EXHIBIT 10.2
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AMENDED AND RESTATED AXEL CREDIT AGREEMENT
DATED AS OF SEPTEMBER 17, 1998
AMONG
AMSCAN HOLDINGS, INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
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AMSCAN HOLDINGS, INC.
AMENDED AND RESTATED AXEL CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1.
DEFINITIONS............................... 3
1.1 Certain Defined Terms...................................... 3
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement............................... 39
1.3 Other Definitional Provisions and Rules of Construction.... 39
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS............... 40
2.1 Commitments; Making of Loans; the Register; Notes.......... 40
2.2 Interest on the Loans...................................... 44
2.3 Fees....................................................... 47
2.4 Repayments, Prepayments; General Provisions
Regarding Payments; Application of Proceeds of Collateral
and Payments Under Subsidiary Guaranty.................... 47
2.5 Use of Proceeds............................................ 53
2.6 Special Provisions Governing Eurodollar Rate AXELs......... 54
2.7 Increased Costs; Taxes; Capital Adequacy................... 56
2.8 Obligation of Lenders to Mitigate.......................... 60
2.9 Removal or Replacement of a Lender......................... 61
SECTION 3.
CONDITIONS TO EFFECTIVENESS; CONDITIONS TO ADDITIONAL AXELS...... 62
3.1 Conditions to Effectiveness................................ 62
3.2 Additional Conditions to AXELs............................. 71
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES................ 72
4.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.................................. 72
4.2 Authorization of Borrowing, etc............................ 73
4.3 Financial Condition........................................ 75
4.4 No Material Adverse Change................................. 76
4.5 Title to Properties; Liens; Real Property.................. 76
4.6 Litigation; Adverse Facts.................................. 77
4.7 Payment of Taxes........................................... 77
(i)
Page
4.8 Performance of Agreements; Materially Adverse Agreements;
Material Contracts......................................... 77
4.9 Governmental Regulation.................................... 78
4.10 Securities Activities...................................... 78
4.11 Employee Benefit Plans..................................... 78
4.12 Certain Fees............................................... 79
4.13 Environmental Protection................................... 79
4.14 Employee Matters........................................... 80
4.15 Solvency................................................... 80
4.16 Matters Relating to Collateral............................. 80
4.17 Related Agreements......................................... 81
4.18 Disclosure................................................. 82
4.19 Revolving Credit Agreement.................................... 82
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS................... 83
5.1 Financial Statements and Other Reports..................... 83
5.2 Corporate Existence, etc................................... 89
5.3 Payment of Taxes and Claims; Tax Consolidation............. 89
5.4 Maintenance of Properties; Insurance; Application of Net
Insurance/CondemnationProceeds............................. 89
5.5 Inspection Rights; Lender Meeting.......................... 91
5.6 Compliance with Laws, etc.................................. 91
5.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental
Laws....................................................... 92
5.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and
Future Subsidiaries........................................ 94
5.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral........................ 96
5.10 Interest Rate Protection................................... 99
5.11 Cash Management System.....................................100
5.12 Trademarks and Patents.....................................100
SECTION 6.
COMPANY'S NEGATIVE COVENANTS.......................100
6.1 Iindebtedness and Issuance of Disqualified Stock ..........100
6.2 Liens and Related Matters .................................103
6.3 Restricted Payments .......................................103
6.4 Dividends and Other Payment Restrictions Affecting
Subsidiaries...............................................106
6.5 Restrictions on Fundamental Changes; Asset Sales...........107
6.6 Transactions with Affiliates...............................108
(ii)
Page
6.7 Asset Sales................................................109
6.8 Amendments of Documents Relating to Subordinated
Indebtedness...............................................109
SECTION 7.
EVENTS OF DEFAULT...........................110
7.1 Failure to Make Payments When Due..........................110
7.2 Default in Other Agreements................................110
7.3 Breach of Certain Covenants................................110
7.5 Other Defaults under AXEL Loan Documents...................111
7.6 Judgments..................................................111
7.7 Bankruptcy; Appointment of Custodian.......................111
7.8 Invalidity of Subsidiary Guaranty..........................112
7.9 Change in Control..........................................112
SECTION 8.
AGENTS..................................114
8.1 Appointment................................................114
8.2 Powers and Duties; General Immunity........................115
8.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness..............................117
8.4 Right to Indemnity.........................................117
8.5 Successor Administrative Agent.............................117
8.6 Collateral Documents and Guaranties........................118
SECTION 9.
MISCELLANEOUS..............................119
9.1 Assignments and Participations in AXELs....................119
9.2 Expenses...................................................122
9.3 Indemnity..................................................123
9.4 Set-Off; Security Interest in Deposit Accounts.............124
9.5 Ratable Sharing............................................124
9.6 Amendments and Waivers.....................................125
9.7 Independence of Covenants..................................126
9.8 Notices....................................................126
9.9 Survival of Representations, Warranties and Agreements.....126
9.10 Failure or Indulgence Not Waiver; Remedies Cumulative......127
9.11 Marshalling; Payments Set Aside............................127
9.12 Severability...............................................127
9.13 Obligations Several; Independent Nature of Lenders'
Rights.....................................................127
9.14 Headings...................................................128
9.15 Applicable Law.............................................128
9.16 Successors and Assigns.....................................128
(iii)
Page
9.17 Consent to Jurisdiction and Service of Process.............128
9.18 Waiver of Jury Trial.......................................129
9.19 Confidentiality............................................130
9.20 Counterparts; Effectiveness................................130
Signature pages S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF AXEL NOTE
IV FORM OF COMPLIANCE CERTIFICATE
V-A FORM OF OPINION OF WACHTELL, LIPTON ▇▇▇▇▇ & ▇▇▇▇
▇-▇ FORM OF OPINION OF ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
VI FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
VII FORM OF ASSIGNMENT AGREEMENT
VIII FORM OF CERTIFICATE RE NON-BANK STATUS
IX FORM OF FINANCIAL CONDITION CERTIFICATE
X FORM OF COMPANY PLEDGE AGREEMENT
XI FORM OF COMPANY SECURITY AGREEMENT
XII FORM OF SUBSIDIARY GUARANTY
XIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIV FORM OF SUBSIDIARY SECURITY AGREEMENT
XV FORM OF MORTGAGE
XVI FORM OF COLLATERAL ACCESS AGREEMENT
XVII FORM OF SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT
(v)
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP; MANAGEMENT
3.1E-I INDEBTEDNESS TO BE REPAID UNDER EXISTING AMSCAN CREDIT
AGREEMENTS
3.1E-II INDEBTEDNESS TO BE REPAID UNDER EXISTING ANAGRAM CREDIT
AGREEMENTS
4.1 SUBSIDIARIES OF COMPANY
4.5 REAL PROPERTY
4.6 LITIGATION
4.8 MATERIAL CONTRACTS
4.13 ENVIRONMENTAL MATTERS
5.11 CASH MANAGEMENT SYSTEM
6.1 CERTAIN EXISTING INDEBTEDNESS
(vi)
AMSCAN HOLDINGS, INC.
AMENDED AND RESTATED AXEL CREDIT AGREEMENT
This AMENDED AND RESTATED AXEL CREDIT AGREEMENT is dated as of
September 17, 1998 and entered into by and among AMSCAN HOLDINGS, INC., a
Delaware corporation ("COMPANY"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., ("GSCP")
as arranger (in such capacity, "ARRANGER"), and as syndication agent (in such
capacity, "SYNDICATION AGENT"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each, including GSCP and Fleet (as hereinafter defined),
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
and FLEET NATIONAL BANK ("FLEET"), as administrative agent for Lenders (in such
capacity, "ADMINISTRATIVE AGENT").
R E C I T A L S
- - - - - - - -
WHEREAS, Company, Arranger, Syndication Agent, Administrative Agent and
certain financial institutions ("EXISTING LENDERS") are parties to that certain
AXEL Credit Agreement dated as of December 19, 1997 (as heretofore amended,
supplemented or otherwise modified, the "EXISTING AXEL CREDIT AGREEMENT")
pursuant to which Existing Lenders have extended certain credit facilities to
Company, the proceeds of which were applied on the Closing Date (this and other
capitalized terms used in these recitals without definition being used as
defined in subsection 1.1) to fund a portion of the Recapitalization Financing
Requirements;
WHEREAS, Company is party to a separate Revolving Loan Credit Agreement
dated as of December 19, 1997 (as heretofore or hereafter amended, supplemented,
refinanced, renewed or extended or otherwise modified from time to time, the
"REVOLVING CREDIT AGREEMENT") with Fleet National Bank, as administrative agent
("REVOLVING CREDIT FACILITY AGENT"), ▇▇▇▇▇▇▇ Sachs Credit Partners L.P., as
arranger and syndication agent, and the financial institutions party thereto as
lenders ("REVOLVING CREDIT LENDERS"), pursuant to which Revolving Credit Lenders
have extended certain credit facilities to Company to fund a portion of the
Recapitalization Financing Requirements and to provide financing for working
capital, the completion of Permitted Business Acquisitions, and other general
corporate purposes of Company and its Subsidiaries;
WHEREAS, on the Closing Date, Administrative Agent and Revolving Credit
Facility Agent entered into the Intercreditor Agreement pursuant to which
Administrative Agent and Revolving Credit Facility Agent appointed Fleet to
serve as collateral agent and representative (in such capacity, "COLLATERAL
AGENT") for Existing Lenders, Revolving Credit Lenders, Administrative Agent,
Revolving Credit Facility Agent and the other agents under
the Existing AXEL Credit Agreement and the Revolving Credit Agreement
(collectively, "SECURED PARTIES") and agreed to the terms on which Collateral,
the benefits of guarantees and the proceeds thereof are to be shared between the
credit facilities;
WHEREAS, Company has secured all of the Obligations under the Existing
AXEL Credit Agreement and under the other Loan Documents by granting to
Collateral Agent, on behalf of Secured Parties, a first priority Lien on
substantially all of its real, personal and mixed property, including a pledge
of all of the capital stock of each of its Domestic Subsidiaries and 66% of the
capital stock of each of its Foreign Subsidiaries;
WHEREAS, all of the Domestic Subsidiaries of Company have guarantied
the Obligations under the Existing AXEL Credit Agreement and under the other
Loan Documents and secured their guaranties by granting to Collateral Agent, on
behalf of Secured Parties, a first priority Lien on substantially all of their
respective personal and mixed property, including a pledge of all of the capital
stock of each of their respective Domestic Subsidiaries and 66% of the capital
stock of each of their respective Foreign Subsidiaries:
WHEREAS, on the Restatement Effective Date, Company intends to acquire
(the "ANAGRAM ACQUISITION") all of the outstanding Capital Stock (the "ANAGRAM
SHARES") of Anagram International, Inc. and certain related companies
(collectively, "ANAGRAM") from ▇▇▇▇▇ ▇▇▇▇▇▇, certain members of his family and
certain trusts (collectively, the "ANAGRAM SELLERS") pursuant to the Anagram
Acquisition Agreement in exchange for aggregate consideration consisting of
$74,500,000 in cash plus 120 shares of newly-issued Company Common Stock (the
"NEW COMPANY SHARES") plus warrants to purchase 10 shares of Company Common
Stock.
WHEREAS, Company desires that Existing Lenders and New Lenders amend
and restate the Existing AXEL Credit Agreement in its entirety to provide for
Additional AXELs in an aggregate principal amount of $40,000,000 to be added to
the Existing AXELs and made a part of the AXELs, the proceeds of which
Additional AXELs, together with (i) cash on hand at the Company and (ii)
proceeds of incremental borrowings under the Revolving Credit Agreement in an
amount up to $23,500,000 plus the excess, if any, of $15,000,000 over the amount
of cash on hand at the Company on the Restatement Effective Date, will be used
(1) to fund the cash portion of the consideration for the Anagram Acquisition,
(2) to refinance certain existing indebtedness of Anagram and its Subsidiaries,
and (3) to pay Anagram Transaction Costs;
WHEREAS, concurrently with the amendment and restatement of the
Existing AXEL Credit Agreement, Company and Revolving Credit Lenders will amend
and restate the Revolving Credit Agreement in its entirety in order to permit
the Additional AXELs and the Anagram Acquisition and to make certain other
changes in connection therewith;
2
WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing AXEL Credit Agreement or be deemed to evidence or constitute
repayment of all or any portion of such obligations and liabilities and that
this Agreement amend and restate in its entirety the Existing AXEL Credit
Agreement and re-evidence the Obligations of Company outstanding thereunder; and
WHEREAS, it is the intent of Loan Parties to confirm that all
Obligations of Loan Parties under the other Loan Documents shall continue in
full force and effect and that, from and after the Restatement Effective Date
all references to the "AXEL CREDIT AGREEMENT" contained therein shall be deemed
to refer to this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and Agents agree
that on the Restatement Effective Date the Existing AXEL Credit Agreement shall
be amended and restated in its entirety as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUIRED DEBT" means, with respect to any specified Person,
(i) indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred
in connection with, or in contemplation of, such other Person merging
with or into or becoming a Restricted Subsidiary of such specified
Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"ADDITIONAL AXEL[Trademark]" or "ADDITIONAL AXELS[Trademark]"
means a loan made by a Lender to Company as an amortization extended
loan pursuant to subsection 2.1A(ii). The term AXEL is a registered
trademark of ▇▇▇▇▇▇▇, Sachs & Co.
"ADDITIONAL AXEL COMMITMENT" means a commitment of a Lender to
make an Additional AXEL as set forth in subsection 2.1A(ii), and
"ADDITIONAL AXEL COMMITMENTS" means such commitments of all Lenders in
the aggregate.
"ADDITIONAL AXEL NOTES" means the promissory notes of Company
issued pursuant to subsection 2.1E on the Restatement Effective Date,
substantially in the
3
form of Exhibit III annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar
Rate AXEL, the interest rate per annum (rounded upward, if necessary,
to the nearest 1/32 of one percent) as determined on the basis of the
offered rates for deposits in U.S. dollars, for a period of time
comparable to such Interest Period which appears on the Telerate Page
3750 as of 11:00 a.m. (New York time) two Business Days before the
first day of such Interest Period; provided, however, that if the rate
described above does not appear on the Telerate System on any
applicable interest determination date, the Adjusted Eurodollar Rate
shall be the rate (rounded upward as described above, if necessary for
deposits in U.S. dollars for a period substantially equal to the
interest period on the Reuters Page "LIBO" or such other page as may
replace the LIBO page on that service for the purpose of displaying
such rates), as of 11:00 a.m. (London time) two Business Days before
the first day of such Interest Period.
If both the Telerate and Reuters system are unavailable, then
the rate for that date will be determined on the basis of the offered
rates for deposits in U.S. dollars for a period of time comparable to
such Interest Period which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. (New York time) two
Business Days before the first day of such Interest Period as selected
by the Administrative Agent. The principal London office of each of the
four major London banks will be requested to provide a quotation of its
U.S. dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of the
quotations. If fewer than two quotations are provided as requested, the
rate for the date will be determined on the basis of the rates quoted
for loans in U.S. dollars to leading European banks for a period of
time comparable to such Interest Period offered by major banks in New
York City at approximately 11:00 a.m. (New York time) two Business Days
before the first day of such Interest Period. In the event that
Administrative Agent is unable to obtain any such quotation as provided
above, it will be deemed that the Adjusted Eurodollar Rate for such
Interest Rate cannot be determined.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Eurodollar Rate Reserve Percentage with
respect to Eurocurrency Liabilities, the Adjusted Eurodollar Rate for
an Interest Period shall be equal to the amount determined above for
such Interest Period divided by a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"ADMINISTRATIVE AGENT" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 8.5A.
4
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of
this definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control with"),
as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of
voting securities, by agreement or otherwise; provided that beneficial
ownership of 10% or more of the voting securities of a Person shall be
deemed to be control.
"AFFILIATE TRANSACTION" has the meaning assigned to that term
in subsection 6.6.
"AGENT" means, individually, each of Arranger, Syndication
Agent, Collateral Agent and Administrative Agent and "AGENTS" means
Arranger, Syndication Agent, Collateral Agent and Administrative Agent,
collectively.
"AGREEMENT" means this Amended and Restated AXEL Credit
Agreement dated as of September 17, 1998, as it may be amended,
supplemented or otherwise modified from time to time.
"ANAGRAM" has the meaning assigned to such term in the
recitals to this Agreement.
"ANAGRAM ACQUISITION" has the meaning assigned to such term in
the recitals to this Agreement.
"ANAGRAM ACQUISITION AGREEMENT" means the Stock Purchase
Agreement dated as of August 6, 1998 by and among Company and the
Anagram Sellers and all exhibits and schedules thereto.
"ANAGRAM HEADQUARTERS FACILITY" means, as of the Restatement
Effective Date, the real property in Minnesota owned in fee simple by
Eden Prairie Holdings where Anagram's headquarters and manufacturing
site are located.
"ANAGRAM INTERNATIONAL" means Anagram International, Inc., a
Minnesota corporation.
"ANAGRAM SELLERS" has the meaning assigned to such term in the
recitals to this Agreement.
5
"ANAGRAM SHARES" has the meaning assigned to such term in the
recitals to this Agreement.
"ANAGRAM TRANSACTION COSTS" means the fees, costs and expenses
payable by Company in connection with the transactions contemplated by
the Anagram Acquisition Agreement, including without limitation any
fees payable to Agents and Lenders on or before the Restatement
Effective Date in connection therewith.
"ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"ASSET SALE" means the sale by Company or any of its
Subsidiaries to any Person other than Company or any of its
wholly-owned Subsidiaries of (i) any of the stock of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any
other assets (whether tangible or intangible) of Company or any of its
Subsidiaries (other than (a) inventory sold in the ordinary course of
business (b) sales of Cash Equivalents (as defined in the Revolving
Credit Agreement) for the fair market value thereof, and (c) any such
other assets to the extent that the aggregate value of such assets sold
in any single transaction or related series of transactions is equal to
$500,000 or less).
"ASSIGNMENT AGREEMENT" means (i) with respect to the period
ending on the Restatement Effective Date, an Assignment Agreement in
substantially the form of Exhibit VII annexed to the Existing AXEL
Credit Agreement, and (ii) thereafter, an Assignment Agreement in
substantially the form of Exhibit VII annexed hereto.
"AUXILIARY PLEDGE AGREEMENT" means each pledge agreement or
similar instrument governed by the laws of a country other than the
United States, executed on the Closing Date pursuant to subsection
3.1I(vii) of the Existing AXEL Credit Agreement or on the Restatement
Effective Date pursuant to subsection 3.1H(v) or from time to time
thereafter in accordance with subsection 5.8 by Company or any Domestic
Subsidiary that owns capital stock of one or more Foreign Subsidiaries
organized in such country, in form and substance satisfactory to
Collateral Agent, as such Auxiliary Pledge Agreement may hereafter be
amended, supplemented or otherwise modified from time to time, and
"AUXILIARY PLEDGE AGREEMENTS" means all such pledge agreements or
instruments, collectively.
"AXEL" or "AXELS" means the Existing AXELs and the Additional
AXELs, collectively.
"AXEL EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the funding of the Additional AXELs,
the sum of that Lender's Additional AXEL Commitment plus the
outstanding principal amount of
6
the Existing AXELs of that Lender, and (ii) after the funding of the
Additional AXELs, the outstanding principal amount of the AXELs of that
Lender.
"AXEL LOAN DOCUMENTS" means this Agreement, the AXEL Notes,
the Subsidiary Guaranty, the Collateral Documents any Hedging
Agreements with Lenders, and the Intercreditor Agreement.
"AXEL NOTES" means (i) the Existing AXEL Notes, (ii) the
Additional AXEL Notes, and (iii) any promissory notes issued by Company
pursuant to the last sentence of subsection 9.1B(i) in connection with
assignments of the AXELs of any Lenders, in each case substantially in
the form of Exhibit III annexed hereto, as they may be amended,
supplemented or otherwise modified from time to time.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BANKRUPTCY LAW" means title 11, U.S. Code or any similar
Federal or state law for the relief of debtors.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE AXELS" means AXELs bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of the State of New
York or is a day on which banking institutions located in such state
are authorized or required by law or other governmental action to
close.
"CAPITAL LEASE", means, at any time any determination thereof
is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a
balance sheet in accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity,
any and all shares, interests, participation, rights or other
equivalents (however designated) of corporate stock, (iii) in the case
of a partnership, partnership interests (whether of general or limited)
and (iv) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person (but excluding customary
employee incentive or bonus arrangements, and customary earn-out
provisions granted in connection with acquisition transactions and
providing for aggregate payouts not in excess of $5,000,000 per year).
7
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality thereof,
(iii) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any domestic bank having capital and
surplus in excess of $500 million and a ▇▇▇▇▇ Bank Watch Rating of "B"
(or the equivalent rating under a substantially similar ratings system
if ▇▇▇▇▇ Bank Watch Ratings are no longer published) or better, (iv)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper
having the highest rating obtainable from ▇▇▇▇▇'▇ Investors Service,
Inc. or Standard & Poor's Corporation (or in their absence, an
equivalent rating from another nationally recognized securities rating
agency) and in each case maturing within one year after the date of
acquisition.
"CERTIFICATE OF MERGER" means the Certificate of Merger dated
as of December 19, 1997 for the Merger of Newco with and into Company,
as in effect on the Closing Date.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit VIII annexed hereto delivered by a
Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"CLOSING DATE" means December 19, 1997, the date on which the
initial AXELs were made under the Existing AXEL Credit Agreement.
"COLLATERAL" means, collectively, all of the real, personal
and mixed property (including capital stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as
security for the Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver,
mortgagee waiver, bailee letter or any similar acknowledgement or
agreement of any landlord in respect of any Leased Property, or
mortgagee in respect of any real property, in which Company or any of
its Subsidiaries owns or holds a fee interest and which is subject to a
mortgage, held by such mortgagee, in either case where any Collateral
is located, or any warehouseman or processor in possession of any
Inventory of any Loan Party, substantially in the form of Exhibit XVI
annexed hereto with such changes thereto as may be agreed to by
Collateral Agent in the reasonable exercise of its discretion.
"COLLATERAL ACCOUNTS" has the meaning assigned to that term in
the Intercreditor Agreement.
8
"COLLATERAL AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"COLLATERAL DOCUMENTS" means the Company Pledge Agreement, the
Company Security Agreement, the Subsidiary Pledge Agreements, the
Subsidiary Security Agreements, the Subsidiary Patent and Trademark
Security Agreements, the Mortgages, the Auxiliary Pledge Agreements and
all other instruments or documents delivered by any Loan Party pursuant
to this Agreement or any of the other Loan Documents in order to grant
to Collateral Agent, on behalf of Secured Parties, a Lien on any real,
personal or mixed property of that Loan Party as security for the
Obligations.
"COMPANY" means Company as the surviving corporation in the
Merger.
"COMPANY COMMON STOCK" means the shares of common stock of
Company par value $0.10 per share.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in
the form of Exhibit X annexed hereto, as such Company Pledge Agreement
may hereafter be amended, supplemented or otherwise modified from time
to time.
"COMPANY SECURITY AGREEMENT" means the Company Security
Agreement executed and delivered by Company on the Closing Date,
substantially in the form of Exhibit XI annexed hereto, as such Company
Security Agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit IV annexed hereto delivered to Administrative Agent
and Lenders by Company pursuant to subsection 5.1(iv).
"CONFIDENTIAL INFORMATION MEMORANDUM" means that certain
Confidential Information Memorandum prepared by GSCP relating to the
Existing AXELs and Revolving Loans dated November 1997.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit
of Collateral Agent (which writing has been delivered to Collateral
Agent), whether under the terms of the applicable lease, under the
terms of a Landlord Consent and Estoppel, or otherwise, to the matters
described in the definition of "Landlord Consent and Estoppel," which
interest, if a sub-leasehold or sub-sub-leasehold interest, is not
subject to any contrary restrictions contained in a superior lease or
sublease.
9
"CONSOLIDATED CASH FLOW" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period
plus (i) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale (to the extent such losses
were deducted in computing such Consolidated Net Income), plus (ii)
provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income, plus (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation, amortization
of original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Leases, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to
Hedging Obligations), to the extent that any such expense was deducted
in computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles
but excluding amortization of prepaid cash operating expenses that were
paid in a prior period) and other non-cash charges of prepaid cash
operating expenses that were paid in a prior period) and other non-cash
charges of such Person and its Restricted Subsidiaries for such period
to the extent that such depreciation, amortization and other non-cash
charges were deducted in computing such Consolidated Net Income, minus
(v) cash outlays that were made by such Person or any of its Restricted
Subsidiaries during such period in respect of any item that was
reflected as a non-cash charge in a prior period, provided that such
non-cash charge was added to Consolidated Net Income in determining
Consolidated Cash Flow for such prior period.
"CONSOLIDATED EXCESS CASH FLOW" has the meaning assigned to
that term under the Revolving Credit Agreement as in effect as of the
Restatement Effective Date.
"CONSOLIDATED FIXED CHARGES" means with respect to any Person
for any period, the sum of (i) the consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Leases, commissions, discounts
and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to
Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such
period, and (iii) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all cash
10
dividend payments (and non-cash dividend payments in the case of a
Person that is a Restricted Subsidiary) paid to any Person other than
Company or a Restricted Subsidiary on any series of Preferred Stock of
such Person, times (b) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined annual
federal, state and local statutory tax rate of such Person paying the
dividend, expressed as a decimal, in each case, on a consolidated basis
and in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO" has the meaning assigned to that
term in the Revolving Credit Agreement as of the Restatement Effective
Date.
