benefit of
Borrower, the Administrative Agent, each of the Lenders, and their
respective successors and assigns, except that Borrower may not assign its
rights hereunder or thereunder or any interest herein or therein without
the prior written consent of all the Lenders. Each Lender represents that
it is not acquiring its Note with a view to the distribution thereof within
the meaning of the Securities Act of 1933, as amended (subject to any
requirement that disposition of such Note must be within the control of
such Lender). Any Lender may at any time pledge its Note or any other
instrument evidencing its rights as a Lender under this Agreement to a
Federal Reserve Bank, but no such pledge shall release that Lender from its
obligations hereunder or grant to such Federal Reserve Bank the rights of a
Lender hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Lender
may assign to one or more Eligible Assignees all or any portion of its Pro
Rata Share of the Commitment; provided that (i) such Eligible Assignee, if
--------
not then a
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Lender or an Affiliate of the assigning Lender, shall be approved by the
Administrative Agent and (if no Event of Default then exists) Borrower
(neither of which approvals shall be unreasonably withheld or delayed),
(ii) such assignment shall be evidenced by a Commitment Assignment and
Acceptance, a copy of which shall be furnished to the Administrative Agent
as hereinbelow provided, (iii) except in the case of an assignment to an
------
Affiliate of the assigning Lender, to another Lender or of the entire
remaining Commitment of the assigning Lender, the assignment shall not
assign a Pro Rata Share of the Commitment that is equivalent to less than
$5,000,000 and (iv) the effective date of any such assignment shall be as
specified in the Commitment Assignment and Acceptance, but not earlier than
the date which is five (5) Banking Days after the date the Administrative
Agent has received the Commitment Assignment and Acceptance. Upon the
effective date of such Commitment Assignment and Acceptance, the Eligible
Assignee named therein shall be a Lender for all purposes of this
Agreement, with the Pro Rata Share of the Commitment therein set forth and,
to the extent of such Pro Rata Share, the assigning Lender shall be
released from its further obligations under this Agreement. Borrower agrees
that it shall execute and deliver (against delivery by the assigning Lender
to Borrower of its Note) to such assignee Lender, Notes evidencing that
assignee Lender's Pro Rata Share of the Commitment, and to the assigning
Lender, Notes evidencing the remaining balance Pro Rata Share retained by
the assigning Lender.
(c) By executing and delivering a Commitment Assignment and
Acceptance, the Eligible Assignee thereunder acknowledges and agrees that:
(i) other than the representation and warranty that it is the legal and
beneficial owner of the Pro Rata Share of the Commitment being assigned
thereby free and clear of any adverse claim, the assigning Lender has made
no representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability,
genuineness or sufficiency of this Agreement or any other Loan Document;
(ii) the assigning Lender has made no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrower or the performance by Borrower of the Obligations; (iii) it has
received a copy of this Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Commitment Assignment and
Acceptance; (iv) it will, independently and without reliance upon the
Administrative Agent or any Lender and based on such documents and
information as it shall deem appropriate at the time, ▇▇▇▇▇-
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nue to make its own credit decisions in taking or not taking action under
this Agreement; (v) it appoints and authorizes the Administrative Agent to
take such action and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by this Agreement; and (vi) it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at the
Administrative Agent's Office a copy of each Commitment Assignment and
Acceptance delivered to it and a register (the "Register") of the names and
address of each of the Lenders and the Pro Rata Share of the Commitment
held by each Lender, giving effect to each Commitment Assignment and
Acceptance. The Register shall be available during normal business hours
for inspection by Borrower or any Lender upon reasonable prior notice to
the Administrative Agent. After receipt of a completed Commitment
Assignment and Acceptance executed by any Lender and an Eligible Assignee,
and receipt of an assignment fee of $3,500 from such Lender or Eligible
Assignee, the Administrative Agent shall, promptly following the effective
date thereof, provide to Borrower and the Lenders a revised Schedule 1.1
------------
giving effect there to. Borrower, the Administrative Agent and the Lenders
shall deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the Pro Rata Share of the Commitment listed therein
for all purposes hereof, and no assignment or transfer of any such Pro Rata
Share of the Commitment shall be effective, in each case unless and until a
Commitment Assignment and Acceptance effecting the assignment or transfer
thereof shall have been accepted by the Administrative Agent and recorded
in the Register as provided above. Prior to such recordation, all amounts
owed with respect to the applicable Pro Rata Share of the Commitment shall
be owed to the Lender listed in the Register as the owner thereof, and any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, assignee
or transferee of the corresponding Pro Rata Share of the Commitment.
