Exhibit 2.(ii)
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
December 1, 1998
Among
MIAMI COMPUTER SUPPLY CORPORATION
as Borrower
THE LENDING INSTITUTIONS NAMED THEREIN
as Lenders
NATIONAL CITY BANK
as a Lender and as Documentation Agent
PNC BANK, NATIONAL ASSOCIATION
as a Lender, the Swing Line Lender, a Letter of Credit Issuer and
as Administrative Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND TERMS...........................................................................1
1.1. Certain Defined Terms...........................................................................1
1.2. Computation of Time Periods....................................................................18
1.3. Accounting Terms...............................................................................18
1.4. Terms Generally................................................................................19
1.5. Borrower May Rely on Administrative Agent......................................................19
SECTION 2. AMOUNT AND TERMS OF LOANS......................................................................19
2.1. Commitments for Loans..........................................................................19
2.2. Procedures for Borrowing.......................................................................20
2.3. Disbursement of Funds..........................................................................21
2.4. Notes..........................................................................................22
2.5. Conversions of General Revolving Loans.........................................................22
2.6. Refunding of, or Participation in, Swing Line Revolving Loans..................................22
2.7. Interest.......................................................................................24
2.8. Selection and Continuation of Interest Periods.................................................26
2.9. Increased Costs, Illegality, etc...............................................................27
2.10. Compensation...................................................................................28
2.11. Change of Lending Office; Replacement of Lenders...............................................29
SECTION 3. LETTERS OF CREDIT..............................................................................29
3.1. Letters of Credit..............................................................................29
3.2. Letter of Credit Requests: Notices of Issuance.................................................30
3.3. Agreement to Repay Letter of Credit Drawings...................................................31
3.4. Letter of Credit Participations................................................................31
3.5. Increased Costs................................................................................33
3.6. Guaranty of Subsidiary Letter of Credit Obligations............................................33
SECTION 4. FEES; COMMITMENTS..............................................................................35
4.1. Fees...........................................................................................35
4.2. Voluntary Termination/Reduction of Commitments.................................................36
4.3. Mandatory Adjustments of Commitments, etc......................................................37
SECTION 5. PAYMENTS.......................................................................................37
5.1. Voluntary Prepayments..........................................................................37
5.2. Mandatory Prepayments..........................................................................38
5.3. Method and Place of Payment....................................................................39
5.4. Net Payments...................................................................................40
SECTION 6. CONDITIONS PRECEDENT...........................................................................41
6.1. Conditions Precedent at Closing Date...........................................................41
6.2. Conditions Precedent to All Credit Events......................................................42
SECTION 7. REPRESENTATIONS AND WARRANTIES.................................................................43
7.1. Corporate Status, etc..........................................................................43
7.2. Subsidiaries...................................................................................43
7.3. Corporate Power and Authority, etc.............................................................43
Page
7.4. No Violation...................................................................................43
7.5. Governmental Approvals.........................................................................43
7.6. Litigation.....................................................................................44
7.7. Use of Proceeds; Margin Regulations............................................................44
7.8. Financial Statements, etc......................................................................44
7.9. No Material Adverse Change.....................................................................45
7.10. Tax Returns and Payments.......................................................................45
7.11. Title to Properties, etc.......................................................................45
7.12. Lawful Operations, etc.........................................................................45
7.13. Environmental Matters..........................................................................46
7.14. Compliance with ERISA..........................................................................46
7.15. Intellectual Property, etc.....................................................................47
7.16. Investment Company.............................................................................47
7.17. Burdensome Contracts; Labor Relations..........................................................47
7.18. Existing Indebtedness..........................................................................47
7.19. Security Interests.............................................................................47
7.20. Year 2000 Computer Matters.....................................................................48
7.21. True and Complete Disclosure...................................................................48
SECTION 8. AFFIRMATIVE COVENANTS..........................................................................48
8.1. Reporting Requirements.........................................................................48
8.2. Books, Records and Inspections.................................................................51
8.3. Insurance......................................................................................51
8.4. Payment of Taxes and Claims....................................................................52
8.5. Corporate Franchises...........................................................................52
8.6. Good Repair....................................................................................52
8.7. Compliance with Statutes, etc..................................................................52
8.8. Compliance with Environmental Laws.............................................................52
8.9. Fiscal Years, Fiscal Quarters..................................................................53
8.10. Certain Subsidiaries to Join in Subsidiary Guaranty............................................53
8.11. Additional Security; Further Assurances........................................................54
8.12. Casualty and Condemnation......................................................................55
8.13. Hedge Agreements, etc..........................................................................56
8.14. Senior Debt....................................................................................56
SECTION 9. NEGATIVE COVENANTS.............................................................................56
9.1. Changes in Business............................................................................56
9.2. Consolidation, Merger, Acquisitions, Sale of Assets, etc.......................................56
9.3. Liens..........................................................................................58
9.4. Indebtedness...................................................................................59
9.5. Advances, Investments, Loans and Guaranty Obligations..........................................59
9.6. Dividends, etc.................................................................................61
9.7. Consolidated Total Debt/Consolidated EBITDA Ratio..............................................61
9.8. Fixed Charge Coverage Ratio....................................................................61
9.9. Capital Expenditures...........................................................................61
9.10. Certain Leases.................................................................................62
9.11. Minimum Consolidated Net Worth.................................................................62
9.12. Prepayments and Refinancings of Other Debt, etc................................................62
9.13. Transactions with Affiliates...................................................................62
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Page
9.14. Limitation on Certain Restrictive Agreements...................................................62
9.15. Limitation on Sale and Lease-Back Transactions.................................................63
SECTION 10. EVENTS OF DEFAULT..............................................................................63
10.1. Events of Default..............................................................................63
10.2. Acceleration, etc..............................................................................65
10.3. Application of Liquidation Proceeds............................................................66
SECTION 11. THE ADMINISTRATIVE AGENT.......................................................................66
11.1. Appointment....................................................................................66
11.2. Delegation of Duties...........................................................................67
11.3. Exculpatory Provisions.........................................................................67
11.4. Reliance by Administrative Agent...............................................................67
11.5. Notice of Default..............................................................................67
11.6. Non-Reliance...................................................................................68
11.7. Indemnification................................................................................68
11.8. The Administrative Agent in Individual Capacity................................................68
11.9. Successor Administrative Agent.................................................................68
11.10. Other Agents...................................................................................69
SECTION 12. MISCELLANEOUS..................................................................................69
12.1. Payment of Expenses etc........................................................................69
12.2. Right of Setoff................................................................................70
12.3. Notices........................................................................................70
12.4. Benefit of Agreement...........................................................................71
12.5. No Waiver: Remedies Cumulative.................................................................72
12.6. Payments Pro Rata..............................................................................72
12.7. Calculations: Computations.....................................................................73
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.........................73
12.9. Counterparts...................................................................................74
12.10. Effectiveness..................................................................................74
12.11. Headings Descriptive...........................................................................74
12.12. Amendment or Waiver............................................................................74
12.13. Survival of Indemnities........................................................................75
12.14. Domicile of Loans..............................................................................75
12.15. Confidentiality................................................................................75
12.16. Lender Register................................................................................75
12.17. Limitations on Liability of the Letter of Credit Issuers.......................................76
12.18. General Limitation of Liability................................................................76
12.19. No Duty........................................................................................76
12.20. Lenders and Agent Not Fiduciary to Borrower, etc...............................................76
12.21. Survival of Representations and Warranties.....................................................76
iii
ANNEX I - INFORMATION AS TO LENDERS
ANNEX II - INFORMATION AS TO SUBSIDIARIES
ANNEX III - DESCRIPTION OF EXISTING INDEBTEDNESS
ANNEX IV - DESCRIPTION OF EXISTING LIENS
ANNEX V - DESCRIPTION OF EXISTING ADVANCES, LOANS,
INVESTMENTS AND GUARANTEES
ANNEX VI - DESCRIPTION OF LETTERS OF CREDIT DEEMED
ISSUED UNDER THE CREDIT AGREEMENT
EXHIBIT A-1 - FORM OF GENERAL REVOLVING NOTE
EXHIBIT A-2 - FORM OF SWING LINE REVOLVING NOTE
EXHIBIT B-1 - FORM OF NOTICE OF BORROWING
EXHIBIT B-2 - FORM OF NOTICE OF CONVERSION
EXHIBIT B-3 - FORM OF LETTER OF CREDIT REQUEST
EXHIBIT C - FORM OF SUBSIDIARY GUARANTY
EXHIBIT D - FORM OF SECURITY AGREEMENT
EXHIBIT E-1 - FORM OF PLEDGE AGREEMENT
EXHIBIT E-2 - FORM OF AMENDMENT TO MORTGAGE OF SHARES OF
DIVERSIFIED DATA PRODUCTS LIMITED
EXHIBIT F - FORM OF OPINION OF SPECIAL COUNSEL TO THE BORROWER
EXHIBIT G - FORM OF ASSIGNMENT AGREEMENT
EXHIBIT H - FORM OF SECTION 5.4(b)(ii) CERTIFICATE
iv
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 1, 1998
(herein, as the same may be from time to time further modified, amended and/or
supplemented, "this Agreement")., among the following:
(i) MIAMI COMPUTER SUPPLY CORPORATION, an Ohio corporation
(herein, together with its successors and assigns, the "Borrower");
(ii) the lending institutions listed in Annex I hereto (each a
"Lender" and collectively, the "Lenders");
(iii) NATIONAL CITY BANK, a national banking association, as
documentation agent (the "Documentation Agent"); and
(iv) PNC BANK, NATIONAL ASSOCIATION, a national banking
association, as administrative agent (the "Administrative Agent"):
PRELIMINARY STATEMENTS:
(1) Unless otherwise defined herein, all capitalized terms used herein
and defined in section 1 are used herein as so defined.
(2) The Borrower has heretofore entered into the Credit Agreement,
dated as of January 8, 1998, among the Borrower, the financial institutions
party thereto as lenders, and National City Bank, as the Administrative Agent
thereunder, as amended by Amendment No. 1 thereto, dated as of February 13,
1998, and Amendment No. 2 thereto, dated as of May 15, 1998 (as so amended and
in effect immediately prior to the Effective Date hereof, the "Original Credit
Agreement").
(3) This Agreement amends and restates in its entirety the Original
Credit Agreement. Loans outstanding under the Original Credit Agreement on the
Closing Date will continue outstanding hereunder as contemplated by section 6.1
hereof. Letters of Credit outstanding under the Original Credit Agreement on the
Closing Date will continue outstanding hereunder as contemplated by section
3.1(d) hereof.
(4) The Borrower has applied to the Lenders for credit facilities in
order to (i) provide financing for acquisitions, and (ii) provide working
capital and funds for other lawful purposes.
(5) Subject to and upon the terms and conditions set forth herein, the
Lenders are willing to make available to the Borrower the credit facilities
provided for herein.
NOW, THEREFORE, it is agreed that this Agreement amends and restates
the Original Credit Agreement in its entirety, and as follows:
SECTION 1. DEFINITIONS AND TERMS.
1.1. Certain Defined Terms. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"Acquisition" shall mean and include (i) any acquisition on a going
concern basis (whether by purchase, lease or otherwise) of any facility and/or
business operated by any person who is not a Subsidiary of the Borrower, and
(ii)
acquisitions of a majority of the outstanding equity or other similar interests
in any such person (whether by merger, stock purchase or otherwise).
"Additional Security Document" shall have the meaning provided in
section 8.11(a).
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to section 11.9.
"Affiliate" shall mean, with respect to any person, any other person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with such person. A person shall be deemed to control a second
person if such first person possesses, directly or indirectly, the power (i) to
vote 20% or more of the securities having ordinary voting power for the election
of directors or managers of such second person or (ii) to direct or cause the
direction of the management and policies of such second person, whether through
the ownership of voting securities, by contract or otherwise. Notwithstanding
the foregoing, (x) a director, officer or employee of a person shall not, solely
by reason of such status, be considered an Affiliate of such person; and (y)
neither the Administrative Agent nor any Lender shall in any event be considered
an Affiliate of the Borrower or any other Credit Party or any of their
respective Subsidiaries.
"Agreement" shall have the meaning provided in the first paragraph
hereof.
"Applicable Eurodollar Margin" shall have the meaning provided in
section 2.7(h).
"Applicable Commitment Fee Rate" shall have the meaning provided in
section 4.1(a).
"Applicable Lending Office" shall mean, with respect to each Lender,
(i) such Lender's Domestic Lending Office in the case of Borrowings consisting
of Prime Rate Loans and (ii) such Lender's Eurodollar Lending Office in the case
of Borrowings consisting of Eurodollar Loans.
"Applicable Prime Rate Margin" shall have the meaning provided in
section 2.7(h).
"Asset Sale" shall mean the sale, transfer or other disposition
(including by means of Sale and Lease-Back Transaction, and by means of mergers,
consolidations, and liquidations of a corporation, partnership or limited
liability company of the interests therein of the Borrower or any Subsidiary) by
the Borrower or any Subsidiary to any person other than the Borrower or any
Subsidiary of any of their respective assets (other than sales, transfers or
other dispositions of inventory, or obsolete or excess furniture, fixtures,
equipment or other property, tangible or intangible, in the ordinary course of
business).
"Assignment Agreement" shall mean an Assignment Agreement substantially
in the form of Exhibit G hereto.
"Authorized Officer" shall mean any officer or employee of the Borrower
designated as such in writing to the Administrative Agent by the Borrower.
"Bankruptcy Code" shall have the meaning provided in section 10.1(h).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean (i) the incurrence of General Revolving Loans
consisting of one Type of Loan, by the Borrower from all of the Lenders having
Commitments in respect thereof on a pro rata basis on a given date (or resulting
from Conversions or Continuations on a given date), having in the case of
Eurodollar Loans the same Interest Period, or (ii) the incurrence of a Swing
Line Revolving Loan of a single Type from the Swing Line Lender on a given date,
having in the case of a Money Market Loan a single maturity date and Quoted
Rate.
2
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city in which the Payment Office is located a legal holiday or a day on
which banking institutions are authorized by law or other governmental actions
to close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) and which is also a day for trading by
and between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any person shall mean any lease of any
property (whether real, personal or mixed) by that person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities identified as "capital lease
obligations" (or any similar words) on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP.
"Cash Equivalents" shall mean any of the following:
(i) securities issued or directly and fully guaranteed or
insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having
maturities of not more than one year from the date of acquisition;
(ii) U.S. dollar denominated time deposits, certificates of
deposit and bankers' acceptances of (x) any Lender or (y) any bank
whose short-term commercial paper rating from S&P is at least A-1 or
the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank, an "Approved Bank"), in each case
with maturities of not more than 90 days from the date of acquisition;
(iii) commercial paper issued by any Lender or Approved Bank
or by the parent company of any Lender or Approved Bank and commercial
paper issued by, or guaranteed by, any industrial or financial company
with a short- term commercial paper rating of at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term
unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case
maturing within 90 days after the date of acquisition;
(iv) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in
clauses (i) through (iii) above;
(v) investments in money market funds access to which is
provided as part of "sweep" accounts maintained with a Lender or an
Approved Bank; and
(vi) in the case of any Foreign Subsidiary only, short term
deposits, certificates of deposit, repurchase agreements and similar
financial instruments, in any currency, with or issued by any local or
international financial institution with undivided capital and surplus
of at least $500,000,000 (or the equivalent in any applicable
currency), not exceeding $2,500,000 (or the equivalent in any other
currency) in the case of any single financial institution.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any Subsidiary from such Asset
Sale.
3
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean and include any of the following:
(i) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the
Borrower's Board of Directors (together with any new directors whose
election by the Borrower's Board of Directors or whose nomination for
election by the Borrower's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the directors then in office;
(ii) any person or group (as such term is defined in section
13(d)(3) of the 1934 Act), other than the Borrower, any trustee or
other fiduciary holding securities under an employee benefit plan of
the Borrower and the Current Holder Group, shall acquire, directly or
indirectly, beneficial ownership (within the meaning of Rule 13d-3 and
13d-5 of the ▇▇▇▇ ▇▇▇) of more than 45%, on a fully diluted basis, of
the economic or voting interest in the Borrower's capital stock;
(iii) the full time active employment of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as
chief executive officer (or other significant position as a senior
executive officer with management authority) of the Borrower shall be
voluntarily terminated by the Borrower or ▇▇. ▇▇▇▇▇▇, or shall
otherwise cease, other than by reason of death or disability, unless a
successor acceptable to the Required Lenders shall have been appointed
or elected and actually taken office on a full time basis within three
months following any such termination or cessation, in which case the
name of such successor shall be substituted for the name of the person
he or she replaces for purposes of this clause (iii);
(iv) the shareholders of the Borrower approve a merger or
consolidation of the Borrower with any other person, other than a
merger or consolidation which would result in the voting securities of
the Borrower outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted or
exchanged for voting securities of the surviving or resulting entity)
more than 60% of the combined voting power of the voting securities of
the Borrower or such surviving or resulting entity outstanding after
such merger or consolidation; and/or
(v) the shareholders of the Borrower approve a plan of
complete liquidation of the Borrower or an agreement or agreements for
the sale or disposition by the Borrower of all or substantially all of
the Borrower's assets.
"Closing Date" shall mean the date, on or after the Effective Date,
upon which the conditions specified in section 6.1 are satisfied.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean any collateral covered by any Security
Document.
"Collateral Agent" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders pursuant to the Security Documents.
"Commitment" shall mean, with respect to each Lender, its General
Revolving Commitment, and/or its Swing Line Revolving Commitment, as applicable.
4
"Commitment Fees" shall have the meaning provided in section 4.1(a).
"Confidential Information Memorandum" shall have the meaning provided
in section 7.8(c).
"Consolidated Amortization Expense" shall mean, for any period, all
amortization expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events amounts expended or capitalized under Capital Leases
but excluding any amount representing capitalized interest) by the Borrower and
its Subsidiaries during that period that, in conformity with GAAP, are or are
required to be included in the property, plant or equipment reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"Consolidated Depreciation Expense" shall mean, for any period, all
depreciation expenses of the Borrower and its Subsidiaries, all as determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
for such period; plus (A) the sum of the amounts for such period included in
determining such Consolidated Net Income of (i) Consolidated Interest Expense,
(ii) Consolidated Income Tax Expense, (iii) amortization or write-off of
deferred financing costs, and (iv) extraordinary (and other one-time) non-cash
losses and charges; less (B) gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains and other one-time
non-cash gains; all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP, provided that in determining
Consolidated Net Income for purposes of this definition there shall be excluded
therefrom (i) the income, (or loss) of any entity (other than Subsidiaries of
the Borrower) in which the Borrower or any of its Subsidiaries has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries during such period, and
(ii) the income of any Subsidiary of the Borrower to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) Consolidated Depreciation
Expense, and (iii) Consolidated Amortization Expense, all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP;
provided that, notwithstanding anything to the contrary contained herein, the
Borrower's Consolidated EBITDA for any Testing Period shall (x) include the
appropriate financial items for any person or business unit which has been
acquired by the Borrower for any portion of such Testing Period prior to the
date of acquisition (but without giving effect to any credit for unobtained or
unrealized gains or any adjustments to overhead in connection with such
acquisition), and (y) exclude the appropriate financial items for any person or
business unit which has been disposed of by the Borrower, for the portion of
such Testing Period prior to the date of disposition.
"Consolidated Income Tax Expense" shall mean, for any period, all
provisions for taxes based on the net income of the Borrower or any of its
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that which is capitalized and that which is
attributable to Capital Leases, in accordance with GAAP) of the Borrower and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and net costs under Hedge Agreements intended to protect
against fluctuations in interest rates, but excluding, however, any amortization
of deferred financing costs, all as determined in accordance with GAAP.
5
"Consolidated Net Income" shall mean for any period, the net income (or
loss), without deduction for minority interests, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period determined in conformity with GAAP.
"Consolidated Rental Expense" shall mean, for any period, total rental
expense of the Borrower and its Subsidiaries, including the interest portion of
all Capitalized Leases if such amount is not reflected in Consolidated Interest
Expense, all as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Net Worth" shall mean at any time for the determination
thereof (i) all amounts which, in conformity with GAAP, would be included under
the caption "total stockholders' equity" (or any like caption) on a consolidated
balance sheet of the Borrower as at such date.
"Consolidated Total Debt" shall mean the sum (without duplication) of
all Indebtedness of the Borrower and of each of its Subsidiaries, all as
determined on a consolidated basis.
"Continue", "Continuation" and "Continued" each refers to a
continuation of General Revolving Loans consisting of Eurodollar Loans for an
additional Interest Period as provided in section 2.8.
"Convert", "Conversion" and "Converted" each refers to a conversion of
General Revolving Loans of one Type into General Revolving Loans of another
Type, pursuant to section 2.5, 2.8(b), 2.9 or 5.2.
"Credit Documents" shall mean this Agreement, the Notes, the Subsidiary
Guaranty, the Security Documents and any Letter of Credit Document.
"Credit Event" shall mean the making of any Loans and/or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Borrower and each of its Subsidiaries
which is a party to any Credit Document.
"Current Holder Group" shall mean (i) those persons who are officers
and directors of the Borrower at the Effective Date, (ii) the spouses, heirs,
legatees, descendants and blood relatives to the third degree of consanguinity
of any such person, (iii) the executors and administrators of the estate of any
such person, and any court appointed guardian of any such person, (iv) any trust
for the benefit of any such person referred to in the foregoing clauses (i) and
(ii) or any other persons, so long as one or more members of the Current Holder
Group has the exclusive right to control the voting and disposition of
securities held by such trust, and (v) the Pittsburgh Investment Group LLC.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with, respect to which a
Lender Default is in effect.
"Designated Hedge Agreement" shall mean any Hedge Agreement to which
the Borrower or any of its Subsidiaries is a party which, pursuant to a written
instrument signed by the Administrative Agent, has been designated as a
Designated Hedge Agreement so that the Borrower's or Subsidiaries's
counterparty's credit exposure thereunder will be entitled to share in the
benefits of the Subsidiary Guaranty and the Security Documents to the extent the
Subsidiary Guaranty and such Security Documents provide guarantees or security
for creditors of the Borrower or any Subsidiary under Designated Hedge
Agreements. The Administrative Agent may, without the approval or consent of the
Lenders, designate a Hedge Agreement as a Designated Hedge Agreement if the
counterparty is a Lender or an Affiliate of a Lender and the maximum credit
exposure of such counterparty under such Hedge Agreement to the Borrower and its
Subsidiaries, when taken together with the maximum credit exposure under all
other Hedge Agreements which are Designated Hedge Agreements, is reasonably
determined by the Administrative Agent, in accordance with its own customary
valuation practices, not to exceed $15,000,000 in the aggregate; however, if the
counterparty is not a Lender or an Affiliate of a Lender, or such credit
exposure is so determined by the Administrative
6
Agent to be such that the aggregate credit exposure under all Designated Hedge
Agreements would be greater than $15,000,000 if such Hedge Agreement were to be
a Designated Hedge Agreement, the Administrative Agent shall only designate the
Hedge Agreement involving such counterparty as a Designated Hedge Agreement if
the Administrative Agent is instructed to do so by the Required Lenders. The
Administrative Agent may impose as a condition to any designation of a
Designated Hedge Agreement a requirement that the counterparty enter into an
intercreditor or similar agreement with the Administrative Agent under which
recoveries from the Borrower and its Subsidiaries with respect to such
Designated Hedge Agreement will be shared in a manner consistent with the
provisions of section 10.3 hereof.
"Dollars", "U.S. dollars" and the sign "$" each means lawful money of
the United States.
"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Office in Annex I or in
the Assignment Agreement pursuant to which it became a Lender, or such other
office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"Domestic Subsidiary" shall mean any Subsidiary organized under the
laws of the United States of America, any State thereof, the District of
Columbia, or any United States possession, the chief executive office and
principal place of business of which is located in, and which conducts the
majority of its business within, the United States of America and its
territories and possessions.
"Effective Date" shall have the meaning provided in section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which
(i) is not disapproved in writing by the Borrower in a notice
given to a requesting Lender and the Administrative Agent, specifying
the reasons for such disapproval, within five Business Days following
the giving of notice to the Borrower of the identity of any proposed
transferee (any such disapproval by the Borrower must be reasonable),
provided that the Borrower shall not be entitled to exercise the
foregoing right of disapproval if and so long as (x) any Event of
Default shall have occurred and be continuing, or (y) any of the
financial covenants contained in this Agreement shall have been waived
or modified following a deterioration in the financial condition or
results of operations of the Borrower and its Subsidiaries; and
(ii) is not a direct competitor of the Borrower or engaged in
the same or similar business as the Borrower and its Subsidiaries
considered as an entirety or is not an Affiliate of any such
competitors of the Borrower and its Subsidiaries.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law or any permit issued under any such law
(hereafter "Claims"), including, without limitation, (i) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (ii) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the storage, treatment or Release (as defined
in CERCLA) of any Hazardous Materials or arising from alleged injury or threat
of injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any binding and
enforceable judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment issued to or
rendered against the Borrower or any of its Subsidiaries relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. ss. 3803 et seq.;
7
the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et
seq., the Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 et seq. and
the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq. (to the extent
it regulates occupational exposure to Hazardous Materials); and any state and
local or foreign counterparts or equivalents, in each case as amended from time
to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in section 3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of section 414(b),(c),
(m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of
the Borrower being or having been a general partner of such person.
"Eurodollar Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its Eurodollar Lending Office in Annex I or
in the Assignment Agreement pursuant to which it became a Lender, or such other
office or offices for Eurodollar Loans of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in section 2.7(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for a
Eurodollar Loan, (A) either (i) the rate per annum for deposits in Dollars of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan for which an interest rate is then being determined for a
maturity most nearly comparable to such Interest Period which appears on page
3750 of the Dow ▇▇▇▇▇ Telerate Screen as of 11:00 A.M. (local time at the Notice
Office) on the date which is two Business Days prior to the commencement of such
Interest Period, or (ii) if such a rate does not appear on such page, an
interest rate per annum equal to the average (rounded upward to the nearest
whole multiple of 1/100th of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in Dollars are offered to each
of the Reference Banks by prime banks in the London interbank Eurodollar market
for deposits of amounts in Dollars in same day funds comparable to the
outstanding principal amount of the Eurodollar Loan for which an interest rate
is then being determined with maturities comparable to the Interest Period to be
applicable to such Eurodollar Loan, determined as of 11:00 A.M. (London time) on
the date which is two Business Days prior to the commencement of such Interest
Period, in each case divided (and rounded upward to the nearest whole multiple
of 1/100th of 1%) by (B) a percentage equal to 100% minus the then stated
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental, special or other reserves and without benefit
of credits for proration, exceptions or offsets which may be available from time
to time) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in section 10.1.
"Existing Indebtedness" shall have the meaning provided in section
7.18.