"CONSOLIDATED NET INCOME" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP; provided that (i) the Net Income
(but not loss) for such period of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned
Restricted Subsidiary thereof, (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or
payment of dividends or similar distributions by that Restricted
Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (that has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded, (iv) the cumulative
effect of a change in accounting principles shall be excluded and (v)
the Net Income of any Unrestricted Subsidiary shall be excluded,
whether or not distributed to Company or one of its Restricted
Subsidiaries.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is
subject.
"CURRENCY AGREEMENT" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic
cap or other similar agreement or arrangement to which Company or any
of its Subsidiaries is a party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
11
"DISQUALIFIED STOCK" means any Capital Stock that, 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 redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date on which the
AXELs mature.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means a Subsidiary of Company that is
organized under the laws of a state of the United States or the
District of Columbia.
"EDEN PRAIRIE HOLDINGS" means Anagram Eden Prairie Property
Holdings LLC, a Delaware limited liability company.
"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a
savings and loan association or savings bank organized under the laws
of the United States or any state thereof; (iii) a commercial bank
organized under the laws of any other country or a political
subdivision thereof; provided that (x) such bank is acting through a
branch or agency located in the United States or (y) such bank is
organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses
including insurance companies, mutual funds and lease financing
companies; and (B) any Lender, and any Related Fund or any Affiliate of
any Lender; provided that no Loan Party or any Subsidiary of any Loan
Party shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or
contributed to by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates.
"EMPLOYMENT AGREEMENTS" means, collectively, the employment
agreements and stock and option agreements between the Company and
certain employees of the Company as set forth on Schedule 3.1C annexed
hereto, in certain cases providing for the exclusive employment of such
Persons by Company, in the form provided to Arranger and Administrative
Agent pursuant to subsection 3.1C of the Existing AXEL Credit Agreement
on or prior to the Closing Date or pursuant to subsection 3.1C of this
Agreement on or prior to the Restatement Effective Date.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order
or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising
12
(i) pursuant to or in connection with any actual or alleged violation
of any Environmental Law, (ii) in connection with any Hazardous
Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat
or harm to natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents,
judgments, Governmental Authorizations, or any other requirements of
governmental authorities relating to (i) environmental matters,
including those relating to any Hazardous Materials Activity, (ii) the
generation, use, storage, transportation or disposal of Hazardous
Materials, or (iii) occupational safety and health, industrial hygiene,
land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Company or any of its Subsidiaries or any
Facility, including the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. [Section] 9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. [Section] 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. [Section]
6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
[Section] 1251 et seq.), the Clean Air Act (42 U.S.C. [Section] 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. [Section] 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
[Section] 136 et seq.), the Occupational Safety and Health Act (29
U.S.C. [Section] 651 et seq.), the Oil Pollution Act (33 U.S.C.
[Section] 2701 et seq) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. [Section] 11001 et seq.), each as amended
or supplemented, any analogous present or future state or local
statutes or laws, and any regulations promulgated pursuant to any of
the foregoing.
"EQUITY INTERESTS" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any
debt security that is convertible into, or exchangeable for, Capital
Stock).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section
414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate
of Company or any of its Subsidiaries shall continue to be considered
an ERISA Affiliate of Company or such Subsidiary within the meaning of
this definition with respect to the period such entity was an ERISA
Affiliate of
13
Company or such Subsidiary and with respect to liabilities arising
after such period for which Company or such Subsidiary could be liable
under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued thereunder
with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation);
(ii) the failure to meet the minimum funding standard of Section 412 of
the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any
Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings
to terminate any Pension Plan, or the occurrence of any event or
condition which could reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal of
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there
is any potential liability therefor, or the receipt by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which could reasonably be
expected to give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the
assertion of a material claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or
the assets thereof, or against Company, any of its Subsidiaries or any
of their respective ERISA Affiliates in connection with any Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue
Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan
14
to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code; or (xi) the imposition of a Lien pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant
to ERISA with respect to any Pension Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System,
as in effect from time to time.
"EURODOLLAR RATE AXELS" means AXELs bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EURODOLLAR RATE RESERVE PERCENTAGE" means, for any Interest
Period for all Eurodollar Rate AXELs comprising part of the same
Borrowing, the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
(or any successor) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference
to which the interest rate on Eurodollar Rate AXELs is determined)
having a term equal to such Interest Period.
"EVENT OF DEFAULT" means each of the events set forth in
Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXCLUDABLE CURRENT LIABILITIES" means, with respect to the
consideration received by the Company in connection with any Asset
Sale, (i) each trade payable incurred in the ordinary course of
business of the Company or any Restricted Subsidiary, (ii) each current
liability that is in an amount less than $50,000 on an individual
basis, and (iii) each liability due within 90 days of the date of
consummation of such Asset Sale, in the case of each of clauses (i)
through (iii), that is assumed by the transferee of the assets the
subject to such Asset Sale pursuant to customary assumption provisions.
"EXISTING AMSCAN CREDIT AGREEMENTS" means any and all credit
agreements entered into by Company prior to the Closing Date, in each
case as amended prior to the Closing Date, as set forth on Schedule
3.1E-I.
"EXISTING ANAGRAM CREDIT AGREEMENTS" means any and all credit
agreements entered into by Anagram and its Subsidiaries, in each case
as amended prior to the Restatement Effective Date, as set forth on
Schedule 3.1E-II.
15
"EXISTING AXELS" means, with respect to any Existing Lender,
the AXELs under the Existing AXEL Credit Agreement held by such
Existing Lender, in the principal amount of such AXELs outstanding
immediately prior to the Restatement Effective Date, and "EXISTING
AXELS" means such AXELs of all Existing Lenders, collectively.
"EXISTING AXEL CREDIT AGREEMENT" has the meaning assigned to
that term in the recitals to this Agreement.
"EXISTING AXEL NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E of the Existing AXEL Credit
Agreement on the Closing Date and (ii) any promissory notes issued by
Company pursuant to the last sentence of subsection 9.1B(i) of the
Existing AXEL Credit Agreement in connection with assignments of the
Existing AXELs of any Existing Lenders, in each case substantially in
the form of Exhibit III annexed to the Existing AXEL Credit Agreement.
"EXISTING INDEBTEDNESS" means Indebtedness of Company and its
Restricted Subsidiaries (other than Indebtedness under this Agreement
and the Revolving Credit Agreement) in existence on the date of the
Senior Subordinated Note Indenture, until such amounts are repaid.
"EXISTING LENDER" has the meaning assigned to such term in the
recitals to this Agreement.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Company or
any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"FEE PROPERTY" means any real property owned in fee simple by
any Loan Party, other than any such real property designated from time
to time by Collateral Agent in its sole discretion as not being
required to be included in the Collateral.
16
"FINANCIAL PLAN" has the meaning assigned to that term in
subsection 5.1(xiii).
"FIRST PRIORITY" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
(i) such Lien has priority over any other Lien on such Collateral
(other than Liens permitted pursuant to subsection 6.2A) and (ii) such
Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 6.2) to which such Collateral is
subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year. For purposes
of this Agreement, any particular Fiscal Year shall be designated by
reference to the calendar year in which such Fiscal Year ends.
"FIXED CHARGE COVERAGE RATIO means with respect to any Person
for any period, the ratio of the Consolidated Cash Flow of such Person
and its Restricted Subsidiaries for such period to the Consolidated
Fixed Charges of such Person and its Restricted Subsidiaries for such
period. In the event that Company or any of its Restricted Subsidiaries
incurs, assumes, Guarantees or redeems any Indebtedness (other than
revolving credit borrowings) or issues Preferred Stock subsequent to
the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "Calculation Date"), then the Fixed Charge Coverage Ratio
shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee or redemption or Indebtedness, or such issuance
or redemption of Preferred Stock, as if the same had occurred at the
beginning of the applicable four-quarter reference period.
Notwithstanding anything else in this Agreement (including
clause (iii) of the definition of Consolidated Net Income) to the
contrary, in calculating the Fixed Charge Coverage Ratio, acquisitions
will be given pro forma effect as follows:
(i) (a) acquisitions that have been made or are being
made by Company or any of its Restricted Subsidiaries during
the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date
(including through mergers or consolidations and including any
related financing transactions) shall be deemed to have
occurred on the first day of the four-quarter reference
period, and
(b) for purposes of determining the pro
forma effects of any such acquisition, Consolidated Cash Flow
shall be increased to reflect the annualized amount of any
cost savings expected by Company to be realized
17
in connection with such acquisition (from steps to be taken
not later than the first anniversary of such acquisition, and
without reduction for any non-recurring charges expected in
connection with such acquisition), as set forth in an
Officers' Certificate signed by Company's chief executive and
chief financial officers (which shall be determinative of such
matters) which states (x) the amount of such increase, (y)
that such increase is based on the reasonable beliefs of the
officers executing such Officers' Certificate at the time of
such execution (and that estimates of cost savings from prior
acquisitions have been reevaluated and updated) and (z) that
any related incurrence of Indebtedness is permitted pursuant
to the this Agreement.
(ii) Consolidated Cash Flow shall be further increased to
reflect the annualized amount of any cost savings expected by
Company but not yet realized in respect of any acquisition
made by Company during the four fiscal quarters immediately
preceding the four quarter reference period prior to the
Calculation Date, to the extent such cost savings are (x)
expected to result from steps taken not later than the first
anniversary of the relevant acquisition and (y) determined and
certified as set forth in clause (i) above.
In addition, in calculating the Fixed Charge Coverage Ratio,
discontinued operations will be given pro forma effect as follows:
(i) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of
on or prior to the Calculation Date, shall be
excluded, and
(ii) the Consolidated Fixed Charges attributable to
discontinued operations, as determined in accordance
with GAAP, and operations or businesses disposed of
on or prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations
giving rise to such Consolidated Fixed Charges will
not be obligations of Company or any of its
Restricted Subsidiaries following the Calculation
Date.
"FLEET" has the meaning assigned to that term in the
introduction to this Agreement.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means a Subsidiary of Company other than
a Domestic Subsidiary.
18
"FUNDING AND PAYMENT OFFICE" means (i) the office of
Administrative Agent located at Fleet National Bank, ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or (ii) such other office of
Administrative Agent as may from time to time hereafter be designated
as such in a written notice delivered by Administrative Agent to
Company and each Lender.
"FUNDING DEFAULT" has the meaning assigned to that term in
subsection 2.9.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"GSCP" has the meaning assigned to that term in the
introduction to this Agreement.
"GSII" means, collectively, GS Capital Partners II, L.P., GS
Capital Partners II Offshore, L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, L.P. and Bridge Street Fund 1997, L.P.
"GUARANTEE" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in respect
thereof), of all of any part of any Indebtedness.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous waste", "acutely hazardous waste", "radioactive
waste", "biohazardous waste", "pollutant", "toxic pollutant",
"contaminant", "restricted hazardous waste", "infectious waste", "toxic
substances", or any other term or expression intended to define, list
or classify substances by reason of properties harmful to health,
safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable
Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or
production of crude oil,
19
natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a
hazard to the health and safety of the owners, occupants or any Persons
in the vicinity of any Facility or to the indoor or outdoor
environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current or
future activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action
with respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest
rates or currency values, respectively.
"HEDGING OBLIGATIONS" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate
swap agreements, currency exchange or interest rate cap agreements and
currency exchange or interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange or interest rates.
"INCREASED COST LENDER" has the meaning assigned to that term
in subsection 2.10.
"INDEBTEDNESS" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of
borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof) or bankers' acceptances or representing Capital Leases
or the balance deferred and unpaid of the purchase price of any
property or representing any Hedging Obligations, except any such
balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as liability upon a
balance sheet of such Person prepared in accordance with GAAP, as well
as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person)
and, to the extent not otherwise included, the Guarantee by such Person
of any indebtedness of any other Person.
20
"INDEMNITEE" has the meaning assigned to that term in
subsection 9.3.
"INSOLVENCY LAWS" means the Bankruptcy Code or any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect in the United States of America or any state thereof.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, technology, know-how and processes used in or
necessary for the conduct of the business of Company and its
Subsidiaries as currently conducted that are material to the condition
(financial or otherwise), business or operations of Company and its
Subsidiaries, taken as a whole.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of December 19, 1997 among the Administrative Agent, the
Revolving Credit Facility Agent, the Collateral Agent, the Company and
the Subsidiary Guarantors, as such agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"INTEREST PAYMENT DATE" means (i) with respect to any Base
Rate AXEL, each March 15, June 15, September 15 and December 15 of each
year, commencing on the first such date to occur after the Closing
Date, and (ii) with respect to any Eurodollar Rate AXEL, the last day
of each Interest Period applicable to such Eurodollar Rate AXEL;
provided that in the case of each Interest Period of longer than three
months "Interest Payment Date" shall also include each date that is
three months, or an integral multiple thereof, after the commencement
of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement to which Company or any of
its Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter,
and any successor statute.
"INVESTMENT" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in
the forms of direct or indirect loans (including guarantees of
indebtedness or other obligations), advances (other than cash advances
made to suppliers with respect to current or anticipated purchases of
21
inventory in the ordinary course of business) or capital contributions
(excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business), purchases or other
acquisitions of Indebtedness, Equity Interests or other securities
(directly from the issuer thereof or from third parties) together with
all items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP; provided that an acquisition of
Equity Interests or other securities by the Company for consideration
consisting of common equity securities of Company shall not be deemed
to be an Investment. If Company or any Subsidiary of Company sells or
otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of Company such that, after giving effect to any such sale
or disposition, Company no longer owns, directly or indirectly greater
than 50% of the outstanding Equity Interest of such Subsidiary, Company
shall be deemed to have made an Investment on the date of any such sale
or disposition equal to the fair market value of the Equity Interests
of such Subsidiary not sold or disposed of.
"IP COLLATERAL" means the Collateral under the Subsidiary
Patent and Trademark Security Agreements.
"JOINT VENTURE" means all corporations, partnerships,
associations or other business entities (i) that are engaged in a
Principal Business and (ii) of which 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or
indirectly, by the Company or one or more Restricted Subsidiaries of
the Company (or a combination thereof).
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in
writing from the lessor under the related lease, satisfactory in form
and substance to Collateral Agent, pursuant to which such lessor
agrees, for the benefit of Collateral Agent, (i) to the matters
contained in the form of Collateral Access Agreement applicable to a
Leasehold Property, and (ii) to such other matters relating to such
Leasehold Property as Collateral Agent may reasonably request,
including, without limitation, that without any further consent of such
lessor or any further action on the part of the Loan Party holding such
Leasehold Property, such Leasehold Property may be encumbered pursuant
to a Mortgage and may be assigned to the purchaser at a foreclosure
sale or in a transfer in lieu of such a sale (and to a subsequent third
party assignee if Collateral Agent, any Lender, or an Affiliate of
either so acquires such Leasehold Property).
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan
Party as lessee under any lease of real property, other than any such
leasehold interest designated from time to time by Collateral Agent in
its sole discretion as not being required to be included in the
Collateral.
22
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together
with their successors and permitted assigns pursuant to subsection 9.1.
To the extent the context so requires, the terms "LENDER" and "LENDERS"
shall include "Lenders" under, and as defined in, the Existing AXEL
Credit Agreement.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"LOAN DOCUMENTS" means the Revolving Loan Documents and the
AXEL Loan Documents.
"LOAN PARTY" means each of Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "LOAN
PARTIES" means all such Persons, collectively.
"MANAGEMENT INVESTORS" means the management officers and
employees of Company and its Subsidiaries identified as Management
Investors on Schedule 3.1C annexed hereto.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company or any of its Subsidiaries or
(ii) the impairment in any material respect of the ability of the Loan
Parties, taken as a whole, to perform, or of Administrative Agent or
Lenders to enforce, the Obligations.
"MATERIAL CONTRACT" means any contract or other arrangement to
which Company or any of its Subsidiaries is a party (other than the
Loan Documents) for which breach, nonperformance, cancellation or
failure to renew could reasonably be expected to have a Material
Adverse Effect.
"MATERIAL DOMESTIC SUBSIDIARY" means (a) each Restricted
Subsidiary and (b) each other Domestic Subsidiary of Company now
existing or hereafter acquired or formed by Company which, on a
consolidated basis for such Subsidiary and its Subsidiaries, (i) for
the most recent Fiscal Year account for more than 5% of the
consolidated revenues of Company and its Subsidiaries or (ii) as at the
end of such Fiscal Year, was the owner of more than 5% of the
consolidated assets of Company and its Subsidiaries; provided that, for
purposes of the calculations contemplated by
23
the foregoing clauses (b)(i) and (ii), any Subsidiary of Company that
was acquired by Company or any of its Subsidiaries after the first day
of the most recent Fiscal Year (whether such acquisition was
consummated during such most recent Fiscal Year or the current Fiscal
Year) shall be deemed to have been acquired on and as of the first day
of such most recent Fiscal Year.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property
reasonably determined by Administrative Agent to be of material value
as Collateral or of material importance to the operations of Company or
any of its Subsidiaries; provided, however that no Leasehold Property
with respect to which the aggregate amount of all rents payable during
any one Fiscal Year is not expected to exceed $500,000 shall be a
"Material Leasehold Property".
"MERGER" means the merger of Newco with and into Company in
accordance with the terms of the Recapitalization Agreement, with
Company being the surviving corporation in such Merger.
"MORTGAGE" means a security instrument (whether designated as
a deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party, substantially in the form of Exhibit XV
annexed hereto or in such other form as may be approved by Collateral
Agent in its sole discretion, in each case with such changes thereto as
may be recommended by Collateral Agent's local counsel based on local
laws or customary local mortgage or deed of trust practices.
"MORTGAGES" means all such instruments collectively.
"MORTGAGE FINANCING" means the incurrence by the Company or a
Restricted Subsidiary of the Company of any Indebtedness secured by a
mortgage or other Lien on real property acquired or improved by the
Company or any Restricted Subsidiary of the Company after the Closing
Date.
"MORTGAGE REFINANCING" means the incurrence by the Company or
a Restricted Subsidiary of the Company of any Indebtedness secured by a
mortgage or other Lien on real property subject to a mortgage or other
Lien existing on the Closing Date or created or incurred subsequent to
the Closing Date and owned by the Company or any Restricted Subsidiary
of the Company.
"MORTGAGED PROPERTY" has the meaning assigned to that term in
subsection 5.9.
"MORTGAGE POLICY" has the meaning assigned to that term in
subsection 5.9.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as defined in Section 3(37) of ERISA.
24
"NET ASSET SALE PROCEEDS" means, with respect to any Asset
Sale, Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or
otherwise, but only as and when so received) received from such Asset
Sale, net of any bona fide direct costs, including, without limitation,
all transaction costs, incurred in connection with such Asset Sale,
including (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale as a result of any gain
recognized in connection with such Asset Sale and (ii) payment of the
outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness that is secured by a Lien on the stock or
assets in question and that prior to the Lien securing the AXELs on
such stock or assets and is required to be repaid under the terms
thereof as a result of such Asset Sale.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before
any reduction in respect of Preferred Stock dividends, excluding,
however, (i) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss) realized in connection
with (a) any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions) or (b) the disposition of
any securities by such Person or any of its Restricted Subsidiaries or
the extinguishment of any Indebtedness of such Person or any of its
Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain
(but not loss) together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments
or proceeds received by Company or any of its Subsidiaries (i) under
any business interruption or casualty insurance policy in respect of a
covered loss thereunder or (ii) as a result of the taking of any assets
of Company or any of its Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a
sale of any such assets to a purchaser with such power under threat of
such a taking, in each case net of (x) any actual and reasonable
documented costs incurred by Company or any of its Subsidiaries in
connection with the adjustment or settlement of any claims of Company
or such Subsidiary in respect thereof and (y) any amounts required to
be applied to the repayment of any Indebtedness secured by a Lien which
is prior to any Liens of the Lenders on the asset or assets that are
subject to the taking, condemnation or casualty but excluding, however,
in each case any payments or proceeds relating to assets having a value
of $500,000 or less in any single transaction or related series of
transactions.
"NEW LENDER" means any Lender which is a party to this
Agreement on the Restatement Effective Date which is not an Existing
Lender.
"NEWCO" means Confetti Acquisition, Inc., a Delaware
corporation existing prior to the Merger.
25
"NON-CONSENTING LENDER" has the meaning assigned to that term
in subsection 2.10.
"NON-RECOURSE DEBT" means Indebtedness of any Unrestricted
Subsidiary (i) as to which neither Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with
respect to which (including any rights that the holders thereof may
have to take enforcement action against an Unrestricted Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness of Company or any of its
Restricted Subsidiaries or cause the payment thereof to be accelerated
or payable prior to its stated maturity; and (iii) as to which the
lenders, have been notified in writing that they will not have any
recourse to the stock or assets of Company or any of its Restricted
Subsidiaries.
"NOTICE OF BORROWING" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 2.1B with respect to a proposed borrowing
of the Additional AXELs.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Company to Administrative Agent pursuant to subsection 2.2D with
respect to a proposed conversion or continuation of the applicable
basis for determining the interest rate with respect to the AXELs
specified therein.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or their
respective Affiliates or any of them under the AXEL Loan Documents,
whether for principal, interest, fees, expenses, indemnification or
otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
a certificate executed on behalf of such corporation by its chairman of
the board (if an officer) or its president or one of its vice
presidents and by its chief financial officer or its treasurer;
provided that every Officers' Certificate with respect to the
compliance with a condition precedent to the making of any AXELs
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signers,
they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
26
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal
Revenue Code or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or by ERISA, any such Lien relating
to or imposed in connection with any Environmental Claim, and any such
Lien expressly prohibited by any applicable terms of any of the
Collateral Documents):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 5.3;
(ii) statutory Liens of landlords, statutory Liens of
banks and rights of set-off, statutory Liens of carriers,
warehousemen, mechanics, repairmen, workmen and materialmen,
and other Liens imposed by law, in each case incurred in the
ordinary course of business (a) for amounts not yet overdue or
(b) for amounts that are overdue and that (in the case of any
such amounts overdue for a period in excess of 15 days) are
being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if
any, as shall be required by GAAP shall have been made for any
such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any
portion of the Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or
similar proceedings have been commenced with respect to any
portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 7.6;
(v) leases or subleases granted to third parties in
accordance with any applicable terms of the Collateral
Documents and not interfering in any material respect with the
ordinary conduct of the business of Company or any
27
of its Subsidiaries or resulting in a material diminution in
the value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, covenants, conditions,
restrictions, encroachments, and other defects or
irregularities in title, in each case which do not and will
not interfere in any material respect with the ordinary
conduct of the business of Company or any of its Subsidiaries
or result in a material diminution in the value of any
Collateral as security for the Obligations;
(vii) any (a) interest or title of a lessor or
sublessor under any lease permitted hereunder, (b) restriction
or encumbrance that the interest or title of such lessor or
sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any
restriction or encumbrance referred to in the preceding clause
(b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee
under such lease;
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement;
(ix) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(x) any zoning or similar law or right reserved to or
vested in any governmental office or agency to control or
regulate the use of any real property;
(xi) Liens securing obligations (other than
obligations representing Indebtedness for borrowed money)
under operating, reciprocal easement or similar agreements
entered into in the ordinary course of business of Company and
its Subsidiaries; and
(xii) licenses of patents, trademarks and other
intellectual property rights granted by Company or any of its
Subsidiaries in the ordinary course of business and not
interfering in any material respect with the ordinary conduct
of the business of Company or such Subsidiary.
" PERMITTED HOLDERS" means ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.. and any of
its Affiliates.
"PERMITTED INVESTMENTS" means (i) any Investment in Company or
in a Restricted Subsidiary of Company (including the acquisition of any
Equity Interest in a Restricted Subsidiary); (ii) any investment in
cash and Cash Equivalents; (iii)
28
any Investment by the Company or any Restricted Subsidiary of Company
in a Person, if as a result of such Investment (a) such Person becomes
a Restricted Subsidiary of Company or (b) such Person, in one
transaction or a series of related transactions, is merged,
consolidated or amalgamated with or into, or transfer or conveys
substantially all of its assets to, or is liquidated into, Company or a
Restricted Subsidiary of Company; (iv) any Investment made as a result
of the receipt of consideration not constituting cash or Cash
Equivalents from an Asset Sale; (v) any Investment existing on the date
of the Indenture; (vi) any Investment by Restricted Subsidiaries in
other Restricted Subsidiaries and Investments by Subsidiaries that are
not Restricted Subsidiaries in other Subsidiaries that are not
Restricted Subsidiaries; (vii) advances to employees not in excess of
$2,500,000 outstanding at any one time; (viii) any Investment acquired
by Company or any of its Restricted Subsidiaries (a) in exchange for
any other Investment or accounts receivable held by Company or any such
Restricted Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other Investment or accounts receivable or (b) as a result of a
foreclosure by Company or any of its Restricted Subsidiaries with
respect to any secured Investment or other transfer of title with
respect to any secured Investment in default; (ix) Hedging Obligations;
(x) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar
expenses, in each case incurred in the ordinary course of business;
(xi) Investments the payment for which consists exclusively of Equity
Interests (exclusive of Disqualified Stock) of Company; and (xii)
additional Investments having an aggregate fair market value, taken
together with all other Investments made pursuant to this clause (xii)
that are at that time outstanding, not to exceed $15,000,000 plus 5% of
the increase in Total Assets of Company since the Closing Date at the
time of such Investment (with the fair market value of each Investment
being measured at the time made and without giving effect to subsequent
changes in value).