(e) Each Lender may from time to time grant participations to
one or more banks or other financial institutions in a portion of its Pro
Rata Share of the Commitment; provided, however, that (i) such Lender's
-------- -------
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other
financial institutions shall not be a Lender hereunder for any purpose
except, if the participation agreement so
------
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provides, for the purposes of Sections 3.5, 3.6, 11.11 and 11.22 but only
--- --- ----- -----
to the extent that the cost of such benefits to Borrower does not exceed
the cost which Borrower would have incurred in respect of such Lender
absent the participation, (iv) Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this
Agreement, (v) the participation interest shall be expressed as a
percentage of the granting Lender's Pro Rata Share of the Commitment as it
then exists and shall not restrict an increase in the Commitment, or in the
granting Lender's Pro Rata Share of the Commitment, so long as the amount
of the participation interest is not affected thereby and (vi) the consent
of the holder of such participation interest shall not be required for
amendments or waivers of provisions of the Loan Documents other than those
----------
which (A) extend the Revolver Termination Date, any Amortization Date, the
Maturity Date or any other date upon which any payment of money is due to
the Lenders, (B) reduce the rate of interest on the Notes, any fee or any
other monetary amount payable to the Lenders, (C) reduce the amount of any
installment of principal due under the Notes, (D) release any Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty or (E) release
any material Collateral from the Lien of the Collateral Documents.
11.9 Right of Setoff. If an Event of Default has occurred and is
---------------
continuing, the Administrative Agent or any Lender (but in each case only with
the consent of the Requisite Lenders) may exercise its rights under Article 9 of
the Uniform Commercial Code and other applicable Laws and, to the extent
permitted by applicable Laws, apply any funds in any deposit account maintained
with it by Borrower and/or any Property of Borrower in its possession against
the Obligations.
11.10 Sharing of Setoffs. Each Lender severally agrees that if it,
------------------
through the exercise of any right of setoff, banker's lien or counterclaim
against Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) the Lender exercising the right of setoff, banker's lien or
counterclaim or otherwise receiving such payment shall purchase, and shall be
deemed to have simultaneously purchased, from each of the other Lenders a
participation in the Obligations held by the other Lenders and shall pay to the
other Lenders a purchase price in an amount so that the share of the Obligations
held by each Lender after the exercise of the right of setoff, banker's lien or
counterclaim or receipt of payment shall be in the same proportion that existed
prior to the exercise of the right of setoff, banker's lien or counterclaim or
receipt of payment; and (b) such other adjustments and purchases of
participations shall be made from time to time as shall be equitable to ensure
that all of the Lenders share any
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payment obtained in respect of the Obligations ratably in accordance with each
Lender's share of the Obligations immediately prior to, and without taking into
account, the payment; provided that, if all or any portion of a disproportionate
--------
payment obtained as a result of the exercise of the right of setoff, banker's
lien, counterclaim or otherwise is thereafter recovered from the purchasing
Lender by Borrower or any Person claiming through or succeeding to the rights of
Borrower, the purchase of a participation shall be rescinded and the purchase
price thereof shall be restored to the extent of the recovery, but without
interest. Each Lender that purchases a participation in the Obligations pursuant
to this Section 11.10 shall from and after the purchase have the right to give
-----
all notices, requests, demands, directions and other communications under this
Agreement with respect to the portion of the Obligations purchased to the same
extent as though the purchasing Lender were the original owner of the
Obligations purchased. Borrower expressly consents to the foregoing arrangements
and agree that any Lender holding a participation in an Obligation so purchased
pursuant to this Section 11.10 may exercise any and all rights of setoff,
-----
banker's lien or counterclaim with respect to the participation as fully as if
the Lender were the original owner of the Obligation purchased.