"Existing Indebtedness Agreements" shall have the meaning provided in
section 7.18.
"Existing Letter of Credit" shall have the meaning provided in section
3.1(d).
"Facing Fee" shall have the meaning provided in section 4.1(c).
"Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
8
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
section 4.1.
"Financial Projections" shall have the meaning provided in section
7.8(c).
"Fixed Charge Coverage Ratio" shall mean, for any Testing Period, the
ratio of
(i) Consolidated EBITDA plus Consolidated Rental Expense for
such Testing Period,
to
(ii) the sum of (A) Consolidated Interest Expense, (B)
Consolidated Rental Expense, (C) Consolidated Income Tax Expense, (D)
Consolidated Capital Expenditures, (E) scheduled or mandatory
repayments, prepayments or redemptions of the principal of Indebtedness
(including required reductions in committed credit facilities), (F)
without duplication of any amount included under the preceding clause
(E), scheduled payments representing the principal portion of
Capitalized Lease Obligations, and (G) the sum of all payments for
dividends (but not stock repurchases) effected pursuant in section 9.6,
if any, in each case on a consolidated basis for the Borrower and its
Subsidiaries for such Testing Period
; provided that, notwithstanding anything to the contrary contained herein, the
Borrower's Fixed Charge Coverage Ratio for any Testing Period shall (x) include
the appropriate financial items for any person or business unit which has been
acquired by the Borrower for any portion of such Testing Period prior to the
date of acquisition, and (y) exclude the appropriate financial items for any
person or business unit which has been disposed of by the Borrower, for the
portion of such Testing Period prior to the date of disposition.
"Foreign Subsidiary" shall mean any Subsidiary (i) which is not
incorporated in the United States and substantially all of whose assets and
properties are located, or substantially all of whose business is carried on,
outside the United States, or (ii) substantially all of whose assets consist of
Subsidiaries that are Foreign Subsidiaries as defined in clause (i) of this
definition.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of section 9,
including defined terms as used therein, are subject (to the extent provided
therein) to section 1.3 and 12.7(a).
"General Revolving Commitment" shall mean, with respect to each Lender,
the amount set forth opposite such Lender's name in Annex I as its "General
Revolving Commitment" as the same may be reduced from time to time pursuant to
section 4.2, 4.3 and/or 10.2 or adjusted from time to time as a result of
assignments to or from such Lender pursuant to section 12.4.
"General Revolving Facility" shall mean the credit facility evidenced
by the Total General Revolving Commitment.
"General Revolving Facility Percentage" shall mean at any time for any
Lender with a General Revolving Commitment, the percentage obtained by dividing
such Lender's General Revolving Commitment by the Total General Revolving
Commitment, provided, that if the Total General Revolving Commitment has been
terminated, the General Revolving Facility Percentage for each Lender with a
General Revolving Commitment shall be determined by dividing such Lender's
General Revolving Commitment immediately prior to such termination by the Total
General Revolving Commitment immediately prior to such termination.
9
"General Revolving Loan" shall have the meaning provided in section
2.1(a).
"General Revolving Note" shall have the meaning provided in section
2.4(a).
"Guaranty Obligations" shall mean as to any person (without
duplication) any obligation of such person guaranteeing any Indebtedness
("primary Indebtedness") of any other person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such person, whether or not contingent, (a) to purchase any such
primary Indebtedness or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary Indebtedness or (ii) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such primary Indebtedness of the
ability of the primary obligor to make payment of such primary Indebtedness, or
(d) otherwise to assure or hold harmless the owner of such primary Indebtedness
against loss in respect thereof, provided, however, that the term Guaranty
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary Indebtedness in respect of which such Guaranty Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such person is required to perform
thereunder) as determined by such person in good faith.
"Hedge Agreement" shall mean (i) any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement or other similar
agreement or arrangement designed to protect against fluctuations in interest
rates, and (ii) any currency swap agreement, forward currency purchase agreement
or similar agreement or arrangement designed to protect against fluctuations in
currency exchange rates.
"Hazardous Materials" shall mean (i) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (ii) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "restricted hazardous materials", "extremely hazardous
wastes", "restrictive hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants" or "pollutants", or words of similar meaning and regulatory
effect, under any applicable Environmental Law.
"Indebtedness" of any person shall mean without duplication:
(i) all indebtedness of such person for borrowed money,
(ii) all bonds, notes, debentures and similar debt securities
of such person,
(iii) the deferred purchase price of capital assets or
services which in accordance with GAAP would be shown on the liability
side of the balance sheet of such person,
(iv) the face amount of all letters of credit issued for the
account of such person and, without duplication, all drafts drawn
thereunder,
(v) all Indebtedness of a second person secured by any Lien on
any property owned by such first person, whether or not such
indebtedness has been assumed, but only to the extent of the fair value
of such property if such Indebtedness has not been assumed,
(vi) all Capitalized Lease Obligations of such person,
(vii) the present value, determined on the basis of the
implicit interest rate, of all basic rental obligations under all
"synthetic" leases (i.e. leases accounted for by the lessee as
operating leases under which the lessee is the "owner" of the leased
property for Federal income tax purposes),
10
(viii) all obligations of such person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, i.e., take-or-pay and similar obligations,
(ix) all net obligations of such person under Hedge Agreements
and
(x) the full outstanding balance of trade receivables, notes
or other instruments sold with full or limited recourse (to the extent
of such recourse), other than solely for purposes of collection of
delinquent accounts,
(xii) the stated value, or liquidation value if higher, of all
Redeemable Stock of such person; and
(xi) all Guaranty Obligations of such person,
provided that (x) neither trade payables nor other similar accrued expenses, in
each case arising in the ordinary course of business, nor obligations in respect
of insurance policies or performance or surety bonds which themselves are not
guarantees of Indebtedness (nor drafts, acceptances or similar instruments
evidencing the same nor obligations in respect of letters of credit supporting
the payment of the same), shall constitute Indebtedness; and (y) the
Indebtedness of any person shall in any event include (without duplication) the
Indebtedness of any other entity (including any general partnership in which
such person is a general partner) to the extent such person is liable thereon as
a result of such person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide expressly
that such person is not liable thereon.
"Interest Period" with respect to any Eurodollar Loan shall mean the
interest period applicable thereto, as determined pursuant to section 2.8.
"Leaseholds" of any person means all the right, title and interest of
such person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender in violation of the requirements of this Agreement to
make available its portion of any incurrence of Loans, to fund its portion of
any Swing Line Participation Amount under section 2.6(b), or to fund its portion
of any unreimbursed payment under section 3.4(c); or (ii) a Lender having
notified the Administrative Agent and/or the Borrower that it does not intend to
comply with the obligations under section 2.1, section 2.6(a) or (b) and/or
section 3.4(c), in the case of either (i) or (ii) as a result of the appointment
of a receiver or conservator with respect to such Lender at the direction or
request of any regulatory agency or authority.
"Lender Register" shall have the meaning provided in section 12.16.
"Letter of Credit" shall have the meaning provided in section 3.1(a).
"Letter of Credit Documents" shall have the meaning specified in
section 3.2(a).
"Letter of Credit Fee" shall have the meaning provided in section
4.1(b).
"Letter of Credit Issuer" shall mean (i) in respect of each Existing
Letter of Credit, the Lender that has issued same as of the Effective Date; and
(ii) in respect of any other Letter of Credit, (1) PNC, and/or (2) such other
Lender that is requested, and agrees, to so act by the Borrower, and is approved
by the Administrative Agent.
"Letter of Credit Outstandings" shall mean, at any time, the sum,
without duplication, of (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings.
11
"Letter of Credit Request" shall have the meaning provided in section
3.2(a).
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or any lease
in the nature thereof).
"Loan" shall mean a General Revolving Loan or a Swing Line Revolving
Loan, as applicable.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean (i )a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of, when used with reference to the Borrower and/or any
of its Subsidiaries, the Borrower and its Subsidiaries, taken as a whole, or
when used with reference to any other person, such person and its Subsidiaries,
taken as a whole, as the case may be; (ii) any material adverse effect on the
ability of the Borrower to perform its obligations under the Credit Documents to
which it is a party; or (iii) any material adverse effect on the validity or
effectiveness as against, or the enforceability against, any Credit Party of any
of the Credit Documents to which it is a party.
"Material Subsidiary" shall mean,, at any time, with reference to any
person, any Subsidiary of such person (i) that has assets at such time
comprising 10% or more of the consolidated assets of such person and its
Subsidiaries, or (ii) whose operations in the current fiscal year are expected
to, or whose operations in the most recent fiscal year did (or would have if
such person had been a Subsidiary for such entire fiscal year), represent 10% or
more of the consolidated earnings before interest, taxes, depreciation and
amortization of such person and its Subsidiaries for such fiscal year.
"Maturity Date" shall mean December 10, 2003, unless earlier
terminated.
"Minimum Borrowing Amount" shall mean (i) for Swing Line Revolving
Loans, $100,000, with minimum increments thereafter of $50,000; and (ii) for
General Revolving Loans which are (A) Prime Rate Loans, $500,000, with minimum
increments thereafter of $100,000, or (B) Eurodollar Loans, $1,000,000, with
minimum increments thereafter of $1,000,000.
"Money Market Rate Loan" shall mean a Swing Line Revolving Loan bearing
interest at a Quoted Rate.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc. and its
successors.
"Multiemployer Plan" shall mean a multiemployer plan, as defined in
section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing an obligation to make contributions or has within any of the
preceding three plan years made or accrued an obligation to make contributions.
"Multiple Employer Plan" shall mean an employee benefit plan, other
than a Multiemployer Plan, to which the Borrower or any ERISA Affiliate, and one
or more employers other than the Borrower or an ERISA Affiliate, is making or
accruing an obligation to make contributions or, in the event that any such plan
has been terminated, to which the Borrower or an ERISA Affiliate made or accrued
an obligation to make contributions during any of the five plan years preceding
the date of termination of such plan.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (i) reasonable and customary expenses
of sale incurred in connection with such Asset Sale, and other reasonable and
customary fees and expenses incurred, and all state, and local taxes paid or
reasonably estimated to be payable by such person, as a consequence of such
Asset Sale and the payment of principal, premium and interest of Indebtedness
secured by the asset which is the subject of the Asset Sale and required to be,
and which is, repaid under the terms thereof as a result of such Asset Sale,
(ii) amounts of any distributions payable to holders of minority
12
interests in the relevant person or in the relevant property or assets and (iii)
incremental income taxes paid or payable as a result thereof.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
"Note" shall mean a General Revolving Note or a Swing Line Revolving
Note, as applicable.
"Notice of Borrowing" shall have the meaning provided in section
2.2(a).
"Notice of Continuation" shall have the meaning provided in section
2.8(a).
"Notice of Conversion" shall have the meaning provided in section 2.5.
"Notice Office" shall mean the office of the Administrative Agent at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Agency
Services (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or such other
office, located in a city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Borrower from time to time. Copies of
all notices and communications with the Administrative Agent shall also be sent
to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President, Corporate Banking, PNC Bank, National
Association, ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (telephone: (513)
▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇).
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing by the
Borrower to the Administrative Agent or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Participant" shall have the meaning provided in section 3.4(a).
"Payment Office" shall mean the office of the Administrative Agent at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Agency
Services (telephone: (▇▇▇) ▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or such other
office, located in a city in the United States Eastern Time Zone, as the
Administrative Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean and include any Acquisition as to
which all of the following conditions are satisfied:
(A) if it involves the acquisition of a person whose primary
business lines include computer consumables, LCD presentation products,
the provision of video conferencing equipment or other audio/visual
products or services, or the acquisition of assets comprising any such
lines of business (it being understood that secondary lines of business
may be included in any such acquisition):
(1) the pro forma ratio of
(x) the Consolidated Total Debt of the
Borrower and the Indebtedness which is to be incurred
to acquire, or which is being directly or indirectly
assumed in connection with the acquisition of, such
acquired business, on a combined basis, to
(y) the Borrower's Consolidated EBITDA and
the earnings before interest, taxes, depreciation and
amortization of the acquired business, on a combined
basis (but without giving effect to any credit for
unobtained or unrealized gains or any adjustments
13
to overhead in connection with such acquisition), as
determined on an annualized basis using a Testing
Period consisting of the current fiscal year to date
through the most recent fiscal quarter or fiscal
month for which financial information is available
and has been delivered to the Lenders (or for a
Testing Period consisting of the previous fiscal
year, if no financial information is then available
for the current fiscal year),
is not greater than 3.50 to 1.00 (or 3.25 to 1.00, in the case
of any Permitted Acquisition made after the second anniversary
of the Closing Date), such ratio being determined on a pro
forma basis, as if such acquisition had been completed at the
beginning of such Testing Period, and any such Indebtedness
had been outstanding for such Testing Period; and
(2) at least five Business Days prior to the
completion of such transaction the Borrower has delivered to
the Lenders a certificate of a responsible financial or
accounting officer of the Borrower demonstrating, in
reasonable detail, the computation of such pro forma ratio; or
(B) if such transaction does not meet the requirements of
clause (A) above, the cumulative aggregate consideration for such
transaction and all other Permitted Acquisitions effected by the
Borrower and its Subsidiaries after the Effective Date pursuant to this
clause (B) does not exceed $5,000,000 (it being understood that the
measurement of the aggregate consideration for a transaction includes
all payments and/or exchanges of stock, cash, securities and/or other
property and the principal amount of any assumed Indebtedness and
(without duplication) any Indebtedness of any acquired person or
persons), unless the Required Lenders specifically approve or consent
to such transaction in writing; and
(C) such transaction is not actively opposed by the Board of
Directors (or similar governing body) of the selling person or the
person whose equity interests are to be acquired, unless all of the
Lenders consent to such transaction;
provided, that the term Permitted Acquisition specifically excludes the
Acquisitions permitted by section 9.2(a) and any loans, advances or minority
investments otherwise permitted pursuant to section 9.5.
"Permitted Liens" shall mean Liens permitted by section 9.3.
"person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute by) the Borrower or a Subsidiary of the
Borrower or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower, or a Subsidiary of
the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in section 6.1(c).
"PNC" shall mean PNC Bank, National Association, a national banking
association, together with its successors and assigns.
"Prime Rate" shall mean, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at
all times be equal to the greater of (i) the rate of interest established by PNC
in Pittsburgh, Pennsylvania, from time to time, as its prime rate, whether or
not publicly announced, which interest rate may or may not be the lowest rate
charged by it for commercial loans or other extensions of credit; and (ii) the
Federal Funds Effective Rate in effect from time to time plus 1/2 of 1% per
annum.
14
"Prime Rate Loan" shall mean each Loan bearing interest at the rate
provided in section 2.7(a).
"Prohibited Transaction" shall mean a transaction with respect to a
Plan that is prohibited under section 4975 of the Code or section 406 of ERISA
and not exempt under section 4975 of the Code or section 408 of ERISA.
"Quoted Rate" shall have the meaning provided in section 2.2(b).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any person shall mean all of the right, title and
interest of such person in and to land, improvements and fixtures, including
Leaseholds.
"Redeemable Stock" shall mean with respect to any person any capital
stock or similar equity interests of such person that (i) is by its terms
subject to mandatory redemption, in whole or in part, pursuant to a sinking
fund, scheduled redemption or similar provisions, at any time prior to the
Maturity Date; or (ii) otherwise is required to be repurchased or retired on a
scheduled date or dates, upon the occurrence of any event or circumstance, at
the option of the holder or holders thereof, or otherwise, at any time prior to
the Maturity Date, other than any such repurchase or retirement occasioned by a
"change of control" or similar event.
"Reference Banks" shall mean (i) PNC and (ii) any other Lender or
Lenders selected as a Reference Bank by the Administrative Agent and the
Required Lenders, provided, that if any of such Reference Banks is no longer a
Lender, such other Lender or Lenders as may be selected by the Administrative
Agent acting on instructions from the Required Lenders.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Reportable Event" shall mean an event described in section 4043 of
ERISA or the regulations thereunder with respect to a Plan, other than those
events as to which the notice requirement is waived under subsections .22, .23,
.25, .27, .28, .29, .30, .31, .32, .34, .35, .62, .63, .64, .65 or .67 of PBGC
Regulation section 4043.
"Required Lenders" shall mean Non-Defaulting Lenders whose outstanding
General Revolving Loans and Unutilized General Revolving Commitments constitute
at least 66+2/3% of the sum of the total outstanding General Revolving Loans and
Unutilized General Revolving Commitments of Non-Defaulting Lenders (provided
that, for purposes hereof, neither the Borrower, nor any of its Affiliates,
shall be included in (i) the Lenders holding such amount of such General
Revolving Loans or having such amount of such Unutilized General Revolving
Commitments, or (ii) determining the aggregate unpaid principal amount of such
General Revolving Loans or such Unutilized General Revolving Commitments).
"Sale and Lease-Back Transaction" shall mean any arrangement with any
person providing for the leasing by the Borrower or any Subsidiary of the
Borrower of any property (except for temporary leases for a term, including any
renewal thereof, of not more than one year and except for leases between the
Borrower and a Subsidiary or between Subsidiaries), which property has been or
is to be sold or transferred by the Borrower or such Subsidiary to such person.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., and its successors.
"SEC" shall mean the United States Securities and Exchange Commission.
15
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Section 5.4(b)(ii) Certificate" shall have the meaning provided in
section 5.4(b)(ii).
"Security Agreement" shall have the meaning provided in section 6.1(c).
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement and each other document pursuant to which any Lien or security
interest is granted by any Credit Party to the Collateral Agent as security for
any of the Obligations.
"Standard Permitted Liens" shall mean the following:
(i) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of the
Borrower) have been established;
(ii) Liens in respect of property or assets imposed by law
which were incurred in the ordinary course of business, such as
carriers', warehousemen's, landlord's, materialmen's and mechanics'
Liens ,and other similar Liens arising in the ordinary course of
business, which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof
in the operation of the business of the Borrower or any Subsidiary;
(iii) Liens created by the Original Credit Agreement or the
other Credit Documents referred to therein, or created by this
Agreement and the other Credit Documents referred to herein;
(iv) Liens (x) in existence on the Closing Date which are
listed, and the Indebtedness secured thereby and the property subject
thereto on the Closing Date described, in Annex IV, or (y) arising out
of the refinancing, extension, renewal or refunding of any Indebtedness
secured by any such Liens, provided that the principal amount of such
Indebtedness is not increased and such Indebtedness is not secured by
any additional assets;
(v) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under section
10.1(g);
(vi) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; and mechanic's Liens, carrier's Liens, and other Liens to
secure the performance of tenders, statutory obligations, contract
bids, government contracts, performance and return-of-money bonds and
other similar obligations, incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money), whether pursuant to statutory requirements, common law or
consensual arrangements;
(vii) Leases or subleases granted to others not interfering in
any material respect with the business of the Borrower or any of its
Subsidiaries and any interest or title of a lessor under any lease not
in violation of this Agreement;
(viii) easements, rights-of-way, zoning or deed restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries
considered as an entirety; and
16
(ix) Liens arising from financing statements regarding
property subject to leases not in violation of the requirements of this
Agreement, provided that such Liens are only in respect of the property
subject to, and secure only, the respective lease (and any other lease
with the same or an affiliated lessor);
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions or other
requirements for drawing could then be met).
"Subsidiary" of any person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantor" shall mean any Subsidiary which is a party to
the Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in section
6.1(c).
"Subordinated Indebtedness" shall mean any Indebtedness which has been
subordinated to the Obligations in such manner and to such extent as the
Administrative Agent (acting on instructions from the Required Lenders) may
require.
"Swing Line Lender" shall mean PNC and its successors and assigns
having the Swing Line Revolving Commitment.
"Swing Line Participation Amount" shall have the meaning provided in
section 2.6(b).
"Swing Line Revolving Commitment" shall mean, with respect to the Swing
Line Revolving Lender, the amount, if any, set forth opposite the Swing Line
Lender's name in Annex I as its "Swing Line Revolving Commitment" as the same
may be reduced from time to time pursuant to sections 4.2, 4.3 and/or 10.2 or
adjusted from time to time as a result of assignments to or from the Swing Line
Lender pursuant to section 12.4.
"Swing Line Revolving Facility" shall mean the credit facility
evidenced by the Swing Line Revolving Commitment.
"Swing Line Revolving Loan" shall have the meaning provided in section
2.1(b).
"Swing Line Revolving Note" shall have the meaning provided in section
2.4(a).
"Testing Period" shall mean (i) for determinations made with reference
to any period ended December 31, 1998, or earlier, amounts determined on an
annualized basis based on the fiscal year to date through the fiscal quarter
then last ended, and (ii) for any determinations made thereafter a single period
consisting of the four consecutive fiscal quarters of the Borrower then last
ended (whether or not such quarters are all within the same fiscal year), except
that if a particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall consist of
the particular fiscal period or periods of the Borrower then last ended which
are so indicated in such provision.
"Total Commitment" shall mean all of the Commitments hereunder.
"Total General Revolving Commitment" shall mean the sum of the General
Revolving Commitments of the Lenders.
17
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Prime Rate Loan, a Eurodollar Loan
or a Money Market Rate Loan.
"UCC" shall mean the Uniform Commercial Code as at the time in effect
in any applicable jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." each means United States of America.
"Unpaid Drawing" shall have the meaning provided in section 3.3(a).
"Unutilized General Revolving Commitment" for any Lender at any time
shall mean the excess of (i) such Lender's General Revolving Commitment at such
time over (ii) the sum of (x) the principal amount of General Revolving Loans
made by such Lender and outstanding at such time and (y) such Lender's General
Revolving Facility Percentage of Letter of Credit Outstandings at such time.
"Unutilized Total General Revolving Commitment" shall mean, at any
time, the excess of (i) the Total General Revolving Commitment at such time over
(ii) the sum of (x) the aggregate principal amount of all General Revolving
Loans then outstanding plus (y) the aggregate Letter of Credit Outstandings at
such time.
"Unutilized Swing Line Revolving Commitment" shall mean, at any time,
the excess of (i) the Swing Line Revolving Commitment at such time over (ii) the
aggregate principal amount of all Swing Line Revolving Loans then outstanding.
"Value" shall mean, with respect to a Sale and Lease-Back Transaction,
as of any particular time, the amount equal to the greater of (i) the net
proceeds of the sale or transfer of the property sold or transferred and then
leased pursuant to such Sale and Lease-Back Transaction or (ii) the fair value
in the opinion of the Borrower, acting in good faith, of such property at the
time of entering into such Sale and Lease-Back Transaction.
"Wholly-Owned Subsidiary" shall mean each Subsidiary of the Borrower at
least 95% of whose capital stock, equity interests and partnership interests,
other than director's qualifying shares or similar interests, are owned directly
or indirectly by the Borrower.
"Written", "written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile transmission,
telegraph or cable.
1.2. Computation of Time Periods. In this Agreement in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3. Accounting Terms. Except as otherwise specifically provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision of section 8 or 9 hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof to such provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any such provision hereof for
such purposes), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance with the requirements of this
Agreement.
18
1.4. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any person shall be construed to include such person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to sections, Annexes
and Exhibits shall be construed to refer to sections of, and Annexes and
Exhibits to, this Agreement, and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all real
property, tangible and intangible assets and properties, including cash,
securities, accounts and contract rights, and interests in any of the foregoing.
1.5. Borrower May Rely on Administrative Agent. Whenever the Borrower
receives a written notice or other written communication from the Administrative
Agent which purports to be on behalf of the Required Lenders or all Lenders, the
Borrower may rely upon such notice or other communication as being authorized by
the Required Lenders or all Lenders, as the case may be.
SECTION 2. AMOUNT AND TERMS OF LOANS.
2.1. Commitments for Loans. Subject to and upon the terms and
conditions herein set forth, each Lender severally agrees to make a loan or
loans (each a "Loan" and, collectively, the "Loans") to the Borrower, which
Loans shall be drawn, to the extent such Lender has a commitment under a
Facility, under the applicable Facility, as set forth below:
(a) General Revolving Facility. Loans under the General
Revolving Facility (each a "General Revolving Loan" and, collectively,
the "General Revolving Loans"): (i) may be incurred by the Borrower at
any time and from time to time on and after the Closing Date and prior
to the earlier of the Maturity Date or the date the Total General
Revolving Commitment is terminated; (ii) except as otherwise provided,
may, at the option of the Borrower, be incurred and maintained as, or
Converted into, General Revolving Loans which are Prime Rate Loans or
Eurodollar Loans, in each case denominated in Dollars, provided that
all General Revolving Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, consist of General
Revolving Loans of the same Type; (iii) may be repaid or prepaid and
reborrowed in accordance with the provisions hereof; (iv) may only be
made if after giving effect thereto the Unutilized Total General
Revolving Commitment exceeds the outstanding Swing Line Revolving
Loans; and (v) shall not exceed for any Lender at any time outstanding
that aggregate principal amount which, when added to the product at
such time of (A) such Lender's General Revolving Facility Percentage,
times (B) the aggregate Letter of Credit Outstandings, equals the
General Revolving Commitment of such Lender at such time.
(b) Swing Line Revolving Facility. Loans under the Swing Line
Revolving Facility (each a "Swing Line Revolving Loan" and,
collectively, the "Swing Line Revolving Loans"): (i) may be incurred by
the Borrower at any time and from time to time on and after the Closing
Date and prior to the earlier of the Maturity Date or the date the
Swing Line Commitment is terminated; (ii) shall be made by only by the
Swing Line Lender; (iii) shall be incurred only for working capital
requirements of the Borrower and its Subsidiaries; (iv) may only be
incurred and maintained as Prime Rate Loans or Money Market Rate Loans,
in each case denominated in Dollars; (v) may be repaid or prepaid and
reborrowed in accordance with the provisions hereof; (vi) may only be
made if after giving effect thereto the Unutilized Total General
Revolving Commitment exceeds the outstanding Swing Line Revolving
Loans; and (vii) shall not exceed for the Swing Line Lender at any time
outstanding its Swing Line Revolving Commitment at such time.
19
2.2. Procedures for Borrowing. (a) Notice of Borrowing. Whenever the
Borrower desires to incur Loans, it shall give the Administrative Agent at its
Notice Office,
(A) Borrowings of Eurodollar Loans: prior to 11:00 A.M. (local
time at its Notice Office), at least three Business Days' prior written
or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) of
each Borrowing of Eurodollar Loans to be made hereunder,
(B) Borrowings of Prime Rate Loans: prior to 11:00 A.M. (local
time at its Notice Office) on the proposed date thereof written or
telephonic notice (in the case of telephonic notice, promptly confirmed
in writing if so requested by the Administrative Agent) of each
Borrowing of Prime Rate Loans to be made hereunder, or
(C) Borrowings under the Swing Line Revolving Facility of
Money Market Rate Loans: in the case of any Borrowing under the Swing
Line Revolving Facility of a Money Market Rate Loan to be made
hereunder, if the Administrative Agent shall have furnished the
Borrower with a Quoted Rate therefor, prior to 11:00 A.M. (local time
at its Notice Office) on the proposed date thereof (which shall be
within such period as the Administrative Agent shall have specified for
such Quoted Rate) written or telephonic notice thereof (in the case of
telephonic notice, promptly confirmed in writing if so requested by the
Administrative Agent).