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of
Company or any of its Restricted Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew,
replace, defease or refund other Indebtedness of Company or any of its
Restricted Subsidiaries in whole or in part; provided that: (i) the
principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith); (ii) such
Permitted Refinancing Indebtedness has a final maturity date on or
later than the final maturity date of, and has a Weighted Average Life
to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded is
subordinated in right of payment to the Obligations, such Permitted
Refinancing Indebtedness has a final maturity date later
29
than the final maturity date of the AXELs, and is subordinated in right
of payment to the AXELs, on terms at least as favorable to the Lenders
as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded;
and (iv) such Indebtedness is incurred either by Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability
companies, limited liability partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and governments (whether federal, state or local, domestic or
foreign, and including political subdivisions thereof) and agencies or
other administrative or regulatory bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged
Collateral" as defined in the Company Pledge Agreement and the
Subsidiary Pledge Agreements.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of
Default.
"PREFERRED STOCK" means any Equity Interest with preferential
right of payment of dividends or upon liquidation, dissolution, or
winding up.
"PRIME RATE" means the rate that Fleet announces from time to
time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Fleet or any
other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Additional AXEL
Commitment of any Lender on or before the Restatement Effective Date,
the percentage obtained by dividing (x) the Additional AXEL Commitment
of that Lender by (y) the aggregate Additional AXEL Commitments of all
Lenders, (ii) with respect to all payments, computations and other
matters relating to the Existing AXELs of any Lender on or before the
Restatement Effective Date (including any such matters with respect to
any interest, fees and other amounts accrued or otherwise payable to
Existing Lenders in respect of the period from the Closing Date through
and including the Restatement Effective Date), the percentage obtained
by dividing (x) the Existing AXELs of that Lender by (y) the aggregate
Existing AXELs of all Lenders, and (iii) with respect to all other
purposes (including voting rights under subsection 9.6, whether prior
to or after the Restatement Effective Date), the percentage obtained by
dividing (x) the AXEL Exposure of that Lender by (y) the aggregate AXEL
Exposure of all Lenders.
30
"PTO" means the United States Patent and Trademark Office or
any successor or substitute office in which filings are necessary or,
in the opinion of Administrative Agent, desirable in order to create or
perfect Liens on any IP Collateral.
"QUALIFIED PUBLIC OFFERING" means any sale of capital stock of
Company to the public pursuant to an offering registered under the
Securities Act of 1933 pursuant to which Company receives cash proceeds
(net of all fees and expenses (including underwriting discounts and
legal, investment banking and accounting and other professional fees)
and disbursements actually incurred in connection therewith) in an
amount not less than $50,000,000.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECAPITALIZATION AGREEMENT" means that certain Agreement and
Plan of Merger between Company and Newco dated as of August 10, 1997,
in the form delivered to Arranger, Administrative Agent and Lenders
prior to their execution of the Existing AXEL Credit Agreement and as
such agreement may hereafter be amended from time to time.
"RECAPITALIZATION CONSIDERATION" means payments required under
Article II of the Recapitalization Agreement.
"RECAPITALIZATION DOCUMENTS" means the Recapitalization
Agreement and all other instruments or documents relating to the
Recapitalization Agreement.
"RECAPITALIZATION FINANCING REQUIREMENTS" means the aggregate
of all amounts necessary (i) to pay the Recapitalization Consideration,
(ii) to refinance all Indebtedness outstanding under the Existing
Amscan Credit Agreements, and (iii) to pay Recapitalization Transaction
Costs.
"RECAPITALIZATION TRANSACTION COSTS" means the fees, costs and
expenses payable by Company in connection with the transactions
contemplated by the Loan Documents and the Related Agreements, in each
case as in effect on the Closing Date.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Collateral Agent's
reasonable judgment, to give constructive notice of such Leasehold
Property to third-party purchasers and encumbrancers of the affected
real property. For purposes of this definition, the term "RECORD
DOCUMENT" means, with respect to any Leasehold Property, (a) the lease
evidencing such Leasehold Property or a memorandum thereof, executed
and
31
acknowledged by the owner of the affected real property, as lessor, or
(b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or
sublease document, executed and acknowledged by such holder, in each
case in form sufficient to give such constructive notice upon
recordation and otherwise in form reasonably satisfactory to
Administrative Agent.
"REFUNDING CAPITAL STOCK" has the meaning assigned to that
term in subsection 6.3A.
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"RELATED AGREEMENTS" means, collectively, the Certificate of
Merger, the Stockholders Agreement, the Employment Agreements, the Tax
Indemnification Agreement, the Recapitalization Agreement and the
Senior Subordinated Note Indenture.
"RELATED FUND" means, with respect to any Lender that is a
fund that invests in commercial loans, any other fund that invests in
commercial loans and is managed by the same investment advisor as such
Lender or by any Affiliate of such investment advisor.
"RELATED PARTIES" means any Person controlled by the Permitted
Holders, including any partnership of which any of the Permitted
Holders or their Affiliates is a general partner.
"RELEASE" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including the abandonment or
disposal of any barrels, containers or other closed receptacles
containing any Hazardous Materials), including the movement of any
Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUIREMENT OF LAW" means, with respect to any Person, (i)
the certificate or articles of incorporation, by-laws and other
organizational or governing documents of such Person, (ii) any law,
treaty, rule, regulation or determination of an arbitrator, court or
other governmental authority binding on such Person or any of its
property, or (iii) any franchise, license, lease, permit, certificate,
authorization, qualification, easement, right of way, or right of
approval binding on such Person or any of its property.
32
"REQUIRED PREPAYMENT DATE" has the meaning assigned to that
term in subsection 2.4.
"REQUISITE LENDERS" means Lenders having or holding more than
50% of the sum of the aggregate AXEL Exposure of all Lenders.
"RESTATEMENT EFFECTIVE DATE" means the date on or before
October 31, 1998 on which (i) the conditions precedent to the
effectiveness of this Agreement set forth in subsection 3.1 shall be
satisfied and (ii) the conditions precedent set forth in subsection 3.2
shall be satisfied or waived in accordance with the terms hereof.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED PAYMENTS" has the meaning assigned to that team in
subsection 6.3.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of a
Person that is not (i) an Unrestricted Subsidiary or (ii) a direct or
indirect Subsidiary of an Unrestricted Subsidiary; provided, however,
that upon the occurrence of any Unrestricted Subsidiary ceasing to be
an Unrestricted Subsidiary, such Subsidiary shall be included in the
definition of Restricted Subsidiary.
"RETIRED CAPITAL STOCK" has the meaning assigned to that term
in subsection 6.3A.
"REVOLVING CREDIT AGREEMENT" has the meaning assigned to that
term in the recitals to this Agreement.
"REVOLVING CREDIT FACILITY AGENT" has the meaning assigned to
that term in the recitals of this Agreement.
"REVOLVING CREDIT LENDER" means a lender under the Revolving
Credit Agreement holding an outstanding Revolving Loan or having a
Revolving Loan Commitment (as defined in the Revolving Credit
Agreement), and "Revolving Lenders" means any such lenders or lenders
under the Revolving Credit Agreement, collectively.
"REVOLVING LOANS" means the loans made by a Revolving Credit
Lender to Company pursuant to the Revolving Credit Agreement.
"REVOLVING LOAN DOCUMENTS" means the Revolving Credit
Agreement, the Revolving Loan Notes, the Subsidiary Guaranty, the
Collateral Documents and the Intercreditor Agreement.
33
"SECURED PARTIES" has the meaning assigned to that term in the
introduction to this Agreement.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing; provided that "Securities"
shall not include any earnout agreement or obligation or any employee
bonus or other incentive compensation plan or agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SENIOR SUBORDINATED NOTE INDENTURE" means the indenture
pursuant to which the Senior Subordinated Notes are issued, as such
indenture may hereafter be amended from time to time.
"SENIOR SUBORDINATED GUARANTEES" means the Guarantees by the
guarantors of the Obligations under the Senior Subordinated Notes
Indenture and the Senior Subordinated Notes;
"SENIOR SUBORDINATED NOTES" means the $110,000,000 in
aggregate principal amount of 9.875% Senior Subordinated Notes due 2007
of Company issued pursuant to the Senior Subordinated Note Indenture.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (A) (i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities) of such Person and (z)
not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe)
that it will incur, debts beyond its ability to pay such debts as they
become due; and (B) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
34
"STATED MATURITY" means, with respect to any installment of
interest or principal on, or any other payments with respect to, any
series of Indebtedness, the date on which such payment of interest or
principal or other payment (including any sinking fund payment) was
scheduled or required to be paid, but shall not include any
acceleration of such payment or any contingent obligations to repay,
redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement
dated as of December 19, 1997 by and among Company, GSII, the Estate of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and certain other individuals and as such agreement
may heretofore have been or hereafter may be amended from time to time
thereafter.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries which is expressly by its
terms subordinated in right of payment to the Obligations.
"SUBSIDIARY" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are such Person
or one or more Subsidiaries of such Person (or any combination
thereof).
"SUBSIDIARY GUARANTOR" means, collectively, (i) any Subsidiary
of Company that executed and delivered a counterpart of the Subsidiary
Guaranty on the Closing Date or from time to time thereafter pursuant
to subsection 5.8 of the Existing AXEL Credit Agreement and (ii) any
Subsidiary of Company that executes and delivers a counterpart of the
Subsidiary Guaranty on the Restatement Effective Date or from time to
time thereafter pursuant to subsection 5.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty (i)
heretofore executed and delivered by certain existing Domestic
Subsidiaries of Company on the Closing Date or from time to time
thereafter in accordance with subsection 5.8 of the Existing AXEL
Credit Agreement and (ii) to be executed and delivered by additional
Domestic Subsidiaries of Company on the Restatement Effective Date and
from time to time thereafter in accordance with subsection 5.8,
substantially in the form of Exhibit XII annexed hereto, as such
Subsidiary Guaranty may heretofore have been or hereafter may be
amended, supplemented or otherwise modified from time to time.
35
"SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT" means (i)
each Subsidiary Patent and Trademark Security Agreement executed and
delivered by any Subsidiary Guarantor on the Restatement Effective Date
and (ii) each Subsidiary Patent and Trademark Security Agreement
executed and delivered by any additional Subsidiary Guarantor from time
to time thereafter in accordance with subsection 5.8, in each case
substantially in the form of Exhibit XVII annexed hereto, as such
Subsidiary Patent and Trademark Security Agreement may hereafter be
amended, supplemented or otherwise modified from time to time, and
"SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENTS" means all such
Subsidiary Patent and Trademark Security Agreements, collectively.
"SUBSIDIARY PLEDGE AGREEMENT" means (i) each Subsidiary Pledge
Agreement executed and delivered by an existing Subsidiary Guarantor on
the Closing Date or from time to time thereafter in accordance with
subsection 5.8 of the Existing AXEL Credit Agreement, (ii) each
Subsidiary Pledge Agreement executed and delivered by a new Subsidiary
Guarantor on the Restatement Effective Date, and (iii) each Subsidiary
Pledge Agreement executed and delivered by any additional Subsidiary
Guarantor from time to time thereafter in accordance with subsection
5.8, in each case substantially in the form of Exhibit XIII annexed to
the Existing AXEL Credit Agreement or Exhibit XIII annexed hereto, as
the case may be, as such Subsidiary Pledge Agreement may heretofore
have been or hereafter may be amended, supplemented or otherwise
modified from time to time, and "SUBSIDIARY PLEDGE AGREEMENTS" means
all such Subsidiary Pledge Agreements, collectively.
"SUBSIDIARY SECURITY AGREEMENT" means (i) each Subsidiary
Security Agreement executed and delivered by an existing Subsidiary
Guarantor on the Closing Date or from time to time thereafter in
accordance with subsection 5.8 of the Existing AXEL Credit Agreement,
(ii) each Subsidiary Security Agreement executed and delivered by a new
Subsidiary Guarantor on the Restatement Effective Date, and (iii) each
Subsidiary Security Agreement executed and delivered by any additional
Subsidiary Guarantor from time to time thereafter in accordance with
subsection 5.8, in each case substantially in the form of Exhibit XIV
annexed hereto, as such Subsidiary Security Agreement may heretofore
have been or hereafter may be amended, supplemented or otherwise
modified from time to time, and "SUBSIDIARY SECURITY AGREEMENTS" means
all such Subsidiary Security Agreements, collectively.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to
that term in subsection 8.1B.
"SYNDICATION AGENT" has the meaning assigned to that term in
the introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on
36
whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person
shall be construed as a reference to a tax imposed by the jurisdiction
in which that Person is organized or in which that Person's principal
office (and/or, in the case of a Lender, its lending office) is located
or in which that Person (and/or, in the case of a Lender, its lending
office) is deemed to be doing business on all or part of the net
income, profits or gains (whether worldwide, or only insofar as such
income, profits or gains are considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the
case of a Lender, its lending office).
"TAX INDEMNIFICATION AGREEMENT" means the Tax Indemnification
Agreement dated as of August 10, 1997 by and between Company, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ and the Estate of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and as such agreement
may heretofore have been or hereafter may be amended from time to time
thereafter.
"TERMINATED LENDER" has the meaning assigned to that term in
subsection 2.10.
"TITLE COMPANY" means, collectively one or more title
insurance companies that are members of ALTA and are reasonably
satisfactory to Arranger and Administrative Agent.
"TOTAL ASSETS" means, with respect to any Person, the total
consolidated assets of such Person and its Restricted Subsidiaries, as
shown on the most recent balance sheet of such Person.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UNREINVESTED ASSET SALE PROCEEDS" means that portion, if any,
of any Net Asset Sale Proceeds that shall not have been reinvested by
Company and its Subsidiaries in the business of Company and its
Subsidiaries within six months after the date of receipt by Company or
any of its Subsidiaries of such Net Asset Sale Proceeds or in the case
of Net Asset Sale Proceeds from the sale of the ▇▇▇▇▇▇▇, New York,
Montreal, Quebec or Melbourne, Australia properties, (i) that portion
of Net Asset Sale Proceeds that is not subject to a binding agreement
with a third party to reinvest such net Asset Sale Proceeds entered
into within six months after the date of receipt of such Net Asset Sale
Proceeds or (ii) if subject to such a binding agreement, that portion
of such Net Asset Sale Proceeds that shall not have been reinvested
within nine months of such binding agreement, such reinvestment to be
evidenced by an Officers' Certificate, satisfactory in form and
substance to Administrative Agent, delivered by Company to
Administrative Agent prior to the expiration of such six-month period
and demonstrating in reasonable detail the reinvestment of such Net
Asset Sale Proceeds as aforesaid.
37
"UNRESTRICTED SUBSIDIARY" means any Subsidiary (other than the
Subsidiary Guarantors or any successor to any of them) that is
designated by the Board of Directors as an Unrestricted Subsidiary
pursuant to a Board Resolution, but only to the extent that such
Subsidiary: (a) has no Indebtedness other than Non-Recourse Debt; (b)
is not party to any agreement, contract, arrangement or understanding
with Company or any Restricted Subsidiary of Company unless the terms
of any such agreement, contract, arrangement or understanding are no
less favorable to Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons who are not Affiliates of
Company; (c) is a Person with respect to which neither Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation
(x) to subscribe for additional Equity Interests or (y) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; (d) has not
guaranteed and does not otherwise directly or indirectly provide credit
support for any Indebtedness of Company or any of its Restricted
Subsidiaries; and (e) has at least one director on its board of
directors that is not a director or executive officer of Company or any
of its Restricted Subsidiaries and has at least one executive officer
that is not a director or executive officer of Company or any of its
Restricted Subsidiaries. If, at any time, any Unrestricted Subsidiary
would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary
for purposes hereof and, so long as such Unrestricted Subsidiary
remains a Subsidiary, any Indebtedness of such Subsidiary shall be
deemed to be incurred by a Restricted Subsidiary of Company as of such
date (and, if such Indebtedness is not permitted to be incurred as of
such date under the covenant described under subsection 6.1, Company
shall be in default of such covenant). The Board of Directors of
Company may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed
to be an incurrence of Indebtedness by a Restricted Subsidiary of
Company of any outstanding Indebtedness of such Unrestricted Subsidiary
and such designation shall only be permitted if (i) such Indebtedness
is permitted under the covenant described under subsection 6.1, and
(ii) no Potential Event of Default or Event of Default would be in
existence following such designation.
"VOTING STOCK" means, with respect to any Person, any class or
series of capital stock of such Person that is ordinarily entitled to
vote in the election of directors thereof at a meeting of stockholders
called for such purpose, without the occurrence of any additional event
or contingency.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i)
the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated
38
to the nearest one-twelfth) that will elapse between such date and the
making of such payment, by (ii) the then outstanding principal amount
of such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" is any Wholly Owned
Subsidiary that is a Restricted Subsidiary.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership
interests of which (other than directors' qualifying shares) shall at
the time be owned by such person or by one or more Wholly Owned
Subsidiaries of such Person or by such Person and one or more Wholly
Owned Subsidiaries of such Person.
1.2 ACCOUNTING TERMS;UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
AGREEMENT
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 5.1 shall be prepared in accordance with GAAP as
in effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 5.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 4.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter.
D. Any term incorporated herein from the Revolving Credit Agreement (as
amended, supplemented or otherwise modified from time to time) shall continue to
have the meaning assigned thereto whether or not the Revolving Agreement is
still in effect.
39
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, each Lender hereby severally agrees to maintain or to lend to Company, as
the case may be, the AXELs described in subsections 2.1A(i) and 2.1A(ii) for the
purposes identified in subsection 2.5A.
(i) Existing AXELs. Company acknowledges and confirms that
each Existing Lender holds Existing AXELs outstanding as of the
Restatement Effective Date. Company hereby represents, warrants,
agrees, covenants and (1) reaffirms that it has no defense, set off,
claim or counterclaim against any Agent or Lender in regard to its
Obligations in respect of such Existing AXELs and (2) reaffirms its
obligation to pay such Existing AXELs in accordance with the terms and
conditions of this Agreement and the other Loan Documents. Based on the
foregoing, (A) Company and each Lender agree that the Existing AXELs
and any amounts owed (whether or not presently due and payable, and
including all interest accrued to the Restatement Effective Date (which
shall be payable on the next Interest Payment Date with respect to the
AXELs to which such interest relates)) by Company to Lenders thereunder
or in respect thereof shall, as of the Restatement Effective Date, be
converted to, maintained as, and owed by Company under and in respect
of AXELS hereunder. Amounts repaid or prepaid in respect of Existing
AXELs may not be reborrowed.
(ii) Additional AXELs. Each Lender severally agrees to lend to
Company on the Restatement Effective Date an amount not exceeding its
Pro Rata Share of the aggregate amount of the Additional AXEL
Commitments, to be used for the purposes identified in subsection 2.5.
The amount of each Lender's Additional AXEL Commitment is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate
amount of the Additional AXEL Commitment is $40,000,000; provided that
the Additional AXEL Commitments of Lenders shall be adjusted to give
effect to any assignments of the Additional AXEL Commitments pursuant
to subsection 9.1B. Each Lender's Additional AXEL Commitment shall
expire immediately and without further action on October 31, 1998 if
the Additional AXELs are not funded on or before that date. Company may
make only one borrowing under the Additional AXEL Commitments. Amounts
borrowed under this subsection 2.1A(ii) and subsequently repaid or
prepaid may not be reborrowed.
B. BORROWING MECHANICS. Additional AXELs that are Eurodollar Rate AXELs
with a particular Interest Period shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of that amount. When
Company desires that
40
Lenders make Additional AXELs it shall deliver to Administrative Agent a Notice
of Borrowing no later than 10:00 A.M. (New York City time) at least three
Business Days in advance of the proposed Restatement Effective Date (in the case
of Additional AXELs that are Eurodollar Rate AXELs) or at least one Business Day
in advance of the proposed Closing Date (in the case of Additional AXELs that
are Base Rate AXELs). The Notice of Borrowing shall specify (i) the proposed
Restatement Effective Date (which shall be a Business Day), (ii) the amount
requested, (iii) whether such Additional AXELS shall be Base Rate AXELs or
Eurodollar Rate AXELs and (iv) in the case of any Additional AXELS requested to
be made as Eurodollar Rate AXELs, the initial Interest Period requested
therefor. Additional AXELs may be continued as or converted into Base Rate AXELs
and Eurodollar Rate AXELs in the manner provided in subsection 2.2D. In lieu of
delivering the above-described Notice of Borrowing, Company may give
Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the Restatement Effective Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Additional AXELs by Lenders in accordance with this Agreement pursuant to any
such telephonic notice Company shall have effected Additional AXELs hereunder.
Company shall notify Administrative Agent prior to the Restatement
Effective Date in the event that any of the matters to which Company is required
to certify in the Notice of Borrowing is no longer true and correct as of the
Restatement Effective Date, and the acceptance by Company of the proceeds of any
Additional AXELs shall constitute a re-certification by Company, as of the
Restatement Effective Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for Additional AXELs that are Eurodollar Rate AXELs (or
telephonic notice in lieu thereof) shall be irrevocable on and after the related
Interest Rate Determination Date, and Company shall be bound to make a borrowing
in accordance therewith.
C. DISBURSEMENT OF FUNDS. All Additional AXELs under this Agreement
shall be made by Lenders simultaneously and proportionately to their respective
Pro Rata Shares, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make an
Additional AXEL requested hereunder nor shall the Additional AXEL Commitment of
any Lender to make the Additional AXEL requested be increased or decreased as a
result of a default by any other Lender in that other Lender's obligation to
make an Additional AXEL requested hereunder. Promptly
41
after receipt by Administrative Agent of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent
shall notify each Lender of the proposed borrowing. Each Lender shall make the
amount of its Additional AXEL available to Administrative Agent not later than
12:00 Noon (New York City time) on the Restatement Effective Date, in same day
funds in Dollars, at the Funding and Payment Office. Upon satisfaction or waiver
of the conditions precedent specified in subsections 3.1 and 3.2, Administrative
Agent shall make the proceeds of such Additional AXELs available to Company on
the Restatement Effective Date by causing an amount of same day funds in Dollars
equal to the proceeds of all such Additional AXELs received by Administrative
Agent from Lenders to be credited to the account of Company at the Funding and
Payment Office.
Unless Administrative Agent shall have been notified by any Lender
prior to the Restatement Effective Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Additional AXEL
requested on the Restatement Effective Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on the
Restatement Effective Date and Administrative Agent may, in its sole discretion,
but shall not be obligated to, make available to Company a corresponding amount
on the Restatement Effective Date. If such corresponding amount is not in fact
made available to Administrative Agent by such Lender, Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the Restatement
Effective Date until the date such amount is paid to Administrative Agent, at
the customary rate set by Administrative Agent for the correction of errors
among banks for three Business Days and thereafter at the Base Rate. If such
Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Company and
Company shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from the Closing Date until the
date such amount is paid to Administrative Agent, at the rate payable under this
Agreement for Base Rate AXELs. Nothing in this subsection 2.1C shall be deemed
to relieve any Lender from its obligation to fulfill its Additional AXEL
Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
D. THE REGISTER.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 9.8, a register for the recordation of the
names and addresses of Lenders and the Additional AXEL Commitments and
AXELs of each Lender from time to time (the "REGISTER"). The Register
shall be available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
42
(ii) Administrative Agent shall record in the Register the
Additional AXEL Commitment and the AXELs from time to time of each
Lender and each repayment or prepayment in respect of the principal
amount of the AXEL of each Lender. Any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest
error; provided that failure to make any such recordation, or any error
in such recordation, shall not affect any Lender's Additional AXEL
Commitment or Company's Obligations in respect of any AXELs.
(iii) Each Lender shall record on its internal records
(including the AXEL Notes held by such Lender) the amount of the AXELs
made by it and each payment in respect thereof. Any such recordation
shall be conclusive and binding on Company, absent manifest error;
provided that failure to make any such recordation, or any error in
such recordation, shall not affect any Lender's Additional AXEL
Commitment or Company's Obligations in respect of any AXELs and
provided, further that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Additional AXEL Commitments and AXELs
listed therein for all purposes hereof, and no assignment or transfer
of any such Additional AXEL Commitment or AXEL shall be effective, in
each case unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 9.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Additional AXEL Commitment or AXEL 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 Additional AXEL
Commitments or AXELs.
(v) Company hereby designates Fleet to serve as Company's
agent solely for purposes of maintaining the Register as provided in
this subsection 2.1D, and Company hereby agrees that, to the extent
Fleet serves in such capacity, Fleet and its officers, directors,
employees, agents and affiliates shall constitute Indemnitees for all
purposes under subsection 9.3.
E. ADDITIONAL AXEL NOTES. Company shall execute and deliver on the
Restatement Effective Date to each Lender having an Additional AXEL Commitment
(or to Administrative Agent for that Lender) an Additional AXEL Note
substantially in the form of Exhibit III annexed hereto to evidence that
Lender's Additional AXEL, in the principal amount of that Lender's Additional
AXEL and with other appropriate insertions.
43
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each AXEL shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted Eurodollar Rate. The
applicable basis for determining the rate of interest with respect to any AXEL
shall be selected by Company initially at the time a Notice of Borrowing is
given with respect to such AXEL pursuant to subsection 2.1B. The basis for
determining the interest rate with respect to any AXEL may be changed from time
to time pursuant to subsection 2.2D. If on any day an AXEL is outstanding with
respect to which notice has not been delivered to Administrative Agent in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that AXEL shall bear
interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the AXELs shall
bear interest through maturity as follows:
(i) if a Base Rate AXEL, then at the sum of the Base Rate plus
1-3/8% per annum; or
(ii) if a Eurodollar Rate AXEL, then at the sum of the
Adjusted Eurodollar Rate plus 2-3/8% per annum.