11.11 Indemnity by Borrower. Borrower agrees to indemnify, save and
---------------------
hold harmless the Administrative Agent and each Lender and their respective
directors, officers, agents, attorneys and employees (collectively the
"Indemnitees") from and against: (a) any and all claims, demands, actions or
------------
causes of action (except a claim, demand, action, or cause of action for any
------
amount excluded from the definition of "Taxes" in Section 3.12(d)) if the claim,
-------
demand, action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of Borrower, its Affiliates or any of its
officers, directors or stockholders relating to the Commitment, the use or
contemplated use of proceeds of any Loan, or the relationship of Borrower and
the Lenders under this Agreement; (b) any administrative or investigative
proceeding by any Governmental Agency arising out of or related to a claim,
demand, action or cause of action described in clause (a) above; and (c) any and
-
all liabilities, losses, costs or expenses (including reasonable attorneys' fees
---------
and the reasonably allocated costs of attorneys employed by any Indemnitee and
disbursements of such attorneys and other professional services) that any
Indemnitee suffers or incurs as a result of the assertion of any foregoing
claim, demand, action or cause of action; provided that no Indemnitee shall be
--------
entitled to indemnification for any loss caused by its own gross negligence or
willful misconduct or for any loss asserted against it by another Indemnitee. If
any claim, demand, action or cause of action is asserted against any Indemnitee,
such Indemnitee shall promptly notify Borrower, but the failure to so promptly
notify Borrower shall not affect Borrower's obligations under this Section
unless such failure materially prejudices Borrower's right to participate in the
contest of such claim, demand, action or cause of action, as hereinafter
provided. Such Indemnitee may (and
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shall, if requested by Borrower in writing) contest the validity, applicability
and amount of such claim, demand, action or cause of action and shall permit
Borrower to participate in such contest. Any Indemnitee that proposes to settle
or compromise any claim or proceeding for which Borrower may be liable for
payment of indemnity hereunder shall give Borrower written notice of the terms
of such proposed settlement or compromise reasonably in advance of settling or
compromising such claim or proceeding and shall obtain Borrower's prior consent
(which shall not be unreasonably withheld or delayed). In connection with any
claim, demand, action or cause of action covered by this Section 11.11 against
-----
more than one Indemnitee, all such Indemnitees shall be represented by the same
legal counsel (which may be a law firm engaged by the Indemnitees or attorneys
employed by an Indemnitee or a combination of the fore going) selected by the
Indemnitees and reasonably acceptable to Borrower; provided, that if such legal
--------
counsel determines in good faith that representing all such Indemnitees would or
could result in a conflict of interest under Laws or ethical principles
applicable to such legal counsel or that a defense or counterclaim is available
to an Indemnitee that is not available to all such Indemnitees, then to the
extent reasonably necessary to avoid such a conflict of interest or to permit
unqualified assertion of such a defense or counterclaim, each affected
Indemnitee shall be entitled to separate representation by legal counsel
selected by that Indemnitee and reasonably acceptable to Borrower, with all such
legal counsel using reasonable efforts to avoid unnecessary duplication of
effort by counsel for all Indemnitees; and further provided that the
----------------
Administrative Agent (as an Indemnitee) shall at all times be entitled to
representation by separate legal counsel (which may be a law firm or attorneys
employed by the Administrative Agent or a combination of the foregoing). Any
obligation or liability of Borrower to any Indemnitee under this Section 11.11
-----
shall survive the expiration or termination of this Agreement and the repayment
of all Loans and the payment and performance of all other Obligations owed to
the Lenders.