Each such notice (each such notice, a "Notice of Borrowing") shall (if requested
by the Administrative Agent to be confirmed in writing), be substantially in the
form of Exhibit B-1, and in any event shall be irrevocable and shall specify:
(i) the Facility under which such Borrowing is to be incurred; (ii) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing;
(iii) the date of the Borrowing (which shall be a Business Day); (iv) whether
the Borrowing shall consist of Prime Rate Loans, Eurodollar Loans or (in the
case of the Swing Line Revolving Facility) a Money Market Rate Loan; (v) if the
requested Borrowing consists of Eurodollar Loans, the Interest Period to be
initially applicable thereto; and (vi) if the requested Borrowing is of a Money
Market Rate Loan under the Swing Line Revolving Facility, the maturity date
thereof (which shall not be more than 30 days and shall conform to the quotation
by the Administrative Agent as provided below) and the Quoted Rate applicable
thereto. The Administrative Agent shall promptly give each Lender which has a
Commitment under any applicable Facility written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing under such Facility,
of such Lender's proportionate share thereof and of the other matters covered by
the Notice of Borrowing relating thereto.
(b) Borrowings of Money Market Rate Loans. Whenever the Borrower
proposes to submit a Notice of Borrowing with respect to a Swing Line Revolving
Loan which will be a Money Market Rate Loan, it will prior to submitting such
Notice of Borrowing notify the Administrative Agent of its intention and request
the Administrative Agent to quote a fixed or floating interest rate (the "Quoted
Rate") to be applicable thereto prior to the proposed maturity thereof (which
shall not exceed 30 days). The Administrative Agent will immediately so notify
the Swing Line Lender, and if the Swing Line Lender is agreeable to a particular
interest rate for the proposed maturity of such Money Market Rate Loan if such
Loan is made on or prior to a specified date, the Administrative Agent shall
quote such interest rate to the Borrower as the Quoted Rate applicable to such
proposed Money Market Rate Loan if made on or before such specified date for a
maturity as so proposed by the Borrower. The Swing Line Lender contemplates that
any Quoted Rate will be a rate of interest which reflects a margin corresponding
to the Applicable Eurodollar Margin in effect at the time of quotation of any
Quoted Rate, over the then prevailing Federal Funds Effective Rate, commercial
paper, call money, overnight repurchase or other commonly quoted interest rate,
or the Swing Line Lender's average fully absorbed cost of short term funds, in
each case as selected and determined by the Swing Line Lender. Nothing herein
shall be deemed to permit any Lender other than the Swing Line Lender any right
of approval with respect to a Quoted Rate.
(c) Actions by Administrative Agent on Telephone Notice. Without in any
way limiting the obligation of the Borrower to confirm in writing any telephonic
notice permitted to be given hereunder, the Administrative Agent may act prior
to receipt of written confirmation without liability upon the basis of such
telephonic notice believed by
20
the Administrative Agent in good faith to be from an Authorized Officer of the
Borrower entitled to give telephonic notices under this Agreement on behalf of
the Borrower. In each such case, the Administrative Agent's record of the terms
of such telephonic notice shall be conclusive absent manifest error.
(d) Minimum Borrowing Amounts, etc. The aggregate principal amount of
each Borrowing by the Borrower shall not be less than the Minimum Borrowing
Amount. More than one Borrowing may be incurred by the Borrower on any day under
the same and/or any different Facility, provided that (i) if there are two or
more Borrowings on a single day by the Borrower under the same Facility which
consist of Eurodollar Loans, each such Borrowing shall have a different initial
Interest Period, and (ii) at no time shall there be more than 12 Borrowings of
Eurodollar Loans outstanding hereunder.
(e) Pro Rata Borrowings. All Borrowings under a Facility shall be made
by the Lenders having Commitments under such Facility pro rata on the basis of
their respective Commitments under such Facility. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its Commitment hereunder.
2.3. Disbursement of Funds. (a) No later than 2:00 P.M. (local time at
the Payment Office) on the date specified in each Notice of Borrowing relating
to Eurodollar Loans, and no later than 2:00 P.M. (local time at the Payment
Office) on the date specified in each Notice of Borrowing relating to Prime Rate
Loans, each Lender will make available its pro rata share, if any, of each
Borrowing requested to be made on such date in the manner provided below. All
amounts shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent by such Lender and the Administrative
Agent has made available same to the Borrower, the Administrative Agent shall be
entitled to recover such corresponding amount from such Lender. If such Lender
does not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Borrower,
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from such Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds
Effective Rate or (y) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with section 2.7, for the respective Loans
(but without any requirement to pay any amounts in respect thereof pursuant to
section 2.10).
(b) Nothing herein and no subsequent termination of the Commitments
pursuant to section 4.2 or 4.3 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments hereunder and in existence from time to
time or to prejudice any rights which the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
2.4. Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made to it by each Lender shall be evidenced (i) a
General Revolving Loan, by a promissory note of the Borrower substantially in
the form of Exhibit A-1 with blanks appropriately completed in conformity
herewith (each a "General Revolving Note" and, collectively, the "General
Revolving Notes"), and (ii) if a Swing Line Revolving Loan, by a promissory note
of the Borrower substantially in the form of Exhibit A-2 with blanks
appropriately completed in conformity herewith (the "Swing Line Revolving
Note").
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(b) The General Revolving Note issued by the Borrower to a Lender with
a General Revolving Commitment shall: (i) be executed by the Borrower; (ii) be
payable to the order of such Lender and be dated on or prior to the Closing Date
(or if later, the date the of the first General Revolving Loan which is
outstanding thereunder); (iii) be payable in the principal amount of General
Revolving Loans evidenced thereby; (iv) mature on the Maturity Date; (v) bear
interest as provided in section 2.7 in respect of the Prime Rate Loans or
Eurodollar Loans, as the case may be, evidenced thereby; (vi) be subject to
mandatory prepayment as provided in section 5.2; and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) The Swing Line Revolving Note issued by the Borrower to the Swing
Line Lender shall: (i) be executed by the Borrower; (ii) be payable to the order
of such Lender and be dated on or prior to the Closing Date (or if later, the
date the of the first Swing Line Revolving Loan which is outstanding
thereunder); (iii) be payable in the principal amount of Swing Line Revolving
Loans evidenced thereby; (iv) mature as to any Swing Line Revolving Loan on the
maturity date therefor (which shall not in any event exceed 30 days) specified
in the Notice of Borrowing related thereto; (v) bear interest as provided in
section 2.7 in respect of the Prime Rate Loans or Money Market Rate Loans
evidenced thereby; (vi) be subject to mandatory prepayment as provided in
section 5.2; and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of its Note, endorse on the reverse side thereof or the grid attached
thereto the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation or any error in any such notation shall not affect the
Borrower's obligations in respect of such Loans.
2.5. Conversions of General Revolving Loans. The Borrower shall have
the option to Convert on any Business Day all or a portion at least equal to the
applicable Minimum Borrowing Amount of the outstanding principal amount of its
General Revolving Loans of one Type into a Borrowing or Borrowings pursuant to
the same Facility of another Type of Loans which can be made pursuant to such
Facility, provided that: (i) no partial Conversion of a Borrowing of Eurodollar
Loans shall reduce the outstanding principal amount of the Eurodollar Loans made
pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable
thereto; (ii) any Conversion of Eurodollar Loans into Prime Rate Loans shall be
made on, and only on, the last day of an Interest Period for such Eurodollar
Loans; (iii) Prime Rate Loans may only be Converted into Eurodollar Loans if no
Default under section 10.1(a) or Event of Default is in existence on the date of
the Conversion unless the Required Lenders otherwise agree; and (iv) Borrowings
of Eurodollar Loans resulting from this section 2.5 shall conform to the
requirements of section 2.2(d). Each such Conversion shall be effected by the
Borrower giving the Administrative Agent at its Notice Office, prior to 11:00
A.M. (local time at such Notice Office), at least three Business Days' (or prior
to 11:00 A.M. (local time at such Notice Office) same Business Day's, in the
case of a Conversion into Prime Rate Loans) prior written notice (or telephonic
notice promptly confirmed in writing if so requested by the Administrative
Agent) (each a "Notice of Conversion"), substantially in the form of Exhibit
B-2, specifying the Loans to be so Converted, the Type of Loans to be Converted
into and, if to be Converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed Conversion affecting any of its
Loans. For the avoidance of doubt, the prepayment or repayment of any General
Revolving Loans out of the proceeds of other General Revolving Loans by the
Borrower is not considered a Conversion of General Revolving Loans into other
General Revolving Loans.
2.6. Refunding of, or Participation in, Swing Line Revolving Loans. (a)
If any Event of Default exists, the Swing Line Lender may, in its sole and
absolute discretion, direct that the Swing Line Revolving Loans owing to it be
refunded by delivering a notice to such effect to the Administrative Agent,
specifying the aggregate principal amount thereof (a "Notice of Swing Line
Refunding"). Promptly upon receipt of a Notice of Swing Line Refunding, the
Administrative Agent shall give notice of the contents thereof to the Lenders
with General Revolving Commitments and, unless an Event of Default specified in
section 10.1(h) in respect of the Borrower has occurred, the Borrower. Each such
Notice of Swing Line Refunding shall be deemed to constitute delivery by the
Borrower of a Notice of Borrowing requesting General Revolving Loans consisting
of Prime Rate Loans in the amount of the Swing Line Revolving Loans to which
such Notice of Swing Line Refunding relates. Each Lender with a General
Revolving Commitment (including the Swing Line Lender giving the Notice of Swing
Line Refunding) hereby unconditionally
22
agrees (notwithstanding that any of the conditions specified in section 6.2
hereof or elsewhere in this Agreement shall not have been satisfied, but subject
to the provisions of paragraph (b) and (d) below) to make a General Revolving
Loan to the Borrower in an amount equal to such Lender's General Revolving
Facility Percentage of the aggregate amount of the Swing Line Revolving Loans to
which such Notice of Swing Line Refunding relates. Each such Lender shall make
the amount of such General Revolving Loan available to the Administrative Agent
in immediately available funds at the Payment Office not later than 2:00 P.M.
(local time at the Payment Office), if such notice is received by such Lender
prior to 11:00 A.M. (local time at its Domestic Lending Office), or not later
than 2:00 P.M. (local time at the Payment Office) on the next Business Day, if
such notice is received by such Lender after such time. The proceeds of such
General Revolving Loans shall be made immediately available to the Swing Line
Lender giving such Notice of Swing Line Refunding and applied by it to repay the
principal amount of the Swing Line Revolving Loans to which such Notice of Swing
Line Refunding related. The Borrower irrevocably and unconditionally agrees
that, notwithstanding anything to the contrary contained in this Agreement,
General Revolving Loans made as herein provided in response to a Notice of Swing
Line Refunding shall constitute General Revolving Loans hereunder consisting of
Prime Rate Loans.
(b) If prior to the time a General Revolving Loan would otherwise have
been made as provided above as a consequence of a Notice of Swing Line
Refunding, any of the events specified in section 10.1(h) shall have occurred in
respect of the Borrower or one or more of the Lenders with General Revolving
Commitments shall determine that it is legally prohibited from making a General
Revolving Loan under such circumstances, each Lender (other than the Swing Line
Lender giving the Notice of Swing Line Refunding), or each Lender (other than
such Swing Line Lender) so prohibited, as the case may be, shall, on the date
such General Revolving Loan would have been made by it (the "Purchase Date"),
purchase an undivided participating interest in the outstanding Swing Line
Revolving Loans to which such Notice of Swing Line Refunding related, in an
amount (the "Swing Line Participation Amount") equal to such Lender's General
Revolving Facility Percentage of such Swing Line Revolving Loans. On the
Purchase Date, each such Lender or each such Lender so prohibited, as the case
may be, shall pay to the Swing Line Lender, in immediately available funds, such
Lender's Swing Line Participation Amount, and promptly upon receipt thereof the
Swing Line Lender shall, if requested by such other Lender, deliver to such
Lender a participation certificate, dated the date of the Swing Line Lender's
receipt of the funds from, and evidencing such Lender's participating interest
in such Swing Line Revolving Loans and its Swing Line Participation Amount in
respect thereof. If any amount required to be paid by a Lender to the Swing Line
Lender pursuant to the above provisions in respect of any Swing Line
Participation Amount is not paid on the date such payment is due, such Lender
shall pay to the Swing Line Lender on demand interest on the amount not so paid
at the overnight Federal Funds Effective Rate from the due date until such
amount is paid in full.
(c) Whenever, at any time after the Swing Line Lender has received from
any other Lender such Lender's Swing Line Participation Amount, the Swing Line
Lender receives any payment from or on behalf of the Borrower on account of the
related Swing Line Revolving Loans, the Swing Line Lender will promptly
distribute to such Lender its General Revolving Facility Percentage of such
payment on account of its Swing Line Participation Amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender's participating interest was outstanding and funded);
provided, however, that in the event such payment received by the Swing Line
Lender is required to be returned, such Lender will return to the Swing Line
Lender any portion thereof previously distributed to it by the Swing Line
Lender.
(d) Each Lender's obligation to make General Revolving Loans and/or to
purchase participations in connection with a Notice of Swing Line Refunding
(which shall in all events be within such Lender's UnutilizedGeneral Revolving
Commitment, taking into account all outstanding participations in connection
with Swing Line Refundings) shall be subject to the conditions that
(i) such Lender shall have received a Notice of Swing Line
Refunding complying with the provisions hereof; and
23
(ii) at the time the Swing Line Revolving Loans which are the
subject of such Notice of Swing Line Refunding were made, the Swing
Line Lender making the same had no actual written notice from another
Lender that an Event of Default had occurred and was continuing);
but otherwise shall be absolute and unconditional, shall be solely for the
benefit of the Swing Line Lender which gives such Notice of Swing Line
Refunding, and shall not be affected by any circumstance, including, without
limitation, (A) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against any other Lender, any Credit Party, or any
other person, or any Credit Party may have against any Lender or other person,
as the case may be, for any reason whatsoever; (B) the occurrence or continuance
of a Default or Event of Default; (C) any event or circumstance involving a
Material Adverse Effect upon the Borrower; (D) any breach of any Credit Document
by any party thereto; or (E) any other circumstance, happening or event, whether
or not similar to any of the foregoing.
2.7. Interest. (a) Interest Rate for Prime Rate Loans. During such
periods as a General Revolving Loan or a Swing Line Revolving Loan is a Prime
Rate Loan, the unpaid principal amount thereof shall bear interest at a
fluctuating rate per annum which shall at all times be equal to the Prime Rate
in effect from time to time plus the Applicable Prime Rate Margin (as defined
below) in effect from time to time.
(b) Interest Rate for Eurodollar Loans. During such periods as a
General Revolving Loan is a Eurodollar Loan, the unpaid principal amount thereof
shall bear interest at a rate per annum which shall at all times during any
Interest Period applicable thereto be the Applicable Eurodollar Margin (as
defined below) for such Eurodollar Loan plus the relevant Eurodollar Rate for
such Interest Period.
(c) Interest Rate for Money Market Rate Loans. During such periods as a
Swing Line Revolving Loan is a Money Market Rate Loan, the unpaid principal
amount thereof shall bear interest at the rate per annum which shall be equal to
the Quoted Rate therefor.
(d) Default Interest. Notwithstanding the above provisions, if a
Default under section 10.1(a) or Event of Default is in existence, all
outstanding amounts of principal and, to the extent permitted by law, all
overdue interest, in respect of each Loan shall bear interest, payable on
demand, at a fluctuating rate per annum equal to 2% per annum above the interest
rate which would be applicable under section 2.7(a) to Prime Rate Loans in
effect from time to time. If any amount (other than the principal of and
interest on the Loans) payable by the Borrower under the Credit Documents is not
paid when due, such amount shall bear interest, payable on demand, at a
fluctuating rate per annum equal 2% per annum above the interest rate which
would be applicable under section 2.7(a) to Prime Rate Loans in effect from time
to time.
(e) Accrual and Payment of Interest. Interest shall accrue from and
including the date of any Borrowing to but excluding the date of any prepayment
or repayment thereof and shall be payable:
(i) in the case of any Swing Line Revolving Loan, (A) at the
maturity date thereof, which shall in any event be less than 30 days,
(B) on any prepayment (on the amount prepaid), and (C) after maturity
(whether by acceleration or otherwise), on demand; and
(ii) in the case of any General Revolving Loan, (A) which is a
Prime Rate Loan, monthly in arrears on the last Business Day of each
calendar month, (B) which is a Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on the dates which are successively
three months after the commencement of such Interest Period, and (C)
on any repayment, prepayment or Conversion (on the amount repaid,
prepaid or Converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(f) Computations of Interest. All computations of interest hereunder
shall be made in accordance with section 12.7(b).
24
(g) Information as to Interest Rates. Each Reference Bank agrees to
furnish the Administrative Agent timely information for the purpose of
determining the Eurodollar Rate for any Borrowing consisting of Eurodollar
Loans. If any one or more of the Reference Banks shall not timely furnish such
information, the Administrative Agent shall determine the Eurodollar Rate on the
basis of timely information furnished by the remaining Reference Banks. The
Administrative Agent upon determining the interest rate for any Borrowing shall
promptly notify the Borrower (on behalf of any applicable Borrower) and the
Lenders thereof.
(h) Interest Margins. As used herein, the term "Applicable Prime Rate
Margin", as applied to any Loan which is a Prime Rate Loan, and the term
"Applicable Eurodollar Margin", as applied to any General Revolving Loan which
is a Eurodollar Loan, means the particular rate per annum determined by the
Administrative Agent in accordance with the Pricing Grid Table which appears
below, based on the Borrower's ratio of Consolidated Total Debt to Consolidated
EBITDA and such Pricing Grid Table, and the following provisions:
(i) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Prime Rate Margin for General
Revolving Loans will be zero basis points per annum and the Applicable
Eurodollar Margin for General Revolving Loans will be 150 basis points
per annum.
(ii) Commencing with the fiscal quarter of the Borrower ended
on or nearest to December 31, 1998, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Eurodollar Margin for any Eurodollar Loan in accordance with
the Pricing Grid Table, based on the Borrower's ratio of (x)
Consolidated Total Debt as of the end of the fiscal quarter, to (y)
Consolidated EBITDA for the Testing Period ended on the last day of the
fiscal quarter, and identified in such Pricing Grid Table. Changes in
the Applicable Eurodollar Margin based upon changes in such ratio shall
become effective on the first day of the month following the receipt by
the Administrative Agent pursuant to section 8.1(a) or (b) of the
financial statements of the Borrower, accompanied by the certificate
and calculations referred to in section 8.1(c), demonstrating the
computation of such ratio, based upon the ratio in effect at the end of
the applicable period covered (in whole or in part) by such financial
statements.
(iii) Notwithstanding the above provisions, during any period
when (A) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (B)
a Default under section 10.1(a) has occurred and is continuing, or (C)
an Event of Default has occurred and is continuing, the Applicable
Eurodollar Margin shall be the highest rate per annum indicated
therefor in the Pricing Grid Table, regardless of the Borrower's ratio
of Consolidated Total Debt to Consolidated EBITDA at such time.
(iv) Any changes in the Applicable Eurodollar Margin shall be
determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
2.7(h) shall be conclusive and binding absent manifest error.
25
PRICING GRID TABLE
(expressed in basis points)
---------------------------------------------------------------------------------------------------------------
Ratio of Applicable Applicable
Consolidated Total Debt Eurodollar Margin Prime Rate
to for General Margin Applicable
Tier Consolidated EBITDA Revolving Loans Commitment
Fee Rate
-------------------------------------------------------------------------------------------------------------------
V > or = 3.20 to 1.00 200.00 50.00 37.50
-------------------------------------------------------------------------------------------------------------------
IV > or = 2.40 to 1.00 but <3.20 to 1.00 175.00 25.00 25.00
-------------------------------------------------------------------------------------------------------------------
III > or = 1.60 to 1.00 but <2.40 to 1.00 150.00 -0- 25.00
-------------------------------------------------------------------------------------------------------------------
II > or = .80 to 1.00 but <1.60 to 1.00 125.00 -0- 20.00
-------------------------------------------------------------------------------------------------------------------
I < .80 to 1.00 100.00 -0- 20.00
-------------------------------------------------------------------------------------------------------------------
2.8. Selection and Continuation of Interest Periods. (a) The Borrower
shall have the right
(x) at the time it gives a Notice of Borrowing or Notice of
Conversion in respect of the making of or Conversion into a Borrowing
of General Revolving Loans consisting of Eurodollar Loans, to select in
such Notice the Interest Period to be applicable to such Borrowing, and
(y) prior to 11:00 A.M. (local time at the Notice Office) on
the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of General Revolving Loans consisting of
Eurodollar Loans, to elect by giving the Administrative Agent written
or telephonic notice (in the case of telephonic notice, promptly
confirmed in writing if so requested by the Administrative Agent) to
Continue all or the Minimum Borrowing Amount of the principal amount of
such Loans as one or more Borrowings of Eurodollar Loans and to select
the Interest Period to be applicable to any such Borrowing (any such
notice, a "Notice of Continuation"),
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six month period; provided, that notwithstanding anything to the contrary
contained above, the Borrower's right to select an Interest Period or to effect
any Continuation shall be subject to the applicable provisions of section 2.10
and to the following:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (the date
of a Borrowing resulting from a Conversion or Continuation shall be the
date of such Conversion or Continuation) and each Interest Period
occurring thereafter in respect of such Borrowing shall commence on the
day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
26
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(iv) no Interest Period for any Eurodollar Loan may be
selected which would end after the Maturity Date;
(v) each Borrowing of Eurodollar Loans resulting from any
Continuation shall be in at least the Minimum Borrowing Amount
applicable thereto; and
(vi) no Interest Period may be elected at any time when a
Default under section 10.1(a) or an Event of Default is then in
existence unless the Required Lenders otherwise agree.
(b) If upon the expiration of any Interest Period the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to Convert such Borrowing to Prime Rate Loans
effective as of the expiration date of such current Interest Period.
2.9. Increased Costs, Illegality, etc. (a) In the event that (x) in the
case of clause (i) below, the Administrative Agent or (y) in the case of clauses
(ii) and (iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the
Effective Date affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs
or reductions in the amounts received or receivable hereunder in an
amount which such Lender deems material with respect to any Eurodollar
Loans (other than any increased cost or reduction in the amount
received or receivable resulting from the imposition of or a change in
the rate of taxes or similar charges) because of (x) any change since
the Effective Date in any applicable law, governmental rule,
regulation, guideline, order or request (whether or not having the
force of law), or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all
events, excluding reserves includable in the Eurodollar Rate pursuant
to the definition thereof) and/or (y) other circumstances adversely
affecting the interbank Eurodollar market or the position of such
Lender in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in
good faith with any change since the Effective Date in any law,
governmental rule, regulation, guideline or order, or the
interpretation or application thereof, or would conflict with any
thereof not having the force of law but with which such Lender
customarily complies or has become impracticable as a result of a
contingency occurring after the Effective Date which materially
adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on or promptly following such date or time
and (y) within 10 Business Days of the date on which such event no longer exists
give notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent
27
no longer exist, and any Notice of Borrowing or Notice of Conversion given by
the Borrower with respect to Eurodollar Loans which have not yet been incurred
or Converted shall be deemed rescinded by the Borrower or, in the case of a
Notice of Borrowing, shall, at the option of the Borrower, be deemed converted
into a Notice of Borrowing for Prime Rate Loans to be made on the date of
Borrowing contained in such Notice of Borrowing, (y) in the case of clause (ii)
above, the Borrower shall pay to such Lender, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender shall determine) as shall
be required to compensate such Lender, for such increased costs or reductions in
amounts receivable hereunder (a written notice as to the additional amounts owed
to such Lender, showing the basis for the calculation thereof, which basis must
be reasonable, submitted to the Borrower by such Lender shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in section 2.9(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in section 2.9(a)(ii) or (iii), the Borrower may (and in
the case of a Eurodollar Loan affected pursuant to section 2.9(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, by giving the Administrative Agent telephonic notice
(confirmed promptly in writing) thereof on the same date that the Borrower was
notified by a Lender pursuant to section 2.9(a)(ii) or (iii), cancel said
Borrowing, convert the related Notice of Borrowing into one requesting a
Borrowing of Prime Rate Loans or require the affected Lender to make its
requested Loan as a Prime Rate Loan, or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least one Business Day's notice to the Administrative
Agent, require the affected Lender to Convert each such Eurodollar Loan into a
Prime Rate Loan, provided that if more than one Lender is affected at any time,
then all affected Lenders must be treated the same pursuant to this section
2.9(b).
(c) If any Lender shall have determined that after the Effective Date,
the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged by law with the interpretation or administration thereof, or
compliance by such Lender or its parent corporation with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank, or comparable agency, in each case made
subsequent to the Effective Date, has or would have the effect of reducing by an
amount reasonably deemed by such Lender to be material the rate of return on
such Lender's or its parent corporation's capital or assets as a consequence of
such Lender's commitments or obligations hereunder to a level below that which
such Lender or its parent corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
its parent corporation's policies with respect to capital adequacy), then from
time to time, within 15 days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or its parent corporation for
such reduction. Each Lender, upon determining in good faith that any additional
amounts will be payable pursuant to this section 2.9(c), will give prompt
written notice thereof to the Borrower, which notice shall set forth, in
reasonable detail, the basis of the calculation of such additional amounts,
which basis must be reasonable, although the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
additional amounts pursuant to this section 2.9(c) upon the subsequent receipt
of such notice.
(d) Notwithstanding anything in this Agreement to the contrary, (i) no
Lender shall be entitled to compensation or payment or reimbursement of other
amounts under section 2.9 or 3.5 for any amounts incurred or accruing more than
180 days prior to the giving of notice to the Borrower of additional costs or
other amounts of the nature described in such sections, and (ii) no Lender shall
demand compensation for any reduction referred to in section 2.9(c) or payment
or reimbursement of other amounts under section 3.5 if it shall not at the time
be the general policy or practice of such Lender to demand such compensation,
payment or reimbursement in similar circumstances under comparable provisions of
other credit agreements.