B. INTEREST PERIODS. In connection with each Eurodollar Rate AXEL,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Eurodollar Rate AXEL, which Interest
Period shall be, at Company's option, either a one-, two-, three-or six-month
period; provided that:
(i) the initial Interest Period for any Eurodollar Rate AXEL
shall commence (i) on the Closing Date in respect of such Eurodollar
Rate AXEL, in the case of an Existing AXEL initially made as a
Eurodollar Rate AXEL, (ii) on the Restatement Effective Date in respect
of such Eurodollar Rate AXEL, in the case of an Additional AXEL
initially made as a Eurodollar Rate AXEL, or (iii) on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of an AXEL converted to a Eurodollar Rate AXEL;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate AXEL continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
44
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the
AXELs shall extend beyond December 31, 2004;
(vi) no Interest Period with respect to any portion of the
AXELs shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the AXELs unless the sum of (a) the
aggregate principal amount of AXELs that are Base Rate AXELs plus (b)
the aggregate principal amount of AXELs that are Eurodollar Rate AXELs
with Interest Periods expiring on or before such date equals or exceeds
the principal amount required to be paid on the AXELs on such date;
(vii) there shall be no more than seven (7) Interest Periods
outstanding at any time under this Agreement and the Revolving Credit
Agreement; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate AXEL in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month.
C. INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each AXEL shall be payable in arrears on and to each Interest
Payment Date applicable to that AXEL, upon any prepayment of that AXEL (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding AXELs equal to $1,000,000 and integral multiples of $100,000 in
excess of that amount from Base Rate AXELs to Eurodollar Rate AXELs or (ii) to
convert at any time all or any part of its outstanding AXELs equal to $100,000
and integral multiples of $100,000 in excess of that amount from Eurodollar Rate
AXELs to Base Rate AXELs upon the expiration of any Interest Period applicable
to a Eurodollar Rate AXEL, to continue all or any portion of such Eurodollar
Rate AXEL equal to $1,000,000 and integral multiples of $100,000 in excess of
that amount as a Eurodollar Rate AXEL; provided, however, that a Eurodollar Rate
45
AXEL may only be converted into a Base Rate AXEL on the expiration date of an
Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate AXEL) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate AXEL). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount to be converted/continued, (iii) the nature of
the proposed conversion/continuation, (iv) in the case of a conversion to, or a
continuation of, a Eurodollar Rate AXEL, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate AXEL,
that no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any AXELs in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate AXEL (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all AXELs and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable AXELs
46
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate AXELs); provided that, in the case of Eurodollar Rate AXELs, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such Eurodollar Rate AXELs shall thereupon become
Base Rate AXELs and shall thereafter bear interest payable upon demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate AXELs. Payment or acceptance of the increased rates
of interest provided for in this subsection 2.2E is not a permitted alternative
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of Administrative Agent or
any Lender.
F. COMPUTATION OF INTEREST. Interest on the AXELs shall be computed on
the basis of a 360-day year, in each case for the actual number of days elapsed
in the period during which it accrues. In computing interest on any AXEL, the
date of the making of such AXEL or the first day of an Interest Period
applicable to such AXEL or, with respect to a Base Rate AXEL being converted
from a Eurodollar Rate AXEL, the date of conversion of such Eurodollar Rate AXEL
to such Base Rate AXEL, as the case may be, shall be included, and the date of
payment of such AXEL or the expiration date of an Interest Period applicable to
such AXEL or, with respect to a Base Rate AXEL being converted to a Eurodollar
Rate AXEL, the date of conversion of such Base Rate AXEL to such Eurodollar Rate
AXEL, as the case may be, shall be excluded; provided that if a AXEL is repaid
on the same day on which it is made, one day's interest shall be paid on that
AXEL.
2.3 FEES.
Company agrees to pay to Arranger and Administrative Agent (including
fees payable to Administrative Agent for distribution to Existing Lenders) such
fees in the amounts and at the times separately agreed upon between Company,
Arranger and Administrative Agent.
2.4 REPAYMENTS, PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS;
APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY
GUARANTY.
A. SCHEDULED PAYMENTS OF AXELS. Company shall make principal payments
on the AXELs in installments on the dates and in the amounts set forth below (it
being understood and agreed that the amounts set forth below reflect the
borrowing of the full amount of Additional AXELs on the Restatement Effective
Date):
47
======================================= ==========================
SCHEDULED
PAYMENT REPAYMENT
DATE OF AXELS
======================================= ==========================
September 30, 1998 $393,002
======================================= ==========================
December 31, 1998 $393,002
======================================= ==========================
March 31, 1999 $393,002
======================================= ==========================
June 30, 1999 $393,002
======================================= ==========================
September 30, 1999 $393,002
======================================= ==========================
December 31, 1999 $393,002
======================================= ==========================
March 31, 2000 $393,002
======================================= ==========================
June 30, 2000 $393,002
======================================= ==========================
September 30, 2000 $393,002
======================================= ==========================
December 31, 2000 $393,002
======================================= ==========================
March 31, 2001 $393,002
======================================= ==========================
June 30, 2001 $393,002
======================================= ==========================
September 30, 2001 $393,002
======================================= ==========================
December 31, 2001 $393,002
======================================= ==========================
March 31, 2002 $393,002
======================================= ==========================
June 30, 2002 $393,002
======================================= ==========================
September 30, 2002 $393,002
======================================= ==========================
December 31, 2002 $393,002
======================================= ==========================
March 31, 2003 $6,717,992
======================================= ==========================
June 30, 2003 $6,717,992
======================================= ==========================
September 30, 2003 $18,667,620
======================================= ==========================
December 31, 2003 $18,667,620
======================================= ==========================
March 31, 2004 $18,667,620
======================================= ==========================
June 30, 2004 $18,667,620
======================================= ==========================
September 30, 2004 $30,617,250
======================================= ==========================
48
======================================= ==========================
SCHEDULED
PAYMENT REPAYMENT
DATE OF AXELS
======================================= ==========================
December 31, 2004 $30,617,250
======================================= ==========================
TOTAL $157,000,000
======================================= ==========================
; provided that the scheduled installments of principal of the AXELs
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the AXELs in accordance with subsection
2.4B(iii); and provided, further that the AXELs and all other amounts
owed hereunder with respect to the AXELs shall be paid in full no later
than December 31, 2004, and the final installment payable by Company in
respect of the AXELs on such date shall be in an amount, if such amount
is different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the AXELs.
B. PREPAYMENTS.
(i) Voluntary Prepayments.
(a) Notice of Prepayment. Company may, upon not less
than one Business Day's prior written or telephonic notice, in
the case of Base Rate AXELs, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate
AXELs, in each case given to Administrative Agent by 12:00
Noon (New York City time) on the date required and, if given
by telephone, promptly confirmed in writing to Administrative
Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile
or telephone to each Lender), at any time and from time to
time prepay any AXELs on any Business Day in whole or in part
in an aggregate minimum amount of $1,000,000 and integral
multiples of $500,000 in excess of that amount. Notice of
prepayment having been given as aforesaid, the principal
amount of the AXELs specified in such notice shall become due
and payable on the prepayment date specified therein. Any such
voluntary prepayment shall be applied as specified in
subsection 2.4B(iii).
(b) Prepayment Fees. If any portion of the AXELs is
prepaid (1) pursuant to clause (a) of subsection 2.4B(i) or
(2) pursuant to clause (a), (b) or (c) of subsection 2.4B(ii),
in each case on or prior to the date that is 18 months after
the Closing Date, Company shall pay to Administrative Agent,
for distribution to the holders of the AXELs so prepaid in
accordance with their Pro Rata Shares, a fee equal to (x) 1.5%
of the principal amount of AXELs so prepaid during the period
commencing on the Closing Date and
49
ending on the day prior to the first anniversary of the
Closing Date and (y) 0.75% of the principal amount of AXELs so
prepaid during the period commencing on the first anniversary
of the Closing Date and ending 18 months after the Closing
Date.
(ii) Mandatory Prepayments. The AXELs shall be prepaid in the
amounts and under the circumstances set forth below, all such
prepayments to be applied as set forth below or as more specifically
provided in subsection 2.4B(iii):
(a) Prepayments From Unreinvested Asset Sale
Proceeds. No later than the first Business Day following the
date on which any Net Asset Sale Proceeds become Unreinvested
Asset Sale Proceeds, Company shall prepay the AXELs in an
aggregate amount equal to such Unreinvested Asset Sale
Proceeds; provided, further that, with respect to an Asset
Sale of any asset owned by a Foreign Subsidiary, the
Unreinvested Asset Sale Proceeds in respect thereof shall be
applied (i) first, to the extent such Unreinvested Net Asset
Sale Proceeds may be repatriated to the United States without
in the reasonable judgment of the Company resulting in a
material tax liability to Company in relation to the amount of
proceeds to be repatriated, to prepay the AXELs as set forth
above in this subsection 2.4B(ii)(a), (ii) second, to the
extent of any remaining portion of such Unreinvested Asset
Sale Proceeds, to finance the general corporate purposes of
such Foreign Subsidiary so long as the aggregate of all such
amounts so applied by all Foreign Subsidiaries with respect to
Asset Sales consummated after the Closing Date does not exceed
$5,000,000, and (iii) third, to the extent of any remaining
portion of such Unreinvested Asset Sale Proceeds, to prepay
the AXELs as set forth above in this subsection 2.4B(ii)(a).
Concurrently with any determination by Company that any
portion of any Unreinvested Asset Sale Proceeds of any Foreign
Subsidiary will be applied as described in clause (ii) of the
immediately preceding proviso, Company shall deliver to Agent
an Officers' Certificate (w) certifying that such Unreinvested
Asset Sale Proceeds cannot be repatriated to the United States
without resulting in a material tax liability to Company and
the reasons therefor, (y) specifying the amount of
Unreinvested Asset Sale Proceeds to be retained by such
Foreign Subsidiary as described in said clause (ii) and the
cumulative aggregate amount of all such Unreinvested Asset
Sale Proceeds so retained by all Foreign Subsidiaries since
the date of this Agreement and (z) demonstrating the
derivation of the Unreinvested Asset Sale Proceeds of the
correlative Asset Sale from the gross sales price thereof.
(b) Prepayments from Net Insurance/Condemnation
Proceeds. No later than the first Business Day following the
date of receipt by Administrative Agent or by Company or any
of its Subsidiaries of any Net Insurance/Condemnation Proceeds
that are required to be applied to prepay
50
the AXELs pursuant to the provisions of subsection 5.4C,
Company shall prepay the AXELs in an aggregate amount equal to
the amount of such Net Insurance/Condemnation Proceeds.
(c) Prepayments Due to Issuance of Debt or Equity
Securities. On the date of receipt by Company or any of its
Subsidiaries of the Cash proceeds (any such proceeds, net of
underwriting discounts and commissions and other reasonable
costs and expenses associated therewith, including reasonable
legal fees and expenses, being "NET SECURITIES PROCEEDS") from
the issuance of any debt (other than debt permitted by Section
6.1) or equity Securities of Company or any of its
Subsidiaries to any Person other than Company or any of its
Subsidiaries (and excluding any private issuances of Company
Common Stock after the Closing Date to the extent such funds
would not be required to prepay any other Indebtedness of the
Company and its Subsidiaries) after the Closing Date, Company
shall prepay the AXELs in an aggregate amount equal to such
Net Securities Proceeds.
(d) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with Fiscal Year 1998), Company shall, no later than 90 days
after the end of such Fiscal Year, prepay the AXELs in an
aggregate amount equal to 75% of such Consolidated Excess Cash
Flow; provided that for any Fiscal Year in which the
Consolidated Leverage Ratio as of the end of any such Fiscal
Year is less than 3.75:1, such percentage of Consolidated
Excess Cash Flow applied to prepay the AXELs shall be reduced
to 50%.
(e) Calculations of Net Proceeds Amounts; Additional
Prepayments Based on Subsequent Calculations. Concurrently
with any prepayment of the AXELs pursuant to subsections
2.4B(ii)(a)-(e), Company shall deliver to Administrative Agent
an Officers' Certificate demonstrating the calculation of the
amount (the "NET PROCEEDS AMOUNT") of the applicable
Unreinvested Asset Sale Proceeds or Net Insurance/Condemnation
Proceeds, the applicable Net Securities Proceeds (as such term
is defined in subsection 2.4B(ii)(c)) or the applicable
Consolidated Excess Cash Flow, as the case may be, that gave
rise to such prepayment. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was
greater than the amount set forth in such Officers'
Certificate, Company shall promptly make an additional
prepayment of the AXELs in an amount equal to the amount of
such excess, and Company shall concurrently therewith deliver
to Administrative Agent an Officers' Certificate demonstrating
the derivation of the additional Net Proceeds Amount resulting
in such excess.
51
(iii) Application of Prepayments.
(a) Application of Voluntary Prepayments. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied to reduce the scheduled installments of principal of
the AXELs set forth in subsections 2.4A on a pro rata basis.
(b) Application of Mandatory Prepayments. Any
mandatory prepayments of the AXELs pursuant to subsection
2.4B(ii) shall be applied to reduce the scheduled installments
of principal of the AXELs set forth in subsection 2.4A on a
pro rata basis.
(c) Application of Prepayments to Base Rate AXELs and
Eurodollar Rate AXELs. Subject to the requirement that any
prepayment of the AXELs shall be applied to the outstanding
AXELs of all Lenders in proportion to their respective Pro
Rata Shares, any such prepayment of the AXELs shall be applied
first to Base Rate AXELs to the full extent thereof before
application to Eurodollar Rate AXELs, in a manner which
minimizes the amount of any payments required to be made by
Company pursuant to subsection 2.6D.
C. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
AXEL Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New York
City time) on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any AXEL shall include
payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding AXELs to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares.
52
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its
Pro Rata Share of all such payments received by Administrative Agent.
Notwithstanding the foregoing provisions of this subsection 2.4C(iii),
if, pursuant to the provisions of subsection 2.6C, any Notice of
Conversion/Continuation is withdrawn as to any Affected Lender or if
any Affected Lender makes Base Rate AXELs in lieu of its Pro Rata Share
of any Eurodollar Rate AXELs, Administrative Agent shall give effect
thereto in apportioning payments received thereafter.
(iv) Payments on Business Days. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the commitment
fees hereunder, as the case may be.
(v) Notation of Payment. Each AXEL Lender agrees that before
disposing of any AXEL Note held by it, or any part thereof (other than
by granting participations therein), that Lender will make a notation
thereon of all AXELs evidenced by that AXEL Note and all principal
payments previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make (or any error
in the making of) a notation of any AXEL made under such AXEL Note
shall not limit or otherwise affect the obligations of Company
hereunder or under such AXEL Note with respect to any AXEL or any
payments of principal or interest on such AXEL Note.
2.5 USE OF PROCEEDS.
A. AXELS. The proceeds of the Existing AXELs were applied by Company to
fund a portion of the Recapitalization Financing Requirements. The proceeds of
the Additional AXELs, together with (i) cash on hand at the Company and (ii)
proceeds of incremental borrowings under the Revolving Credit Agreement in an
amount up to $23,500,000 plus the excess, if any, of $15,000,000 over the amount
of cash on hand at the Company on the Restatement Effective Date, will be used
to pay the cash portion of the consideration for the Anagram Shares and to pay
Anagram Transaction Costs.
B. MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
53
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE AXELS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate AXELs as
to the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate AXELs for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate AXELs, that by reason of
circumstances affecting the Eurodollar market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Eurodollar Rate
AXELs on the basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no AXELs may be converted to Eurodollar Rate AXELs
until such time as Administrative Agent notifies Company and Lenders that the
circumstances giving rise to such notice no longer exist and (ii) any Notice of
Conversion/Continuation given by Company with respect to the AXELs in respect of
which such determination was made shall be deemed to be rescinded by Company.
C. ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE AXELS. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate AXELs (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not be
unlawful) or (ii) has become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the Eurodollar market or the
position of such Lender in that market, then, and in any such event, such Lender
shall be an "AFFECTED LENDER" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). Thereafter (a) the obligation of
the Affected Lender to convert AXELs to Eurodollar Rate AXELs shall be suspended
until such notice shall be withdrawn by the Affected Lender, (b) to the extent
such determination by the Affected Lender relates to a
54
Eurodollar Rate AXEL then being requested by Company pursuant to a Notice of
Conversion/Continuation, the Affected Lender shall convert such AXEL to a Base
Rate AXEL, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate AXELs (the "AFFECTED LOANS") shall be terminated at the earlier
to occur of the expiration of the Interest Period then in effect with respect to
the Affected Loans or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate AXELs on the date of such termination.
Notwithstanding the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate AXEL then being requested
by Company pursuant to a Notice of Conversion/Continuation, Company shall have
the option, subject to the provisions of subsection 2.6D, to rescind such Notice
of Conversion/Continuation as to all Lenders by giving notice (by telefacsimile
or by telephone confirmed in writing) to Administrative Agent of such rescission
on the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to maintain AXELs as, or to convert AXELs
to, Eurodollar Rate AXELs in accordance with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
AXELs and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate AXEL does not occur on a date specified therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate AXEL does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its Eurodollar Rate AXELs occurs on a date prior to the last day of an
Interest Period applicable to that AXEL, (iii) if any prepayment of any of its
Eurodollar Rate AXELs is not made on any date specified in a notice of
prepayment given by Company, or (iv) as a consequence of any other default by
Company in the repayment of its Eurodollar Rate AXELs when required by the terms
of this Agreement.
E. BOOKING OF EURODOLLAR RATE AXELS. Any Lender may make, carry or
transfer Eurodollar Rate AXELs at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE AXELS. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate
55
AXELs through the purchase of a Eurodollar deposit bearing interest at the rate
obtained pursuant to clause (i) of the definition of Adjusted Eurodollar Rate in
an amount equal to the amount of such Eurodollar Rate AXEL and having a maturity
comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of that Lender to a domestic office
of that Lender in the United States of America; provided, however, that each
Lender may fund each of its Eurodollar Rate AXELs in any manner it sees fit and
the foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 2.7A.
G. EURODOLLAR RATE AXELS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have an AXEL be maintained as, or converted to, a
Eurodollar Rate AXEL after the expiration of any Interest Period then in effect
for that AXEL and (ii) subject to the provisions of subsection 2.6D, any Notice
of Conversion/Continuation given by Company with respect to a requested
conversion/continuation that has not yet occurred shall be deemed to be
rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby and to the extent a Lender is not entitled to payment
under the terms of Section 2.7B, it shall not be entitled to such payment
pursuant to this subsection 2.7A), in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
Closing Date (in the case of an Existing Lender) or the Restatement Effective
Date (in the case of each New Lender), or compliance by such Lender with any
guideline, request or directive issued or made after the Closing Date by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or
56
deposits or other liabilities in or for the account of, or advances or
loans by, or other credit extended by, or any other acquisition of
funds by, any office of such Lender (other than any such reserve or
other requirements with respect to Eurodollar Rate AXELs that are
reflected in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining AXELs hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto by an amount considered by the Lender to be material; then, in
any such case, Company shall promptly pay to such Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Lender in its sole discretion shall determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this subsection 2.7A, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
B. WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other AXEL Loan Documents shall (except to
the extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on
the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf
of Company or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If Company or any other Person
is required by law to make any deduction or withholding on account of
any such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the AXEL Loan Documents:
(a) Company shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
57
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Company) for its own
account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to the
other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing
or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the Closing Date (in the case of each Existing Lender), after the
Restatement Effective Date (in the case of each New Lender) or after
the date of the Assignment Agreement pursuant to which such Lender
became a Lender (in the case of each other Lender) in any such
requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect on the Closing Date, at the
date of this Agreement or at the date of such Assignment Agreement, as
the case may be, in respect of payments to such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "NON-US LENDER") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Existing Lender), on
or prior to the Restatement Effective Date (in the case of
each New Lender) or on or prior to the date of the Assignment
Agreement pursuant to which it becomes a Lender (in the case
of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form 1001 or
4224 (or any successor forms), properly
58
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required under the
Internal Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect
to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the AXEL Loan Documents or
(2) if such Lender is not a "bank" or other Person described
in Section 881(c)(3) of the Internal Revenue Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service
Form W-8 (or any successor form), properly completed and duly
executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that
such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments
to such Lender of interest payable under any of the AXEL Loan
Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent
for transmission to Company two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of Internal Revenue
Service Form W-8, as the case may be, properly completed and
duly executed by such Lender, together with any other
certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the AXEL Loan
Documents or (2) notify Administrative Agent and Company of
its inability to deliver any such forms, certificates or other
evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to
satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the
Closing Date (in the case of each Existing Lender), on the
Restatement Effective Date (in the case of each New Lender) or
on the date of the Assignment Agreement pursuant to which it
became a Lender (in the case of each other Lender), nothing in
this subsection 2.7B(iii)(c) shall relieve Company of its
obligation to pay any additional amounts pursuant to clause
(c) of subsection 2.7B(ii) in the event
59
that, as a result of any change in any applicable law, treaty
or governmental rule, regulation or order, or any change in
the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the Closing
Date (in the case of an Existing Lender) or the Restatement Effective Date (in
the case of each New Lender) of any law, rule or regulation (or any provision
thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's AXELS or AXEL Commitments or
other obligations hereunder with respect to the AXELs to a level below that
which such Lender or such controlling corporation could have achieved but for
such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy) by an amount considered by the
Lender to be material, then from time to time, within five Business Days after
receipt by Company from such Lender of the statement referred to in the next
sentence, Company shall pay to such Lender such additional amount or amounts as
will compensate such Lender or such controlling corporation on an after-tax
basis for such reduction. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis of the calculation of such additional amounts, which statement shall
be conclusive and binding upon all parties hereto absent manifest error.
2.8 OBLIGATION OF LENDERS TO MITIGATE.
Each Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the AXELs of such Lender becomes
aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender
to receive payments under subsection 2.7, it will, to the extent not
inconsistent with the internal policies of such Lender and any applicable legal
or regulatory restrictions, use reasonable efforts (i) to make, fund or maintain
the AXEL Commitments of such Lender or the affected AXELs of such Lender through
another lending of such Lender, or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
subsection 2.7 would
60
be materially reduced and if, as determined by such Lender in its sole
discretion, the making, funding or maintaining of such AXEL Commitments or AXELs
through such other lending or in accordance with such other measures, as the
case may be, would not otherwise materially adversely affect such AXEL
Commitments or AXELs or the interests of such Lender; provided that such Lender
will not be obligated to utilize such other lending pursuant to this subsection
2.8 unless Company agrees to pay all incremental expenses incurred by such
Lender as a result of utilizing such other lending office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender to Company (with a
copy to Administrative Agent) shall be conclusive absent manifest error.
2.9 REMOVAL OR REPLACEMENT OF A LENDER.
A. Anything contained in this Agreement to the contrary
notwithstanding, in the event that:
(i) (a) any Lender (an "INCREASED-COST LENDER") shall give
notice to Company that such Lender is an Affected Lender or that such
Lender is entitled to receive payments under subsection 2.7, (b) the
circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in
effect, and (c) such Lender shall fail to withdraw such notice within
five Business Days after Company's request for such withdrawal; or
(ii) (a) in connection with any proposed amendment,
modification, termination, waiver or consent with respect to any of the
provisions of this Agreement as contemplated by clauses (i) through (v)
of the first proviso to subsection 9.6A, the consent of Requisite
Lenders shall have been obtained but the consent of one or more of such
other Lenders (each a "NON-CONSENTING LENDER") whose consent is
required shall not have been obtained, and (b) the failure to obtain
Non-Consenting Lenders' consents does not result solely from the
exercise of Non-Consenting Lenders' rights (and the withholding of any
required consents by Non-Consenting Lenders) pursuant to the second
proviso to subsection 9.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender or Non-Consenting Lender
(the "TERMINATED LENDER") to the extent permitted by subsection 2.9B.
B. Company may, by giving written notice to Administrative Agent and
any Terminated Lender of its election to do so:
(i) elect to prepay on the date of such termination any
outstanding AXELs made by such Terminated Lender, together with accrued
and unpaid interest thereon and any other amounts payable to such
Terminated Lender hereunder pursuant to
61
subsection 2.6 or subsection 2.7 or otherwise; provided that, in the
event such Terminated Lender has any AXELs outstanding at the time of
such termination, the written consent of Administrative Agent and
Requisite Lenders (which consent shall not be unreasonably withheld or
delayed) shall be required in order for Company to make the election
set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such
Terminated Lender hereby irrevocably agrees) to assign its outstanding
AXELs in full at par to one or more Eligible Assignees (each a
"REPLACEMENT LENDER") in accordance with the provisions of subsection
9.1B; provided that (a) on the date of such assignment, Company shall
pay any amounts payable to such Terminated Lender pursuant to
subsection 2.6 or subsection 2.7 or otherwise as if it were a
prepayment and (b) in the event such Terminated Lender is a
Non-Consenting Lender, each Replacement Lender shall consent, at the
time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that Company may not make either of the elections set forth in clauses
(i) or (ii) above with respect to any Non-Consenting Lender unless Company also
makes one of such elections with respect to each other Terminated Lender which
is a Non-Consenting Lender.
C. Upon the prepayment of all amounts owing to any Terminated Lender
pursuant to clause (i) of subsection 2.9B, such Terminated Lender shall no
longer constitute a "Lender" for purposes of this Agreement; provided that any
rights of such Terminated Lender to indemnification under this Agreement
(including under subsections 2.6D, 2.7, 9.2 and 9.3) shall survive as to such
Terminated Lender.