11.12 Nonliability of the Lenders. Borrower acknowledges and agrees
---------------------------
that:
(a) Any inspections of any Property of Borrower made by or
through the Administrative Agent or the Lenders are for purposes of
administration of the Loan only and Borrower is not entitled to rely upon
the same (whether or not such inspections are at the expense of Borrower);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to the Administrative Agent or the Lenders
pursuant to the Loan Documents, neither the Administrative Agent nor the
Lenders shall be deemed to have warranted or represented the sufficiency,
legality, effectiveness or legal effect of the same, or of any term,
provision or
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condition thereof, and such acceptance or approval thereof shall not
constitute a warranty or representation to anyone with respect thereto by
the Administrative Agent or the Lenders;
(c) The relationship between Borrower and the Administrative
Agent and the Lenders is, and shall at all times remain, solely that of
borrowers and lenders; neither the Administrative Agent nor the Lenders
shall under any circumstance be construed to be partners or joint venturers
of Borrower or its Affiliates; neither the Administrative Agent nor the
Lenders shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrower or its
Affiliates, or to owe any fiduciary duty to Borrower or its Affiliates;
neither the Administrative Agent nor the Lenders undertake or assume any
responsibility or duty to Borrower or its Affiliates to select, review,
inspect, supervise, pass judgment upon or inform Borrower or its Affiliates
of any matter in connection with their Property or the operations of
Borrower or its Affiliates; Borrower and its Affiliates shall rely entirely
upon their own judgment with respect to such matters; and any review,
inspection, supervision, exercise of judgment or supply of information
undertaken or assumed by the Administrative Agent or the Lenders in
connection with such matters is solely for the protection of the
Administrative Agent and the Lenders and neither Borrower nor any other
Person is entitled to rely thereon; and
(d) The Administrative Agent and the Lenders shall not be
responsible or liable to any Person for any loss, damage, liability or
claim of any kind relating to injury or death to Persons or damage to
Property caused by the actions, inaction or negligence of Borrower and/or
its Affiliates and Borrower hereby indemnify and hold the Administrative
Agent and the Lenders harmless on the terms set forth in Section 11.11 from
-----
any such loss, damage, liability or claim.
11.13 No Third Parties Benefited. This Agreement is made for the
--------------------------
purpose of defining and setting forth certain obligations, rights and duties of
Borrower, the Administrative Agent and the Lenders in connection with the Loans,
and is made for the sole benefit of Borrower, the Administrative Agent and the
Lenders, and the Administrative Agent's and the Lenders' successors and assigns.
Except as provided in Sections 11.8 and 11.11, no other Person shall have any
------ ---- -----
rights of any nature hereunder or by reason hereof.
11.14 Confidentiality. Each Lender agrees to hold any confidential
---------------
information that it may receive from Borrower pursuant to this Agreement in
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confidence, except for disclosure: (a) to other Lenders or Affiliates of a
------
Lender; (b) to legal counsel and accountants for Borrower or any Lender; (c) to
other professional advisors to Borrower or any Lender, provided that the
recipient has accepted such information subject to a confidentiality agreement
substantially similar to this Section 11.14; (d) to regulatory officials having
-----
jurisdiction over that Lender; (e) as required by Law or legal process, provided
that each Lender agrees to notify Borrower of any such disclosures unless
prohibited by applicable Laws, or in connection with any legal proceeding to
which that Lender and Borrower are adverse parties; and (f) to another financial
institution in connection with a disposition or proposed disposition to that
financial institution of all or part of that Lender's interests hereunder or a
parti cipation interest in its Notes, provided that the recipient has accepted
such information subject to a confidentiality agreement substantially similar to
this Section 11.14. For purposes of the foregoing, "confidential information"
-----
shall mean any information respecting Borrower or its Subsidiaries reasonably
considered by Borrower to be confidential, other than (i) information previously
----------
filed with any Governmental Agency and available to the public, (ii) information
previously published in any public medium from a source other than, directly or
indirectly, that Lender, and (iii) information previously disclosed by Borrower
to any Person not associated with Borrower which does not owe a professional
duty of confidentiality to Borrower or which has not executed an appropriate
confidentiality agreement with Borrower. Nothing in this Section shall be
construed to create or give rise to any fiduciary duty on the part of the
Administrative Agent or the Lenders to Borrower.