2.10. Compensation. The Borrower shall compensate each applicable
Lender, upon its written request (which request shall set forth the detailed
basis for requesting and the method of calculating such compensation), for
28
all reasonable losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund its
Eurodollar Loans) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of (A)
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to section 2.9(a)), or (B) a Borrowing of a Money
Market Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing; (ii) if any repayment, prepayment or Conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period applicable thereto; (iii) if any repayment or prepayment of any of its
Money Market Rate Loans occurs on a date which is not the maturity date thereof;
(iv) if any prepayment of any of its Eurodollar Loans or Money Market Rate Loans
is not made on any date specified in a notice of prepayment given by the
Borrower; or (v) as a consequence of (x) any other default by the Borrower to
repay its Eurodollar Loans or Money Market Rate Loans when required by the terms
of this Agreement or (y) an election made pursuant to section 2.9(b).
2.11. Change of Lending Office; Replacement of Lenders. (a) Each Lender
agrees that, upon the occurrence of any event giving rise to the operation of
section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such Lender, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another Applicable Lending Office
for any Loans or Commitment affected by such event, provided that such
designation is made on such terms that such Lender and its Applicable Lending
Office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
section.
(b) If any Lender requests any compensation, reimbursement or other
payment under section 2.9(a)(ii) or (iii), 2.9(c) or 3.5 with respect to such
Lender, or if any Lender is a Defaulting Lender, then the Borrower may, at its
sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with the restrictions contained in section 12.4(b)), all its
interests, rights and obligations under this Agreement to an assignee that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Administrative Agent, which consent shall not be
unreasonably withheld or delayed, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts), and (iii) in the case
of any such assignment resulting from a claim for compensation, reimbursement or
other payments required to be made under section 2.9(a)(ii) or (iii), 2.9(c) or
3.5 with respect to such Lender, such assignment will result in a reduction in
such compensation, reimbursement or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
(c) Nothing in this section 2.11 shall affect or postpone any of the
obligations of the Borrower or the right of any Lender provided in section 2.9
or 3.5.
SECTION 3. LETTERS OF CREDIT.
3.1. Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time on or after the Closing Date and prior to the
date that is 15 Business Days prior to the Maturity Date to issue, for the
account of the Borrower or any of its Subsidiaries and in support of
(i) trade obligations incurred in the ordinary course of
business, or
(ii) worker compensation, liability insurance, releases of
contract retention obligations, contract performance guarantee
requirements and other bonding obligations of the Borrower or any such
Subsidiary
29
incurred in the ordinary course of its business, and such other standby
obligations of the Borrower and its Subsidiaries that are acceptable to
the Letter of Credit Issuer,
and subject to and upon the terms and conditions herein set forth, such Letter
of Credit Issuer agrees to issue from time to time, irrevocable documentary or
standby letters of credit denominated and payable in Dollars in such form as may
be approved by such Letter of Credit Issuer and the Administrative Agent (each
such letter of credit (and each Existing Letter of Credit described in section
3.1(d)), a "Letter of Credit" and collectively, the "Letters of Credit").
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $10,000,000, or (y) when
added to the aggregate principal amount of all Revolving Loans then outstanding,
an amount equal to the Total General Revolving Commitment at such time; (ii) no
individual Letter of Credit (other than any Existing Letter of Credit) shall be
issued which has an initial Stated Amount less than $100,000 unless such lesser
Stated Amount is acceptable to the Letter of Credit Issuer; and (iii) each
Letter of Credit shall have an expiry date (including any renewal periods)
occurring not later than the earlier of (A) one year from the date of issuance
thereof, unless a longer period is approved by the relevant Letter of Credit
Issuer and Lenders (other than any Defaulting Lender) holding a majority of the
Total General Revolving Commitment, and (B) 15 Business Days prior to the
Maturity Date, in each case on terms acceptable to the Administrative Agent and
the relevant Letter of Credit Issuer.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless either (i) such Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Lender or Lenders, including by cash collateralizing such
Defaulting Lender's or Lenders' General Revolving Facility Percentage of the
Letter of Credit Outstandings; or (ii) the issuance of such Letter of Credit,
taking into account the potential failure of the Defaulting Lender or Lenders to
risk participate therein, will not cause the Letter of Credit Issuer to incur
aggregate credit exposure hereunder with respect to General Revolving Loans and
Letter of Credit Outstandings in excess of its General Revolving Commitment, and
the Borrower has undertaken, for the benefit of such Letter of Credit Issuer,
pursuant to an instrument satisfactory in form and substance to such Letter of
Credit Issuer, not to thereafter incur Revolving Loans or Letter of Credit
Outstandings hereunder which would cause the Letter of Credit Issuer to incur
aggregate credit exposure hereunder with respect to General Revolving Loans and
Letter of Credit Outstandings in excess of its General Revolving Commitment.
(d) Annex VI hereto contains a description of all letters of credit
outstanding on, and to continue in effect after, the Closing Date. Each such
letter of credit issued by a bank that is or becomes a Lender under this
Agreement on the Effective Date (each, an "Existing Letter of Credit") shall
constitute a "Letter of Credit" for all purposes of this Agreement, issued, for
purposes of section 3.4(a), on the Closing Date, and the Borrower, the
Administrative Agent and the applicable Lenders hereby agree that, from and
after such date, the terms of this Agreement shall apply to such Letters of
Credit, superseding any other agreement theretofore applicable to them to the
extent inconsistent with the terms hereof.
3.2. Letter of Credit Requests: Notices of Issuance. (a) Whenever it
desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written or telephonic
notice (in the case of telephonic notice, promptly confirmed in writing if so
requested by the Administrative Agent) which, if in the form of written notice
shall be substantially in the form of Exhibit B-3, or transmit by electronic
communication (if arrangements for doing so have been approved by the Letter of
Credit Issuer), prior to 11:00 A.M. (local time at its Notice Office) at least
three Business Days (or such shorter period as may be acceptable to the relevant
Letter of Credit Issuer) prior to the proposed date of issuance (which shall be
a Business Day) (each a "Letter of Credit Request"), which Letter of Credit
Request shall include such supporting documents that such Letter of Credit
Issuer customarily requires in connection therewith (including, in the case of a
Letter of Credit for an account party other than the Borrower, an application
for, and if applicable a reimbursement agreement with respect to, such Letter of
Credit). Any such documents executed in connection with the issuance of a Letter
of Credit, including the Letter of Credit itself, are herein referred to as
"Letter of Credit Documents". In the event of any inconsistency between any of
the terms or provisions of any Letter of Credit Document and the terms and
provisions of this Agreement respecting
30
Letters of Credit, the terms and provisions of this Agreement shall control. The
Administrative Agent shall promptly notify each Lender of each Letter of Credit
Request.
(b) Each Letter of Credit Issuer shall provide to the Administrative
Agent and each other Lender a quarterly (or monthly if requested by the
Administrative Agent or any applicable Lender) summary describing each Letter of
Credit issued by such Letter of Credit Issuer and then outstanding and an
identification for the relevant period of the daily aggregate Letter of Credit
Outstandings represented by Letters of Credit issued by such Letter of Credit
Issuer. Each Letter of Credit Issuer shall, if requested by the Administrative
Agent or any other Lender, provide a copy of each Letter of Credit issued by it.
3.3. Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse (or cause any Subsidiary for whose account a Letter
of Credit was issued to reimburse) each Letter of Credit Issuer, by making
payment directly to such Letter of Credit Issuer in immediately available funds
at the payment office of such Letter of Credit Issuer, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
(each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date on which, such Letter of Credit
Issuer notifies the Borrower (or any such Subsidiary for whose account such
Letter of Credit was issued) of such payment or disbursement (which notice to
the Borrower (or such Subsidiary) shall be delivered reasonably promptly after
any such payment or disbursement), such payment to be made in Dollars, with
interest on the amount so paid or disbursed by such Letter of Credit Issuer, to
the extent not reimbursed prior to 1:00 P.M. (local time at the payment office
of the Letter of Credit Issuer) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date such
Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall
be the rate then applicable to Loans which are Prime Rate Loans (plus an
additional 2% per annum if not reimbursed by the third Business Day after the
date of such payment or disbursement), any such interest also to be payable on
demand.
(b) The Borrower's obligation under this section 3.3 to reimburse, or
cause a Subsidiary to reimburse, each Letter of Credit Issuer with respect to
Unpaid Drawings (including, in each case, interest thereon) shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have or have
had against such Letter of Credit Issuer, the Administrative Agent, any other
Letter of Credit Issuer or any Lender, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing, provided,
however that the Borrower shall not be obligated to reimburse, or cause a
Subsidiary to reimburse, a Letter of Credit Issuer for any wrongful payment made
by such Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of
such Letter of Credit Issuer.
3.4. Letter of Credit Participations. (a) Immediately upon the issuance
by a Letter of Credit Issuer of any Letter of Credit (and on the Closing Date
with respect to any Existing Letter of Credit), such Letter of Credit Issuer
shall be deemed to have sold and transferred to each Lender with a General
Revolving Commitment, and each such Lender (each a "Participant") shall be
deemed irrevocably and unconditionally to have purchased and received from such
Letter of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's General Revolving Facility
Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder, the obligations of the Borrower under this Agreement
with respect thereto (although Letter of Credit Fees shall be payable directly
to the Administrative Agent for the account of the Lenders as provided in
section 4.1(b) and the Participants shall have no right to receive any portion
of any fees of the nature contemplated by section 4.1(c)), the obligations of
any Subsidiary of the Borrower under any Letter of Credit Documents pertaining
thereto, and any security for, or guaranty pertaining to, any of the foregoing.
Upon any change in the General Revolving Commitments of the Lenders pursuant to
section 12.4(b), it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment to
the participations pursuant to this section 3.4 to reflect the new General
Revolving Facility Percentages of the assigning and assignee Lender.
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(b) In determining whether to pay under any Letter of Credit, a Letter
of Credit Issuer shall not have any obligation relative to the Participants
other than to determine that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by a Letter of Credit Issuer under or in connection with any Letter
of Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for such Letter of Credit Issuer any resulting
liability.
(c) In the event that a Letter of Credit Issuer makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed (or caused any
applicable Subsidiary to reimburse) such amount in full to such Letter of Credit
Issuer pursuant to section 3.3(a), such Letter of Credit Issuer shall promptly
notify the Administrative Agent, and the Administrative Agent shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Administrative Agent for the account of such Letter
of Credit Issuer, the amount of such Participant's General Revolving Facility
Percentage of such payment in U.S. Dollars and in same day funds, provided,
however, that no Participant shall be obligated to pay to the Administrative
Agent its General Revolving Facility Percentage of such unreimbursed amount for
any wrongful payment made by such Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of such Letter of Credit Issuer. If the Administrative
Agent so notifies any Participant required to fund a payment under a Letter of
Credit prior to 11:00 A.M. (local time at its Notice Office) on any Business
Day, such Participant shall make available to the Administrative Agent for the
account of the relevant Letter of Credit Issuer such Participant's General
Revolving Facility Percentage of the amount of such payment on such Business Day
in same day funds. If and to the extent such Participant shall not have so made
its General Revolving Facility Percentage of the amount of such payment
available to the Administrative Agent for the account of the relevant Letter of
Credit Issuer, such Participant agrees to pay to the Administrative Agent for
the account of such Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of such Letter of
Credit Issuer at the Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
relevant Letter of Credit Issuer its General Revolving Facility Percentage of
any payment under any Letter of Credit shall not relieve any other Participant
of its obligation hereunder to make available to the Administrative Agent for
the account of such Letter of Credit Issuer its General Revolving Facility
Percentage of any payment under any Letter of Credit on the date required, as
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to the Administrative Agent for the account
of such Letter of Credit Issuer such other Participant's General Revolving
Facility Percentage of any such payment.
(d) Whenever a Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of such Letter of Credit Issuer any payments from the Participants
pursuant to section 3.4(c) above, such Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its General Revolving Facility Percentage thereof, in
U.S. dollars and in same day funds, an amount equal to such Participant's
General Revolving Facility Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective participations,
as and to the extent so received.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of each Letter of Credit Issuer with
respect to Letters of Credit shall be irrevocable and not subject to
counterclaim, set-off or other defense or any other qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off defense or other
right which the Borrower (or any Subsidiary) may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any person for whom any such transferee may be
acting), the Administrative Agent, any
32
Letter of Credit Issuer, any Lender, or other person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower (or any Subsidiary) and the
beneficiary named in any such Letter of Credit), other than any claim
which the Borrower (or any Subsidiary which is the account party with
respect to a Letter of Credit) may have against any applicable Letter
of Credit Issuer for gross negligence or wilful misconduct of such
Letter of Credit Issuer in making payment under any applicable Letter
of Credit;
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents: or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by the
Borrower, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective General Revolving Facility
Percentages, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Letter of Credit Issuer in performing its respective duties in
any way related to or arising out of its issuance of Letters of Credit, provided
that no Participants shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements resulting from the Letter of Credit Issuer's gross
negligence or willful misconduct.
3.5. Increased Costs. If after the Effective Date, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Letter of Credit Issuer or any Lender with any
request or directive (whether or not having the force of law) by any such
authority, central bank or comparable agency (in each case made subsequent to
the Effective Date) shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against Letters of
Credit issued by such Letter of Credit Issuer or such Lender's participation
therein, or (ii) shall impose on such Letter of Credit Issuer or any Lender any
other conditions affecting this Agreement, any Letter of Credit or such Lender's
participation therein; and the result of any of the foregoing is to increase the
cost to such Letter of Credit Issuer or such Lender of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such Lender hereunder
(other than any increased cost or reduction in the amount received or receivable
resulting from the imposition of or a change in the rate of taxes or similar
charges), then, upon demand to the Borrower by such Letter of Credit Issuer or
such Lender (a copy of which notice shall be sent by such Letter of Credit
Issuer or such Lender to the Administrative Agent), the Borrower shall pay to
such Letter of Credit Issuer or such Lender such additional amount or amounts as
will compensate any such Letter of Credit Issuer or such Lender for such
increased cost or reduction. A certificate submitted to the Borrower by any
Letter of Credit Issuer or any Lender, as the case may be (a copy of which
certificate shall be sent by such Letter of Credit Issuer or such Lender to the
Administrative Agent), setting forth, in reasonable detail, the basis for the
determination of such additional amount or amounts necessary to compensate any
Letter of Credit Issuer or such Lender as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this section 3.5. Reference is
hereby made to the provisions of section 2.9(d) for certain limitations upon the
rights of a Letter of Credit Issuer or Lender under this section.
3.6. Guaranty of Subsidiary Letter of Credit Obligations. (a) The
Borrower hereby unconditionally guarantees, for the benefit of the
Administrative Agent and the Lenders, the full and punctual payment of the
Obligations of each Subsidiary under each Letter of Credit Document to which
such Subsidiary is now or hereafter becomes a party. Upon failure by any such
Subsidiary to pay punctually any such amount, the Borrower shall forthwith
33
on demand by the Administrative Agent pay the amount not so paid at the place
and in the currency and otherwise in the manner specified in this Agreement or
any applicable Letter of Credit Document.
(b) As a separate, additional and continuing obligation, the Borrower
unconditionally and irrevocably undertakes and agrees, for the benefit of the
Administrative Agent and the Lenders, that, should any amounts not be
recoverable from the Borrower under section 3.6(a) for any reason whatsoever
(including, without limitation, by reason of any provision of any Credit
Document or any other agreement or instrument executed in connection therewith
being or becoming void, unenforceable, or otherwise invalid under any applicable
law) then, notwithstanding any notice or knowledge thereof by any Lender, the
Administrative Agent, any of their respective Affiliates, or any other person,
at any time, the Borrower as sole, original and independent obligor, upon demand
by the Administrative Agent, will make payment to the Administrative Agent, for
the account of the Lenders and the Administrative Agent, of all such obligations
not so recoverable by way of full indemnity, in such currency and otherwise in
such manner as is provided in the Credit Documents.
(c) The obligations of the Borrower under this section shall be
unconditional and absolute and, without limiting the generality of the foregoing
shall not be released, discharged or otherwise affected by the occurrence, one
or more times, of any of the following:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect to any obligation of any Subsidiary under any Letter
of Credit Document, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to this
Agreement, any Note or any other Credit Document;
(iii) any release, non-perfection or invalidity of any direct
or indirect security for any obligation of the Borrower under this
Agreement, any Note or any other Credit Document or of any Subsidiary
under any Letter of Credit Document;
(iv) any change in the corporate existence, structure or
ownership of any Subsidiary or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Subsidiary or
its assets or any resulting release or discharge of any obligation of
any Subsidiary contained in any Letter of Credit Document;
(v) the existence of any claim, set-off or other rights which
the Borrower may have at any time against any Subsidiary, the
Administrative Agent, any Lender or any other person, whether in
connection herewith or any unrelated transactions;
(vi) any invalidity or unenforceability relating to or against
any Subsidiary for any reason of any Letter of Credit Document, or any
provision of applicable law or regulation purporting to prohibit the
payment by any Subsidiary of any Obligations in respect of any Letter
of Credit; or
(vii) any other act or omission to act or delay of any kind by
any Subsidiary, the Administrative Agent, any Lender or any other
person or any other circumstance whatsoever which might, but for the
provisions of this section, constitute a legal or equitable discharge
of the Borrower's obligations under this section.
(d) The Borrower's obligations under this section shall remain in full
force and effect until the Commitments shall have terminated and the principal
of and interest on the Notes and all other amounts payable by the Borrower under
the Credit Documents and by any Subsidiary under the Letter of Credit Documents
shall have been paid in full. If at any time any payment of any of the
Obligations of any Subsidiary in respect of any Letter of Credit Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of such Subsidiary, the Borrower's obligations
under this section with respect to such payment shall be reinstated at such time
as though such payment had been due but not made at such time.
34
(e) The Borrower irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any person against any
Subsidiary or any other person, or against any collateral or guaranty of any
other person.
(f) Until the indefeasible payment in full of all of the Obligations
and the termination of the Commitments of the Lenders hereunder, the Borrower
shall have no rights, by operation of law or otherwise, upon making any payment
under this section to be subrogated to the rights of the payee against any
Subsidiary with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by any Subsidiary in respect thereof.
(g) In the event that acceleration of the time for payment of any
amount payable by any Subsidiary under any Letter of Credit Document is stayed
upon insolvency, bankruptcy or reorganization of such Subsidiary, all such
amounts otherwise subject to acceleration under the terms of any applicable
Letter of Credit Document shall nonetheless be payable by the Borrower under
this section forthwith on demand by the Administrative Agent.
SECTION 4. FEES; COMMITMENTS.
4.1. Fees. (a) Commitment Fees. (i) The Borrower agrees to pay to the
Administrative Agent commitment fees (collectively, "Commitment Fees") for the
account of each Non-Defaulting Lender which has a General Revolving Commitment
for the period from and including the Effective Date to, but not including, the
Maturity Date or, if earlier, the date upon which the Total General Revolving
Commitment has been terminated, computed for each day at a rate per annum equal
to the Applicable Commitment Fee Rate for such day on such Lender's Unutilized
General Revolving Commitment for such day. Commitment Fees shall be due and
payable in arrears on the last Business Day of each June, September, December
and March and on the Maturity Date or, if earlier, the date upon which the Total
General Revolving Commitment has been terminated.
(ii) As used herein, the term "Applicable Commitment Fee Rate" means
the particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears in section 2.7(h), based on
the Borrower's ratio of Consolidated Total Debt to Consolidated EBITDA and such
Pricing Grid Table, and the following provisions:
(A) Initially, until changed hereunder in accordance with the
following provisions, the Applicable Commitment Fee Rate will be 25
basis points per annum.
(B) Commencing with the fiscal quarter of the Borrower ended
on or nearest to December 31, 1998, and continuing with each fiscal
quarter thereafter, the Administrative Agent will determine the
Applicable Commitment Fee Rate in accordance with the Pricing Grid
Table, based on the Borrower's ratio of (x) Consolidated Total Debt as
of the end of the fiscal quarter, to (y) Consolidated EBITDA for the
Testing Period ended on the last day of the fiscal quarter, and
identified in such Table. Changes in the Applicable Commitment Fee Rate
based upon changes in such ratio shall become effective on the first
day of the month following the receipt by the Administrative Agent
pursuant to section 8.1(a) or (b) of the financial statements of the
Borrower, accompanied by the certificate and calculations referred to
in section 8.1(c), demonstrating the computation of such ratio, based
upon the ratio in effect at the end of the applicable period covered
(in whole or in part) by such financial statements.
(C) Notwithstanding the above provisions, during any period
when (1) the Borrower has failed to timely deliver its consolidated
financial statements referred to in section 8.1(a) or (b), accompanied
by the certificate and calculations referred to in section 8.1(c), (2)
a Default under section 10.1(a) has occurred and is continuing, or (3)
an Event of Default has occurred and is continuing, the Applicable
Commitment Fee Rate shall be the highest rate per annum indicated
therefor in the Pricing Grid Table, regardless of the Borrower's ratio
of Consolidated Total Debt to Consolidated EBITDA at such time.
35
(D) Any changes in the Applicable Commitment Fee Rate shall be
determined by the Administrative Agent in accordance with the above
provisions and the Administrative Agent will promptly provide notice of
such determinations to the Borrower and the Lenders. Any such
determination by the Administrative Agent pursuant to this section
4.1(a)(ii) shall be conclusive and binding absent manifest error.
(b) Letter of Credit Fees. The Borrower agrees to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender, pro rata on
the basis of its General Revolving Facility Percentage, a fee in respect of each
Letter of Credit (the "Letter of Credit Fee"), computed at the rate per annum
equal to the Applicable Eurodollar Margin then in effect from time to time on
the Stated Amount thereof for the period from the date of issuance (including
any date of increase, renewal or extension) to the expiration date thereof
(including any extensions of such expiration date which may be made at the
election of the account party or the beneficiary thereof). Accrued Letter of
Credit Fees shall be due and payable on the last Business Day of each March,
June, September and December and if only one Letter of Credit remains
outstanding hereunder, on the date of expiration thereof.
(c) Facing Fees. The Borrower agrees to pay directly to each Letter of
Credit Issuer, for its own account, a fee in respect of each Letter of Credit
issued by it (a "Facing Fee"), payable on the date of issuance (or any increase
in the amount, or renewal or extension) thereof, computed at the rate of 1/8 of
1% per annum on the Stated Amount thereof for the period from the date of
issuance (or increase, renewal or extension) to the expiration date thereof
(including any extensions of such expiration date which may be made at the
election of the beneficiary thereof).
(d) Additional Charges of Letter of Credit Issuer. The Borrower agrees
to pay directly to each Letter of Credit Issuer upon each issuance of, drawing
under, and/or amendment, extension, renewal or transfer of, a Letter of Credit
issued by it such amount as shall at the time of such issuance, drawing,
amendment, extension, renewal or transfer be the administrative or processing
charge which such Letter of Credit Issuer is customarily charging for issuances
of, drawings under or amendments, extensions, renewals or transfers of, letters
of credit issued by it.
(e) Other Fees. The Borrower shall pay to the Administrative Agent on
the Effective Date and thereafter for its own account and/or for distribution to
the Lenders such fees as heretofore agreed by the Borrower and the
Administrative Agent.
(f) Computations of Fees. All computations of Fees shall be made in
accordance with section 12.7(b).
4.2. Voluntary Termination/Reduction of Commitments. Upon at least
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, to:
(a) terminate the Total General Revolving Commitment, provided
that (i) the Swing Line Revolving Commitment is simultaneously
terminated; and (ii) all outstanding General Revolving Loans and Swing
Line Revolving Loans are contemporaneously prepaid in accordance with
section 5.1;
(b) terminate the Swing Line Commitment, provided that (i) the
Total General Revolving Commitment is simultaneously terminated; and
(ii) all outstanding Swing Line Revolving Loans and General Revolving
Loans are contemporaneously prepaid in accordance with section 5.1;
(c) partially and permanently reduce the Unutilized Total
General Revolving Commitment, provided that (i) any such reduction
shall apply to proportionately and permanently reduce the General
Revolving Commitment of each of the affected Lenders; (ii) any partial
reduction of the Unutilized Total General Revolving Commitment pursuant
to this section 4.2(c) shall be in the amount of at least $1,000,000
(or, if greater, in integral multiples of $1,000,000); and (iii) after
giving effect thereto, the remaining Total General Revolving Commitment
exceeds the Total Swing Line Commitment by at least $5,000,000; and/or
36
(d) partially and permanently reduce the Unutilized Swing Line
Revolving Commitment, provided that any partial reduction of the
Unutilized Swing Line Revolving Commitment pursuant to this section
4.2(d) shall be in the amount of at least $500,000 (or, if greater, in
integral multiples of $100,000).
4.3. Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment (and the Commitment of each Lender) shall terminate on the date which
is the one month anniversary of the Effective Date, unless the Closing Date has
occurred on or prior to such date.
(b) The Total General Revolving Commitment (and the General Revolving
Commitment of each Lender) shall terminate on the earlier of (x) the Maturity
Date and (y) the date on which a Change of Control occurs. The Swing Line
Revolving Commitment of the Swing Line Lender shall terminate on the earlier of
(x) the Maturity Date and (y) the date on which a Change of Control occurs.
(c) The Total General Revolving Commitment shall be permanently
reduced, without premium or penalty, at the time that any mandatory prepayment
of General Revolving Loans would be made pursuant to section 5.2(d) if General
Revolving Loans were then outstanding in the full amount of the Total General
Revolving Commitment, in an amount equal to the required prepayment of principal
of General Revolving Loans which would be required to be made in such
circumstance. Any such reduction shall apply to proportionately and permanently
reduce the General Revolving Commitment of each of the affected Lenders. The
Borrower will provide at least three Business Days' prior written notice (or
telephonic notice confirmed in writing) to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), of any reduction of the Total General Revolving Commitment
pursuant to this section 4.3(c), specifying the date and amount of the
reduction.
SECTION 5. PAYMENTS.
5.1. Voluntary Prepayments. The Borrower shall have the right to prepay
any of its Loans, in whole or in part, without premium or penalty, from time to
time, but only on the following terms and conditions:
(a) the Borrower shall give the Administrative Agent at the
Notice Office written or telephonic notice (in the case of telephonic
notice, promptly confirmed in writing if so requested by the
Administrative Agent) of its intent to prepay the Loans, the amount of
such prepayment and (in the case of Eurodollar Loans) the specific
Borrowing(s) pursuant to which made, which notice shall be received by
the Administrative Agent by
(x) 11:00 A.M. (local time at the Notice Office)
three Business Days prior to the date of such prepayment, in
the case of any prepayment of Eurodollar Loans, or
(y) 12:00 noon (local time at the Notice Office) on
the date of such prepayment, in the case of any prepayment of
Prime Rate Loans,
and which notice shall promptly be transmitted by the Administrative
Agent to each of the affected Lenders;
(b) each partial prepayment by the Borrower of any Borrowing
of General Revolving Loans shall be in an aggregate principal amount of
(i) at least $500,000, or an integral multiple of $100,000 in excess
thereof, in the case of General Revolving Loans which are Prime Rate
Loans, or (ii) at least $3,000,000, or an integral multiple of
$1,000,000 in excess thereof, in the case of General Revolving Loans
which are Eurodollar Loans;
(c) each partial prepayment by the Borrower of any Borrowing
of a Swing Line Revolving Loan shall be in an aggregate principal
amount of at least $100,000, or an integral multiple of $50,000 in
excess thereof;
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(d) no partial prepayment of Eurodollar Loans of the Borrower
made pursuant to a Borrowing shall reduce the aggregate principal
amount of the Eurodollar Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto;
(e) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; and
(f) each prepayment of Eurodollar Loans or Money Market Rate
Loans pursuant to this section 5.1 on any date other than the last day
of the Interest Period applicable thereto, in the case of Eurodollar
Loans, or the maturity date thereof, in the case of Money Market Rate
Loans, shall be accompanied by any amounts payable in respect thereof
under section 2.10.