SECTION 3.
CONDITIONS TO EFFECTIVENESS; CONDITIONS TO ADDITIONAL AXELS
The effectiveness of this Agreement and the obligations of Lenders to
make (or maintain, as the case may be) AXELs hereunder are subject to the
satisfaction of the following conditions.
3.1 CONDITIONS TO EFFECTIVENESS.
The effectiveness of this Agreement is subject to prior or concurrent
satisfaction of the following conditions:
A. LOAN PARTY DOCUMENTS. On or before the Restatement Effective Date,
Company shall, and shall cause each other Loan Party to, deliver to Lenders (or
to Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Company or such
62
Loan Party, as the case may be, each, unless otherwise noted, dated the
Restatement Effective Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Person (or, in lieu thereof, a certificate of the
corporate secretary of such Person certifying as of the Restatement
Effective Date that its Certificate of Incorporation delivered on the
Closing Date pursuant to subsection 3.1 of the Existing AXEL Credit
Agreement is in full force and effect without modification or
amendment), together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
state in which such Person is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from the appropriate taxing authority of each of such
jurisdictions, each dated a recent date prior to the Restatement
Effective Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary (or, in lieu thereof, a certificate of the corporate
secretary of such Person certifying as of the Restatement Effective
Date that its Bylaws delivered on the Closing Date pursuant to
subsection 3.1 of the Existing AXEL Credit Agreement is in full force
and effect without modification or amendment);
(iii) Resolutions of the Board of Directors of such Person
approving and authorizing the execution, delivery and performance of
the AXEL Loan Documents and the Anagram Acquisition Agreement to which
it is a party, certified as of the Restatement Effective Date by the
corporate secretary or an assistant secretary of such Person as being
in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Person executing the AXEL Loan Documents to which it is a party;
(v) Executed originals of this Agreement and (to the extent
not previously executed and delivered to Lenders) the other Loan
Documents to which such Person is a party; and
(vi) Such other documents as Arranger or Administrative Agent
may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since December 31, 1997, no Material
Adverse Effect (in the opinions of Arranger and Administrative Agent) shall have
occurred. Since December 31, 1997, there shall not have been an adverse change,
or any development involving a prospective adverse change, in or affecting
Anagram or any of its Subsidiaries or the general affairs, management, financial
position, shareholders' equity or results of
63
operation of Anagram and its Subsidiaries which is, in the reasonable judgment
of Arranger, Administrative Agent or Requisite Lenders, material.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) Corporate Structure. The corporate organizational
structure of Company and its Subsidiaries, both before and after giving
effect to the Anagram Acquisition, shall be as set forth on Schedule
3.1C annexed hereto.
(ii) Capital Structure and Ownership. The capital structure
and ownership of Company, both before and after giving effect to the
Anagram Acquisition, shall be as set forth on Schedule 3.1C annexed
hereto.
(iii) Management; Employment Agreements. The management
structure of Company after giving effect to the Anagram Acquisition
shall be as set forth on Schedule 3.1C annexed hereto. Arranger and
Administrative Agent shall have received duly executed copies of, and
shall be satisfied with the form and substance of, the Employment
Agreements as set forth on Schedule 3.1C annexed hereto.
D. ANAGRAM ACQUISITION AGREEMENT.
(i) The Anagram Acquisition Agreement shall be satisfactory in
form and substance to Arranger and Administrative Agent;
(ii) On or prior to the Restatement Effective Date, Arranger
and Administrative Agent shall each have received a fully executed or
conformed copy of the Anagram Acquisition Agreement (including all
schedules and exhibits thereto) and any material documents executed in
connection therewith;
(iii) the Anagram Acquisition Agreement shall be in full force
and effect and no provision thereof shall have been modified or waived
in any respect determined by Arranger or Administrative Agent to be
material, in each case without the consent of Arranger and
Administrative Agent;
(iv) the parties thereto shall not have failed in any material
respect to perform any material obligation or covenant required by the
Anagram Acquisition Agreement to be performed or complied with by any
of them on or before the Restatement Effective Date; and
(v) Arranger and Administrative Agent shall have received an
Officer's Certificate from Company to the effect set forth in clauses
(ii)-(iv) above.
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E. MATTERS RELATING TO EXISTING INDEBTEDNESS OF COMPANY AND ITS
SUBSIDIARIES
(i) Termination of Existing Anagram Credit Agreements and
Related Liens; Existing Anagram Letters of Credit. On or prior to the
Restatement Effective Date, Anagram and its Subsidiaries shall have (a)
repaid in full all Indebtedness outstanding under the Existing Anagram
Credit Agreements as set forth on Schedule 3.1E-II (the aggregate
principal amount of which Indebtedness shall not exceed $19,000,000),
(b) terminated any commitments to lend or make other extensions of
credit thereunder, (c) delivered to Arranger and Administrative Agent
all documents or instruments necessary to release all Liens securing
Indebtedness or other obligations of Anagram and its Subsidiaries
thereunder, and (d) made arrangements satisfactory to Arranger and
Administrative Agent with respect to the cancellation of any letters of
credit outstanding thereunder or the issuance of Letters of Credit
under the Revolving Credit Agreement to support the obligations of
Company and its Subsidiaries (after giving effect to the Anagram
Acquisition) with respect thereto.
(ii) Existing Indebtedness to Remain Outstanding. On the
Restatement Effective Date, Arranger and Administrative Agent shall
have received an Officers' Certificate of Company stating that, after
giving effect to the transactions described in this subsection 3.1E,
the Indebtedness of Loan Parties (other than Indebtedness under the
Loan Documents and the Senior Subordinated Notes) shall consist of (a)
approximately $5,809,255 in aggregate principal amount of outstanding
Indebtedness described in Part I of Schedule 6.1 annexed hereto and (b)
Indebtedness in an aggregate amount not to exceed $4,123,512 in respect
of Capital Leases described in Part II of Schedule 6.1 annexed hereto.
The terms and conditions of all such Indebtedness shall be in form and
in substance satisfactory to Arranger, Administrative Agent and
Requisite Lenders.
F. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Anagram Acquisition and the other
transactions contemplated by the Loan Documents and the Anagram Acquisition
Agreement and the continued operation of the business conducted by Company and
its Subsidiaries (including Anagram and its Subsidiaries) in substantially the
same manner as conducted prior to the consummation of the Anagram Acquisition,
and each of the foregoing shall be in full force and effect, in each case other
than those the failure to obtain or maintain which, either individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect. All applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on the Anagram Acquisition or the
financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall
be pending, and the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
65
G. CONSUMMATION OF ANAGRAM ACQUISITION.
(i) All conditions to the Anagram Acquisition set forth in the
Anagram Acquisition Agreement shall have been satisfied or the
fulfillment of any such conditions shall have been waived; provided
that Arranger, Administrative Agent and Requisite Lenders shall have
consented to any such waiver of any such condition that Arranger or
Administrative Agent reasonably deems material;
(ii) The Anagram Acquisition shall have become effective in
accordance with the terms of the Anagram Acquisition Agreement at or
immediately prior to the time of funding of the Additional AXELs;
(iii) Anagram Transaction Costs shall not exceed $4,000,000,
and Arranger shall have received evidence to its satisfaction to such
effect; and
(iv) Arranger and Administrative Agent shall have received an
Officers' Certificate of Company to the effect set forth in clauses
(i)-(iii) above.
H. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. Collateral Agent
shall have received evidence satisfactory to it that Company and Subsidiary
Guarantors shall have taken or caused to be taken (to the extent not previously
taken pursuant to the terms of the Existing AXEL Credit Agreement and the other
Loan Documents executed in connection therewith) all such actions, executed and
delivered or caused to be executed and delivered all such agreements, documents
and instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Collateral Agent
desirable in order to create in favor of Collateral Agent, for the benefit of
Secured Parties, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral.
Such actions shall include the following:
(i) Schedules to Collateral Documents. Delivery to Collateral
Agent of accurate and complete schedules to all of the applicable
Collateral Documents.
(ii) Stock Certificates and Instruments. Delivery to
Collateral Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to Collateral Agent)
representing all capital stock pledged pursuant to the Company Pledge
Agreement and the Subsidiary Pledge Agreements and (b) all promissory
notes or other instruments (duly endorsed, where appropriate, in a
manner satisfactory to Collateral Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery
to Arranger and Administrative Agent of (a) the results of a recent
search, by a Person satisfactory to Arranger and Administrative Agent,
of all effective UCC financing
66
statements and fixture filings and all judgment and tax lien filings
which may have been made with respect to any personal or mixed property
of Anagram or any of its Subsidiaries, together with copies of all such
filings disclosed by such search, and (b) UCC termination statements
duly executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement).
(iv) UCC Financing Statements and Fixture Filings; PTO
Filings. (a) Delivery to Collateral Agent of UCC financing statements
and, where appropriate, fixture filings, duly executed by each
applicable Loan Party with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as may
be necessary or, in the reasonable opinion of Collateral Agent,
desirable to perfect the security interests created in such Collateral
pursuant to the Collateral Documents and (b) delivery to Administrative
Agent of all cover sheets or other documents or instruments required to
be filed with the PTO or the United States Copyright Office in order to
create or perfect Liens in respect of any IP Collateral;
(v) Auxiliary Pledge Agreements. Execution and delivery to
Collateral Agent of Auxiliary Pledge Agreements with respect to the
stock of all Foreign Subsidiaries organized under the laws of all
jurisdictions with respect to which Collateral Agent deems an Auxiliary
Pledge Agreement necessary or advisable to perfect or otherwise protect
the First Priority Liens granted to Collateral Agent on behalf of
Secured Parties in such stock, and the taking of all such other actions
under the laws of such jurisdictions as Collateral Agent may deem
necessary or advisable to perfect or otherwise protect such Liens; and
(vi) Opinions of Local Counsel. Delivery to Arranger and
Administrative Agent of an opinion of counsel (which counsel shall be
reasonably satisfactory to Arranger and Administrative Agent) under the
laws of each state in the United States in which any personal or mixed
property Collateral with an aggregate value in excess of $500,000 is
located with respect to the creation and perfection of the security
interests in favor of Collateral Agent in such Collateral and such
other matters governed by the laws of such jurisdiction regarding such
security interests as Arranger and Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Arranger and Administrative Agent.
I. EDEN PRAIRIE HOLDINGS. On or before the Restatement Effective
Date, Collateral Agent shall have received from Anagram:
(i) Certified copy of the Certificate of Formation of Eden
Prairie Holdings, together with a good standing certificate from the
Secretary of State of
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Delaware and each other state in which Eden Prairie Holdings is
qualified to do business, each dated a recent date prior to the
Restatement Effective Date;
(ii) Evidence in form and substance satisfactory to Arranger
and Administrative Agent that Anagram International has transferred all
its right, title and interest in and to the Anagram Headquarters
Facility to Eden Prairie Holdings;
(iii) Evidence in form and substance satisfactory to Arranger
and Administrative Agent that Company has assigned all its membership
interest in Eden Prairie Holdings to Anagram International;
(iv) Copy of a lease relating to the Anagram Headquarters
Facility entered into by and between Eden Prairie Holdings and Anagram
International, in form and substance satisfactory to Arranger and
Administrative Agent; and
(v) Evidence satisfactory to Arranger and Administrative Agent
that Anagram International has appointed an independent manager for
Eden Prairie Holdings in accordance with paragraph Seventh of the
Certificate of Formation of Eden Prairie Holdings; provided that, to
the extent such independent manager is not so appointed on or before
the Restatement Effective Date, Company shall cause Anagram
International to appoint an independent manager for Eden Prairie
Holdings in accordance with paragraph Seventh of the Certificate of
Formation of Eden Prairie Holdings as promptly as practicable after
being requested to do so by Collateral Agent in accordance with said
paragraph Seventh.
J. ENVIRONMENTAL REPORTS. Arranger and Administrative Agent shall have
received such reports and other information, in form, scope and substance
satisfactory to Arranger and Administrative Agent, as Arranger and
Administrative Agent may reasonably require regarding environmental matters
relating to Anagram and its Subsidiaries and any of their respective Facilities.
K. FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before the
Restatement Effective Date, Lenders shall have received from Company (i) audited
financial statements of Anagram International, Inc. and its Subsidiaries for its
fiscal years ended December 31, 1996 and 1997, consisting of balance sheets and
the consolidated statements of income, stockholders' equity and cash flows for
such fiscal years, (ii) unaudited combined and combining financial statements of
Anagram and its Subsidiaries as at June 30, 1998, consisting of an unaudited
combined and combining balance sheet and the combined and combining statements
of income for the six-month period ending on such date, all in reasonable detail
and certified by the chief financial officer of Anagram that they fairly present
the financial condition of Anagram and its Subsidiaries as at the dates
indicated and the results of their operations for the periods indicated, subject
to changes resulting from audit and normal year-end adjustments, (iii) unaudited
financial statements of Company and its Subsidiaries as at June 30, 1998,
consisting of a balance sheet and the related
68
consolidated statements of income, stockholders' equity and cash flows for the
six-month period ending on such date, all in reasonable detail and certified by
the chief financial officer of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments, (iv)
pro forma consolidated balance sheets of Company and its Subsidiaries as of July
31, 1998, prepared in accordance with GAAP and reflecting the consummation of
the Anagram Acquisition, the related financings and the other transactions
contemplated by the Loan Documents and the Anagram Acquisition Agreement, which
pro forma financial statements shall be in form and substance satisfactory to
Lenders, and (v) pro forma financial statements (including consolidated balance
sheets, statements of operations, stockholders' equity and cash flows) of
Company and its Subsidiaries (after giving effect to the Anagram Acquisition)
for the 10-year period commencing on the Restatement Effective Date, which pro
forma financial statements shall be in form and substance satisfactory to
Lenders.
L. EVIDENCE OF INSURANCE. Collateral Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 5.4 is in
full force and effect and that Collateral Agent on behalf of Secured Parties has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 5.4.
M. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of (a) Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇, special
counsel for Loan Parties, in form and substance reasonably satisfactory to
Administrative Agent and Arranger and its counsel, dated as of the Restatement
Effective Date and setting forth substantially the matters in the opinions
designated in Exhibit V-A annexed hereto and as to such other matters as
Administrative Agent or Arranger and acting on behalf of Lenders may reasonably
request and (b) ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel for Loan Parties, in form and
substance reasonably satisfactory to Administrative Agent and Arranger and its
counsel, dated as of the Restatement Effective Date and setting forth
substantially the matters in the opinions designated in Exhibit V-B annexed
hereto and as to such other matters as Administrative Agent or Arranger and
acting on behalf of Lenders may reasonably request, and (ii) evidence
satisfactory to Arranger and Administrative Agent that Company has requested
such counsel to deliver such opinions to Lenders.
N. OPINIONS OF ARRANGER AND ADMINISTRATIVE AGENT'S COUNSEL. Lenders
shall have received originally executed copies of one or more favorable written
opinions of O'Melveny & ▇▇▇▇▇ LLP, counsel to Arranger and Administrative Agent,
dated as of the Restatement Effective Date, substantially in the form of Exhibit
VI annexed hereto and as to such other matters as Arranger and Administrative
Agent may reasonably request.
69
O. OPINIONS OF COUNSEL RELATING TO THE ANAGRAM ACQUISITION AGREEMENT.
On or prior to the Effective Date, Arranger and Administrative Agent shall each
have received executed copies of all opinions by counsel delivered in connection
with the Anagram Acquisition Agreement to Company or any of its Subsidiaries.
All such opinions shall be, to the extent agreed to by the person delivering
such opinion, addressed to Arranger, Administrative Agent and Lenders or
accompanied by written authorization from each person delivering such an opinion
stating that Arranger, Administrative Agent and Lenders may rely on such opinion
as though it were addressed to them.
P. FEES. Company shall have paid to Arranger and Administrative Agent,
for distribution (as appropriate) to Arranger, Administrative Agent and Lenders,
the fees payable on the Restatement Effective Date referred to in subsection
2.3.
Q. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Arranger and Administrative Agent an Officers'
Certificate, in form and substance satisfactory to Arranger and Administrative
Agent, to the effect that the representations and warranties in Section 4 hereof
are true, correct and complete in all material respects on and as of the
Restatement Effective Date to the same extent as though made on and as of that
date (or, to the extent such representations and warranties specifically relate
to an earlier date, that such representations and warranties were true, correct
and complete in all material respects on and as of such earlier date) and that
Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Restatement Effective Date except as otherwise
disclosed to and agreed to in writing by Arranger, Administrative Agent and
Requisite Lenders.
R. COMPLETION OF PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, or Arranger and its counsel shall be
satisfactory in form and substance to Administrative Agent and Arranger and such
counsel, and Administrative Agent, Arranger and such counsel shall have received
all such counterpart originals or certified copies of such documents as
Administrative Agent or Arranger may reasonably request.
S. COLLATERAL ACCESS AGREEMENTS. On or prior to the Restatement
Effective Date, Anagram and each applicable Subsidiary Guarantor shall have used
its reasonable good faith efforts to obtain, in the case of any Leasehold
Property or any real property in which Anagram or any of its Subsidiaries owns
or holds a fee interest and which is subject to a mortgage held by a third-party
mortgagee holding inventory or equipment with an aggregate fair market value
exceeding $500,000, a Collateral Access Agreement with respect thereto, in each
case in form and substance reasonably satisfactory to Arranger and
Administrative Agent; provided that, to the extent any such Collateral Access
Agreement is not so obtained on or before the Restatement Effective Date, upon
the reasonable request of Collateral Agent, Company hereby covenants and agrees
to cause the applicable Subsidiary Guarantor
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to continue to use its reasonable good faith efforts to obtain such Collateral
Access Agreement as promptly as practicable after the Restatement Effective
Date.
T. REVOLVING CREDIT AGREEMENT. Arranger and Administrative Agent shall
each have received a fully executed or conformed copy of the Revolving Credit
Agreement, as amended and restated in connection with the Anagram Acquisition,
satisfactory in form and substance to Arranger and Administrative Agent. The
Revolving Credit Agreement shall be in full force and effect and the conditions
to advances of the Revolving Loans thereunder shall have been satisfied or
waived by the Revolving Credit Lenders.
U. NO EVENT OF DEFAULT. Company shall have delivered to Administrative
Agent an Officer's Certificate, in form and substance satisfactory to
Administrative Agent, to the effect that, immediately prior to the Restatement
Effective Date, no event has occurred and is continuing that would constitute an
Event of Default or Potential Event of Default under the Existing AXEL Credit
Agreement or the Revolving Credit Agreement.
3.2 ADDITIONAL CONDITIONS TO AXELS.
The obligations of Lenders to make Additional AXELs on the Restatement
Effective Date are subject to the following further conditions precedent:
A. Administrative Agent shall have received before the Restatement
Effective Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the chief
executive officer, the chief financial officer or the treasurer or corporate
controller of Company or by any executive officer of Company designated by any
of the above-described officers on behalf of Company in a writing delivered to
Administrative Agent.
B. As of the Restatement Effective Date:
(i) The representations and warranties contained herein and in
the other AXEL Loan Documents shall be true, correct and complete in
all material respects on and as of the Restatement Effective Date to
the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall
have been true, correct and complete in all material respects on and as
of such earlier date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
71
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
the Restatement Effective Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Additional AXELs to be made by it on the Restatement
Effective Date;
(v) The making of the Additional AXELs requested on the
Restatement Effective Date shall not violate any law including
Regulation G, Regulation T, Regulation U or Regulation X of the Board
of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries that
has not been disclosed by Company in writing prior to the execution of
this Agreement), and there shall have occurred no development not so
disclosed in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed, that, in either event, in
the opinion of Administrative Agent or of Requisite Lenders, would be
expected to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated
by this Agreement or the making of AXELs hereunder.
SECTION 4.
COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make (or
maintain, as the case may be) the AXELs, Company represents and warrants to each
Lender, on the date of this Agreement and on the Restatement Effective Date,
that the following statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
A. ORGANIZATION AND POWERS. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation as specified in Schedule 4.1 annexed hereto as it
may be supplemented pursuant to subsection 5.1(xvi). Each Loan Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be
72
conducted, to enter into the AXEL Loan Documents, the Related Agreements and the
Anagram Acquisition Agreement to which it is a party and to carry out the
transactions contemplated thereby.
B. QUALIFICATION AND GOOD STANDING. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and could not reasonably be expected to have a Material Adverse Effect.
C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only
in (i) the businesses engaged in by Company and its Subsidiaries on the
Restatement Effective Date and similar or related businesses and (ii) such other
lines of business as may be consented to be Requisite Lenders.
D. SUBSIDIARIES. All of the Subsidiaries of Company as of the
Restatement Effective Date (after giving effect to the Anagram Acquisition) are
identified in Schedule 4.1 annexed hereto, as said Schedule 4.1 may be
supplemented from time to time pursuant to the provisions of subsection
5.1(xvi). The capital stock of each of the Subsidiaries of Company identified in
Schedule 4.1 annexed hereto (as so supplemented) is duly authorized, validly
issued, fully paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Company identified in Schedule 4.1
annexed hereto (as so supplemented) is a corporation duly organized, validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation set forth therein, has all requisite corporate power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, in each case except where
failure to be so qualified or in good standing or a lack of such corporate power
and authority has not had and could not reasonably be expected to have a
Material Adverse Effect. Schedule 4.1 annexed hereto (as so supplemented)
correctly sets forth, as of the Closing Date, the ownership interest of Company
and each of its Subsidiaries in each of the Subsidiaries of Company identified
therein.
4.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents, the Related Agreements and the Anagram Acquisition
Agreement have been duly authorized by all necessary corporate action on the
part of each Loan Party that is a party thereto.
B. NO CONFLICT. The execution, delivery and performance by Loan Parties
of the AXEL Loan Documents, the Related Agreements and the Anagram Acquisition
Agreement to which they are parties and the consummation of the transactions
contemplated by the
73
AXEL Loan Documents, the Related Agreements and the Anagram Acquisition
Agreement do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Company or any of
its Subsidiaries, except for any breach or default which could not reasonably be
expected to have a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Subsidiaries (other than any Liens created under any of
the AXEL Loan Documents in favor of Administrative Agent on behalf of Lenders),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Company or any of its Subsidiaries,
except for such approvals or consents which will be obtained on or before the
Restatement Effective Date and disclosed in writing to Lenders and such consents
the failure of which to receive could not reasonably be expected to have a
Material Adverse Effect.
C. GOVERNMENTAL CONSENTS. Except as specified in Schedule 3.9(b) to the
Anagram Acquisition Agreement, the execution, delivery and performance by Loan
Parties of the AXEL Loan Documents, the Related Agreements and the Anagram
Acquisition Agreement to which they are parties and the consummation of the
transactions contemplated by the AXEL Loan Documents, such Related Agreements
and the Anagram Acquisition Agreement do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body the failure of which to receive could not reasonably be expected to cause a
Material Adverse Effect. Any such required consents, approvals, notices or other
actions shall have been received, given or performed, as the case may be, on or
prior to the Restatement Effective Date.
D. BINDING OBLIGATION. Each of the AXEL Loan Documents, the Related
Agreements and the Anagram Acquisition Agreement has been duly executed and
delivered by each Loan Party that is a party thereto and is the legally valid
and binding obligation of such Loan Party, enforceable against such Loan Party
in accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. VALID ISSUANCE OF COMPANY COMMON STOCK AND SENIOR SUBORDINATED
NOTES.
(i) Company Common Stock. The Company Common Stock issued in
the Merger on the Closing Date has been duly and validly issued and is
fully paid and nonassessable. The New Company Shares to be issued in
partial consideration for the Anagram Acquisition on or before the
Restatement Effective Date, when issued
74
and delivered, will be duly and validly issued, fully paid and
nonassessable. No stockholder of Company has or will have any
preemptive rights to subscribe for any additional equity Securities of
Company. The issuance and sale of such Company Common Stock or New
Company Shares, upon such issuance and sale, either (a) have been or
will have been registered or qualified under applicable federal and
state securities laws or (b) have been or will be exempt therefrom.
(ii) Senior Subordinated Notes. The Senior Subordinated Notes
are the legally valid and binding obligations of Company, enforceable
against Company in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The subordination
provisions of the Senior Subordinated Notes will be enforceable against
the holders thereof and the AXELs and all other monetary Obligations
hereunder are and will be within the definition of "Senior Debt"
included in such provisions. The Senior Subordinated Notes either (a)
have been registered or qualified under applicable federal and state
securities laws or (b) are exempt therefrom.
4.3 FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at December 31, 1997 and the
related consolidated statements of income, stockholders' equity and cash flows
of Company and its Subsidiaries for the Fiscal Year then ended, (ii) the
unaudited consolidated balance sheets of Company and its Subsidiaries as at June
30, 1998 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for the
six-months then ended, (iii) the audited consolidated balance sheets of Anagram
and its Subsidiaries as at December 31, 1997 and the consolidated statements of
income, stockholders' equity and cash flows of Anagram and its Subsidiaries for
its fiscal year then ended and (iv) the unaudited combined and combining balance
sheets of Anagram and its Subsidiaries as at June 30, 1998 and the unaudited
combined and combining statements of income of Anagram and its Subsidiaries for
the six-months then ended. All such statements were prepared in accordance with
GAAP applied on a consistent basis throughout the periods covered thereby
(except as otherwise indicated therein or in the Anagram Acquisition Agreements)
and fairly present, in all material respects, the financial position of the
entities described in such financial statements as of such respective dates and
the results of operations of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Company does not (and did not immediately following the funding of the Existing
AXELs) and Anagram does not (and will not immediately following the funding of
the Additional AXELs) have any Guarantee, contingent liability or liability for
taxes, long-term lease or unusual forward or long-term
75
commitment that is not reflected in the foregoing financial statements or the
notes thereto and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries (after giving effect to the
Anagram Acquisition).