11.15 Further Assurances. Borrower shall, at its expense and without
------------------
expense to the Lenders or the Administrative Agent, do, execute and deliver such
further acts and documents as the Requisite Lenders or the Administrative Agent
from time to time reasonably require for the assuring and confirming unto the
Lenders or the Administrative Agent of the rights hereby created or intended now
or hereafter so to be, or for carrying out the intention or facilitating the
performance of the terms of any Loan Document.
11.16 Integration. This Agreement, together with the other Loan
-----------
Documents and the letter agreement referred to in Sections 3.2 and 3.4,
--- ---
comprises the complete and integrated agreement of the parties on the subject
matter hereof and supersedes all prior agreements, written or oral, on the
subject matter hereof. In the event of any conflict between the provisions of
this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control and govern; provided that the inclusion of supplemental
--------
rights or remedies in favor of the Administrative Agent or the Lenders in any
other Loan Document shall not be deemed a conflict with this Agreement. Each
Loan Document was drafted with the joint participation of the
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respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
11.17 Governing Law. Except to the extent otherwise provided therein,
------------- ------
each Loan Document shall be governed by, and construed and enforced in
accordance with, the Laws of California applicable to contracts made and
performed in California.
11.18 Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable or invalid as to any party or in
any jurisdiction shall, as to that party or jurisdiction, be inoperative,
unenforceable or invalid without affecting the remaining provisions or the
operation, enforceability or validity of that provision as to any other party or
in any other jurisdiction, and to this end the provisions of all Loan Documents
are declared to be severable.
11.19 Headings. Article and Section headings in this Agreement and
--------
the other Loan Documents are included for convenience of reference only and are
not part of this Agreement or the other Loan Documents for any other purpose.
11.20 Time of the Essence. Time is of the essence of the Loan
-------------------
Documents.
11.21 Foreign Lenders and Participants. Each Lender that is
--------------------------------
incorporated or otherwise organized under the Laws of a jurisdiction other than
the United States of America or any State thereof or the District of Columbia
shall deliver to Borrower (with a copy to the Administrative Agent), on or
before the Closing Date (or on or before accepting an assignment or receiving a
participation interest herein pursuant to Section 11.8, if applicable) two duly
----
completed copies, signed by a Responsible Official, of either Form 1001
(relating to such Lender and entitling it to a complete exemption from
withholding on all payments to be made to such Lender by Borrower pursuant to
this Agreement) or Form 4224 (relating to all payments to be made to such Lender
by the Borrower pursuant to this Agreement) of the United States Internal
Revenue Service or such other evidence (including, if reasonably necessary, Form
---------
W-9) satisfactory to Borrower and the Administrative Agent that no withholding
under the federal income tax laws is required with respect to such Lender.
Thereafter and from time to time, each such Lender shall (a) promptly submit to
Borrower (with a copy to the Administrative Agent), such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and the
Administrative Agent of any available exemption from, United States withholding
taxes in respect of all payments to be made to such Lender by
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Borrower pursuant to this Agreement and (b) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the re-designation of its Eurodollar
Lending Office, if any) to avoid any requirement of applicable Laws that
Borrower make any deduction or withholding for taxes from amounts payable to
such Lender. In the event that Borrower or the Administrative Agent become aware
that a participation has been granted pursuant to Section 11.8(e) to a financial
-------
institution that is incorporated or otherwise organized under the Laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia, then, upon request made by Borrower or the Administrative
Agent to the Lender which granted such participation, such Lender shall cause
such participant financial institution to deliver the same documents and
information to Borrower and the Administrative Agent as would be required under
this Section if such financial institution were a Lender.