5.2. Mandatory Prepayments. The Loans shall be subject to mandatory
prepayment in accordance with the following provisions:
(a) If Outstanding General Revolving Loans, Swing Line
Revolving Loans and Letter of Credit Outstandings Exceed Total General
Revolving Commitment. If on any date (after giving effect to any other
payments on such date) the sum of (i) the aggregate outstanding
principal amount of General Revolving Loans and Swing Line Revolving
Loans, plus (ii) the aggregate amount of Letter of Credit Outstandings,
exceeds the Total General Revolving Commitment as then in effect, the
Borrower shall prepay on such date that principal amount of Swing Line
Revolving Loans and, after Swing Line Revolving Loans have been paid in
full, General Revolving Loans, and after General Revolving Loans have
been paid in full, Unpaid Drawings, in an aggregate amount at least
equal to such excess and conforming in the case of partial prepayments
of Revolving Loans to the requirements as to the amounts of prepayments
of Revolving Loans which are contained in section 5.1. If, after giving
effect to the prepayment of Loans and Unpaid Drawings, the aggregate
amount of Letter of Credit Outstandings exceeds the Total General
Revolving Commitment as then in effect, the Borrower shall pay to the
Administrative Agent an amount in cash and/or Cash Equivalents equal to
such excess and the Administrative Agent shall hold such payment as
security for the reimbursement obligations of the Borrower hereunder in
respect of Letters of Credit pursuant to a cash collateral agreement to
be entered into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative
Agent and the Borrower until the proceeds are applied to the secured
obligations).
(b) If Outstanding Swing Line Revolving Loans Exceed the
Unutilized Total General Revolving Commitment. If on any date (after
giving effect to any other payments on such date) the aggregate
outstanding principal amount of Swing Line Revolving Loans exceeds the
Unutilized Total General Revolving Commitment as then in effect, the
Borrower shall prepay on such date Swing Line Revolving Loans in an
aggregate principal amount, conforming to the requirements of section
5.1 as to the amount of partial prepayments provided for therein, at
least equal to such excess.
(c) If Outstanding Swing Line Revolving Loans Exceed the Total
Swing Line Revolving Commitment. If on any date (after giving effect to
any other payments on such date) the aggregate outstanding principal
amount of Swing Line Revolving Loans exceeds the Total Swing Line
Revolving Commitment as then in effect, the Borrower shall prepay on
such date Swing Line Revolving Loans in an aggregate principal amount,
conforming to the requirements of section 5.1 as to the amount of
partial prepayments provided for therein, at least equal to such
excess.
(d) Certain Proceeds of Asset Sales. If during any fiscal year
of the Borrower, the Borrower and its Subsidiaries have received
cumulative Cash Proceeds during such fiscal year from one or more Asset
Sales of at least $2,000,000, not later than the third Business Day
following the date of receipt of any Cash Proceeds in excess of such
amount, an amount, conforming to the requirements as to the amount of
partial prepayments contained in section 5.1, at least equal to 100% of
the Net Cash Proceeds then received in excess of such amount from any
Asset Sale, shall be applied as a mandatory prepayment of principal of
the
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outstanding General Revolving Loans; provided, that (i) if no Default
under section 10.1(a) or Event of Default shall have occurred and be
continuing, (ii) the Borrower and its Subsidiaries have scheduled
Consolidated Capital Expenditures and/or proposed Permitted
Acquisitions during the following six months, and (iii) the Borrower
notifies the Administrative Agent of the amount and nature thereof and
of its intention to reinvest all or a portion of such Net Cash Proceeds
in such Consolidated Capital Expenditures and proposed Permitted
Acquisitions during such six month period, then no such prepayment
shall be required to the extent the Borrower so indicates that such
reinvestment will take place. If at the end of any such six month
period any portion of such Net Cash Proceeds has not been so
reinvested, the Borrower will immediately make a prepayment of the
outstanding General Revolving Loans as provided above in an amount,
conforming to the requirements as to amount of prepayments contained in
section 5.1, at least equal to such remaining amount.
(e) Change of Control. On the date of which a Change of
Control occurs, notwithstanding anything to the contrary contained in
this Agreement, no further Borrowings shall be made and the then
outstanding principal amount of all Loans, if any, shall become due and
payable and shall be prepaid in full, and the Borrower shall
contemporaneously either (i) cause all outstanding Letters of Credit to
be surrendered for cancellation (any such Letters of Credit to be
replaced by letters of credit issued by other financial institutions),
or (ii) the Borrower shall pay to the Administrative Agent an amount in
cash and/or Cash Equivalents equal to 100% of the Letter of Credit
Outstandings and the Administrative Agent shall hold such payment as
security for the reimbursement obligations of the Borrower hereunder in
respect of Letters of Credit pursuant to a cash collateral agreement to
be entered into in form and substance reasonably satisfactory to the
Administrative Agent and the Borrower (which shall permit certain
investments in Cash Equivalents satisfactory to the Administrative
Agent and the Borrower until the proceeds are applied to the secured
obligations).
(f) Particular Loans to be Prepaid. With respect to each
repayment or prepayment of Loans required by this section 5.2, the
Borrower shall designate the Types of Loans which are to be prepaid and
the specific Borrowing(s) pursuant to which such repayment or
prepayment is to be made, provided that (i) the Borrower shall first so
designate all Loans that are Prime Rate Loans and Eurodollar Loans with
Interest Periods ending on the date of repayment or prepayment prior to
designating any other Eurodollar Loans for repayment or prepayment,
(ii) if the outstanding principal amount of Eurodollar Loans made
pursuant to a Borrowing is reduced below the applicable Minimum
Borrowing Amount as a result of any such repayment or prepayment, then
all the Loans outstanding pursuant to such Borrowing shall be Converted
into Prime Rate Loans, and (iii) each repayment and prepayment of any
Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans. In the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under section 2.10. Any
repayment or prepayment of Eurodollar Loans or Money Market Rate Loans
pursuant to this section 5.2 shall in all events be accompanied by such
compensation as is required by section 2.10.
5.3. Method and Place of Payment. (a) Payments by the Borrower. Except
as otherwise specifically provided herein, all payments under this Agreement
shall be made to the Administrative Agent for the ratable (based on its pro rata
share) account of the Lenders entitled thereto, not later than 11:00 A.M. (local
time at the Payment Office) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office, it being understood that written notice by the Borrower
to the Administrative Agent to make a payment from the funds in the Borrower's
account at the Payment Office shall constitute the making of such payment to the
extent of such funds held in such account. Any payments under this Agreement
which are made later than 11:00 A.M. (local time at the Payment Office) shall be
deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.
39
(b) Application if Payments Insufficient. If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully all
amounts of principal, Unpaid Drawings, interest and Fees then due hereunder,
such funds shall be applied (i) first, to pay Fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of Fees then
due to such parties, (ii) second, to pay interest then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
then due to such parties, and (iii) finally, to pay principal and Unpaid
Drawings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and Unpaid Drawings then due to such
parties.
5.4. Net Payments. (a) All payments made by the Borrower hereunder,
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in section 5.4(c), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future United States withholding taxes. The
Borrower will furnish to the Administrative Agent within 45 days after the date
of any withholding or deduction on account of United States withholding taxes
certified copies of tax receipts, or other evidence satisfactory to the Lender,
evidencing such payment by the Borrower.
(b) Each Lender that is not a United States person (as such term is
defined in section 7701(a)(30) of the Code) for Federal income tax purposes
agrees to provide to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the cases of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to section 12.4 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer and such Lender is in compliance with the provisions of
this section 5.4(b)), on the date of such assignment or transfer to such Lender,
(i) two accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001 (or successor forms) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments to be made under this Agreement, any Note or any other Credit Document,
or (ii) if the Lender is not a "bank" within the meaning of section 881(c)(3)(A)
of the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit H (any such certificate, a "Section 5.4(b)(ii) Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form
W-8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement, any Note or any other Credit Document.
In addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 5.4(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement, any Note or any other Credit Document,
or it shall immediately notify the Borrower and the Administrative Agent of its
inability to deliver any such Form or Certificate, in which case such Lender
shall not be required to deliver any such Form or Certificate pursuant to this
section 5.4(b).
(c) Notwithstanding anything to the contrary contained in section
5.4(a), the Borrower shall be entitled, to the extent it is required to do so by
law, to deduct or withhold income or other similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in section
7701(a)(30) of the Code) for United States federal income tax purposes and which
has not provided to the Borrower such forms that establish a complete exemption
from such deduction or withholding (i) if such Lender has not provided to the
Borrower the Internal Revenue Service forms required to be provided to the
Borrower pursuant to section 5.4(b), or (ii) in the case of a payment other than
interest, to a Lender described in clause (ii) of section 5.2(b) above, to the
extent that such forms do not establish a complete exemption from withholding of
such taxes.
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SECTION 6. CONDITIONS PRECEDENT.
6.1. Conditions Precedent at Closing Date. The obligation of the
Lenders to make Loans, and of any Letter of Credit Issuer to issue Letters of
Credit, is subject to the satisfaction of each of the following conditions on
the Closing Date:
(a) Effectiveness; Notes. On or prior to the Closing Date, (i)
the Effective Date shall have occurred and (ii) there shall have been
delivered to the Administrative Agent for the account of each Lender
the appropriate Note or Notes executed by the Borrower, in each case,
in the amount, maturity and as otherwise provided herein.
(b) Fees, etc. The Borrower shall have paid or caused to be
paid all fees required to be paid by it on or prior to such date
pursuant to section 4 hereof and all reasonable fees and expenses of
the Administrative Agent and of special counsel to the Administrative
Agent which are payable or reimbursable by the Borrower in accordance
with section 12.1 and have been invoiced on or prior to such date in
connection with the preparation, execution and delivery of this
Agreement and the other Credit Documents and the consummation of the
transactions contemplated hereby and thereby.
(c) Other Credit Documents. The Credit Parties named therein
shall have duly executed and delivered and there shall be in full force
and effect, and original counterparts shall have been delivered to the
Administrative Agent, in sufficient quantities for the Administrative
Agent and the Lenders, of, (i) the Amended and Restated Subsidiary
Guaranty (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Subsidiary
Guaranty"), substantially in the form attached hereto as Exhibit C;
(ii) the Amended and Restated Security Agreement (as modified, amended
or supplemented from time to time in accordance with the terms thereof
and hereof, the "Security Agreement"), substantially in the form
attached hereto as Exhibit D; (iii) the Amended and Restated Pledge
Agreement (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Pledge Agreement"),
substantially in the form attached hereto as Exhibit E-1;.and (iv) the
amendment to the Mortgage providing for the pledge of a portion of the
outstanding shares of the Borrower's English Subsidiary, substantially
in the form attached hereto as Exhibit E-2.
(d) Corporate Resolutions and Approvals. The Administrative
Agent shall have received, in sufficient quantity for the
Administrative Agent and the Lenders, certified copies of the
resolutions of the Board of Directors of the Borrower and each other
Credit Party, approving the Credit Documents to which the Borrower or
any such other Credit Party, as the case may be, is or may become a
party, and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the execution,
delivery and performance by the Borrower or any such other Credit Party
of the Credit Documents to which it is or may become a party.
(e) Incumbency Certificates. The Administrative Agent shall
have received, in sufficient quantity for the Administrative Agent and
the Lenders, a certificate of the Secretary or an Assistant Secretary
of the Borrower and of each other Credit Party, certifying the names
and true signatures of the officers of the Borrower or such other
Credit Party, as the case may be, authorized to sign the Credit
Documents to which the Borrower or such other Credit Party is a party
and any other documents to which the Borrower or any such other Credit
Party is a party which may be executed and delivered in connection
herewith.
(f) Opinion of Counsel. On the Closing Date, the
Administrative Agent shall have received an opinion, addressed to the
Administrative Agent and each of the Lenders and dated the Closing
Date, from Elias, Matz, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel to the
Borrower, substantially in the form of Exhibit F hereto and covering
such other matters incident to the transactions contemplated hereby as
the Administrative Agent may reasonably request, such opinion to be in
form and substance satisfactory to the Administrative Agent.
41
(g) Reallocation of Commitments and Loans. The Borrower shall
have prepaid in full all Swing Line Revolving Loans which are
outstanding under the Original Credit Agreement. The Borrower shall
have prepaid in full all General Revolving Loans outstanding under the
Credit Agreement as in effect immediately prior to the Closing Date out
of available cash and one or more Borrowings under this Agreement
(giving effect to a netting of amounts with Lenders who were parties to
the Credit Agreement before giving effect to this Agreement).
(h) Recordation of Security Documents, Delivery of Collateral,
Taxes, etc. The Security Documents (or proper notices or financing
statements in respect thereof) shall have been duly recorded, published
and filed in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and security
interests of the parties thereto and their respective successors and
assigns, all collateral items required to be physically delivered to
the Collateral Agent thereunder shall have been so delivered,
accompanied by any appropriate instruments of transfer, and all taxes,
fees and other charges then due and payable in connection with the
execution, delivery, recording, publishing and filing of such
instruments and the issue and delivery of the Notes shall have been
paid in full. Without limitation of the foregoing, National City Bank,
which acted as the Collateral Agent under the Original Credit Agreement
and the other Credit Documents referred to therein, shall have assigned
to PNC, which is to act as the Collateral Agent under this Agreement
and the other Credit Documents referred to herein, its UCC financing
statements with respect to the Collateral covered by the Original
Credit Agreement and the Credit Documents referred to therein, and
delivered to PNC all items of Collateral in its possession.
(i) Evidence of Insurance. The Collateral Agent shall have
received certificates of insurance and other evidence, satisfactory to
it, of compliance with the insurance requirements of this Agreement and
the Security Documents.
(j) Search Reports. The Administrative Agent shall have
received completed requests for information on Form UCC-11, or search
reports from one or more commercial search firms acceptable to the
Administrative Agent, listing all of the effective financing statements
filed against any Credit Party which is a party to the Security
Agreement in any jurisdiction in which such Credit Party maintains an
office or in which any Collateral of such Credit Party is located,
together with copies of such financing statements.
(k) Proceedings and Documents. All corporate and other
proceedings and all documents incidental to the transactions
contemplated hereby shall be satisfactory in substance and form to the
Administrative Agent and the Lenders and the Administrative Agent and
its special counsel and the Lenders shall have received all such
counterpart originals or certified or other copies of such documents as
the Administrative Agent or its special counsel or any Lender may
reasonably request.
6.2. Conditions Precedent to All Credit Events. The obligations of the
Lenders to make each Loan and/or of a Letter of Credit Issuer to issue each
Letter of Credit is subject, at the time thereof, to the satisfaction of the
following conditions:
(a) Notice of Borrowing, etc. The Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of section
2.3 with respect to the incurrence of Loans or a Letter of Credit
Request meeting the requirement of section 3.2 with respect to the
issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties of the Credit Parties contained herein or in the other
Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, except to the
extent that such representations and warranties expressly relate to an
earlier specified date, in which case such representations and
warranties shall have been true and correct in all material respects as
of the date when made.
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The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to each of the Lenders that all of
the applicable conditions specified in section 6.1 were satisfied at and as of
the Closing Date, and that all of the applicable conditions specified in section
6.2 were satisfied at and as of the date of such Credit Event. All of the
certificates, legal opinions and other documents and papers referred to in this
section 6, unless otherwise specified, shall be delivered to the Administrative
Agent for the account of each of the Lenders and, except for the Notes, in
sufficient counterparts for each of the Lenders, and the Administrative Agent
will promptly distribute to the Lenders their respective Notes and the copies of
such other certificates, legal opinions and documents.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and/or to issue and/or to participate in the Letters of Credit
provided for herein, the Borrower makes the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and each Credit Event:
7.1. Corporate Status, etc. Each of the Borrower and its Subsidiaries
(i) is a duly organized or formed and validly existing corporation, partnership
or limited liability company, as the case may be, in good standing under the
laws of the jurisdiction of its formation and has the corporate, partnership or
limited liability company power and authority, as applicable, to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage, and (ii) has duly qualified and is authorized to
do business in all jurisdictions where it is required to be so qualified except
where the failure to be so qualified would not have a Material Adverse Effect.
7.2. Subsidiaries. Annex II hereto lists, as of the date hereof, each
Subsidiary of the Borrower (and the direct and indirect ownership interest of
the Borrower therein).
7.3. Corporate Power and Authority, etc. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is party
and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is party. Each Credit Party has duly executed and delivered each Credit
Document to which it is party and each Credit Document to which it is party
constitutes the legal, valid and binding agreement or obligation of such Credit
Party enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
7.4. No Violation. Neither the execution, delivery and performance by
any Credit Party of the Credit Documents to which it is party nor compliance
with the terms and provisions thereof (i) will contravene any provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any court
or governmental instrumentality applicable to such Credit Party or its
properties and assets, (ii) will conflict with or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien (other than the Liens created pursuant to the Security
Documents) upon any of the property or assets of such Credit Party pursuant to
the terms of any promissory note, bond, debenture, indenture, mortgage, deed of
trust, credit or loan agreement, or any other material agreement or other
instrument, to which such Credit Party is a party or by which it or any of its
property or assets are bound or to which it may be subject, or (iii) will
violate any provision of the certificate or articles of incorporation, code of
regulations or by-laws, or other charter documents of such Credit Party.
7.5. Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required as a
condition to (i) the execution, delivery and performance by any Credit Party of
any Credit Document to which it is a party, or (ii) the legality, validity,
43
binding effect or enforceability of any Credit Document to which any Credit
Party is a party, except the filing and recording of financing statements and
other documents necessary in order to perfect the Liens created by the Security
Documents
7.6. Litigation. There are no actions, suits or proceedings pending or,
to, the knowledge of the Borrower, threatened with respect to the Borrower or
any of its Subsidiaries (i) that have, or could reasonably be expected to have,
a Material Adverse Effect, with the possible exception of those matters
identified in a letter from the Borrower to the Lenders delivered prior to the
Effective Date which makes reference to this section 7.6, or (ii) which question
the validity or enforceability of any of the Credit Documents, or of any action
to be taken by any Credit Party pursuant to any of the Credit Documents.
7.7. Use of Proceeds; Margin Regulations. (a) The proceeds of (i) any
General Revolving Loans shall be used solely to finance Permitted Acquisitions
and for any other lawful purposes not inconsistent with the requirements of this
Agreement; and (ii) any Swing Line Revolving Loans shall be used solely for
working capital requirements of the Borrower and its Subsidiaries.
(b) No part of the proceeds of any Credit Event will be used directly
or indirectly to purchase or carry Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock, in violation of the
provisions of Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System. The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock. At no time would
more than 25% of the value of the assets of the Borrower or of the Borrower and
its consolidated Subsidiaries that are subject to any "arrangement" (as such
term is used in section 221.2(g) of such Regulation U) hereunder be represented
by Margin Stock.
7.8. Financial Statements, etc. (a) The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of (i) the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1996, and December 31, 1997, and the related
audited consolidated statements of income, shareholders' equity, and cash flows
for the fiscal years then ended, accompanied by the unqualified report thereon
of the Borrower's independent accountants, as contained in the Form 10-K Annual
Report of the Borrower filed with the SEC; and (ii) the unaudited condensed
consolidated balance sheets of the Borrower and its consolidated subsidiaries as
of September 30, 1998, and the related unaudited condensed consolidated
statements of income and of cash flows of the Borrower and its consolidated
subsidiaries for the fiscal period then ended, as contained in the Form 10-Q
Quarterly Report of the Borrower filed with the SEC. All such financial
statements have been prepared in accordance with GAAP, consistently applied
(except as stated therein), and fairly present the financial position of the
Borrower and its consolidated subsidiaries as of the respective dates indicated
and the consolidated results of their operations and cash flows for the
respective periods indicated, subject in the case of any such financial
statements which are unaudited, to normal audit adjustments, none of which will
involve a Material Adverse Effect.
(b) The Borrower has received consideration which is the reasonable
equivalent value of the obligations and liabilities that the Borrower has
incurred to the Administrative Agent and the Lenders. The Borrower now has
capital sufficient to carry on its business and transactions and all business
and transactions in which it is about to engage and is now solvent and able to
pay its debts as they mature and the Borrower, as of the Closing Date, owns
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay the Borrower's debts; and the
Borrower is not entering into the Credit Documents with the intent to hinder,
delay or defraud its creditors. Without limitation of the foregoing, on and as
of the Closing Date, and after giving effect to all Indebtedness incurred and to
be incurred by the Borrower and its Subsidiaries in connection herewith, (i) the
sum of the assets, at a fair valuation, of the Borrower will exceed its debts,
(ii) the Borrower will not have incurred or intended to, or believe that it
will, incur debts beyond its ability to pay such debts as such debts mature and
(iii) the Borrower will have sufficient capital with which to conduct its
business. For purposes of this section 7.8(b), "debt" means any liability on a
claim, and "claim" means (x) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a
44
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(c) The Borrower has delivered or caused to be delivered to the Lenders
prior to the execution and delivery of this Agreement (i) a copy of the
Borrower's Report on Form 10-K as filed (without Exhibits) with the SEC for its
fiscal year ended December 31, 1997, which contains a general description of the
business and affairs of the Borrower and its Subsidiaries, (ii) a confidential
information brochure dated November 1998 prepared by the Administrative Agent
(with assistance from the Borrower) which contains information with respect to
the business, properties and operations of the Borrower and its Subsidiaries and
the initial Acquisitions (the "Confidential Information Memorandum"), and (iii)
confidential financial projections prepared by management of the Borrower for
the Borrower and its Subsidiaries and with respect to the Initial Acquisitions,
which are included in Section 8 of the Confidential Information Memorandum (the
"Financial Projections"). The Financial Projections were prepared on behalf of
the Borrower in good faith after taking into account the existing and historical
levels of business activity of the Borrower and its Subsidiaries, known trends,
including general economic trends, and other information, assumptions and
estimates considered by management of the Borrower and its Subsidiaries to be
pertinent thereto. The Financial Projections were considered by management of
the Borrower, as of such date of preparation, to be reasonable, based upon the
assumptions presented therewith; provided, that no representation or warranty is
made as to impact of future general economic conditions or as to whether the
Borrower's projected consolidated results as set forth in the Financial
Projections will actually be achieved or realized. No facts are known to the
Borrower at the date hereof which, if reflected in the Financial Projections,
would result in a material adverse change in the assets, liabilities, results of
operations or cash flows reflected therein.
7.9. No Material Adverse Change. Since December 31, 1997, there has
been no change in the condition, business or affairs of the Borrower and its
Subsidiaries taken as a whole, or their properties and assets considered as an
entirety, except for changes, none of which, individually or in the aggregate,
has had or could reasonably be expected to have, a Material Adverse Effect.
7.10. Tax Returns and Payments. Each of the Borrower and each of its
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries has established on its books such charges,
accruals and reserves in respect of taxes, assessments, fees and other
governmental charges for all fiscal periods as are required by GAAP. The
Borrower knows of no proposed assessment for additional federal, foreign or
state taxes for any period, or of any basis therefor, which, individually or in
the aggregate, taking into account such charges, accruals and reserves in
respect thereof as the Borrower and its Subsidiaries have made, could reasonably
be expected to have a Material Adverse Effect.
7.11. Title to Properties, etc. The Borrower and each of its
Subsidiaries has good and marketable title, in the case of real property, and
good title (or valid leasehold interests, in the case of any leased property),
in the case of all other property, to all of its material properties and assets
free and clear of Liens other than Liens permitted by section 9.3. The interests
of the Borrower and each of its Subsidiaries in the properties reflected in the
most recent balance sheet referred to in section 7.8, taken as a whole, were
sufficient, in the judgment of the Borrower, as of the date of such balance
sheet for purposes of the operation of the businesses conducted by the Borrower
and such Subsidiaries.
7.12. Lawful Operations, etc. The Borrower and each of its Subsidiaries
(i) holds all necessary federal, state and local governmental licenses,
registrations, certifications, permits and authorizations necessary to conduct
its business, and (ii) is in compliance with all material requirements imposed
by law, regulation or rule, whether federal, state or local, which are
applicable to it, its operations, or its properties and assets, including
without limitation, applicable requirements of Environmental Laws, except in any
such case referred to above for any failure to obtain and maintain in effect, or
noncompliance, which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
45
7.13. Environmental Matters. (a) (i) The Borrower and each of its
Subsidiaries is, to the actual knowledge of the senior management officers of
the Borrower, in compliance with all Environmental Laws governing its business,
except to the extent that any such failure to comply (together with any
resulting penalties, fines or forfeitures) would not reasonably be expected to
have a Material Adverse Effect.
(ii) To the actual knowledge of the senior management officers of the
Borrower, all licenses, permits, registrations or approvals required for the
business of the Borrower and each of its Subsidiaries, as conducted as of the
Closing Date, under any Environmental Law have been secured and the Borrower and
each of its Subsidiaries is in substantial compliance therewith, except in any
such case for such licenses, permits, registrations or approvals the failure to
secure or to comply therewith is not reasonably likely to have a Material
Adverse Effect.
(iii) Neither the Borrower nor any of its Subsidiaries has received
written notice, or otherwise knows, that it is in any respect in noncompliance
with, breach of or default under any applicable writ, order, judgment,
injunction, or decree to which the Borrower or such Subsidiary is a party or
which would affect the ability of the Borrower or such Subsidiary to operate any
real property and no event has occurred and is continuing which, with the
passage of time or the giving of notice or both, would constitute noncompliance,
breach of or default thereunder, except in each such case, such noncompliance,
breaches or defaults as would not reasonably be expected to, in the aggregate,
have a Material Adverse Effect.
(iv) There are, as of the Closing Date, no Environmental Claims pending
or, to the actual knowledge of the senior management officers of the Borrower,
threatened wherein an unfavorable decision, ruling or finding would reasonably
be expected to have a Material Adverse Effect.