4.4 NO MATERIAL ADVERSE CHANGE.
Since December 31, 1997, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect.
4.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. After giving effect to the transactions
contemplated by this Agreement and the Anagram Acquisition Agreement to occur on
the Restatement Effective Date, except for Permitted Encumbrances and Liens
permitted under subsection 6.2, Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 4.3 or in the most recent
financial statements delivered pursuant to subsection 5.1 of the Existing AXEL
Credit Agreement or this Agreement, in each case except for assets disposed of
since the date of such financial statements in the ordinary course of business
or as otherwise permitted under subsection 6.5. All such properties and assets
are free and clear of Liens other than Permitted Encumbrances and other Liens
permitted under this Agreement.
B. REAL PROPERTY. After giving effect to the transactions contemplated
by this Agreement and the Anagram Acquisition Agreement, as of the Restatement
Effective Date, Schedule 4.5 annexed hereto contains a true, accurate and
complete list of (i) all Fee Properties and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Restatement Effective Date, except as
specified in Schedule 4.5 annexed hereto, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Company
does not have knowledge of any material default that has occurred and is
continuing thereunder, and each such agreement constitutes the legally valid and
binding obligation of each applicable Loan Party, enforceable against such Loan
Party in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
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4.6 LITIGATION; ADVERSE FACTS.
Except as set forth in Schedule 4.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
4.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 5.3, all material tax
returns and reports of Company and its Subsidiaries required to be filed by any
of them have been timely filed, and all taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable. Company knows of no proposed material tax assessment against
Company or any of its Subsidiaries which is not being actively contested by
Company or such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any, as shall be
required in conformity with GAAP shall have been made or provided therefor.
4.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS; MATERIAL
CONTRACTS.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
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C. Schedule 4.8 contains a true, correct and complete list of all the
Material Contracts in effect on the Restatement Effective Date. Except as
described on Schedule 4.8, all such Material Contracts are in full force and
effect and no defaults currently exist thereunder other than any such defaults
or failure to be in force and effect which could not reasonably be expected to
result in a Material Adverse Effect.
4.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
4.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each AXEL and each
Revolving Loan under the Revolving Credit Agreement, not more than 25% of the
value of the assets (either of Company only or of Company and its Subsidiaries
on a consolidated basis) subject to the provisions of subsection 6.2 or 6.5 or
subject to any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 7.2, will be Margin Stock.
4.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan, and have performed all their obligations under
each Employee Benefit Plan. Each Employee Benefit Plan which is intended to
qualify under Section 401(a) of the Internal Revenue Code is so qualified.
B. No ERISA Events have occurred or are reasonably expected to occur
which could reasonably be expected to result in liabilities to the Company or
any of its Subsidiaries in excess of $1,000,000 in the aggregate.
C. As of the most recent valuation date for any Pension Plan, the
excess of (1) the actuarial present value (determined on the basis of reasonable
assumptions employed by the independent actuary for each Pension Plan for
purposes of Section 412 of the Internal Revenue Code or Section 302 of ERISA) of
benefit liabilities (as defined in Section
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4001(a)(16) of ERISA), over (2) the fair market value of the assets of such
Pension Plan, individually or in the aggregate for all Pension Plans (excluding
for purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $5,000,000.
D. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $5,000,000.
4.12 CERTAIN FEES.
Except as described in the Confidential Information Memorandum and the
advisory fee payable by Company to ▇▇▇▇▇ ▇▇▇▇▇▇▇ in an amount not to exceed
$700,000, no broker's or finder's fee or commission has been or will be payable
by Company with respect to this Agreement or any of the transactions
contemplated hereby, and Company hereby indemnifies Lenders against, and agrees
that it will hold Lenders harmless from, any claim, demand or liability for any
such broker's or finder's fees alleged to have been incurred in connection
herewith or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
4.13 ENVIRONMENTAL PROTECTION.
Except as set forth in Schedule 4.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity;
(ii) neither Company nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. [Section] 9604) or any comparable state law;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries;
(iv) neither Company nor any of its Subsidiaries nor, to
Company's knowledge, any predecessor of Company or any of its
Subsidiaries has filed any
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notice under any Environmental Law indicating past or present treatment
of Hazardous Materials at any Facility, and none of Company's or any of
its Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent;
(v) compliance with all current or reasonably foreseeable
future requirements pursuant to or under Environmental Laws will not,
individually or in the aggregate, have a reasonable possibility of
giving rise to a Material Adverse Effect.
Notwithstanding anything in this subsection 4.13 to the contrary, no
event or condition has occurred or is occurring with respect to Company or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 4.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.
4.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
4.15 SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.
4.16 MATTERS RELATING TO COLLATERAL.
A. CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the date hereof pursuant to subsections 3.1I, 5.8
and 5.9 of the Existing AXEL Credit Agreement and subsections 3.1H, 5.8 and 5.9
of this Agreement and (ii) the delivery to Collateral Agent of any Pledged
Collateral not delivered to Collateral Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Collateral Agent for
the benefit of Secured Parties, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than the filing of any UCC
financing statements delivered to Collateral Agent for filing (but not yet
filed) and the
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periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Collateral Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Collateral Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Collateral Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
4.16A and except as may be required, in connection with the disposition of any
Pledged Collateral, by laws generally affecting the offering and sale of
securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed
in favor of Collateral Agent as contemplated by subsection 4.16A, no effective
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
D. MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
E. INFORMATION REGARDING COLLATERAL. All information supplied to
Collateral Agent by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
4.17 RELATED AGREEMENTS.
A. DELIVERY OF RELATED AGREEMENTS. Company has delivered to
Lenders complete and correct copies of each Related Agreement and the Anagram
Acquisition Agreement and of all exhibits and schedules thereto.
B. WARRANTIES OF COMPANY.
(i) Except to the extent otherwise set forth herein or in the
schedules hereto, each of the representations and warranties given by
Company in the Recapitalization Agreement is true and correct in all
material respects as of the Closing Date (or as of any earlier date to
which such representation and warranty specifically relates) and will
be true and correct in all material respects as of the Closing Date (or
as of such earlier date, as the case may be), in each case subject to
the qualifications set forth in the schedules to the Recapitalization
Agreement.
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(ii) Except to the extent otherwise set forth herein or in the
schedules hereto, each of the representations and warranties given by
Company in the Anagram Acquisition Agreement is true and correct in all
material respects as of the date hereof (or as of any earlier date to
which such representation and warranty specifically relates) and will
be true and correct in all material respects as of the Restatement
Effective Date (or as of such earlier date, as the case may be), in
each case subject to the qualifications set forth in the schedules to
the Anagram Acquisition Agreement.
C. SURVIVAL. Notwithstanding anything in the Recapitalization Agreement
or the Anagram Acquisition Agreement to the contrary, (i) the representations
and warranties of Company set forth in subsection 4.17B(i) shall, solely for
purposes of this Agreement, survive the Closing Date for the benefit of Lenders
and (ii) the representations and warranties of Company set forth in subsection
4.17B(ii) shall, solely for purposes of this Agreement, survive the Restatement
Effective Date for the benefit of Lenders.
4.18 DISCLOSURE.
No representation or warranty of Company or any of its Subsidiaries
contained in the Confidential Information Memorandum or in any Loan Document or
in any other document, certificate or written statement furnished to Lenders by
or on behalf of Company or any of its Subsidiaries for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact (known to Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by
Lenders that such projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by any such
projections may differ from the projected results. There are no facts known (or
which should upon the reasonable exercise of diligence be known) to Company
(other than matters of a general economic nature) that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
4.19 REVOLVING CREDIT AGREEMENT.
A. DELIVERY OF REVOLVING CREDIT AGREEMENT. Company has delivered to
Lenders complete and correct copies of the Revolving Credit Agreement, as
amended and restated as of the Restatement Effective Date, and of all exhibits
and schedules thereto.
B. WARRANTIES OF COMPANY. Except to the extent otherwise set forth
herein or in the schedule hereto, each of the representations and warranties
given by Company in the
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Revolving Credit Agreement, as amended and restated as of the Restatement
Effective Date, is true and correct in all material respects as of the date
hereof (or as of any earlier date to which such representation and warranty
specifically relates) and will be true and correct in all material respects as
of the Restatement Effective Date (or as of such earlier date, as the case may
be), in each case subject to the qualifications set forth in the schedules to
the Revolving Credit Agreement, as amended and restated.
SECTION 5.
COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Additional
AXEL Commitments hereunder shall remain in effect and until payment in full of
all of the AXELs and other Obligations unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent and Lenders:
(i) Monthly Financials: as soon as available and in any event
within 30 days after the end of each month ending after the Restatement
Effective Date, commencing with the calendar month of August 1998 (or
within 45 days after the end of each month which ends a Fiscal
Quarter), the consolidated balance sheets of Company and its
Subsidiaries as at the end of such month and the related consolidated
statements of income, stockholders' equity and cash flows of Company
and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month,
setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and
the corresponding figures from the Financial Plan for the current
Fiscal Year, to the extent prepared on a monthly basis, all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of each of first three Fiscal
Quarters of each year, (a) the consolidated balance sheets of Company
and its Subsidiaries as at the end of such
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Fiscal Quarter and the related consolidated statements of income,
stockholders' equity and cash flows of Company and its Subsidiaries for
such Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting forth in
each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, all in
reasonable detail and certified by the chief financial officer of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and
normal year-end adjustments, and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form of the MD&A,
which is prepared by the Company for public filing for such Fiscal
Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheets of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year
and the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year, and (c) a report thereon of independent certified
public accountants of recognized national standing selected by Company
and satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of Company and
its Subsidiaries to continue as a going concern, and shall state that
such consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years (except as
otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards;
(iv) Officers' and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officers'
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under
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their supervision, a review in reasonable detail of the transactions
and condition of Company and its Subsidiaries during the accounting
period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as
at the date of such Officers' Certificate, of any condition or event
that constitutes an Event of Default or Potential Event of Default, or,
if any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail (1) compliance during
and at the end of the applicable accounting periods with the
restrictions contained in Section 6, in each case to the extent
compliance with such restrictions is required to be tested at the end
of the applicable accounting period and (2) with respect to any Net
Asset Sale Proceeds received by Company or any of its Subsidiaries
during the second Fiscal Quarter immediately preceding the Fiscal
Quarter in which the applicable accounting period ends, whether or not
all or any portion of such Net Asset Sale Proceeds shall have become
Unreinvested Asset Sale Proceeds;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 4.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (ii), (iii) or
(xiii) of this subsection 5.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (ii), (iii) or
(xiii) of this subsection 5.1 following such change, consolidated
financial statements of Company and its Subsidiaries for (y) the
current Fiscal Year to the effective date of such change and (z) the
two full Fiscal Years immediately preceding the Fiscal Year in which
such change is made, in each case prepared on a pro forma basis as if
such change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to subdivision
(ii), (iii) or (xiii) of this subsection 5.1 following such change, a
written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each delivery
of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit examination has included a review of the terms
of this Agreement and the other AXEL Loan Documents as they relate to
accounting matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and,
if such a condition or event has come to
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their attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination, and (c) stating that based on their audit
examination nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iv) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants
to management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 7.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the
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notice given or action taken by any such Person and the nature of such
claimed Event of Default, Potential Event of Default, default, event or
condition, and what action Company has taken, is taking and proposes to
take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or
any property of Company or any of its Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within twenty days after the end of each
Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after
request by Administrative Agent such other information as may be
reasonably requested by Administrative Agent to enable Administrative
Agent and its counsel to evaluate any of such Proceedings;
(xi) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan; (b) all notices received by Company or
any of its Subsidiaries from a Multiemployer Plan sponsor concerning an
ERISA Event; and (c) copies of such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;
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(xiii) Financial Plans: as soon as practicable and in any
event no later than 30 days prior to the beginning of each Fiscal Year,
a consolidated plan and financial forecast for such Fiscal Year and
each succeeding Fiscal Year through the date of the last scheduled
payment relating to the AXELs (the "FINANCIAL PLAN" for such Fiscal
Years), including (a) forecasted consolidated balance sheets and
forecasted consolidated statements of income and cash flows of Company
and its Subsidiaries for each such Fiscal Year, together with pro forma
Compliance Certificates for each such Fiscal Year and an explanation of
the assumptions on which such forecasts are based, (b) forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each month of the first such Fiscal Year, together
with an explanation of the assumptions on which such forecasts are
based, and (c) such other information and projections as any Lender may
reasonably request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be
maintained by Company and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of
Company and (b) all of the data required to be set forth in Schedule
4.1 annexed hereto with respect to all Subsidiaries of Company (it
being understood that such written notice shall be deemed to supplement
Schedule 4.1 annexed hereto for all purposes of this Agreement);
(xvii) Material Contracts: promptly, and in any event within
ten Business Days after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Company or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing such
event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto; and
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
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5.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 6.5, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; provided, however that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
material taxes, assessments and other governmental charges imposed upon it or
any of its properties or assets or in respect of any of its income, businesses
or franchises before any penalty accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET INSURANCE/
CONDEMNATION PROCEEDS.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof except where the failure
to maintain such properties could not reasonably be expected in any individual
case or in the aggregate to have a Material Adverse Effect.
B. INSURANCE. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage
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insurance, business interruption insurance and casualty insurance with respect
to liabilities, losses or damage in respect of the assets, properties and
businesses of Company and its Subsidiaries as may customarily be carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on
such terms and conditions as shall be customary for corporations similarly
situated in the industry. Without limiting the generality of the foregoing,
Company will maintain or cause to be maintained (i) flood insurance with respect
to each Flood Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve System,
and (ii) replacement value casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with such
deductibles, and covering such risks as are at all times satisfactory to
Administrative Agent in its commercially reasonable judgment. Each such policy
of insurance shall (a) name Collateral Agent for the benefit of Secured Parties
as an additional insured thereunder as its interests may appear and (b) in the
case of each business interruption and casualty insurance policy, contain a loss
payable clause or endorsement, satisfactory in form and substance to Collateral
Agent, that names Collateral Agent for the benefit of Secured Parties as the
loss payee thereunder for any covered loss in excess of $1,500,000 and provides
for at least 30 days prior written notice to Administrative Agent of any
modification or cancellation of such policy.
C. APPLICATION OF NET INSURANCE/CONDEMNATION PROCEEDS.
(i) Business Interruption Insurance. Upon receipt by Company
or any of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a) so long
as no Event of Default shall have occurred and be continuing, Company
or such Subsidiary may retain and apply such Net Insurance/Condemnation
Proceeds for working capital purposes, and (b) if an Event of Default
shall have occurred and be continuing, Company shall apply an amount
equal to such Net Insurance/Condemnation Proceeds to prepay the AXELs
as provided in subsection 2.4B(ii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long
as no Event of Default shall have occurred and be continuing, Company
shall, or shall cause one or more of its Subsidiaries to, (1) subject
to clause (iv) below, promptly and diligently and in any event within
six months of receipt apply such Net Insurance/Condemnation Proceeds to
pay or reimburse the costs of repairing, restoring or replacing the
assets in respect of which such Net Insurance/Condemnation Proceeds
were received or, (2) to the extent not so applied, or applied pursuant
to clause (iv) below within six months of receipt by Company or any of
its Subsidiaries to prepay the AXELs as provided in subsection
2.4B(ii)(b), and (b) if an Event of Default shall have occurred
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and be continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds to prepay the AXELs as provided in
subsection 2.4B(ii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by
Collateral Agent. Upon receipt by Collateral Agent of any Net
Insurance/Condemnation Proceeds as loss payee, such loss proceeds shall
be held and applied in accordance with the terms of the Intercreditor
Agreement.
(iv) Reinvestment of Insurance Proceeds. So long as no Event
of Default or Potential Event of Default shall have occurred and be
continuing Company and its Subsidiaries may reinvest in the business of
Company and its Subsidiaries up to $1,000,000 per year of Net
Insurance/Condemnation Proceeds recovered by the Company or any of its
Subsidiaries provided that such funds are reinvested within six months
of receipt by Company or any of its Subsidiaries.
5.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
B. LENDER MEETING. Company will, upon the request of Arranger,
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
5.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.
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5.7 ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.; COMPANY'S
ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES, ENVIRONMENTAL CLAIMS
AND VIOLATIONS OF ENVIRONMENTAL LAWS.
A. ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion,
(i) retain, at Company's expense, an independent professional consultant to
review any environmental audits, investigations, analyses and reports relating
to Hazardous Materials prepared by or for Company and (ii) conduct its own
investigation of any Facility; provided that, in the case of any Facility no
longer owned, leased, operated or used by Company or any of its Subsidiaries,
Company shall only be obligated to use its good faith and reasonable efforts to
obtain permission for Administrative Agent's professional consultant to conduct
an investigation of such Facility. For purposes of conducting such a review
and/or investigation, Company hereby grants to Administrative Agent and its
agents, employees, consultants and contractors the right to enter into or onto
any Facilities currently owned, leased, operated or used by Company or any of
its Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by Company and
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such Facility or to cause any damage or loss to any property at
such Facility. Company and Administrative Agent hereby acknowledge and agree
that any report of any investigation conducted at the request of Administrative
Agent pursuant to this subsection 5.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the AXELs and to protect Lenders' security
interests, if any, created by the AXEL Loan Documents. Administrative Agent
agrees to deliver a copy of any such report to Company with the understanding
that Company acknowledges and agrees that (x) it will indemnify and hold
harmless Administrative Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such report, (y) neither
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to Company, neither
Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. ENVIRONMENTAL DISCLOSURE. Company will deliver to Administrative
Agent and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any
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other Persons, with respect to significant environmental matters at any
Facility or with respect to any Environmental Claims;
(ii) Notice of Certain Releases, Remedial Actions, Etc.
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported by Company or
any of its Subsidiaries to any federal, state or local governmental or
regulatory agency under any applicable Environmental Laws, (b) any
remedial action taken by Company or any of its Subsidiaries or any
other Person of which Company has knowledge in response to (1) any
Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims having,
individually or in the aggregate, a Material Adverse Effect, or (2) any
Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and
(c) Company's discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Facility that could
reasonably be expected to cause such Facility or any part thereof to be
subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof,by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims
that, individually or in the aggregate, are reasonably expected to have
a Material Adverse Effect, (b) any Release required to be reported by
Company or any of its Subsidiaries to any federal, state or local
governmental or regulatory agency, and (c) any request made to Company
or any of its Subsidiaries for information from any governmental agency
that suggests such agency is investigating whether Company or any of
its Subsidiaries may be potentially responsible for any Hazardous
Materials Activity.
(iv) Notice of Certain Proposed Actions Having Environmental
Impact. Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or any of
its Subsidiaries that could reasonably be expected to (1) expose
Company or any of its Subsidiaries to, or result in, Environmental
Claims that would have, individually or in the aggregate, a Material
Adverse Effect or (2) result in Company or any of its Subsidiaries
failing to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by
Company or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject Company or any of
its Subsidiaries to any additional obligations or requirements under
any Environmental Laws.
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(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed
pursuant to this subsection 5.7.
C. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) Remedial Actions Relating to Hazardous Materials
Activities. Company shall promptly undertake, and shall cause each of
its Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal, remediation or
other response actions necessary to remove, remediate, clean up or
▇▇▇▇▇ any Hazardous Materials Activity on, under or about any Facility
that is in violation of any Environmental Laws or that presents a
material risk of giving rise to an Environmental Claim. In the event
Company or any of its Subsidiaries undertakes any such action with
respect to any Hazardous Materials, Company or such Subsidiary shall
conduct and complete such action in compliance with all applicable
Environmental Laws and in accordance with the policies, orders and
directives of all federal, state and local governmental authorities
except when, and only to the extent that, Company's or such
Subsidiary's liability with respect to such Hazardous Materials
Activity is being contested in good faith by Company or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and
Violations of Environmental Laws. Company shall promptly take, and
shall cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental
Laws by Company or its Subsidiaries and (ii) make an appropriate
response to any Environmental Claim against Company or any of its
Subsidiaries and discharge any obligations it may have to any Person
thereunder.
5.8 EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Domestic Subsidiary existing on the Restatement
Effective Date that has not previously executed the Subsidiary Guaranty
hereafter owns or acquires assets with an aggregate fair market value (without
netting such fair market value against any liability of such Subsidiary)
exceeding $500,000, or in the event that any Person becomes a Material Domestic
Subsidiary after the date hereof, Company will promptly notify Collateral Agent
of that fact and cause such Subsidiary to execute and deliver to Collateral
Agent a counterpart of the Subsidiary Guaranty and a Subsidiary Pledge Agreement
and a Subsidiary Security Agreement and to take all such further actions and
execute all such further documents and instruments (including actions, documents
and instruments comparable to those described in subsection 3.1H) as may be
necessary or, in the opinion of Collateral Agent, desirable to create in favor
of Collateral Agent, for the
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benefit of Secured Parties, a valid and perfected First Priority Lien on all of
the personal and mixed property assets of such Subsidiary described in the
applicable forms of Collateral Documents.
B. SUBSIDIARY CHARTER DOCUMENTS, LEGAL OPINIONS, ETC. Company shall
deliver to Collateral Agent, together with such AXEL Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Collateral Agent, (ii) a copy of such Subsidiary's Bylaws, certified
by its corporate secretary or an assistant secretary as of a recent date prior
to their delivery to Collateral Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such AXEL Loan
Documents are in full force and effect and have not been modified or amended and
(b) the incumbency and signatures of the officers of such Subsidiary executing
such AXEL Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Collateral Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of such
AXEL Loan Documents, (c) the enforceability of such AXEL Loan Documents against
such Subsidiary, (d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to such AXEL Loan
Documents) as Collateral Agent may reasonably request, all of the foregoing to
be satisfactory in form and substance to Administrative Agent and its counsel.
C. FOREIGN SUBSIDIARY LOAN DOCUMENTS. In the event that any
Foreign Subsidiary existing on the Restatement Effective Date whose shares have
not been pledged pursuant to an Auxiliary Pledge Agreement owns or acquires
assets with an aggregate fair market value (without netting such fair market
value against any liability of such Subsidiary) exceeding $1,500,000, or in the
event that any person becomes a Foreign Subsidiary which owns assets with an
aggregate fair market value (without netting such fair market value against any
liability of such Subsidiary) exceeding $1,500,000, Company will promptly notify
Collateral Agent of that fact and shall or cause the applicable subsidiary which
owns equity in such Foreign Subsidiary to execute and deliver to Collateral
Agent an Auxiliary Pledge Agreement in form and substance satisfactory to
Collateral Agent; to take all such further actions and execute such further
documents and instruments as may be necessary or, in the opinion of Collateral
Agent reasonably desirable, to perfect a Lien on the equity interests of such
Foreign Subsidiary for the benefit of Secured Parties and to deliver to
Collateral Agent an opinion of counsel (which counsel shall be reasonably
acceptable to Collateral Agent) as to the enforceability of the Auxiliary Pledge
Agreement under the laws of such
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Foreign Subsidiary's jurisdiction of organization and such other matters as
Collateral Agent may reasonably request (including as to the perfection of liens
on such equity interests)
D. If at any time JCS Realty acquires any personal property
assets with an aggregate fair market value (without netting such fair market
value against any liability of JCS Realty) in excess of $500,000, Company will
promptly notify Collateral Agent of that fact and cause JCS Realty to execute
and deliver all documents and to take all such further actions as may be
necessary or, in the opinion of Collateral Agent, desirable to create in favor
of Collateral Agent, for the benefit of Secured Parties, a valid and perfected
First Priority Lien on such property in all relevant jurisdictions.
5.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL
A. CONFORMING LEASEHOLD INTERESTS. From and after the Restatement
Effective Date, if Company or any of its Subsidiaries acquires any Leasehold
Property, Company shall, or shall cause such Subsidiary to, use its reasonable
and good faith efforts (without requiring Company or such Subsidiary to
relinquish any material rights or incur any material obligations or to expend
more than a nominal amount of money over and above the reimbursement, if
required, of the Landlord's reasonable out-of-pocket costs, including attorneys'
fees) to cause such Leasehold Property to be a Conforming Leasehold Interest.