11.22 Hazardous Material Indemnity. Borrower hereby agrees to
----------------------------
indemnify, hold harmless and defend (by counsel reasonably satisfactory to the
Administrative Agent) the Administrative Agent and each of the Lenders and their
respective directors, officers, employees, agents, successors and assigns from
and against any and all claims, losses, damages, liabilities, fines, penalties,
charges, administrative and judicial proceedings and orders, judgments, remedial
action require ments, enforcement actions of any kind, and all costs and
expenses incurred in connection therewith (including but not limited to
reasonable attorneys' fees and the reasonably allocated costs of attorneys
employed by the Administrative Agent or any Lender, and expenses to the extent
that the defense of any such action has not been assumed by Borrower), arising
directly or indirectly out of (i) the presence on, in, under or about any Real
Property of any Hazardous Materials, or any releases or discharges of any
Hazardous Materials on, under or from any Real Property and (ii) any activity
carried on or undertaken on or off any Real Property by Borrower or any of its
predecessors in title, whether prior to or during the term of this Agreement,
and whether by Borrower or any predecessor in title or any employees, agents,
contractors or subcontractors of Borrower or any predecessor in title, or any
third persons at any time occupying or present on any Real Property, in
connection with the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Materials at any time located
or present on, in, under or about any Real Property. The foregoing indemnity
shall further apply to any residual contamination on, in, under or about any
Real Property, or affecting any natural resources, and to any contamination of
any Property or natural resources arising in connection with the generation,
use, handling, storage, transport or disposal of any such Hazardous Materials,
and irrespective of whether any of such activities were or will be undertaken in
accordance with applicable Laws, but the foregoing indemnity shall not apply to
Hazardous Materials on any Real Property, the presence of which is
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caused by the Administrative Agent or the Lenders. Borrower hereby acknowledges
and agrees that, notwithstanding any other provision of this Agreement or any of
the other Loan Documents to the contrary, the obligations of Borrower under this
Section shall be unlimited corporate obligations of Borrower and shall not be
---
secured by any Lien on any Real Property. Any obligation or liability of
Borrower to any Indemnitee under this Section 11.22 shall survive the expiration
-----
or termination of this Agreement and the repayment of all Loans and the payment
and performance of all other Obligations owed to the Lenders.
11.23 Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT
--------------------------------
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
11.24 Purported Oral Amendments. BORROWER EXPRESSLY ACKNOWLEDGES THAT
-------------------------
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED, OR
THE PROVISIONS HEREOF OR THEREOF WAIVED OR SUPPLEMENTED, BY AN INSTRUMENT IN
WRITING THAT COMPLIES WITH SECTION 11.2. BORROWER AGREES THAT IT WILL NOT RELY
----
ON ANY COURSE OF DEALING, COURSE OF PERFORMANCE, OR ORAL OR WRITTEN STATEMENTS
BY ANY REPRESENTATIVE OF THE MANAGING AGENT OR ANY BANK THAT DOES NOT COMPLY
WITH SECTION 11.2 TO EFFECT AN
----
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AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
DATA PROCESSING RESOURCES CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
Address:
Data Processing Resources Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇ FARGO BANK, NATIONAL
ASSOCIATION, as Administrative Agent and a
Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Address:
▇▇▇▇▇ Fargo Bank, National Association
Orange Coast Regional Banking Center
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NATIONAL CITY BANK
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Vice President
Address:
National City Bank
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Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
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Senior Vice President
Address:
NationsBank of Texas, N.A.
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Senior Vice President
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Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Vice President
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Vice President
Address:
Union Bank of California, N.A.
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Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
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