(v) There are no facts, circumstances, conditions or occurrences on any
Real Property now or at any time owned, leased or operated by the Borrower or
any of its Subsidiaries or on any property adjacent to any such Real Property,
which are known by the Borrower or as to which the Borrower or any such
Subsidiary has received written notice, that (in the judgment of the senior
management officers of the Borrower) could reasonably be expected (A) to form
the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property of the Borrower or any of its Subsidiaries, or
(B) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
(b) To the actual knowledge of the senior management officers of the
Borrower, Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any such Real Property,
in each case where such occurrence or event is not in compliance with
Environmental Laws and is reasonably likely to have a Material Adverse Effect.
7.14. Compliance with ERISA. Compliance by the Borrower with the
provisions hereof and Credit Events contemplated hereby will not involve any
prohibited transaction within the meaning of ERISA or section 4975 of the Code.
The Borrower and each of its Subsidiaries, (i) has fulfilled all obligations
under minimum funding standards of ERISA and the Code with respect to each Plan
that is not a Multiemployer Plan or a Multiple Employer Plan, (ii) has satisfied
all respective contribution obligations in respect of each Multiemployer Plan
and each Multiple Employer Plan, (iii) is in compliance in all material respects
with all other applicable provisions of ERISA and the Code with respect to each
Plan, each Multiemployer Plan and each Multiple Employer Plan, and (iv) has not
incurred any liability under the Title IV of ERISA to the PBGC with respect to
any Plan, any Multiemployer Plan, any Multiple Employer Plan, or any trust
established thereunder. No Plan or trust created thereunder has been terminated,
and there have been no Reportable Events, with respect to any Plan or trust
created thereunder or with respect to any Multiemployer Plan or Multiple
Employer Plan, which termination or Reportable Event will or could result in the
termination of such Plan, Multiemployer Plan or Multiple Employer Plan and give
rise to a material liability of the Borrower or any ERISA Affiliate in respect
thereof. Neither the Borrower nor any ERISA Affiliate is at the date hereof, or
has been at any time within the two years preceding the date hereof, an employer
required to contribute to any Multiemployer Plan or Multiple Employer Plan, or a
"contributing sponsor" (as such term is defined in section
46
4001 of ERISA) in any Multiemployer Plan or Multiple Employer Plan. Neither the
Borrower nor any ERISA Affiliate has any contingent liability with respect to
any post-retirement "welfare benefit plan" (as such term is defined in ERISA)
except as has been disclosed to the Lenders in writing.
7.15. Intellectual Property, etc. The Borrower and each of its
Subsidiaries has obtained or has the right to use all material patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights
with respect to the foregoing necessary for the present and planned future
conduct of its business, without any known conflict with the rights of others,
except for such patents, trademarks, servicemarks, trade names, copyrights,
licenses and rights, the loss of which, and such conflicts, which in any such
case individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect.
7.16. Investment Company Act, etc. Neither the Borrower nor any of its
Subsidiaries is subject to regulation with respect to the creation or incurrence
of Indebtedness under the Investment Company Act of 1940, as amended, the
Interstate Commerce Act, as amended, the Federal Power Act, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any applicable state
public utility law.
7.17. Burdensome Contracts; Labor Relations. Neither the Borrower nor
any of its Subsidiaries (i) is subject to any burdensome contract or agreement
which is not terminable except upon payment of a material penalty or similar
amount, or any corporate restriction, judgment, decree or order, (ii) is a party
to any labor dispute affecting any bargaining unit or other group of employees
generally, (iii) is subject to any material strike, slow down, workout or other
concerted interruptions of operations by employees of the Borrower or any
Subsidiary, whether or not relating to any labor contracts, (iv) is subject to
any significant pending or, to the knowledge of the Borrower, threatened, unfair
labor practice complaint, before the National Labor Relations Board, and (v) is
subject to any significant pending or, to the knowledge of the Borrower,
threatened, grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement, (vi) is subject to any significant
pending or, to the knowledge of the Borrower, threatened, significant strike,
labor dispute, slowdown or stoppage, or (vii) is, to the knowledge of the
Borrower, involved or subject to any union representation organizing or
certification matter with respect to the employees of the Borrower or any of its
Subsidiaries, except (with respect to any matter specified in any of the above
clauses), for such matters as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
7.18. Existing Indebtedness. Annex III sets forth a true and complete
list, as of the date or dates set forth therein, of all Indebtedness of the
Borrower and each of its Subsidiaries, on a consolidated basis, which (i) has an
outstanding principal amount of at least $250,000, or may be incurred pursuant
to existing commitments or lines of credit, or (ii) is secured by any Lien on
any property of the Borrower or any Subsidiary, and which will be outstanding on
the Closing Date after giving effect to the initial Borrowing hereunder, other
than the Indebtedness created under the Credit Documents (all such Indebtedness,
whether or not in a principal amount meeting such threshold and required to be
so listed on Annex III, herein the "Existing Indebtedness"). The Borrower has
provided to the Administrative Agent prior to the date of execution hereof true
and complete copies (or summary descriptions) of all agreements and instruments
governing the Indebtedness listed on Annex III (the "Existing Indebtedness
Agreements").
7.19. Security Interests. Once executed and delivered, and until
terminated in accordance with the terms thereof, each of the Security Documents
creates, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto from time to time, in favor of the Collateral Agent
for the benefit of the Secured Creditors referred to in the Security Documents,
subject to no other Liens (except Permitted Liens). No filings or recordings are
required in order to perfect the security interests created under any Security
Document except for filings or recordings required in connection with any such
Security Document which shall have been made, or for which satisfactory
arrangements have been made, upon or prior to the execution and delivery
thereof. All recording, stamp, intangible or other similar taxes required to be
paid by any person under applicable legal requirements or other laws applicable
to the property encumbered by the Security Documents in connection with the
execution, delivery, recordation, filing, registration, perfection or
enforcement thereof have been paid.
47
7.20. Year 2000 Computer Matters. The Borrower and its Subsidiaries
have reviewed the areas of their business that could be adversely affected by
the "Y2K issue" (that is, the risk that computer applications used by the
Borrower and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), and have developed or are developing a program to address on
a timely basis the Y2K issuee. Such review and program has, among other things,
included and will include inquiry of all of the Borrower's and its Subsidiaries'
key suppliers, vendors and customers with respect to their own assessments and
programs for dealing with the Y2K issue. Based on such review and program, the
Borrower reasonably believes that the Y2K issue is not reasonably likely to have
a Material Adverse Effect.
7.21. True and Complete Disclosure. All factual information (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any of its Subsidiaries in writing to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement or any transaction
contemplated herein, other than the Financial Projections (as to which
representations are made only as provided in section 7.8), is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of such person in writing to any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided, except that any such
future information consisting of financial projections prepared by management of
the Borrower is only represented herein as being based on good faith estimates
and assumptions believed by such persons to be reasonable at the time made, it
being recognized by the 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 materially from the projected
results. As of the Effective Date, there is no fact known to the Borrower or any
of its Subsidiaries which has, or could reasonably be expected to have, a
Material Adverse Effect which has not theretofore been disclosed in writing to
the Lenders.
SECTION 8. AFFIRMATIVE COVENANTS.
The Borrower hereby covenants and agrees that so long as this Agreement
is in effect and until such time as the Total Commitment has been terminated, no
Notes are outstanding and the Loans, together with interest, Fees and all other
Obligations hereunder, have been paid in full:
8.1. Reporting Requirements. The Borrower will furnish to each Lender
and the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in
any event within 90 days after the close of each fiscal year of the
Borrower, the consolidated and consolidating balance sheets of the
Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of
income, of stockholder's equity and of cash flows for such fiscal year,
in each case setting forth comparative figures for the preceding fiscal
year, all in reasonable detail and accompanied by the opinion with
respect to such consolidated financial statements of independent public
accountants of recognized national standing selected by the Borrower,
which opinion shall be unqualified and shall (i) state that such
accountants audited such consolidated financial statements in
accordance with generally accepted auditing standards, that such
accountants believe that such audit provides a reasonable basis for
their opinion, and that in their opinion such consolidated financial
statements present fairly, in all material respects, the consolidated
financial position of the Borrower and its consolidated subsidiaries as
at the end of such fiscal year and the consolidated results of their
operations and cash flows for such fiscal year in conformity with
generally accepted accounting principles, or (ii) contain such
statements as are customarily included in unqualified reports of
independent accountants in conformity with the recommendations and
requirements of the American Institute of Certified Public Accountants
(or any successor organization).
(b) Quarterly Financial Statements. As soon as available and
in any event within 45 days after the close of each of the first three
quarterly accounting periods in each fiscal year of the Borrower, the
unaudited condensed consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as at the
48
end of such quarterly period and the related unaudited condensed
consolidated statements of income and of cash flows for such quarterly
period, and setting forth, in the case of such unaudited consolidated
statements of income and of cash flows, comparative figures for the
related periods in the prior fiscal year, and which consolidated
financial statements shall be certified on behalf of the Borrower by
the Chief Financial Officer or other Authorized Officer of the
Borrower, subject to changes resulting from normal year-end audit
adjustments.
(c) Officer's Compliance Certificates. At the time of the
delivery of the financial statements provided for in sections 8.1(a)
and (b), a certificate on behalf of the Borrower of the Chief Financial
Officer or other Authorized Officer of the Borrower to the effect that,
to the best knowledge of the Borrower, no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish compliance with the provisions of
sections 9.4(b), 9.5(r), 9.7. 9.8, 9.9, 9.10 and 9.11 of this Agreement
and identify in reasonable detail any financial adjustments included in
such calculations to take into account the acquisition or disposition
of any business which is required or permitted to be taken into account
hereunder in connection with such calculations.
(d) Budgets and Forecasts. Not later than 30 days prior to the
commencement of any fiscal year of the Borrower and its Subsidiaries, a
confidential consolidated budget in reasonable detail for each of the
four fiscal quarters of such fiscal year, and (if and to the extent
prepared by management of the Borrower) for any subsequent fiscal
years, as customarily prepared by management for its internal use,
setting forth, with appropriate discussion, the forecasted balance
sheet, income statement, operating cash flows and capital expenditures
of the Borrower and its Subsidiaries for the period covered thereby,
and the principal assumptions upon which forecasts and budget are
based.
(e) Notice of Default, Litigation or Certain Matters Involving
Major Customers or Suppliers. Promptly, and in any event within three
Business Days, in the case of clause (i) below, or five Business Days,
in the case of clause (ii) or (iii) below, after the Borrower or any of
its Material Subsidiaries obtains knowledge thereof, notice of
(i) the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the
nature thereof, the period of existence thereof and what
action the Borrower proposes to take with respect thereto,
(ii) any litigation or governmental or regulatory
proceeding pending against the Borrower or any of its Material
Subsidiaries which is likely to have a Material Adverse Effect
or a material adverse effect on the ability of the Borrower to
perform its obligations hereunder or under any other Credit
Document, and
(iii) any significant adverse change (in the
Borrower's reasonable judgment) in the Borrower's or any
Subsidiary's relationship with, or any significant event or
circumstance which is in the Borrower's reasonable judgment
likely to adversely affect the Borrower's or any Subsidiary's
relationship with, (A) any customer (or related group of
customers) representing more than 10% of the Borrower's
consolidated revenues during its most recent fiscal year, or
(B) any supplier which is significant to the Borrower and its
Subsidiaries considered as an entirety.
(f) ERISA. Promptly, and in any event within 10 days after the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows
of the occurrence of any of the following, the Borrower will deliver to
each of the Lenders a certificate on behalf of the Borrower of an
Authorized Officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed
with or by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC,
a Plan participant or the Plan administrator with respect thereto:
49
(i) that a Reportable Event has occurred with respect
to any Plan;
(ii) the institution of any steps by the Borrower,
any ERISA Affiliate, the PBGC or any other person to terminate
any Plan;
(iii) the institution of any steps by the Borrower or
any ERISA Affiliate to withdraw from any Plan;
(iv) the institution of any steps by the Borrower or
any Subsidiary to withdraw from any Multiemployer Plan or
Multiple Employer Plan, if such withdrawal could result in
withdrawal liability (as described in Part 1 of Subtitle E of
Title IV of ERISA) in excess of $1,000,000;
(v) a non-exempt "prohibited transaction" within the
meaning of section 406 of ERISA in connection with any Plan;
(vi) that a Plan has an Unfunded Current Liability
exceeding $1,000,000;
(vii) any material increase in the contingent
liability of the Borrower or any Subsidiary with respect to
any post-retirement welfare liability; or
(viii) the taking of any action by, or the
threatening of the taking of any action by, the Internal
Revenue Service, the Department of Labor or the PBGC with
respect to any of the foregoing.
(g) Environmental Matters. Promptly upon, and in any event
within 10 Business Days after, an officer of the Borrower obtains
actual knowledge thereof, notice of any of the following environmental
matters which involves any reasonable likelihood (in the Borrower's
reasonable judgment) of resulting in a Material Adverse Effect:
(i) any pending or threatened (in writing)
Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property owned or operated by the
Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from
any Real Property owned or operated by the Borrower or any of
its Subsidiaries that results in material noncompliance by the
Borrower or any of its Subsidiaries with any applicable
Environmental Law;
(iii) any condition or occurrence on any Real
Property owned, leased or operated by the Borrower or any of
its Subsidiaries that could reasonably be expected to cause
such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by the Borrower
or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency.
All such notices shall describe in reasonable detail the nature of the
Environmental Claim and the Borrower's or such Subsidiary's response
thereto.
(h) Auditors' Internal Control Comment Letters, etc. Promptly
upon receipt thereof, a copy of each letter or memorandum commenting on
internal accounting controls and/or accounting or financial reporting
policies followed by the Borrower and/or any of its Subsidiaries, which
is submitted to the
50
Borrower by its independent accountants in connection with any annual
or interim audit made by them of the books of the Borrower or any of
its Subsidiaries.
(i) SEC Reports and Registration Statements. Promptly upon
transmission thereof or other filing with the SEC, copies of all
registration statements (other than the exhibits thereto and any
registration statement on Form S-8 or its equivalent) and annual,
quarterly or current reports that the Borrower or any of its
Subsidiaries files with the SEC.
(j) Other Information. With reasonable promptness, such other
information or documents (financial or otherwise) relating to the
Borrower or any of its Subsidiaries as any Lender may reasonably
request from time to time.
8.2. Books, Records and Inspections. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep proper books of record and account, in
which full and correct entries shall be made of all financial transactions and
the assets and business of the Borrower or such Subsidiaries, as the case may
be, in accordance with GAAP; and (ii) permit, upon at least five Business Days'
notice to the Chief Financial Officer or any other Authorized Officer of the
Borrower, officers and designated representatives of the Administrative Agent or
any of the Lenders to visit and inspect any of the properties or assets of the
Borrower and any of its Subsidiaries in whomsoever's possession (but only to the
extent the Borrower or such Subsidiary has the right to do so to the extent in
the possession of another person), to examine the books of account and other
records of the Borrower and any of its Subsidiaries, to make copies thereof and
take extracts therefrom, and to discuss the affairs, finances and accounts of
the Borrower and of any of its Subsidiaries with, and be advised as to the same
by, its and their officers and independent accountants and independent
actuaries, if any, all at such reasonable times and intervals and to such
reasonable extent as the Administrative Agent or any of the Lenders may request
without disrupting the continuation of the business operations of the Borrower
and its Subsidiaries.
8.3. Insurance. (a) The Borrower will, and will cause each of its
Subsidiaries to, (i) maintain insurance coverage by such insurers and in such
forms and amounts and against such risks as are generally consistent with the
insurance coverage maintained by the Borrower and its Subsidiaries at the date
hereof, and (ii) promptly upon any Lender's written request, furnish to such
Lender such information about such insurance as such Lender may from time to
time reasonably request, which information shall be prepared in form and detail
satisfactory to such Lender and certified by an Authorized Officer of the
Borrower.
(b) The Borrower will, and will cause each of its Subsidiaries which is
a Credit Party to, at all times keep their respective property which is subject
to the Lien of any Security Document insured in favor of the Collateral Agent
and any applicable Credit Party, and all policies or certificates (or certified
copies thereof) with respect to such insurance (and any other insurance
maintained by the Borrower or any such Subsidiary) (i) shall be endorsed to the
Collateral Agent's satisfaction for the benefit of the Collateral Agent
(including, without limitation, by naming the Collateral Agent as loss payee
(with respect to Collateral) or, to the extent permitted by applicable law, as
an additional insured), (ii) shall state that such insurance policies shall not
be canceled without 30 days' prior written notice thereof (or 10 days' prior
written notice in the case of cancellation for the non-payment of premiums) by
the respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Lenders, and (iv) shall in the case of
any such certificates or endorsements in favor of the Collateral Agent, be
delivered to or deposited with the Collateral Agent. In no event shall the
Borrower be required to deposit the actual insurance policies with the
Collateral Agent. The Administrative Agent shall deliver copies of any
certificates of insurance to a Lender upon such Lender's request.
(c) If the Borrower or any of its Subsidiaries shall fail to maintain
all insurance in accordance with this section 8.3, or if the Borrower or any of
its Subsidiaries shall fail to so endorse and deliver or deposit all
endorsements or certificates with respect thereto, the Administrative Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation), upon prior notice to the Borrower, to procure such insurance and
the Borrower agrees to reimburse the Administrative Agent or the Collateral
Agent, as the case may be, on demand, for all costs and expenses of procuring
such insurance.
51
8.4. Payment of Taxes and Claims. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Borrower or any of its
Subsidiaries; provided that neither the Borrower nor any of its Subsidiaries
shall be required to pay any such tax, assessment, charge, levy or claim which
is being contested in good faith and by proper proceedings if it has maintained
adequate reserves with respect thereto in accordance with GAAP. Without limiting
the generality of the foregoing, the Borrower will, and will cause each of its
Subsidiaries to, pay in full all of its wage obligations to its employees in
accordance with the Fair Labor Standards Act (29 U.S.C. sections 206-207) and
any comparable provisions of applicable law.
8.5. Corporate Franchises. The Borrower will do, and will cause each of
its Subsidiaries to do, or cause to be done, all things necessary to preserve
and keep in full force and effect its corporate or other organizational
existence, rights, authority and franchises, provided that nothing in this
section 8.5 shall be deemed to prohibit (i) any transaction permitted by section
9.2; (ii) the termination of existence of any Subsidiary if (A) the Borrower
determines that such termination is in its best interest and (B) such
termination is not adverse in any material respect to the Lenders; or (iii) the
loss of any rights, authorities or franchises if the loss thereof, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
8.6. Good Repair. The Borrower will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business in whomsoever's possession they may be, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements, thereto, to the extent and in the manner customary for
companies in similar businesses.
8.7. Compliance with Statutes, etc. The Borrower will, and will cause
each of its Subsidiaries to, comply, in all material respects, with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, other than those (i)
being contested in good faith by appropriate proceedings, as to which adequate
reserves are established to the extent required under GAAP, and (ii) the
noncompliance with which would not have, and which would not be reasonably
expected to have, a Material Adverse Effect or a material adverse effect on the
ability of the Borrower to perform its obligations under any Credit Document.
8.8. Compliance with Environmental Laws. Without limitation of the
covenants contained in section 8.7 hereof:
(a) The Borrower will, and will cause each of its Subsidiaries
to, (i) comply, in all material respects, with all Environmental Laws
applicable to the ownership, lease or use of all Real Property now or
hereafter owned, leased or operated by the Borrower or any of its
Subsidiaries, and promptly pay or cause to be paid all costs and
expenses incurred in connection with such compliance, except for such
noncompliance as would not have, and which would not be reasonably
expected to have, a Material Adverse Effect or a material adverse
effect on the ability of the Borrower to perform its obligations under
any Credit Document; and (ii) keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such
Environmental Laws which are not permitted under section 9.3.
(b) Without limitation of the foregoing, if the Borrower or
any of its Subsidiaries shall generate, use, treat, store, release or
dispose of, or permit the generation, use, treatment, storage, release
or disposal of, Hazardous Materials on any Real Property now or
hereafter owned, leased or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, any such action shall be
effected only in the ordinary course of business and in any event in
compliance, in all material respects, with all Environmental Laws
applicable thereto, except for such noncompliance as would not have,
and which would not be reasonably expected to have, a Material Adverse
52
Effect or a material adverse effect on the ability of the Borrower to
perform its obligations under any Credit Document.
(c) If required to do so under any applicable order of any
governmental agency, the Borrower will undertake, and cause each of its
Subsidiaries to undertake, any clean up, removal, remedial or other
action necessary to remove and clean up any Hazardous Materials from
any Real Property owned, leased or operated by the Borrower or any of
its Subsidiaries in accordance with, in all material respects, the
requirements of all applicable Environmental Laws and in accordance
with, in all material respects, such orders of all governmental
authorities, except (i) to the extent that the Borrower or such
Subsidiary is contesting such order in good faith and by appropriate
proceedings and for which adequate reserves have been established to
the extent required by GAAP, or (ii) for such noncompliance as would
not have, and which would not be reasonably expected to have, a
Material Adverse Effect or a material adverse effect on the ability of
the Borrower to perform its obligations under any Credit Document.
(d) At the written request of the Administrative Agent or the
Required Lenders, which request shall specify in reasonable detail the
basis therefor, at any time and from time to time after the Lenders
receive notice under section 8.1(g) for any Environmental Claim
involving potential expenditures by the Borrower or any of its
Subsidiaries in excess of $1,000,000 in the aggregate for any Real
Property, the Borrower will provide, at its sole cost and expense, an
environmental site assessment report concerning any such Real Property
now or hereafter owned, leased or operated by the Borrower or any of
its Subsidiaries, prepared by an environmental consulting firm
reasonably acceptable to the Administrative Agent, indicating the
presence or absence of Hazardous Materials and the potential cost of
any removal or a remedial action in connection with any Hazardous
Materials on such Real Property. If the Borrower fails to provide the
same within 90 days after such request was made, the Administrative
Agent may order the same, and the Borrower shall grant and hereby
grants, to the Administrative Agent and the Lenders and their agents,
access to such Real Property and specifically grants the Administrative
Agent and the Lenders an irrevocable non-exclusive license, subject to
the rights of tenants, to undertake such an assessment, all at the
Borrower's expense, but in a manner which shall not disrupt the
continuation of normal business activities of the Borrower and its
Subsidiaries.
8.9. Fiscal Years, Fiscal Quarters. The Borrower will, for consolidated
financial reporting purposes, continue to use December 31 as the end of its
fiscal year and March 31, June 30, September 30 and December 31 as the end of
its fiscal quarters. If the Borrower shall change any of its Subsidiaries'
fiscal years or fiscal quarters (other than the fiscal year or fiscal quarters
of a person which becomes a Subsidiary, made at the time such person becomes a
Subsidiary, to conform to the Borrower's fiscal year and fiscal quarters or to
conform to the fiscal year or fiscal quarters which the Borrower generally
utilizes for its Subsidiaries), the Borrower will promptly, and in any event
within 30 days following any such change, deliver a notice to the Administrative
Agent and the Lenders describing such change and any material accounting entries
made in connection therewith and stating whether such change will have any
impact upon any financial computations to be made hereunder, and if any such
impact is foreseen, describing in reasonable detail the nature and extent of
such impact. If the Required Lenders determine that any such change will have
any impact upon any financial computations to be made hereunder which is adverse
to the Lenders, the Borrower will, if so requested by the Administrative Agent,
enter into an amendment to this Agreement, in form and substance satisfactory to
the Administrative Agent and the Required Lenders, modifying any of the
financial covenants or related provisions hereof in such manner as the Required
Lenders determine is necessary to eliminate such adverse effect.
8.10. Certain Subsidiaries to Join in Subsidiary Guaranty. (a) In the
event that at any time after the Closing Date
(x) the Borrower has any Subsidiary (other than a Foreign
Subsidiary as to which section 8.10(b) applies) which is not a party to
the Subsidiary Guaranty, or
(y) an Event of Default shall have occurred and be continuing
and the Borrower has any Subsidiary which is not a party to the
Subsidiary Guaranty,
53
the Borrower will notify the Administrative Agent in writing of such event,
identifying the Subsidiary in question and referring specifically to the rights
of the Administrative Agent and the Lenders under this section. The Borrower
will, within 30 days following written request therefor from the Administrative
Agent (who may give such request on its own initiative or upon request by the
Required Lenders), cause such Subsidiary to deliver to the Administrative Agent,
in sufficient quantities for the Lenders, (i) a joinder supplement, satisfactory
in form and substance to the Administrative Agent and the Required Lenders, duly
executed by such Subsidiary, pursuant to which such Subsidiary joins in the
Subsidiary Guaranty as a guarantor thereunder, and (ii) if such Subsidiary is a
corporation, resolutions of the Board of Directors of such Subsidiary, certified
by the Secretary or an Assistant Secretary of such Subsidiary as duly adopted
and in full force and effect, authorizing the execution and delivery of such
joinder supplement, or if such Subsidiary is not a corporation, such other
evidence of the authority of such Subsidiary to execute such joinder supplement
as the Administrative Agent may reasonably request.
(b) Notwithstanding the foregoing or the provisions of section 8.11
hereof, the Borrower shall not, unless an Event of Default shall have occurred
and be continuing, be required to cause a Foreign Subsidiary to join in the
Subsidiary Guaranty or to become a party to an Additional Security Document, or
be required to pledge or to cause a Subsidiary to Pledge more than 65% of the
capital stock of a Foreign Subsidiary pursuant to the Pledge Agreement or an
Additional Security Document, if (i) to do so would subject the Borrower to
liability for additional United States income taxes by virtue of section 956 of
the Code in an amount the Borrower considers material, and (ii) the Borrower
provides the Administrative Agent with documentation, including computations
prepared by the Borrower's internal tax officer, its independent accountants or
tax counsel, acceptable to the Required Lenders, in support thereof.