B. MORTGAGES, ETC. From and after the Restatement Effective Date, in
the event that (i) Company or any Subsidiary Guarantor acquires any fee interest
in real property or any Material Leasehold Property, (ii) with respect to any
Material Leasehold Property or any real property in which Company has a fee
interest in on or prior to the Restatement Effective Date, any first priority
mortgage existing on or prior to the Restatement Effective Date on such property
is removed or (iii) at the time any Person (including Eden Prairie Holdings)
becomes a Subsidiary Guarantor, such Person owns or holds any fee interest in
real property or any Material Leasehold Property, in all cases excluding (A) any
such Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (iii) above) then-existing senior
lienholder, where Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's consent and (B) the Anagram Headquarters
Facility in the event (a) the mortgage recording tax payable in respect of a
Mortgage thereon would be based on an amount greater than the amount of Eden
Prairie Holdings' Additional Guarantor's Obligations under and as defined in the
Subsidiary Guaranty, or (b) in the opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) in the state in which the Anagram
Headquarters Facility is located, there is a reasonable likelihood that a
mortgage to secure Eden Prairie Holdings' obligations under the Subsidiary
Guaranty in the form requested by the Collateral Agent would not be valid and
enforceable in the applicable jurisdictions of such state (any such non-excluded
Real Property Asset described in the foregoing clause (i), (ii) or (iii) a
"MORTGAGED PROPERTY") Company or such Subsidiary Guarantor shall promptly notify
Collateral Agent, and shall deliver upon Collateral Agent's written request, as
soon as
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practicable after such Person acquires such Mortgaged Property or becomes a
Subsidiary Guarantor, as the case may be, the following:
(i) Mortgage. A fully executed and notarized Mortgage duly
recorded in all appropriate places in all applicable jurisdictions,
encumbering the interest of such Loan Party in such Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel
to such Loan Party, in form and substance satisfactory to Collateral
Agent and its counsel, as to the due authorization, execution and
delivery by such Loan Party of such Mortgage and such other matters as
Collateral Agent may reasonably request, and (b) if required by
Collateral Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) in the state in which such
Mortgaged Property is located with respect to the enforceability of
such Mortgage and such other matters (including any matters governed by
the laws of such state regarding personal property security interests
in respect of any Collateral) as Collateral Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Collateral Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of a Mortgaged Property consisting of a Leasehold
Property, (a) if such Leasehold Property is holding or will hold
inventory or equipment with an aggregate fair market value exceeding
$500,000, a Landlord Consent and Estoppel provided that Company shall
only be required to use reasonable and good faith efforts to obtain
such Landlord Consent and Estoppel and in no event shall Company be
obligated to pay any fee, charge or other consideration to any landlord
in order to obtain such Landlord Consent and Estoppel, other than, if
required, the landlord's reasonable out-of-pocket costs, including
attorneys' fees and (b) if such Leasehold Property is a Recorded
Leasehold Interest, evidence to that effect
(iv) Title Insurance. (a) If reasonably requested by
Collateral Agent, an ALTA mortgagee title insurance policy or an
unconditional commitment therefor (a "MORTGAGE POLICY") issued by the
Title Company with respect to such Mortgaged Property, in an amount
satisfactory to Collateral Agent, insuring fee simple title to, or a
valid leasehold interest in, such Mortgaged Property vested in such
Loan Party and assuring Collateral Agent that such Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Mortgaged
Property, subject only to, if available in the state in which such
Mortgaged Property is located, a standard survey exception and to
Permitted Encumbrances, which Mortgage Policy (1) shall include, if
available in the state in which such Mortgaged Property is located, an
endorsement for mechanics' liens, for future advances under this
Agreement and for any other matters reasonably requested by Collateral
Agent and (2) shall provide for such affirmative insurance and such
reinsurance as Collateral Agent may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to Collateral
Agent; and
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(b) evidence satisfactory to Collateral Agent that such Loan Party has
(i) delivered to the Title Company all certificates and affidavits
customarily required by the Title Company in connection with the
issuance of the Mortgage Policy and (ii) paid to the Title Company or
to the appropriate governmental authorities all expenses and premiums
of the Title Company in connection with the issuance of the Mortgage
Policy and all recording and stamp taxes (including mortgage recording
and intangible taxes) payable in connection with recording the Mortgage
in the appropriate real estate records; provided however, that
Administrative Agent shall allow for such reasonable revisions to the
applicable mortgage and shall otherwise take such steps as are
reasonable and customary to minimize recording, mortgage recording,
stamp, documentary and intangible taxes, at Company's cost; provided,
further, that in no event shall such Loan Party be required to pay any
additional mortgage recording tax after the initial recording of any
such Mortgage which may be required in order to maintain the secured or
priority status of such Mortgage.
(v) Title Report. If no Mortgage Policy is required with
respect to such Mortgaged Property, a title report issued by the Title
Company with respect thereto, dated not more than 30 days prior to the
date such Mortgage is to be recorded and satisfactory in form and
substance to Collateral Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Mortgage Policy or title report delivered pursuant
to clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Mortgaged Property is a
Flood Hazard Property and (2) if so, whether the community in which
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if such Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt
of written notification from Collateral Agent (1) that such Mortgaged
Property is a Flood Hazard Property and (2) as to whether the community
in which such Flood Hazard Property is located is participating in the
National Flood Insurance Program, and (c) in the event such Mortgaged
Property is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System; and
(viii) Environmental Audit. If required by Collateral Agent,
reports and other information, in form, scope and substance
satisfactory to Collateral Agent and prepared by environmental
consultants satisfactory to Collateral Agent, concerning any
environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Mortgaged Property.
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C. REAL ESTATE APPRAISALS. Company shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser satisfactory to
Collateral Agent, upon reasonable notice, to visit and inspect any Additional
Mortgaged Property for the purpose of preparing an appraisal of such Mortgaged
Property satisfying the requirements of any applicable laws and regulations (in
each case to the extent required under such laws and regulations as determined
by Collateral Agent in its discretion).
5.10 INTEREST RATE PROTECTION.
A. EXISTING AXELS. Company shall at all times maintain in effect one or
more Interest Rate Agreements with respect to the Existing AXELs and the
Revolving Loans, each such Interest Rate Agreement to be for a term of not less
than three years from the Closing Date and in form and substance reasonably
satisfactory to Administrative Agent, which Interest Rate Agreements shall
effectively limit the Unadjusted Eurodollar Rate Component (as hereinafter
defined) of the interest costs to Company (i) with respect to an aggregate
notional principal amount of not less than 25% of the aggregate principal amount
of the Existing AXELs outstanding on the Closing Date (based on the assumption
that such notional principal amount was a Eurodollar Rate AXEL with an Interest
Period of three months) to a rate equal to not more than 9% per annum and (ii)
with respect to an aggregate notional principal amount of not less than 25% of
the aggregate principal amount of the Existing AXELs outstanding on the Closing
Date (based on the assumption that such notional principal amount was a
Eurodollar Rate AXEL with an Interest Period of three months) to a rate equal to
not more than 10% per annum. For purposes of this subsection 5.10, the term
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of the interest
costs to Company in respect of a Eurodollar Rate AXEL that is based upon the
rate obtained pursuant to the definition of Adjusted Eurodollar Rate (without
giving effect to the last paragraph thereof).
B. ADDITIONAL AXELS. At all times after the date which is 45 days after
the Restatement Effective Date, Company shall maintain in effect one or more
Interest Rate Agreements with respect to the Additional AXELs, each such
Interest Rate Agreement to be for a term of not less than three years from the
Restatement Effective Date and in form and substance reasonably satisfactory to
Administrative Agent, which Interest Rate Agreements shall effectively limit the
Unadjusted Eurodollar Rate Component of the interest costs to Company (i) with
respect to an aggregate notional principal amount of not less than 25% of the
aggregate principal amount of the Additional AXELs outstanding on the
Restatement Effective Date (based on the assumption that such notional principal
amount was a Eurodollar Rate AXEL with an Interest Period of three months) to a
rate equal to not more than 9% per annum and (ii) with respect to an aggregate
notional principal amount of not less than 25% of the aggregate principal amount
of the Additional AXELs outstanding on the Restatement Effective Date (based on
the assumption that such notional principal amount was a Eurodollar Rate AXEL
with an Interest Period of three months) to a rate equal to not more than 10%
per annum.
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5.11 CASH MANAGEMENT SYSTEM.
Company shall at all times maintain a cash management system for the
Loan Parties in form and substance reasonably satisfactory to the Arranger and
the Administrative Agent. The terms and conditions of such cash management
system shall be as set forth in Schedule 5.11 annexed hereto.
5.12 TRADEMARKS AND PATENTS.
If Company or any of its Subsidiaries acquires any material patents,
trademarks or copyrights, Company shall promptly notify the Collateral Agent of
that fact and, if requested by Administrative Agent, Company shall, or cause the
applicable Subsidiary to, execute and deliver to Collateral Agent supplemental
security agreements and take such other actions as the Collateral Agent may
reasonably request to create in favor of Collateral Agent, for the benefit of
Secured Parties a valid and perfected First Priority Lien on such patents,
trademarks or copyrights.
SECTION 6.
COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Additional
AXEL Commitments hereunder shall remain in effect and until payment in full of
all of the AXELs and other Obligations unless Requisite Lenders shall otherwise
give prior written consent, Company shall perform, and shall cause each of its
Subsidiaries to perform, all covenants in this Section 6.
6.1 INDEBTEDNESS AND ISSUANCE OF DISQUALIFIED STOCK .
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, (collectively, "incur"
and correlatively, an "incurrence" of) any Indebtedness (including Acquired
Debt) and that the Company will not issue any Disqualified Stock; provided,
however, that the Company may incur Indebtedness (including Acquired Debt) or
issue shares of Disqualified Stock if the Fixed Charge Coverage Ratio for the
Company for the most recent four full fiscal quarters for which internal
financial statements are available at the time of such incurrence would have
been at least 2.0 to 1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the Disqualified Stock had been issued, as the case may be,
and the application of the proceeds therefrom had occurred at the beginning of
such four-quarter period.
The foregoing provision will not apply to:
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(i) the incurrence by the Company (and the Guarantee
thereof by the Guarantors) of Obligations under this
Agreement;
(ii) the incurrence by Company (and the Guarantee
thereof by the Guarantors) of Indebtedness under the Revolving
Credit Agreement and the issuance of letters of credit under
the Revolving Credit Agreement (with letters of credit being
deemed to have a principal amount equal to the aggregate
maximum amount available to be drawn thereunder, assuming
compliance with all conditions for drawing) up to an aggregate
principal amount of $50,000,000 outstanding at any one time,
less permanent commitment reductions with respect to Revolving
Loans and letters of credit under the Revolving Credit
Agreement (in each case, other than in connection with an
amendment, refinancing, refunding, replacement, renewal or
modification) made after the Closing Date;
(iii) the incurrence by the Company or any of its
Restricted Subsidiaries of any Existing Indebtedness;
(iv) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by the
Senior Subordinated Notes (but, with respect to this clause
(iv), only up to the aggregate principal amount thereof issued
on the Closing Date);
(v) Indebtedness (including Acquired Debt) incurred
by the Company or any of its Restricted Subsidiaries to
finance the purchase, lease or improvement of property (real
or personal), assets or equipment (whether through the direct
purchase of assets or the Capital Stock of any Person owning
such assets), in an aggregate principal amount not to exceed
$15,000,000 plus 5% of the increase in Total Assets since the
Closing Date;
(vi) Indebtedness incurred by the Company or any of
its Restricted Subsidiaries constituting reimbursement
obligations with respect to letters of credit issued in the
ordinary course of business, including, without limitation,
letters of credit in respect of workers' compensation claims
or self-insurance, or other Indebtedness with respect to
reimbursement type obligations regarding workers' compensation
claims;
(vii) intercompany Indebtedness between or among the
Company and any of its Restricted Subsidiaries and Guarantees
by the Company of Indebtedness of any Restricted Subsidiary of
the Company or by a Restricted Subsidiary of the Company of
Indebtedness of any other Restricted Subsidiary of the Company
or the Company; provided that (a) all such intercompany
Indebtedness shall be evidenced by promissory notes subject to
a first priority perfected pledge in favor of Lenders, (b) all
such intercompany Indebtedness
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owed by Company to or in respect of any of its Subsidiaries
and all such Guarantees shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to
the terms of the applicable promissory notes or an
intercompany subordination agreement and (c) any payment by
any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the
amount of any intercompany Indebtedness owed by such
Subsidiary to Company or to any of its Subsidiaries for whose
benefit such payment is made;
(viii) Hedging Obligations that are incurred (1) for
the purpose of fixing or hedging interest rate or currency
exchange rate risk with respect to any Indebtedness that is
permitted by the terms of this Agreement to be outstanding or
(2) for the purpose of fixing or hedging currency exchange
rate risk with respect to any purchases or sales of goods or
other transactions or expenditures made or to be made in the
ordinary course of business and consistent with past practices
as to which the payment therefor or proceeds therefrom, as the
case may be, are denominated in a currency other than U.S.
dollars;
(ix) obligations in respect of performance and surety
bonds and completion guarantees provided by the Company or any
Restricted Subsidiary in the ordinary course of business;
(x) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness
in exchange for, or the net proceeds of which are used to
extend, refinance, renew, replace, defease or refund,
Indebtedness that was permitted by this Agreement to be
incurred;
(xi) the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt, provided, however, that if
any such Indebtedness ceases to be Non-Recourse Debt of an
Unrestricted Subsidiary, such event shall be deemed to
constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company; and
(xii) the incurrence by the Company of additional
Indebtedness (including any increase in the AXEL Commitment
under this Agreement or any increase in the Revolving Loan
Commitment under the Revolving Credit Agreement) not otherwise
permitted hereunder in an amount under this clause (xii) not
to exceed $25,000,000 in aggregate principal amount (or
accreted value, as applicable) outstanding at any one time.
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6.2 LIENS AND RELATED MATTERS.
A. Company shall not and shall not permit any of its Subsidiaries to
directly or indirectly, create, incur, assume or suffer to exist any Lien that
secures obligations under any Indebtedness on any asset or property now owned or
hereafter acquired by the Company or any of its Subsidiaries, or on any income
or profits therefrom, or assign or convey any right to receive income therefrom
to secure any Indebtedness other than (i) Permitted Encumbrances, (ii) Liens
securing (a) purchase money Indebtedness incurred to finance the purchase price
of specific assets and Capital Leases, so long as, upon default, the holder of
such Indebtedness may seek recourse or payment against Company and its
Subsidiaries only through the return or sale of the assets financed thereby or
(b) Indebtedness assumed or acquired in connection with any acquisition to the
extent attaching only to assets acquired and so long as the Indebtedness secured
thereby is recourse only to the Person acquired or acquiring such assets
provided in each case that the aggregate amount of Indebtedness secured by such
Liens does not exceed $10,000,000 in the aggregate and (iii) any other Liens
permitted under subsection 7.2A of the Revolving Credit Agreement (as in effect
on the Closing Date) other than clause (iv) thereof.
B. If the Company or any of its Subsidiaries shall create or assume any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired, other than as permitted under subsection 6.2A, it shall make or cause
to be made effective provision whereby the obligations of the Company and the
Subsidiaries under the AXEL Loan Documents will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this provision shall not be construed as a consent by the Lenders to
the creation or assumption of any Lien other than Liens permitted under
subsection 6.2A.
6.3 RESTRICTED PAYMENTS.
A. Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable to the Company or any Restricted Subsidiary
of the Company); (ii) purchase, redeem, defease or otherwise acquire or retire
for value any Equity Interests of the Company; (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Subordinated Indebtedness, except for a payment of principal or
interest at Stated Maturity; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) above being
collectively referred to as "RESTRICTED PAYMENTS"), unless, at the time of and
after giving effect to such Restricted Payment:
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(a) no Potential Event of Default or Event of Default shall
have occurred and be continuing or would occur as a consequence
thereof;
(b) the Company would, at the time of such Restricted Payment
and immediately after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in subsection 6.1; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries permitted by clause (i) of the next succeeding paragraph,
but excluding all other Restricted Payments permitted by the next
succeeding paragraph, is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the Closing Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate net cash proceeds and the
fair market value, as determined in good faith by the Board of
Directors, of marketable securities received by the Company from the
issue or sale since the Closing Date of Equity Interests (including
Retired Capital Stock (as defined below)) of the Company (except in
connection with the Merger) or of debt securities of the Company that
have been converted into such Equity Interests (other than Refunding
Capital Stock (as defined below) or Equity Interests or convertible
debt securities of the Company sold to a Restricted Subsidiary of the
Company and other than Disqualified Stock or debt securities that have
been converted into Disqualified Stock), plus (iii) 100% of the
aggregate amounts contributed to the common equity capital of the
Company since the Closing Date, (except amounts contributed to finance
the Merger), plus (iv) 100% of the aggregate amounts received in cash
and the fair market value of marketable securities (other than
Restricted Investments) received from (x) the sale or other disposition
of Restricted Investments made by the Company and its Restricted
Subsidiaries since the Closing Date or (y) the sale of the stock of an
Unrestricted Subsidiary or the sale of all or substantially all of the
assets of an Unrestricted Subsidiary to the extent that a liquidating
dividend is paid to the Company or any Subsidiary from the proceeds of
such sale, plus (v) 100% of any dividends received by the Company or a
Wholly Owned Restricted Subsidiary of the Company after the Closing
Date from an Unrestricted Subsidiary of the Company, plus (vi)
$10,000,000.
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The foregoing provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at the date of declaration such payment
would have complied with the provisions of this Agreement;
(ii) the redemption, repurchase, retirement or other
acquisition of any Equity Interests of the Company or any Restricted
Subsidiary (the "Retired Capital Stock") or any Subordinated
Indebtedness, in each case, in exchange for, or out of the proceeds of
the substantially concurrent sale (other than to a Restricted
Subsidiary of the Company) of Equity Interests of the Company (other
than any Disqualified Stock) (the "REFUNDING CAPITAL STOCK"); provided
that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be
excluded from clause (c)(ii) of the immediately preceding paragraph;
(iii) the defeasance, redemption or repurchase of Subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(iv) the redemption, repurchase or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company held by any member of the
Company's (or any of its Subsidiaries') management pursuant to any
management equity subscription agreement or stock option or similar
agreement; provided that the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests shall not
exceed the sum of $5,000,000 in any twelve-month period plus the
aggregate cash proceeds received by the Company during such
twelve-month period from any issuance of Equity Interests by the
Company to members of management of the Company and its Subsidiaries;
provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c)(ii) of the immediately
preceding paragraph;
(v) Investments in Unrestricted Subsidiaries or in Joint
Ventures having an aggregate fair market value, taken together with all
other Investments made pursuant to this clause (v) that are at that
time outstanding, not to exceed $15,000,000 plus 5% of the increase in
Total Assets of Company since the Closing Date at the time of such
Investment (with the fair market value of each Investment being
measured at the time made and without giving effect to subsequent
changes in value);
(vi) repurchase of Equity Interests deemed to occur upon
exercise or conversion of stock options, warrants, convertible
securities or other similar Equity Interests if such Equity Interests
represent a portion of the exercise or conversion
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price of such options, warrants, convertible securities or other
similar Equity Interests;
(vii) any dividend or distribution payable on or in respect of
any class of Equity Interests issued by a Restricted Subsidiary of the
Company; provided that such dividend or distribution is paid on a pro
rata basis to all of the holders of such Equity Interests in accordance
with their respective holdings of such Equity Interests;
provided, further, that at the time of, and after giving effect to, any
Restricted Payment permitted under clauses (iv) or (v) above, no Potential Event
of Default or Event of Default shall have occurred and be continuing or would
occur as a consequence thereof. The amount of all Restricted Payments (other
than cash) shall be the fair market value on the date of the Restricted Payment
of the asset(s) proposed to be transferred by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment.
6.4 DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) (a) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) sell, lease or transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness as in effect on the Closing Date, (b) this Agreement or
the Revolving Credit Agreement and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings
thereof, provided that this Agreement and the Revolving Credit Agreement and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings thereof are no more restrictive taken as
a whole with respect to such dividend and other payment restrictions than those
terms included in this Agreement and the Revolving Credit Agreement, as
applicable, on the Closing Date, (c) the Senior Subordinated Note Indenture and
the Senior Subordinated Notes, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Agreement to
be incurred, (f) customary non-assignment or net worth provisions in leases and
other agreements entered into in the ordinary course of
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business and consistent with past practices, (g) purchase money obligations for
property acquired in the ordinary course of business that impose restrictions of
the nature described in clause (iii) above on the property so acquired, (h)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced, (i) any Mortgage Financing or Mortgage Refinancing that
imposes restrictions on the real property securing such Indebtedness, (j) any
Permitted Investment, (k) contracts for the sale of assets, including, without
limitation customary restrictions with respect to a Restricted Subsidiary of the
Company pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Restricted Subsidiary or (l) customary provisions in joint venture agreements
and other similar agreements.
6.5 RESTRICTIONS ON FUNDAMENTAL CHANGES; ASSET SALES.
Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer,lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia; (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or Person
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under this
Agreement pursuant to documentation in form and substance satisfactory to
Administrative Agent; (iii) immediately after such transaction no Potential
Event of Default or Event of Default exists; and (iv) except in the case of a
merger of the Company with or into a Wholly Owned Restricted Subsidiary of the
Company, the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made will, at
the time of such transaction and after giving pro forma effect thereto as if
such transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in subsection 6.1.
Notwithstanding the foregoing clauses (iii) and (iv), (a) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (b) the Company may merge with an
Affiliate incorporated solely for the purpose of reincorporating the Company in
another jurisdiction.
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6.6 TRANSACTIONS WITH AFFILIATES.
Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Administrative Agent (a)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5,000,000, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and
(if there are any disinterested members of the Board of Directors) that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors and (b) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $10,000,000, or with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5,000,000 as to which there are no disinterested
members of the Board of Directors, an opinion as to the fairness of such
Affiliate Transaction (as required by the Senior Subordinated Note Indenture)
from a financial point of view issued by an accounting, appraisal or investment
banking firm of national standing.
The foregoing provisions will not apply to the following: (i)
transactions between or among the Company and/or any of its Restricted
Subsidiaries; (ii) Restricted Payments or Permitted Investments permitted under
subsection 6.3; (iii) the payment of all fees, expenses and other amounts as
disclosed in the Offering Circular relating to the Merger; (iv) the payment of
reasonable and customary regular fees to, and indemnity provided on behalf of,
officer, directors, employees or consultants of the Company or any Restricted
Subsidiary of the Company; (v) the transfer or provision of inventory, goods or
services by the Company or any Restricted Subsidiary of the Company in the
ordinary course of business to any Affiliate of the Company on terms that are
customary in the industry or consistent with past practices, including with
respect to price and volume discounts; (vi) the execution of, or the performance
by the Company or any of its Restricted Subsidiaries of its obligations under
the terms of, any financial advisory, financing, underwriting or placement
agreement or any other agreement relating to investment banking or financing
activities with ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or any of its Affiliates including, without
limitation, in connection with acquisitions or divestitures, in each case to the
extent that such agreement was approved by a majority of the disinterested
members of the Board of Directors in good faith; (vii) payments, advances or
loans to employees that are approved by a majority of the disinterested members
of the Board of Directors of the Company in good faith; (viii) the performance
of any agreement as in effect as of the Closing Date or any transaction
contemplated thereby (including pursuant to any amendment thereto so long as any
such amendment is
108
not disadvantageous to the Lenders in any material respect); (ix) the existence
of, or the performance by the Company or any of its Restricted Subsidiaries of
its obligations under the terms of, any stockholders agreement (including any
registration rights agreement or purchase agreement related thereto) to which it
is a party as of the Closing Date and any similar agreements which it may enter
into thereafter, provided, however, that the existence of, or the performance by
the Company or any of its Restricted Subsidiaries of obligations under, any
future amendment to any such existing agreement or under any similar agreement
entered into after the Closing Date shall only be permitted by this clause (ix)
to the extent that the terms of any such amendment or new agreement are not
otherwise disadvantageous to the Lenders in any material respect; (x)
transactions permitted by, and complying with, the provisions of the covenant
described under subsection 6.5; and (xi) transactions with suppliers or other
purchases or sales of goods or services, in each case in the ordinary course of
business (including, without limitation, pursuant to joint venture agreements)
and otherwise in compliance with the terms of this Agreement which are fair to
the Company or its Restricted Subsidiaries, in the reasonable determination of a
majority of the disinterested members of the Board of Directors of the Company
or an executive officer thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party.
6.7 ASSET SALES. Company shall not, and shall not permit any of its
Restricted Subsidiaries to, cause, make or suffer to exist an Asset Sale unless
(i) the Company (or the Restricted Subsidiary, as the case may be) received
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee (as defined in the Indenture as
in effect as of the Closing Date)) of the assets or Equity Interests issued or
sold or otherwise disposed of and (ii) at least 80% of the consideration
therefor received by Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents; provided that the amount of (x) any liabilities (as
shown on Company's or such Restricted Subsidiary's most recent balance sheet) of
Company or any Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Senior Subordinated
Notes or any guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases Company or such
Restricted Subsidiary from further liability, (y) any Excludable Current
Liabilities and (z) any notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are immediately
converted by the Company or such Restricted Subsidiary into cash (to the extent
of the cash received), shall be deemed to be cash for purposes of this
provision.
6.8 AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
amend or otherwise change the terms of any Subordinated Indebtedness, or make
any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to
109
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate any such event of default or increase
any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions of such
Subordinated Indebtedness (or of any guaranty thereof), or change any collateral
therefor (other than to release such collateral), or if the effect of such
amendment or change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness (or a trustee
or other representative on their behalf) which would be adverse to Company or
Lenders.
SECTION 7.
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any AXEL when
due, and payable whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; or failure by
Company to pay any interest on any fee or any other amount due under this
Agreement within three days after the date due; or
7.2 DEFAULT IN OTHER AGREEMENTS.
Failure of Company or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
7.1) or Guarantees with an aggregate principal amount of $5,000,000 or more, in
each case beyond the end of any grace period provided therefor; or (ii) breach
or default by Company or any of its Subsidiaries with respect to any other
material term of (a) one or more items of Indebtedness or Guarantees in the
individual or aggregate principal amounts referred to in clause (i) above or (b)
any loan agreement (including the Revolving Credit Agreement), mortgage,
indenture or other agreement relating to such item(s) of Indebtedness or
Guarantee(s), if the effect of such breach or default is to cause, or to permit
the holder or holders of that Indebtedness or Guarantee(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness or Guarantee(s) to
become or be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise) and in either case such
breach or default shall continue for 20 days beyond any applicable grace period;
or
7.3 BREACH OF CERTAIN COVENANTS.
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The Company fails, and such failure continues for 30 days after notice
from the Administrative Agent or Lenders holding at least 25% in principal
amount of the then outstanding AXELs, to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to Sections 6.1, 6.3 and 6.5 hereof; or
7.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any AXEL Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
7.5 OTHER DEFAULTS UNDER AXEL LOAN DOCUMENTS.
The Company fails, and such failure continues for 60 days after notice
from the Administrative Agent or Lenders holding at least 25% in principal
amount of the then outstanding AXELs, to comply with any of its other agreements
or covenants in, or provisions of, this Agreement or any other AXEL Loan
Document; or
7.6 JUDGMENTS.
The Company or any of its Restricted Subsidiaries fails to pay final
judgments aggregating in excess of $15,000,000, which judgments are not paid,
discharged or stayed for a period of 60 days; or
7.7 BANKRUPTCY; APPOINTMENT OF CUSTODIAN.
A. The Company or any of its Restricted Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law
(each, a "Custodian"),
(iv) makes a general assignment for the benefit of its
creditors, or
(v) admits in writing its inability to pay is debts as they
become due.
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B. A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company or any Restricted
Subsidiary in an involuntary case,
(ii) appoints a Custodian of the Company or any Restricted
Subsidiary or for all or substantially all of the property of the
Company or any Restricted Subsidiary, or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary,
and the order or decree remains unstayed and in effect for 60 consecutive days;
or
7.8 INVALIDITY OF SUBSIDIARY GUARANTY.
Except as otherwise permitted under the provisions of this Agreement or
the Intercreditor Agreement, the Subsidiary Guaranty is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full
force and effect (except by its terms) or any Subsidiary Guarantor, or any
Person acting on behalf of any Subsidiary Guarantor, denies or disaffirms such
Subsidiary Guarantor's obligations under the Subsidiary Guaranty; or
7.9 CHANGE IN CONTROL.
If (i) prior to a Qualified Public Offering GSII together with any
Affiliates of GSII shall cease to beneficially own and control 51% or more of
the combined voting power of all Securities of the Company, (ii) following
consummation of a Qualified Public Offering any Person or any two or more
Persons acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Exchange Act), directly or indirectly, of Securities of Company (or other
Securities convertible into such Securities) representing more of the combined
voting power of all Securities of Company than is owned by GSII and its
Affiliates at such time or (iii) a "Change of Control" as defined in the Senior
Subordinated Notes Indenture occurs;
THEN (i) upon the occurrence of any Event of Default described in subsection
7.7, each of (a) the unpaid principal amount of and accrued interest on the
AXELs, and (b) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company, and (ii) upon the
occurrence and during the continuation of any other Event of Default,
Administrative Agent shall, upon the written request or with the written consent
of Requisite Lenders, by written notice to Company, declare all or any portion
of the
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amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable.
Notwithstanding anything contained in the preceding paragraph, if at
any time within 60 days after an acceleration of the AXELs pursuant to clause
(ii) of such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Potential Events of Default (other than
non-payment of the principal of and accrued interest on the AXELS, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 9.6, then Requisite Lenders, by written notice to
Company, may at their option rescind and annul such acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon. The
provisions of this paragraph are intended merely to bind Lenders to a decision
which may be made at the election of Requisite Lenders and are not intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any acceleration hereunder or to preclude Administrative Agent or
Lenders from exercising any of the rights or remedies available to them under
any of the AXEL Loan Documents, even if the conditions set forth in this
paragraph are met.
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SECTION 8.
AGENTS
8.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. GSCP is hereby appointed Arranger and
Syndication Agent hereunder, and each Lender hereby authorizes Arranger and
Syndication Agent to act as its agent in accordance with the terms of this
Agreement and the other AXEL Loan Documents. Fleet is hereby appointed
Administrative Agent hereunder and under the other AXEL Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Fleet is also
being appointed Collateral Agent under the Intercreditor Agreement and each
Lender hereby authorizes Collateral Agent to act as its agent in accordance with
the terms of the Intercreditor Agreement and the other AXEL Loan Documents. Each
Agent hereby agrees to act upon the express conditions contained in this
Agreement and the other AXEL Loan Documents, as applicable. The provisions of
this Section 8 are solely for the benefit of Agents and Lenders and Company
shall have no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this Agreement, each Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries. Each of Arranger and Syndication
Agent, without consent of or notice to any party hereto, may assign any and all
of its rights or obligations hereunder to any of its Affiliates. As of the
Restatement Effective Date, all obligations of Arranger and Syndication Agent
hereunder shall terminate.
B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of
this Agreement and the other AXEL Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other AXEL Loan Documents, and in particular in case of
the enforcement of any of the AXEL Loan Documents, or in case Administrative
Agent deems that by reason of any present or future law of any jurisdiction it
may not exercise any of the rights, powers or remedies granted herein or in any
of the other AXEL Loan Documents or take any other action which may be desirable
or necessary in connection therewith, it may be necessary that Administrative
Agent appoint an additional individual or institution as a separate trustee,
co-trustee, collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually as a
"SUPPLEMENTAL COLLATERAL AGENT" and collectively as "SUPPLEMENTAL COLLATERAL
AGENTS").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other AXEL Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall
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be exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the AXEL Loan Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this Section 8 and of subsections 9.2 and 9.3 that refer
to Administrative Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
8.2 POWERS AND DUTIES; GENERAL IMMUNITY.
▇. ▇▇▇▇▇▇; DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other AXEL Loan Documents as are
specifically delegated or granted to such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other AXEL Loan Documents. Each
Agent may exercise such powers, rights and remedies and perform such duties by
or through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other AXEL Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other AXEL
Loan Documents, expressed or implied, is intended to or shall be so construed as
to impose upon any Agent any obligations in respect of this Agreement or any of
the other AXEL Loan Documents except as expressly set forth herein or therein.
B. NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
AXEL Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by any of Agent to Lenders or by or
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on behalf of Company to any Agent or any Lender in connection with the AXEL Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall any Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the AXEL Loan Documents
or as to the use of the proceeds of the AXELs or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding AXELs.
C. EXCULPATORY PROVISIONS. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the AXEL Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents or from the
exercise of any power, discretion or authority vested in it hereunder or
thereunder unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 9.6) and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such Agent shall be entitled to act or (where so instructed) refrain from
acting, or to exercise such power, discretion or authority, in accordance with
such instructions. Without prejudice to the generality of the foregoing, (i)
each Agent shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and
shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other AXEL Loan Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 9.6).
D. AGENT ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the AXELs, each Agent shall have the same
rights and powers hereunder as any other Lender and may exercise the same as
though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include each Agent in its individual
capacity. Any Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and
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may accept fees and other consideration from Company for services in connection
with this Agreement and otherwise without having to account for the same to
Lenders.
8.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the AXELs hereunder and that
it has made and shall continue to make its own appraisal of the creditworthiness
of Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any
such appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the AXELs or at any time or times thereafter, and no Agent
shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
8.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other AXEL Loan Documents or otherwise in its capacity as
such Agent in any way relating to or arising out of this Agreement or the other
AXEL Loan Documents; provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct and provided further that any such
indemnification of the Collateral Agent shall be on the terms described in
section 6(c) of the Intercreditor Agreement. If any indemnity furnished to any
Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished (excluding any indemnity for its gross negligence or will misconduct).
8.5 SUCCESSOR ADMINISTRATIVE AGENT.
SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may
resign at any time by giving 30 days' prior written notice thereof to Lenders
and Company, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to Company
and Administrative Agent and signed by Requisite Lenders. Upon any such notice
of resignation or any such removal,
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Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by Requisite Lenders and shall
have accepted such appointment within 30 days after the notice of the intent of
the Administrative Agent to resign, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
8.6 COLLATERAL DOCUMENTS AND GUARANTIES.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into the Intercreditor Agreement and
to appoint the Collateral Agent thereunder as agent for and representative of
Lenders. Under the terms of the Intercreditor Agreement, the Collateral Agent is
authorized to enter into each Collateral Document as secured party and to be the
agent for and representative of Secured Parties under the Subsidiary Guaranty,
and each Lender agrees to be bound by the terms of the Intercreditor Agreement,
each Collateral Document and the Subsidiary Guaranty. Administrative Agent shall
not enter into or consent to any material amendment, modification or termination
of the Intercreditor Agreement without the prior consent of Requisite Lenders.
Each Lender acknowledges that under the terms of the Intercreditor Agreement
without further written consent or authorization from Lenders, Collateral Agent
may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders or Lenders
(as applicable) have otherwise consented. Anything contained in any of the AXEL
Loan Documents to the contrary notwithstanding, Company, Administrative Agent
and each Lender hereby agree that (X) no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
or to enforce the Subsidiary Guaranty, it being understood and agreed that all
powers, rights and remedies under the Collateral Documents and the Subsidiary
Guaranty may be exercised solely by Collateral Agent for the benefit of Secured
Parties in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Party may be the purchaser of any
or all of such Collateral at any such sale and Collateral Agent, as agent for
and representative of Secured Parties (but not any Secured Party or Secured
Parties in its or their respective individual capacities
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unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Collateral Agent at such sale. The Lenders
each further acknowledge and agree that pursuant to the Intercreditor Agreement
and the Collateral Documents, Collateral Agent will act as the fonde de pouvoir
(holder of the power of attorney) of the holders from time to time of Notes
issued pursuant hereto to the extent necessary or desirable for the purposes of
creating, maintaining or enforcing any Liens or guarantees created or
established under any Collateral Documents contemplated hereby to be executed
under the laws of the Province of Quebec, Canada including, without limiting the
generality of the foregoing, entering into any such Collateral Documents and
exercising all or any of the rights, powers, trusts or duties conferred upon the
Collateral Agent therein and in the Intercreditor Agreement and each holder of
Notes by receiving and holding same accepts and confirms the appointment of the
Collateral Agent as fonde de pouvoir (holder of the power of attorney) of such
holder for such purposes.
SECTION 9.
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN AXELS.
A. GENERAL. Subject to subsection 9.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its AXEL
Commitments or the AXEL or AXELs made by it or any other interest herein or in
any other Obligations owed to it; provided that no such sale, assignment,
transfer or participation shall, without the consent of Company, require Company
to file a registration statement with the Securities and Exchange Commission or
apply to qualify such sale, assignment, transfer or participation under the
securities laws of any state; provided, further that no such sale, assignment or
transfer described in clause (i) above shall be effective unless and until an
Assignment Agreement effecting such sale, assignment or transfer shall have been
accepted by Administrative Agent and recorded in the Register as provided in
subsection 9.1B(ii). Except as otherwise provided in this subsection 9.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its AXEL Commitments or the
AXELs, or the other Obligations owed to such Lender.
B. ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each AXEL Commitment,
AXEL or other Obligation may (a) be assigned in any amount to another
Lender, or to an Affiliate or a Related Fund of the assigning Lender or
another Lender, with
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the giving of notice to Company, Syndication Agent and Administrative
Agent or (b) be assigned in an aggregate amount of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate
amount of the AXEL Commitments, AXEL, and other Obligations of the
assigning Lender) to any other Eligible Assignee with the giving of
notice to Company and with the consent of Administrative Agent and
Syndication Agent (which consent shall not be unreasonably withheld or
delayed). To the extent of any such assignment in accordance with
either clause (a) or (b) above, the assigning Lender shall be relieved
of its obligations with respect to its AXEL Commitments, AXELs, or
other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Administrative Agent,
for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing and recordation fee of $500 if
such assignment is to another Lender or an Affiliate or Related Fund of
the assigning Lender, or $2,000, if such assignment is to any other
Eligible Assignee, and such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a).
Upon such execution, delivery, acceptance and recordation, from and
after the effective date specified in such Assignment Agreement, (y)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment Agreement, shall have the rights and obligations of a
Lender hereunder and (z) the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under
subsection 9.9B) and be released from its obligations under this
Agreement and, in the case of an Assignment Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto. The
AXEL Commitments hereunder shall be modified to reflect the AXEL
Commitment of such assignee and any remaining AXEL Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of the AXEL Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable AXEL Notes to Administrative
Agent for cancellation, and thereupon new AXEL Notes shall be issued to
the assignee and/or to the assigning Lender, substantially in the form
of Exhibit III annexed hereto with appropriate insertions, to reflect
the new AXEL Commitments and/or outstanding AXELs, the case may be, of
the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to
in subsection 9.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that
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such assignee may be required to deliver to Administrative Agent
pursuant to subsection 2.7B(iii)(a), Administrative Agent shall, if
Administrative Agent has consented to the assignment evidenced thereby
(to the extent such consent is required pursuant to subsection
9.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Administrative Agent to such
assignment), (b) record the information contained therein in the
Register, and (c) give prompt notice thereof to Company. Administrative
Agent shall maintain a copy of each Assignment Agreement delivered to
and accepted by it as provided in this subsection 9.1B(ii).
C. PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any AXEL allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any AXEL allocated to such participation, and all amounts
payable by Company hereunder (including amounts payable to such Lender pursuant
to subsections 2.6D and 2.7) shall be determined as if such Lender had not sold
such participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 9.4 and 9.5, (a) any participation will give
rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
9.1, any Lender may assign and pledge all or any portion of its AXELs, the other
Obligations owed to such Lender, and its AXEL Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 9.19.
F. REPRESENTATIONS OF LENDERS. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (A) of the definition thereof; (ii) that it has experience
and expertise in the making of or investing in loans such as the AXELs; and
(iii) that it will make its AXELs for its own account in the ordinary course of
its business and without a view to distribution of such AXELs within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this subsection 9.1, the
disposition of such
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AXELs or any interests therein shall at all times remain within its exclusive
control). Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall be deemed to agree that the representations and warranties of
such Lender contained in Section 2(c) of such Assignment Agreement are
incorporated herein by this reference.
9.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the AXEL Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance with all agreements and conditions on its part to
be performed or complied with under this Agreement and the other AXEL Loan
Documents including with respect to confirming compliance with environmental,
insurance and solvency requirements; (iii) the reasonable fees, expenses and
disbursements of counsel to Arranger and counsel to Administrative Agent (in
each case including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the AXEL Loan
Documents and any consents, amendments, waivers or other modifications thereto
and any other documents or matters requested by Company; (iv) all the actual
costs and reasonable expenses of creating and perfecting Liens in favor of
Collateral Agent on behalf of Secured Parties pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Arranger and counsel to Administrative
Agent and of counsel providing any opinions that Arranger, Administrative Agent
or Requisite Lenders may request in respect of the Collateral Documents or the
Liens created pursuant thereto; (v) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Administrative Agent or Arranger and its
counsel) of obtaining and reviewing any appraisals provided for under subsection
3.1J or 5.9C, any environmental audits or reports provided for under subsection
3.1K or 5.9B(viii) and any reports provided for under subsection 3.1L; (vi) all
the actual costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any consultants, advisors and agents employed or
retained by Administrative Agent and its counsel) in connection with the custody
or preservation of any of the Collateral; (vii) all other actual and reasonable
costs and expenses incurred by Syndication Agent, Arranger or Administrative
Agent in connection with the syndication of the AXEL Commitments and the
negotiation, preparation and execution of the AXEL Loan Documents and any
consents, amendments, waivers or other modifications thereto and the
transactions contemplated thereby; and (viii) after the occurrence of an Event
of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Arranger, Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from any Loan Party hereunder
or under the other AXEL Loan
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Documents by reason of such Event of Default (including in connection with the
sale of, collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.
9.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection 9.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Agents and Lenders, and the officers, partners,
directors, employees, agents and affiliates of any of Agents and Lenders
(collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final, non-appealable judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other AXEL Loan Documents or the
Related Agreements or the transactions contemplated hereby or thereby (including
Lenders' agreement to make the AXELs hereunder or the use or intended use of the
proceeds thereof or any enforcement of any of the AXEL Loan Documents (including
any sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Subsidiary Guaranty)), (ii) the statements contained in
the commitment letter delivered by any Lender to Company with respect thereto,
or (iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past or present activity,
operation, land ownership, or practice of Company or any of its Subsidiaries.
123
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 9.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
9.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, subject to the consent of Administrative Agent, without notice to
Company or to any other Person (other than Administrative Agent), any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the credit or the account of Company against and on account of the
obligations and liabilities of Company to that Lender under this Agreement, and
the other AXEL Loan Documents, including all claims of any nature or description
arising out of or connected with this Agreement any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the AXELs or any other
amounts due hereunder shall have become due and payable pursuant to Section 7
and although said obligations and liabilities, or any of them, may be contingent
or unmatured. Company hereby further grants to Collateral Agent and each Lender
a security interest in all deposits and accounts maintained with Administrative
Agent or such Lender as security for the Obligations.
9.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of AXELs made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the AXEL
Loan Documents or otherwise, or as adequate protection of a deposit treated as
cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of, fees and other amounts then due and owing to that Lender hereunder
or under the other AXEL Loan Documents (collectively, the "AGGREGATE AMOUNTS
DUE" to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment)
124
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
9.6 AMENDMENTS AND WAIVERS.
A. No amendment, modification, termination or waiver of any provision
of the AXEL Loan Documents, or consent to any departure by the Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that no such amendment, modification, termination,
waiver or consent shall, without the consent of each Lender (with Obligations
directly affected in the case of the following clause (i)): (i) extend the
scheduled final maturity of any AXEL, or extend the due date or reduce the
amount of any scheduled principal payment in respect of any AXELs, or reduce the
rate of interest on any AXEL (other than any waiver of any increase in the
interest rate applicable to any AXEL pursuant to subsection 2.2E) or any
commitment fees payable hereunder, or extend the time for payment of any such
interest or fees, or reduce the principal amount of any AXEL, (ii) amend,
modify, terminate or waive any provision of this subsection 9.6, (iii) reduce
the percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the AXEL Commitments and
the AXELs (as such terms are defined in the Existing AXEL Credit Agreement) are
included on the Closing Date), (iv) consent to the assignment or transfer by the
Company of any of its rights and obligations under this Agreement or (v) release
all or substantially all the Liens granted pursuant to the Collateral Documents
(including Liens on real property) or release any Subsidiary from the Subsidiary
Guaranty if such release would constitute a release of all or substantially all
of the Collateral; provided, further that no such amendment, modification,
termination or waiver shall (1) increase the Additional AXEL Commitment of any
Lender over the amount thereof then in effect without the consent of such Lender
(it being understood that no amendment, modification or waiver of any condition
precedent, covenant, Potential Event of Default or Event of Default shall
constitute an increase in the Additional AXEL Commitment of any Lender, and that
no increase in the available portion of the Additional AXEL Commitment of any
Lender shall constitute an increase in such Additional AXEL Commitment of such
Lender); or (2) amend, modify, terminate or waive any provision of Section 8 as
the same applies to any Agent, or any other provision of this
125
Agreement as the same applies to the rights or obligations of any Agent, in each
case without the consent of such Agent.
B. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Company in any case shall entitle Company to any
other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 9.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, the Company.
9.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
9.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Arranger, Syndication Agent or
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent and Company.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the AXELs
hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 9.2, 9.3
and 9.4 and the agreements of Lenders set forth in subsections 8.2C, 8.4 and 9.5
shall survive the payment of the AXELs, and the termination of this Agreement.
126
9.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
AXEL Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
9.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
9.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or the AXEL
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
9.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or AXEL Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
127
9.14 HEADINGS.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 9.1). Neither Company's
rights or obligations hereunder nor any interest therein may be assigned or
delegated by Company without the prior written consent of all Lenders.
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 9.8;
128
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
9.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER AXEL LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants and represents that it has reviewed this waiver
with its legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER AXEL LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE OBLIGATIONS MADE HEREUNDER. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
129
9.19 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices (and any Lender without such
customary procedures agrees to keep such information confidential), it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates or Related Funds of such Lender or disclosures reasonably required
by any bona fide assignee, transferee or participant in connection with the
contemplated assignment or transfer by such Lender of any AXELs (so long as such
Persons agree in advance in writing to keep such information confidential) or
disclosures required or requested by any governmental agency or representative
thereof or pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information; and provided, further that in no event shall any
Lender be obligated or required to return any materials furnished by Company or
any of its Subsidiaries.
9.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
It is the intention of each of the parties hereto that the Existing
AXEL Credit Agreement be amended and restated so as to preserve the perfection
and priority of all security interests securing indebtedness and obligations
under the Existing AXEL Credit Agreement and the other Loan Documents and that
all indebtedness and obligations of Company and its Subsidiaries hereunder and
thereunder shall be secured by the Collateral Documents and that this Agreement
shall not constitute a novation of the obligations and liabilities existing
under the Existing AXEL Credit Agreement or be deemed to evidence or constitute
repayment of all or any portion of any such obligations or liabilities. The
parties hereto further acknowledge and agree that this Agreement constitutes an
amendment of the Existing AXEL Credit Agreement made under the terms of
subsection 9.6 thereof.
This Agreement shall become effective upon the execution of a
counterpart hereof by Company, Administrative Agent, Arranger and Requisite
Lenders (as such term is defined in the Existing AXEL Credit Agreement) and
receipt by Company and
130
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof; provided that, unless and until all of the
conditions set forth in subsections 3.1 and 3.2 have been satisfied or waived in
accordance with subsection 9.6 of the Existing AXEL Credit Agreement, the
Existing AXEL Credit Agreement shall remain in full force and effect without
giving effect to the amendments set forth herein, all as if this Agreement had
never been executed and delivered.
[Remainder of page intentionally left blank]
131
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
AMSCAN HOLDINGS, INC.
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
Notice Address:
Amscan Holdings, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
individually and as Arranger
and Syndication Agent
By:/s/
------------------------------------
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
16th Floor
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ (Credit)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
27th Floor
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ (Operations)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
FLEET NATIONAL BANK,
as Administrative Agent
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: AVP
Notice Address:
Fleet National Bank
One Federal Street, 5th Floor
Mail Stop MAOFD05P
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fleet National Bank
One ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
GENERAL ELECTRIC CAPITAL CORPORATION
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Duly Authorized Signatory
Notice Address:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇,
Associate
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Senior Vice President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
SOUTHERN PACIFIC BANK
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Southern Pacific Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
TRANSAMERICA BUSINESS CREDIT CORPORATION
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
Transamerica Business Credit Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
CREDIT AGRICOLE INDOSUEZ
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Notice Address:
Credit Agricole Indosuez
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Credit)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Credit Agricole Indosuez
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇/
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (Loans)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Senior Floating Rate Fund, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ - ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
PILGRIM AMERICA PRIME RATE TRUST
By: Pilgrim America Investments, Inc.,
its Investment Manager
By:
--------------------------------------
Name:
Title:
Notice Address:
Pilgrim America Prime Rate Trust
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ Tiffen
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to
Pilgrim America Prime Rate Trust
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
State Street Bank and Trust Company
Alternative Structures Unit
Boston, Massachusetts
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Reference: Pilgrim America Prime Rate Trust
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/5367/5368
S-9
CRESCENT/MACH I PARTNERS, L.P.
by: TCW Asset Management Company,
its Investment Manager
By:
------------------------------------
Name:
Title:
Notice Address:
TCW Asset Management Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Gold/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Crescent/Mach I Partners, L.P.
c/o State Street Bank & Trust Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Prime Income Trust
c/o Morgan ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Advisors
2 World Trade Center - 72nd Floor
New York, New York 10048
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Credit)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
Prime Income Trust
c/o Morgan ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Advisors
2 World Trade Center - 72nd Floor
New York, New York 10048
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ (Administration)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ & ▇▇
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Notice Address:
Bank of America NT & SA
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-12
CYPRESSTREE INVESTMENT PARTNERS I, LTD.,
By: CypressTree Investment Management
Company, Inc., as Portfolio Manager,
soley in its capacity as an existing
Lender
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Principal
Notice Address:
CypressTree Investment Partners I, Ltd.
c/o CypressTree Investment Management
Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
CypressTree Investment Partners I, Ltd.
c/o CypressTree Investment Management
Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-13
KZH CYPRESSTREE-1 LLC
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Notice Address:
KZH CypressTree-1 LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - 15th Floor
New York, New York 10001
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇-▇
▇▇▇ ▇▇▇▇▇▇▇▇-▇ LLC
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Notice Address:
KZH CRESCENT-2 LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - 15th Floor
New York, New York 10001
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-13-B
KZH ING-2 LLC
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Signatory
Notice Address:
KZH ING-2 LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - 15th Floor
New York, New York 10001
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-13-C
SENIOR DEBT PORTFOLIO
By:/s/ Payson ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: Payson ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Senior Debt Portfolio
c/o ▇▇▇▇▇ ▇▇▇▇▇ Asset Management
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇), INC.
By:
-----------------------------------
Name:
Title:
Notice Address:
Toronto Dominion (Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-15
ING CAPITAL ADVISORS
By:
-----------------------------------
Name:
Title:
Notice Address:
ING Capital Advisors
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-16
KZH PAMCO LLC
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
Notice Address:
KZH Pamco LLC
▇/▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Highland Capital Management, L.P.
1150 Two Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇-▇▇ #▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-17
▇▇▇▇▇▇▇ & ▇▇▇▇ FINANCIAL, INC.
By:
-----------------------------------
Name:
Title:
Notice Address:
▇▇▇▇▇▇▇ & ▇▇▇▇ Financial, Inc.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-18
BANKERS TRUST COMPANY
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Notice Address:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Mailstop ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-20
HIGHLAND CAPITAL MANAGEMENT, L.P.
By:
-------------------------------------
Name:
Title:
Notice Address:
Highland Capital Management, L.P.
1150 Two Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇-▇▇ #▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Deadman
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-20