8.11. Additional Security; Further Assurances. (a) In the event that at
any time after the Closing Date
(x) the Borrower or any Subsidiary acquires, or a person which
has become a Subsidiary owns or holds, an ownership interest in any
Real Property, or any interest in any other property (tangible or
intangible), located in the United States, which is not at the time
included in the Collateral and is not subject to a Permitted Lien
securing Indebtedness, the Borrower will notify the Administrative
Agent in writing of such event, identifying the property in question
and referring specifically to the rights of the Administrative Agent
and the Lenders under this section,
(y) the Borrower or any Subsidiary at any time owns or holds
an ownership interest in any Real Property, or any interest in any
other property (tangible or intangible), located in the United States,
(1) which is not at the time included in the Collateral and is not
subject to a Permitted Lien securing Indebtedness, and (2) as to which
the Administrative Agent on its own initiative or upon instructions
from the Required Lenders has notified the Borrower that it requires
that the same be included in the Collateral, or
(z) an Event of Default shall have occurred and be continuing
and the Borrower or any Subsidiary at any time owns or holds an
interest in any Real Property or other property (tangible or
intangible), located within or outside of the United States, which is
not at the time included in the Collateral and is not subject to a
Permitted Lien securing Indebtedness,
the Borrower will, or will cause such Subsidiary to, within 20 days following
request by the Collateral Agent (who may make such request on its own initiative
or upon instructions from the Required Lenders), grant the Collateral Agent for
the benefit of the Secured Creditors (as defined in the Security Documents)
security interests and mortgages (each an "Additional Security Document") in
such interests or properties of the Borrower or any Subsidiary, subject to
obtaining any required consents from third parties (including third party
lessors and co-venturers) necessary to be obtained for the granting of a Lien on
the interests or assets involved (with the Borrower hereby agreeing to use its
reasonable best efforts to obtain such consents), and also subject to the
provisions of section 8.11(b). Each Additional Security Document (i) shall be
granted pursuant to documentation satisfactory in form and substance to the
Administrative Agent and the Collateral Agent, which documentation shall in the
case of Real Property or interests therein be accompanied by such Phase I
environmental assessments, surveys and surveyor's certifications, a mortgage
policy of title insurance, consents of landlords and other supporting
documentation requested by and satisfactory in form and substance to the
Administrative Agent and the Collateral Agent; and (ii) shall constitute a valid
and
54
enforceable perfected Lien upon the interests or properties so included in the
Collateral, subject to no other Liens except those permitted by section 9.3 or
otherwise agreed by the Administrative Agent at the time of perfection thereof
and (in the case of Real Property or interests therein) such other encumbrances
as may be set forth in the mortgage policy, if any, relating to such Additional
Security Document which shall be delivered to the Collateral Agent together with
such Additional Security Document and which shall be satisfactory in form and
substance to the Collateral Agent. The Borrower, at its sole cost and expense,
will cause each Additional Security Document or instruments related thereto to
be duly recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens created thereby
required to be granted pursuant to the Additional Security Document, and will
pay or cause to be paid in full all taxes, fees and other charges payable in
connection therewith.
(b) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, and other
assurances or instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may reasonably
require. If at any time the Collateral Agent determines, based on applicable
law, that all applicable taxes (including, without limitation, mortgage
recording taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall promptly pay
the same upon demand. Furthermore, the Borrower shall cause to be delivered to
the Collateral Agent such opinions of local counsel, appraisals, title
insurance, surveys, environmental assessments, consents of landlords, lien
waivers from landlords or mortgagees and other related documents as may be
reasonably requested by the Administrative Agent or the Collateral Agent in
connection therewith, all of which documents shall be in form and substance
satisfactory to the Administrative Agent and the Collateral Agent, except that
no title insurance or surveys shall be required for any leasehold properties
(unless the lessee has a nominal or bargain purchase option).
(c) The Borrower will if requested by any Lender at any time, in order
to meet any legal requirement applicable to such Lender, provide to
Administrative Agent, the Collateral Agent and the Lenders, at the sole cost and
expense of the Borrower, appraisals and other supporting documentation relating
to any mortgage or deed of trust delivered as an Additional Security Document
hereunder, as specified by any Lender, meeting the appraisal and other
documentation requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, or any
other legal requirements applicable to any Lender, which in the case of any such
appraisal shall be prepared by one or more valuation firms of national standing,
acceptable to the Required Lenders, utilizing appraisal standards satisfying
such Amendments, Act or other legal requirements.
(d) The Borrower will provide the Administrative Agent with sufficient
copies of each Additional Security Document and any additional supporting
documents delivered in connection therewith for distribution of copies thereof
to the Lenders, and the Administrative Agent will promptly so distribute such
copies.
8.12. Casualty and Condemnation. (a) The Borrower will promptly (and in
any event within 10 days) furnish to the Administrative Agent and the Lenders
written notice of any casualty or other insured damage to any portion of any
material Collateral or the commencement of any action or other proceeding for
the taking of any material portion of or interest in any Collateral under power
of eminent domain or by condemnation or similar proceeding.
(b) If any event described in the preceding paragraph (a) results in
Net Proceeds (whether in the form of insurance proceeds, a condemnation award or
otherwise), the Collateral Agent is authorized to collect such Net Proceeds and,
if received by any Credit Party, the Borrower will, or will cause any applicable
Credit Party, to pay over such Net Proceeds to the Collateral Agent; provided
that (i) if the aggregate Net Proceeds in respect of such event (other than
proceeds in respect of business interruption insurance) are less than $500,000,
such Net Proceeds shall be paid over to or retained by the applicable Credit
Party unless a Default has occurred and is continuing, and (ii) all proceeds of
business interruption insurance shall be paid over to or retained by the
applicable Credit Party unless a Default has occurred and is continuing. All
such Net Proceeds retained by or paid over to the Collateral Agent shall be held
by the Collateral Agent as part of the Collateral and released from time to time
to pay the costs of repairing, restoring or replacing the affected property in
accordance with the terms of the applicable Security Document, subject
55
to the terms of the applicable Security Document regarding application of such
Net Proceeds during a Default or Event of Default.
(c) If any Net Proceeds retained by or paid over to the Collateral
Agent as provided above continue to be held by the Collateral Agent on the date
that is 9 months after the occurrence of the event giving rise to such Net
Proceeds, then such Net Proceeds shall be applied to prepay Loans in accordance
with the provisions of this Agreement applicable to the prepayment of Loans in
connection with Asset Sales.
8.13. Hedge Agreements, etc. The Borrower will, and will cause each of
its Subsidiaries to, enter into Hedge Agreements (i) in order to provide
protection to the Borrower or any such Subsidiary from fluctuations and other
changes in interest rates and currency exchange rates, as and to the extent
considered reasonably necessary by the Borrower, but without exposing the
Borrower or its Subsidiaries to predominantly speculative risks unrelated to the
amount of assets, Indebtedness or other liabilities intended to be subject to
coverage on a notional basis under all such Hedge Agreements; and (ii) in the
case of any Hedge Agreement entered into after the Effective Date, only if the
proposed form thereof (including any proposed pricing or other material terms)
has been provided to the Administrative Agent contemporaneously with the entry
into such Hedge Agreement.
8.14. Senior Debt. The Borrower will at all times ensure that (a) the
claims of the Lenders in respect of the Obligations of the Borrower will not be
subordinate to, and will in all respects at least rank pari passu with, the
claims of every other senior secured or unsecured creditor of the Borrower, and
(b) any Indebtedness subordinated in any manner to the claims of any other
senior secured or unsecured creditor of the Borrower will be subordinated in
like manner to such claims of the Lenders.
SECTION 9. NEGATIVE COVENANTS.
The Borrower hereby covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until such time as the
Total Commitment has been terminated, no Notes remain outstanding and the Loans,
together with interest, Fees and all other Obligations incurred hereunder are
paid in full:
9.1. Changes in Business. Neither the Borrower nor any of its
Subsidiaries will engage in any business if, as a result, the general nature of
the business, taken on a consolidated basis, which would then be engaged in by
the Borrower and its Subsidiaries, would be substantially changed from the
general nature of the business engaged in by the Borrower and its Subsidiaries
on the date hereof.
9.2. Consolidation, Merger, Acquisitions, Sale of Assets, etc. The
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation
or sell or otherwise dispose of any of its property or assets (but excluding any
sale or disposition of obsolete or excess furniture, fixtures or equipment or
excess vacant land in the ordinary course of business), or purchase, lease or
otherwise acquire (in one transaction or a series of related transactions) all
or any part of the property or assets of any person (excluding any purchases,
leases or other acquisitions of property or assets in, and for use in, the
ordinary course of business) or agree to do any of the foregoing at any future
time, except that the following shall be permitted:
(a) Initial Acquisitions: the Acquisitions of the stock or
assets, as applicable, of Axidata, Inc., ▇▇▇▇▇▇ Business Products
Corporation and Matrix Data Corporation, on substantially the terms
disclosed to the Lenders prior to the Effective Date (including the
payment of any Indebtedness for borrowed money of any acquired
entities), in compliance with all material legal requirements
applicable thereto;
(b) Certain Intercompany Mergers, etc.: if no Default or Event
of Default shall have occurred and be continuing or would result
therefrom, (i) the merger, consolidation or amalgamation of any
Wholly-Owned Subsidiary with or into the Borrower or another
Wholly-Owned Subsidiary, so long as in any merger, consolidation or
amalgamation involving the Borrower, the Borrower is the surviving or
continuing
56
or resulting corporation, or the liquidation or dissolution of any
Subsidiary, or (ii) the transfer or other disposition of any property
by the Borrower to any Wholly-Owned Subsidiary or by any Wholly-Owned
Subsidiary to the Borrower or any other Wholly-Owned Subsidiary of the
Borrower;
(c) Permitted Acquisitions: if no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the
Borrower or any Subsidiary may make Permitted Acquisitions, provided
that (i) at least five Business Days prior to the date of any such
Permitted Acquisition which involves consideration (including the
amount of any assumed Indebtedness and (without duplication) any
outstanding Indebtedness of any person which becomes a Subsidiary as a
result of such Permitted Acquisition) of $5,000,000 or more, the
Borrower shall have delivered to the Administrative Agent an officer's
certificate executed on behalf of the Borrower by an Authorized Officer
of the Borrower, which certificate shall (A) contain the date such
Permitted Acquisition is scheduled to be consummated, (B) contain the
estimated purchase price of such Permitted Acquisition, (C) contain a
description of the property and/or assets acquired in connection with
such Permitted Acquisition, (D) demonstrate that at the time of making
any such Permitted Acquisition the covenants contained in sections 9.7
through 9.13 shall be complied with on a pro forma basis as if the
properties and/or assets so acquired had been owned by the Borrower,
and the Indebtedness assumed and/or incurred to acquire and/or finance
same has been outstanding, for the four fiscal quarter period ended
most recently prior to such acquisition for which financial information
is available and has been delivered to the Lenders (without giving
effect to any credit for unobtained or unrealized gains or any
adjustments to overhead in connection with any such Permitted
Acquisition), and (E) if requested by the Administrative Agent, attach
thereto a true and correct copy of the then proposed purchase
agreement, merger agreement or similar agreement, partnership agreement
and/or other contract entered into in connection with such Permitted
Acquisition;
(d) Permitted Dispositions: if no Default or Event of Default
shall have occurred and be continuing or would result therefrom, the
Borrower or any of its Subsidiaries may (i) sell any property, land or
building (including any related receivables or other intangible assets)
to any person which is not a Subsidiary of the Borrower, or (ii) sell
the entire capital stock (or other equity interests) and Indebtedness
of any Subsidiary owned by the Borrower or any other Subsidiary to any
person which is not a Subsidiary of the Borrower, or (iii) permit any
Subsidiary to be merged or consolidated with a person which is not an
Affiliate of the Borrower, or (iv) consummate any other Asset Sale with
a person who is not a Subsidiary of the Borrower; provided that (A) the
consideration for such transaction represents fair value (as determined
by management of the Borrower), and at least 90% of such consideration
consists of cash, (B) in the case of any such transaction involving
consideration in excess of $1,500,000, at least five Business Days
prior to the date of completion of such transaction the Borrower shall
have delivered to the Administrative Agent an officer's certificate
executed on behalf of the Borrower by an Authorized Officer of the
Borrower, which certificate shall contain a description of the proposed
transaction, the date such transaction is scheduled to be consummated,
the estimated purchase price or other consideration for such
transaction, financial information pertaining to compliance with the
preceding clause (A), and which shall (if requested by the
Administrative Agent) include a certified copy of the draft or
definitive documentation pertaining thereto, and (C) contemporaneously
therewith, the Borrower prepays Loans as and to the extent contemplated
by section 5.2(d);
(e) Permitted Investments: the investments permitted pursuant
to section 9.5;
(f) Capital Expenditures: Consolidated Capital Expenditures
permitted by section 9.9; and
(g) Leases: the Borrower or any of its Subsidiaries may enter
into leases of property or assets not constituting Permitted
Acquisitions in the ordinary course of business not otherwise in
violation of this Agreement.
To the extent the Required Lenders (or all of the Lenders as shall be required
by section 12.12) waive the provisions of this section 9.2 with respect to the
sale, transfer or other disposition of any Collateral, or any Collateral is
sold,
57
transferred or disposed of as permitted by this section 9.2, (i) such Collateral
shall be sold, transferred or disposed of free and clear of the Liens created by
the respective Security Documents; (ii) if such Collateral includes all of the
capital stock of a Subsidiary which is a party to the Subsidiary Guaranty or
whose stock is pledged pursuant to the Pledge Agreement, such capital stock
shall be released from the Pledge Agreement and such Subsidiary shall be
released from the Subsidiary Guaranty; and (iii) the Administrative Agent and
the Collateral Agent shall be authorized to take actions deemed appropriate by
them in order to effectuate the foregoing.
9.3. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with or without
recourse to the Borrower or any of its Subsidiaries, other than for purposes of
collection of delinquent accounts in the ordinary course of business) or assign
any right to receive income, or file or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, except that the foregoing restrictions shall not
apply to:
(a) the Standard Permitted Liens;
(b) Liens consisting of purchase money security interests
retained by Hewlett Packard (or other major manufacturers approved in
writing by the Administrative Agent, acting on instructions from the
Required Lenders) on computers and other items manufactured by it and
purchased by the Borrower and its Subsidiaries for resale in the
ordinary course of business, provided such purchase money security
interests cover only the items so supplied (and the proceeds thereof),
secure only the purchase price thereof, and do not extend to other
property of the Borrower or any of its Subsidiaries;
(c) Liens which
(i) are placed upon equipment or machinery used in
the ordinary course of business of the Borrower or any
Subsidiary at the time of (or within 180 days after) the
acquisition thereof by the Borrower or any such Subsidiary to
secure Indebtedness incurred to pay or finance all or a
portion of the purchase price thereof, provided that the Lien
encumbering the equipment or machinery so acquired does not
encumber any other asset of the Borrower or any such
Subsidiary; or
(ii) are existing on property or other assets at the
time acquired by the Borrower or any Subsidiary or on assets
of a person at the time such person first becomes a Subsidiary
of the Borrower; provided that (A) any such Liens were not
created at the time of or in contemplation of the acquisition
of such assets or person by the Borrower or any of its
Subsidiaries; (B) in the case of any such acquisition of a
person, any such Lien attaches only to the property and assets
of such person; and (C) in the case of any such acquisition of
property or assets by the Borrower or any Subsidiary, any such
Lien attaches only to the property and assets so acquired and
not to any other property or assets of the Borrower or any
Subsidiary;
provided that (1) the Indebtedness secured by any such Lien does not
exceed 100% of the fair market value of the property and assets to
which such Lien attaches, determined at the time of the acquisition of
such property or asset or the time at which such person becomes a
Subsidiary of the Borrower (except in the circumstances described in
clause (ii) above to the extent such Liens constituted customary
purchase money Liens at the time of incurrence and were entered into in
the ordinary course of business), and (2) the Indebtedness secured
thereby is permitted by section 9.4(b); and
(d) Liens on assets, properties and rights of Foreign
Subsidiaries, securing Indebtedness permitted by section 9.4(c).
58
9.4. Indebtedness. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness of the Borrower or any of its Subsidiaries, except:
(a) Indebtedness incurred under this Agreement and the other
Credit Documents;
(b) Indebtedness of the Borrower or any Subsidiary (x) in
respect of Capital Leases and/or (y) subject to Liens permitted by
section 9.3(c); provided that (i) the aggregate Capitalized Lease
Obligations of the Borrower and its Subsidiaries, plus the aggregate
outstanding principal amount of Indebtedness subject to Liens permitted
under section 9.3(c), shall not exceed $10,000,000 in the aggregate at
any time outstanding, and (ii) at the time of any incurrence thereof
after the date hereof, and after giving effect thereto, no Event of
Default shall have occurred and be continuing or would result
therefrom;
(c) Indebtedness incurred by Foreign Subsidiaries; provided
that (i) the aggregate outstanding principal amount of such
Indebtedness outstanding at any time shall not exceed $7,000,000, and
(ii) at the time of any incurrence thereof after the date hereof, and
after giving effect thereto, no Event of Default shall have occurred
and be continuing or would result therefrom;
(d) any guaranty by the Borrower of any Indebtedness referred
to in the preceding clauses (b) and (c);
(e) Existing Indebtedness, to the extent not otherwise
permitted pursuant to the foregoing clauses; and any refinancing,
extension, renewal or refunding of any such Existing Indebtedness not
involving an increase in the principal amount thereof or a reduction of
more than 10% in the remaining weighted average life to maturity
thereof (computed in accordance with standard financial practice);
(f) Indebtedness of the Borrower or any Subsidiary under Hedge
Agreements;
(g) Indebtedness of the Borrower to any of its Subsidiaries,
and Indebtedness of any of the Borrower's Subsidiaries to the Borrower
or to another Subsidiary of the Borrower, in each case to the extent
permitted under section 9.5; and
(h) Guaranty Obligations permitted under section 9.5.
9.5. Advances, Investments, Loans and Guaranty Obligations. The
Borrower will not, and will not permit any of its Subsidiaries to, (1) lend
money or credit or make advances to any person, (2) purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, or other investment in, any person, (3) create, acquire
or hold any Subsidiary, (4) be or become a party to any joint venture or
partnership, or (5) be or become obligated under any Guaranty Obligations (other
than those created in favor of the Lenders pursuant to the Credit Documents),
except:
(a) the Borrower or any of its Subsidiaries may invest in cash
and Cash Equivalents;
(b) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the normal course
of business;
(c) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(d) investments acquired by the Borrower or any of its
Subsidiaries (i) in exchange for any other investment held by the
Borrower or any such Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization of the issuer
of such other investment, or (ii) as a result of a foreclosure by the
Borrower or any of its Subsidiaries with respect to any secured
investment or other transfer of title with respect to any secured
investment in default;
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(e) loans and advances to employees for business-related
travel expenses, moving expenses, costs of replacement homes, business
machines or supplies, automobiles and other similar expenses, in each
case incurred in the ordinary course of business, shall be permitted;
(f) investments in the capital of any Wholly-Owned Subsidiary
which is not a Foreign Subsidiary;
(g) to the extent not permitted by the foregoing clauses,
existing investments in any Subsidiaries (and any increases thereof
attributable to increases in retained earnings);
(h) to the extent not permitted by the foregoing clauses, the
existing loans, advances, investments and guarantees described on Annex
V hereto;
(i) any unsecured guaranty by the Borrower of any Indebtedness
of a Subsidiary permitted by section 9.4, and any guaranty by any
Subsidiary described in section 9.4;
(j) investments of the Borrower and its Subsidiaries in Hedge
Agreements;
(k) loans and advances by any Subsidiary of the Borrower to
the Borrower, provided that the Indebtedness represented thereby
constitutes Subordinated Indebtedness;
(l) loans and advances by the Borrower or by any Subsidiary of
the Borrower to, or other investments in, any Subsidiary of the
Borrower which is a Subsidiary Guarantor;
(m) loans and advances by the Borrower to Foreign
Subsidiaries, made after September 30, 1998, provided that the
aggregate principal amount thereof, when taken together with the
aggregate principal amount of Indebtedness of Foreign Subsidiaries
outstanding at such time under section 9.4(c), does not at any time
exceed $7,000,000;
(n) loans and advances by any Subsidiary of the Borrower which
is not a Subsidiary Guarantor to, or other investments by any such
Subsidiary in, any other Subsidiary of the Borrower which is a
Wholly-Owned Subsidiary;
(o) Guaranty Obligations, not otherwise permitted by the
foregoing clauses, of (i) the Borrower or any Subsidiary in respect of
leases of the Borrower or any Subsidiary the entry into which is not
prohibited by this Agreement, (ii) the Borrower or any Subsidiary in
respect of any other person (other than in respect of (x) Indebtedness
for borrowed money or represented by bonds, notes, debentures or
similar securities, or (y) Indebtedness constituting Capital Leases)
arising as a matter of applicable law because the Borrower or such
Subsidiary is or is deemed to be a general partner of such other
person, or (iii) the Borrower or any Subsidiary in respect of any other
person (other than in respect of (x) Indebtedness for borrowed money or
represented by bonds, notes, debentures or similar securities, or (y)
Indebtedness constituting Capital Leases) arising in the ordinary
course of business;
(p) the Acquisitions permitted by section 9.2;
(q) loans, advances and investments of any person which are
outstanding at the time such person becomes a Subsidiary of the
Borrower as a result of an Acquisition permitted by section 9.2, but
not any increase in the amount thereof;
(r) Subordinated Indebtedness of the Borrower representing the
deferred purchase price payable in connection with any Acquisition
permitted by section 9.2, provided that the maturity of any such
Subordinated Indebtedness is not greater than 13 months; and
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(s) any other loans, advances, investments (whether in the
form of cash or contribution of property, and if in the form of a
contribution of property, such property shall be valued for purposes of
this clause (s) at the fair value thereof as reasonably determined by
the Borrower) and Guaranty Obligations, including, without limitation,
in or to or for the benefit of, Subsidiaries, joint ventures, or other
persons, not otherwise permitted by the foregoing clauses, made after
the end of the most recent fiscal quarter of the Borrower for which
financial statements were furnished to the Lenders prior to the
Effective Date (such loans, advances and investments, collectively,
"Basket Investments", and such Guaranty Obligations, collectively
"Basket Guarantees") described below: (i) if no Event of Default shall
have occurred and be continuing, or would result therefrom, Basket
Investments of up to an aggregate of $3,000,000, taking into account
the repayment of any loans or advances comprising such Basket
Investments, shall be permitted to be made, and (ii) if no Event of
Default shall have occurred and be continuing, or would result
therefrom, Basket Guarantees covering up to $3,000,000 aggregate
principal amount of Indebtedness outstanding at any time, shall be
permitted to be incurred.
9.6. Dividends, etc. The Borrower will not (a) directly or indirectly
declare, order, pay or make any dividend (other than dividends payable solely in
capital stock of the Borrower) or other distribution on or in respect of any
capital stock of any class of the Borrower, whether by reduction of capital or
otherwise, or (b) directly or indirectly make, or permit any of its Subsidiaries
to directly or indirectly make, any purchase, redemption, retirement or other
acquisition of any capital stock of any class of the Borrower (other than for a
consideration consisting solely of capital stock of the same class of the
Borrower) or of any warrants, rights or options to acquire or any securities
convertible into or exchangeable for any capital stock of the Borrower, except
that the Borrower may make cash payments for open market or privately negotiated
repurchases of its common stock, if (i) no Default under section 10.1(a) or
Event of Default shall have occurred and be continuing at the time of such
repurchase, (ii) after giving effect thereto the Borrower will be in compliance
with section 9.11, (iii) the aggregate consideration for all such repurchases
subsequent to June 30, 1998, net of the net cash proceeds of sales of common
stock and the market value of shares of common stock used as consideration for
Acquisitions and/or contributed to employee benefit or stock purchase plans
subsequent to such date, does not exceed $15,000,000, and (iv) if the aggregate
consideration for all such repurchases during any fiscal quarter (net of the
amounts described above during such fiscal quarter) would exceed $1,000,000,
prior to making any purchases during such fiscal quarter in excess of such
amount the Borrower shall have delivered to the Administrative Agent a
certificate of an Authorized Officer of the Borrower demonstrating that the
Borrower would be in compliance with sections 9.7, 9.8, 9.9 and 9.11 on a pro
forma basis after giving effect to the contemplated additional repurchases
during such fiscal quarter and the incurrence of any Indebtedness the proceeds
of which are used directly or indirectly to finance such repurchases.
9.7. Consolidated Total Debt/Consolidated EBITDA Ratio. The Borrower
will not at any time permit the ratio of (i) the amount of Consolidated Total
Debt at such time to (ii) Consolidated EBITDA for the Testing Period most
recently ended, to exceed 4.00 to 1.00 in the case of any Testing Period ended
on or prior to September 30, 2000, or 3.75 to 1.00 in the case of any Testing
Period ended thereafter.
9.8. Fixed Charge Coverage Ratio. The Borrower will not permit its
Fixed Charge Coverage Ratio for any Testing Period to be less than 1.40 to 1.00.
9.9. Capital Expenditures. The Borrower will not, and will not permit
any of its Subsidiaries to, make or incur Consolidated Capital Expenditures
during any fiscal year in excess of $5,000,000. In the event actual Consolidated
Capital Expenditures for any fiscal year are less than such amount, the excess
amount may not be carried over to any subsequent period.
9.10. Certain Leases. The Borrower will not permit the aggregate
payments (excluding any property taxes, insurance or maintenance obligations
paid by the Borrower and its Subsidiaries as additional rent or lease payments)
by the Borrower and its Subsidiaries on a consolidated basis under agreements to
rent or lease any real or personal property for a period exceeding 12 months
(including any renewal or similar option periods), including any leases
constituting Capital Leases, to exceed in any fiscal year of the Borrower an
amount equal to 2% of the consolidated revenues of the Borrower and its
Subsidiaries for the preceding fiscal year.
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9.11. Minimum Consolidated Net Worth. The Borrower will not permit its
Consolidated Net Worth at any time to be less than $71,000,000, except that (i)
effective as of the end of the Borrower's fiscal quarter ended December 31,
1998, and as of the end of each fiscal quarter thereafter, the foregoing amount
(as it may from time to time be increased as herein provided), shall be
increased by 50% of the Consolidated Net Income of the Borrower and its
Subsidiaries for the fiscal quarter ended on such date (there being no reduction
in the case of any such Consolidated Net Income which reflects a deficit), (ii)
the foregoing amount (as it may from time to time be increased as herein
provided), shall be increased by an amount equal to 90% of the cash proceeds
(net of underwriting discounts and commissions and other customary fees and
costs associated therewith) from any sale or issuance of equity by the Borrower
after September 30, 1998 (other than any sale or issuance to management or
employees pursuant to employee benefit plans of general application), and (iii)
the foregoing amount (as it may from time to time be increased as herein
provided), shall be increased by an amount equal to 90% of the increase in
Consolidated Net Worth attributable to the issuance of common stock or other
equity interests subsequent to September 30, 1998 as consideration in any
Permitted Acquisitions.
9.12. Prepayments and Refinancings of Other Debt, etc. The Borrower
will not, and will not permit any of its Subsidiaries to, make (or give any
notice in respect thereof) any voluntary or optional payment or prepayment or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) or exchange of, or refinance or refund, any
Indebtedness of the Borrower or its Subsidiaries (other than the Obligations,
intercompany loans and advances among the Borrower and its Subsidiaries, and
Indebtedness representing all or any portion of the consideration payable for
any Permitted Acquisition); provided that the Borrower or any Subsidiary may
refinance or refund any such Indebtedness if the aggregate principal amount
thereof is not increased and the weighted average life to maturity thereof
(computed in accordance with standard financial practice) is not reduced by more
than 10%.
9.13. Transactions with Affiliates. The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction or series of transactions
with any Affiliate (other than, in the case of the Borrower, any Subsidiary, and
in the case of a Subsidiary, the Borrower or another Subsidiary) other than in
the ordinary course of business of and pursuant to the reasonable requirements
of the Borrower's or such Subsidiary's business and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than would obtain in
a comparable arm's-length transaction with a person other than an Affiliate,
except (i) loans, advances and investments permitted by section 9.5, (ii) sales
of goods to an Affiliate for use or distribution outside the United States which
in the good faith judgment of the Borrower complies with any applicable legal
requirements of the Code, or (iii) agreements and transactions (including
leases) with and payments to officers, directors and shareholders which are
either (A) entered into in the ordinary course of business and not prohibited by
any of the provisions of this Agreement, or (B) entered into outside the
ordinary course of business, approved by the directors or shareholders of the
Borrower, and not prohibited by any of the provisions of this Agreement.
9.14. Limitation on Certain Restrictive Agreements. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist or become effective, any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Subsidiary to create, incur or suffer to exist
any Lien upon any of its property or assets as security for Indebtedness, or (b)
the ability of any such Subsidiary to pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by the Borrower or any Subsidiary of the Borrower, or pay any
Indebtedness owed to the Borrower or a Subsidiary of the Borrower, or to make
loans or advances to the Borrower or any of the Borrower's other Subsidiaries,
or transfer any of its property or assets to the Borrower or any of the
Borrower's other Subsidiaries, except for such restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest, (iv) customary provisions restricting
assignment of any licensing agreement entered into in the ordinary course of
business, (v) customary provisions restricting the transfer or further
encumbering of assets subject to Liens permitted under section 9.3 (b) or (c),
(vi) restrictions contained in the Existing Indebtedness Agreements as in effect
on the Effective Date and customary restrictions affecting only a Subsidiary of
the Borrower under any agreement or instrument governing any of the Indebtedness
of a Subsidiary permitted pursuant to 9.4, (vii) any document relating to
Indebtedness secured by a Lien permitted by section 9.3, insofar as the
provisions thereof
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limit grants of junior liens on the assets securing such Indebtedness, and
(viii) any operating lease or Capital Lease, insofar as the provisions thereof
limit grants of a security interest in, or other assignments of, the related
leasehold interest to any other person.
9.15. Limitation on Sale and Lease-Back Transactions. The Borrower will
not, nor will it permit any Subsidiary to, enter into any Sale and Lease-Back
Transaction involving any individual property (or related group of properties as
part of the same Sale and Lease-Back Transaction) having a Value over $100,000
unless either (a) the Borrower or such Subsidiary would be entitled to incur
Indebtedness secured by a Lien on such property pursuant to section 9.4(c), or
(b) the Borrower shall prepay General Revolving Loans, and to the extent General
Revolving Loans are not so prepaid, shall voluntarily permanently reduce the
Unutilized Total General Revolving Commitment, by an amount, conforming to the
requirements of section 4.2 as to the amount of any partial reduction of the
Unutilized Total General Revolving Commitment, and/or section 5.1, as to the
amount of any partial prepayment of the General Revolving Loans, at least equal
to the Value of such Sale and Lease-Back Transaction.
SECTION 10. EVENTS OF DEFAULT.
10.1. Events of Default. Any of the following specified events (each an
"Event of Default") shall constitute an Event of Default hereunder:
(a) Payments: the Borrower shall (i) default in the payment
when due of any principal of the Loans or any reimbursement obligation
in respect of any Unpaid Drawing; or (ii) default, and such default
shall continue for five or more days, in the payment when due of any
interest on the Loans or any Fees or any other amounts owing hereunder
or under any other Credit Document; or
(b) Representations, etc.: any representation, warranty or
statement made by the Borrower herein or in any other Credit Document
or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
(c) Certain Negative Covenants: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.2 through 9.12, inclusive, or section
9.15, of this Agreement; or
(d) Other Covenants: the Borrower shall default in the due
performance or observance by it of any term, covenant or agreement
contained in this Agreement or any other Credit Document, other than
those referred to in section 10.1(a) or (b) or (c) above, and such
default shall not be remedied within 30 days after the earlier of (i)
an officer of the Borrower obtaining actual knowledge of such default
or (ii) the Borrower receiving written notice of such default from the
Administrative Agent or the Required Lenders (any such notice to be
identified as a "notice of default " and to refer specifically to this
paragraph); or
(e) Default Under Other Agreements: the Borrower or any of its
Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) owed to any Lender, or having
an unpaid principal amount of $250,000 or greater, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or (ii)
default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto (and all grace
periods applicable to such observance, performance or condition shall
have expired), or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and payable, or shall be required to be prepaid
(other than by a regularly scheduled required prepayment or redemption,
prior to the stated maturity thereof); or
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(f) Other Credit Documents: the Subsidiary Guaranty or any
Security Document (once executed and delivered) shall cease for any
reason (other than termination in accordance with its terms) to be in
full force and effect; or any Credit Party shall default in any payment
obligation thereunder; or any Credit Party shall default in any
material respect in the due performance and observance of any other
obligation thereunder and such default shall continue unremedied for a
period of at least 30 days after notice by the Administrative Agent or
the Required Lenders; or any Credit Party shall (or seek to) disaffirm
or otherwise limit its obligations thereunder otherwise than in strict
compliance with the terms thereof; or
(g) Judgments: one or more judgments or decrees shall be
entered against the Borrower and/or any of its Subsidiaries involving a
liability (whether or not covered by insurance) of $500,000 or more in
the aggregate for all such judgments and decrees for the Borrower and
its Subsidiaries) and any such judgments or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within 30 days
from the entry thereof; or
(h) Bankruptcy, etc.: any of the following shall occur:
(i) the Borrower, any of its Material Subsidiaries or
any other Credit Party (the Borrower and each of such other
persons, each a "Principal Party") shall commence a voluntary
case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or
(ii) an involuntary case is commenced against any
Principal Party and the petition is not controverted within 10
days, or is not dismissed within 60 days, after commencement
of the case; or
(iii) a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all
of the property of any Principal Party; or
(iv) any Principal Party commences (including by way
of applying for or consenting to the appointment of, or the
taking of possession by, a rehabilitator, receiver, custodian,
trustee, conservator or liquidator (collectively, a
"conservator") of itself or all or any substantial portion of
its property) any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency, liquidation, rehabilitation,
conservatorship or similar law of any jurisdiction whether now
or hereafter in effect relating to such Principal Party; or
(v) any such proceeding is commenced against any
Principal Party to the extent such proceeding is consented by
such person or remains undismissed for a period of 60 days; or
(vi) any Principal Party is adjudicated insolvent or
bankrupt; or
(vii) any order of relief or other order approving
any such case or proceeding is entered; or
(viii) any Principal Party suffers any appointment of
any conservator or the like for it or any substantial part of
its property which continues undischarged or unstayed for a
period of 60 days; or
(ix) any Principal Party makes a general assignment
for the benefit of creditors; or
(x) any corporate (or similar organizational) action
is taken by any Principal Party for the purpose of effecting
any of the foregoing; or
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(i) ERISA: (i) any of the events described in clauses (i)
through (viii) of section 8.1(f) shall have occurred; or (ii) there
shall result from any such event or events the imposition of a lien,
the granting of a security interest, or a liability or a material risk
of incurring a liability; and (iii) any such event or events or any
such lien, security interest or liability, individually, and/or in the
aggregate, in the opinion of the Required Lenders, has had, or could
reasonably be expected to have, a Material Adverse Effect; or
(j) Material Adverse Effect: any event or circumstance shall
occur or exist which has a Material Adverse Effect upon the Borrower,
as compared to the business, operations, property, assets, liabilities
or condition (financial or otherwise) of the Borrower and its
Subsidiaries as reflected in the financial statements and the Financial
Projections referred to in section 7.8.
10.2. Acceleration, etc. Upon the occurrence of any Event of Default,
and at any time thereafter, if any Event of Default shall then be continuing,
the Administrative Agent shall, upon the written request of the Required
Lenders, by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Administrative Agent, the
Collateral Agent or any Lender to enforce its claims against the Borrower or any
other Credit Party in any manner permitted under applicable law:
(a) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately without
any other notice of any kind;
(b) declare the principal of and any accrued interest in
respect of all Loans, all Unpaid Drawings and all other Obligations
owing hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower;
(c) terminate any Letter of Credit which may be terminated in
accordance with its terms;
(d) direct the Borrower to pay (and the Borrower hereby agrees
that on receipt of such notice or upon the occurrence of an Event of
Default with respect to the Borrower under section 10.1(h), it will
pay) to the Administrative Agent an amount of cash equal to the
aggregate Stated Amount of all Letters of Credit then outstanding (such
amount to be held as security for the Borrower's (and any Subsidiary
which is an account party) reimbursement obligations in respect
thereof); and/or
(e) exercise any other right or remedy available under any of
the Credit Documents or applicable law;
provided that, if an Event of Default specified in section 10.1(h) shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (a) and/or
(b) above shall occur automatically without the giving of any such notice.
10.3. Application of Liquidation Proceeds. All monies received by the
Administrative Agent, the Collateral Agent or any Lender from the exercise of
remedies hereunder or under the other Credit Documents or under any other
documents relating to this Agreement shall, unless otherwise required by the
terms of the other Credit Documents or by applicable law, be applied as follows:
(i) first, to the payment of all expenses (to the extent not
otherwise paid by the Borrower or any of the other Credit Parties)
incurred by the Administrative Agent and the Lenders in connection with
the exercise of such remedies, including, without limitation, all
reasonable costs and expenses of collection, reasonable documented
attorneys' fees, court costs and any foreclosure expenses;
(ii) second, to the payment pro rata of interest then accrued
on the outstanding Loans;
65
(iii) third, to the payment pro rata of any fees then accrued
and payable to the Administrative Agent, any Letter of Credit Issuer or
any Lender under this Agreement in respect of the Loans or the Letter
of Credit Outstandings;
(iv) fourth, to the payment pro rata of (A) the principal
balance then owing on the outstanding Loans, (B) the amounts then due
under Designated Hedge Agreements to creditors of the Borrower or any
Subsidiary, subject to confirmation by the Administrative Agent of any
calculations of termination or other payment amounts being made in
accordance with normal industry practice, and (C) the Stated Amount of
the Letter of Credit Outstandings (to be held and applied by the
Administrative Agent as security for the reimbursement obligations in
respect thereof);
(v) fifth, to the payment to the Lenders of any amounts then
accrued and unpaid under sections 2.9, 2.10 and 3.5 hereof, and if such
proceeds are insufficient to pay such amounts in full, to the payment
of such amounts pro rata;
(vi) sixth, to the payment pro rata of all other amounts owed
by the Borrower to the Administrative Agent, to any Letter of Credit
Issuer or any Lender under this Agreement or any other Credit Document,
and to any counterparties under Designated Hedge Agreements of the
Borrower and its Subsidiaries, and if such proceeds are insufficient to
pay such amounts in full, to the payment of such amounts pro rata; and
(vii) finally, any remaining surplus after all of the
Obligations have been paid in full, to the Borrower or to whomsoever
shall be lawfully entitled thereto.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1. Appointment. Each Lender hereby irrevocably designates and
appoints PNC as Administrative Agent (such term to include, for the purposes of
this section 11, PNC acting as Collateral Agent) to act as specified herein and
in the other Credit Documents, and each such Lender hereby irrevocably
authorizes PNC as the Administrative Agent for such Lender, to take such action
on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such upon the
express conditions contained in this section 11. The Administrative Agent will
not give any written notice or other written communication to the Borrower which
purports to be on behalf of the Required Lenders or all Lenders unless the
Required Lenders or all Lenders, as applicable, have consented thereto or
otherwise instructed the Administrative Agent to do so. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein or in the other Credit Documents, nor any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent. The provisions of this section 11 are solely
for the benefit of the Administrative Agent, and the Lenders, and the Borrower
and its Subsidiaries shall not have any rights as a third party beneficiary of
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for the Borrower or any of its
Subsidiaries.
11.2. Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care except to the extent
otherwise required by section 11.3.
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11.3. Exculpatory Provisions. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such person under or in connection with this Agreement (except
for its or such person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or of its Subsidiaries or any
of their respective officers contained in this Agreement, any other Credit
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Credit Document or for any failure
of the Borrower or any Subsidiary of the Borrower or any of their respective
officers to perform its obligations hereunder or thereunder. The Administrative
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrower or any of its Subsidiaries. The Administrative Agent shall not be
responsible to any Lender for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Credit
Document or for any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statement or in any financial
or other statements, instruments, reports, certificates or any other documents
in connection herewith or therewith furnished or made by the Administrative
Agent to the Lenders or by or on behalf of the Borrower or any of its
Subsidiaries to the Administrative Agent or any Lender or be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.4. Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, facsimile transmission, telex or teletype message, statement, order or
other document or conversation believed by it, in good faith, to be genuine and
correct and to have been signed, sent or made by the proper person or persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of its Subsidiaries), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Credit Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Credit Documents in accordance with a request of the Required Lenders (or
all of the Lenders, as to any matter which, pursuant to section 12.12, can only
be effectuated with the consent of all Lenders), and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders.
11.5. Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6. Non-Reliance. Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representations or warranties to
it and that no act by the Administrative Agent hereinafter taken, including any
review of the affairs of the Borrower or any of its Subsidiaries, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent, or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and
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other conditions, prospects and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent, or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement, and to make such investigation as it
deems necessary to inform itself as to the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and its Subsidiaries. The Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
conditions, prospects or creditworthiness of the Borrower or any of its
Subsidiaries which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
11.7. Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such ratably according to their
respective General Revolving Loans and Unutilized General Revolving Commitments,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, reasonable expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
incurred by or asserted against the Administrative Agent in its capacity as such
in any way relating to or arising out of this Agreement or any other Credit
Document, or any documents contemplated by or referred to herein or the
transactions contemplated hereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing, but
only to the extent that any of the foregoing is not paid by the Borrower,
provided that no Lender shall be liable to the Administrative Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting solely from the Administrative Agent's gross negligence or
willful misconduct. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this section 11.7 shall
survive the payment of all Obligations.
11.8. The Administrative Agent in Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower, its Subsidiaries
and their Affiliates as though not acting as Administrative Agent hereunder.
With respect to the Loans made by it and all Obligations owing to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
11.9. Successor Administrative Agent. The Administrative Agent may
resign as the Administrative Agent upon 20 days' notice to the Lenders and the
Borrower. The Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders subject to prior approval by the Borrower
(such approval not to be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall include such
successor agent effective upon its appointment, and the resigning Administrative
Agent's rights, powers and duties as the Administrative Agent shall be
terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement. After the retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this section 11 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this
Agreement.
11.10. Other Agents. Any Lender identified herein as a Co-Agent,
Syndication Agent, Documentation Agent, Managing Agent, Manager or any other
corresponding title, other than "Administrative Agent" or "Collateral Agent",
shall have no right, power, obligation, liability, responsibility or duty under
this Agreement or any other Credit Document except those applicable to all
Lenders as such. Each Lender acknowledges that it has not relied, and will not
rely, on any Lender so identified in deciding to enter into this Agreement or in
taking or not taking any action hereunder.
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SECTION 12. MISCELLANEOUS.
12.1. Payment of Expenses etc. The Borrower agrees to:
(a) whether or not the transactions herein contemplated are
consummated, pay (or reimburse the Administrative Agent, the
Documentation Agent and the Lenders for) all reasonable out-of-pocket
costs and expenses of the Administrative Agent, the Documentation Agent
and the Lenders in connection with the negotiation, preparation,
execution and delivery of the Credit Documents and the documents and
instruments referred to therein, and the initial Borrowing hereunder,
including, without limitation, (i) the reasonable documented fees and
disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the
Documentation Agent, up to the amount previously quoted by the
Documentation Agent to the Borrower, and (ii) the reasonable documented
fees and disbursements of any individual counsel to any Lender
(including allocated costs of internal counsel);
(b) pay (or reimburse the Administrative Agent, the
Documentation Agent and the Lenders for) all reasonable out-of-pocket
costs and expenses of the Administrative Agent, the Documentation Agent
and the Lenders in connection with any amendment, waiver or consent
relating to any of the Credit Documents which is requested by any
Credit Party, including, without limitation, (i) the reasonable
documented fees and disbursements of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇,
special counsel to the Documentation Agent, and (ii) the reasonable
documented fees and disbursements of any individual counsel to any
Lender (including allocated costs of internal counsel);
(c) pay (or reimburse the Administrative Agent and the Lenders
for) all reasonable documented out-of-pocket costs and expenses of the
Administrative Agent and the Lenders in connection with the enforcement
of any of the Credit Documents or the other documents and instruments
referred to therein, including, without limitation, (i) the reasonable
documented fees and disbursements of counsel to the Administrative
Agent, and (ii) the reasonable documented fees and disbursements of any
individual counsel to any Lender (including allocated costs of internal
counsel);
(d) without limitation of the preceding clause (c), in the
event of the bankruptcy, insolvency, rehabilitation or other similar
proceeding in respect of the Borrower or any of its Subsidiaries, pay
all costs of collection and defense, including reasonable documented
attorneys' fees in connection therewith and in connection with any
appellate proceeding or post-judgment action involved therein, which
shall be due and payable together with all required service or use
taxes;
(e) pay and hold each of the Lenders harmless from and against
any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Lenders harmless
from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and
(f) indemnify the Administrative Agent, the Documentation
Agent, the Collateral Agent and each Lender, its officers, directors,
employees, representatives and agents (collectively, the "Indemnitees")
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses reasonably incurred by any of
them as a result of, or arising out of, or in any way related to, or by
reason of
(i) any investigation, litigation or other proceeding
(whether or not any Lender is a party thereto) related to the
entering into and/or performance of any Credit Document or the
use of the proceeds of any Loans hereunder or the consummation
of any transactions contemplated in any Credit Document, other
than any such investigation, litigation or proceeding arising
out of transactions solely between any of the Lenders or the
Administrative Agent, transactions solely involving the
assignment by a Lender of all or a portion of its Loans and
Commitments, or the
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granting of participations therein, as provided in this
Agreement, or arising solely out of any examination of a
Lender by any regulatory authority having jurisdiction over
it, or
(ii) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the
surface or subsurface of any Real Property owned, leased or at
any time operated by the Borrower or any of its Subsidiaries,
the release, generation, storage, transportation, handling or
disposal of Hazardous Materials at any location, whether or
not owned or operated by the Borrower or any of its
Subsidiaries, if the Borrower or any such Subsidiary could
have or is alleged to have any responsibility in respect
thereof, the non-compliance of any such Real Property with
foreign, federal, state and local laws, regulations and
ordinances (including applicable permits thereunder)
applicable thereto, or any Environmental Claim asserted
against the Borrower or any of its Subsidiaries, in respect of
any such Real Property,
including, in each case, without limitation, the reasonable documented
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the person
to be indemnified or of any other Indemnitee who is such person or an
Affiliate of such person).
To the extent that the undertaking to indemnify, pay or hold harmless any person
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall make the maximum contribution to
the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.2. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default (taking into account any
grace periods provided in section 10.1 hereof), each Lender is hereby authorized
at any time or from time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other person, any such notice being
hereby expressly waived, to set off and to appropriate and apply any and all
deposits (general or special) and any other Indebtedness at any time held or
owing by such Lender (including, without limitation, by branches and agencies of
such Lender wherever located) to or for the credit or the account of the
Borrower against and on account of the Obligations and liabilities of the
Borrower to such Lender under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations of the
Borrower purchased by such Lender pursuant to section 12.4(b), and all other
claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
12.3. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, transmitted, cabled or delivered, if to the
Borrower, at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, attention: Chief
Financial Officer (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); if to any Lender at its address
specified for such Lender on Annex I hereto; if to the Administrative Agent, at
its Notice Office; or at such other address as shall be designated by any party
in a written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied, or cabled or
sent by overnight courier, and shall be effective when received.
12.4. Benefit of Agreement. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, provided that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of all the Lenders, and, provided, further, that any assignment by a
Lender of its rights and obligations hereunder shall be effected in accordance
with section 12.4(b). Notwithstanding the foregoing, each Lender may at any time
grant participations in any of its rights hereunder or under any of the Notes to
(x) another Lender that is not a Defaulting Lender or to an
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Affiliate of such Lender which is a commercial bank, financial institution or
other "accredited investor" (as defined in SEC Regulation D), and (y) one or
more Eligible Transferees, provided that in the case of any such participation,
(i) the participant shall not have any rights under this Agreement or any of the
other Credit Documents, including rights of consent, approval or waiver (the
participant's rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
participant relating thereto), (ii) such Lender's obligations under this
Agreement (including, without limitation, its Commitment hereunder) shall remain
unchanged, (iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iv) such Lender shall
remain the holder of any Note for all purposes of this Agreement and (v) the
Borrower, the Administrative Agent, and the other Lenders shall continue to deal
solely and directly with the selling Lender in connection with such Lender's
rights and obligations under this Agreement, and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
sections 2.9 and 2.10 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered into or
sold, and, provided further, that no Lender shall transfer, grant or sell any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (x) extend the final scheduled
maturity of the Loans in which such participant is participating (it being
understood that any waiver of the making of, or the application of , any
mandatory prepayment to such Loans shall not constitute an extension of the
final maturity date thereof), or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of the
applicability of any post-default increase in interest rates), or reduce the
principal amount thereof, or increase such participant's participating interest
in any Commitment over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of any mandatory prepayment
or a mandatory reduction in such Commitment, or a mandatory prepayment, shall
not constitute a change in the terms of any such Commitment) or (y) release any
Credit Party from its obligations under the Subsidiary Guaranty, or release all
or any substantially all of the Collateral, in each case except strictly in
accordance with the terms of the Credit Documents, or (z) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
fixed portion of its Loans and/or Commitments, which assignment does not have to
be pro rata among the Facilities, and its rights and obligations hereunder, to
another Lender that is not a Defaulting Lender, or to an Affiliate of any Lender
(including itself) and which is not a Defaulting Lender and which is a
commercial bank, financial institution or other "accredited investor" (as
defined in SEC Regulation D), and (y) any Lender may assign all, or if less than
all, a fixed portion, equal to at least $5,000,000 in the aggregate for the
assigning Lender or assigning Lenders in the case of assignments of General
Revolving Loans and/or General Revolving Commitments related thereto, of its
Loans and/or Commitments and its rights and obligations hereunder, which
assignment does not have to be pro rata among the Facilities, to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment Agreement, provided that,
(i) the Swing Line Lender may only assign its Swing Line Revolving Commitment
and its Swing Line Revolving Loans as an entirety and only if the assignee
thereof is or becomes a Lender with a General Revolving Commitment, (ii) in the
case of any assignment of a portion of any General Revolving Loans and/or
related Commitments of a Lender, such Lender shall retain a minimum fixed
portion thereof equal to at least $5,000,000, (iii) at the time of any such
assignment Annex I shall be deemed modified to reflect the Commitments of such
new Lender and of the existing Lenders, (iv) upon surrender of the old Notes,
new Notes will be issued to such new Lender and to the assigning Lender, such
new Notes to be in conformity with the requirements of section 2.5 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments, (v) in the case of clause (y) only, the consent of the
Administrative Agent and each Letter of Credit Issuer shall be required in
connection with any such assignment (which consent shall not be unreasonably
withheld or delayed), and (vi) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Lender, the payment
of a non-refundable assignment fee of $3,500 and, provided further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Lender Register maintained by it as provided herein.
To the extent of any assignment pursuant to this section 12.4(b) the assigning
Lender shall be relieved of its obligations hereunder with respect to its
assigned Commitments. At the time of each assignment pursuant to this section
12.4(b) to a person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Lender shall
provide to the
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Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 5.4(b)(ii) Certificate) described in section
5.4(b). To the extent that an assignment of all or any portion of a Lender's
Commitment and related outstanding Obligations pursuant to this section 12.4(b)
would, at the time of such assignment, result in increased costs under section
2.9 from those being charged by the respective assigning Lender prior to such
assignment, then the Borrower shall not be obligated to pay such increased costs
(although the Borrower shall be obligated to pay any other increased costs of
the type described above resulting from changes after the date of the respective
assignment). Nothing in this section 12.4(b) shall prevent or prohibit any
Lender from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
(c) Notwithstanding any other provisions of this section 12.4, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each person that becomes a Lender pursuant to an assignment permitted by
this section 12.4 will, upon its becoming party to this Agreement, represent
that it is a commercial lender, other financial institution or other
"accredited" investor (as defined in SEC Regulation D) which makes or acquires
loans in the ordinary course of its business and that it will make or acquire
Loans for its own account in the ordinary course of such business, provided that
subject to the preceding sections 12.4(a) and (b), the disposition of any
promissory notes or other evidences of or interests in Indebtedness held by such
Lender shall at all times be within its exclusive control.
12.5. No Waiver: Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between the Borrower and the Administrative Agent or any Lender shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Administrative
Agent or any Lender would otherwise have. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.6. Payments Pro Rata. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations, it shall distribute such payment to the Lenders
(other than any Lender that has expressly waived in writing its right to receive
its pro rata share thereof) pro rata based upon their respective shares, if any,
of the Obligations with respect to which such payment was received. As to any
such payment received by the Administrative Agent prior to 1:00 P.M. (local time
at the Payment Office) in funds which are immediately available on such day, the
Administrative Agent will use all reasonable efforts to distribute such payment
in immediately available funds on the same day to the Lenders as aforesaid.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations to such Lenders in such amount as shall result in a proportional
participation by all of the Lenders in such amount, provided that if all or any
portion of such excess amount is thereafter recovered from such Lender, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
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(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding sections 12.6(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Lenders which are not Defaulting Lenders, as opposed to
Defaulting Lenders.
12.7. Calculations: Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided, that if at any time the computations
determining compliance with section 9 utilize accounting principles different
from those utilized in the financial statements furnished to the Lenders, such
computations shall set forth in reasonable detail a description of the
differences and the effect upon such computations.
(b) All computations of interest on Eurodollar Loans hereunder and all
computations of Commitment Fees, Letter of Credit Fees and other Fees hereunder
shall be made on the actual number of days elapsed over a year of 360 days, and
all computations of interest on Prime Rate Loans hereunder shall be made on the
actual number of days elapsed over a year of 365 or 366 days, as applicable.
12.8. Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF OHIO, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE PARTIES HERETO HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY JURISDICTION OTHER
THAN THE STATE OF OHIO GOVERNS THIS AGREEMENT OR ANY OF THE OTHER CREDIT
DOCUMENTS. Any legal action or proceeding with respect to this Agreement or any
other Credit Document may be brought in the Court of Common Pleas of Cuyahoga
County, Ohio, or of the United States for the Northern District of Ohio, and, by
execution and delivery of this Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Borrower hereby
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower at its
address for notices pursuant to section 12.3, such service to become effective
30 days after such mailing or at such earlier time as may be provided under
applicable law. Nothing herein shall affect the right of the Administrative
Agent or any Lender to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against the Borrower in any
other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in section 12.8(a) above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.9. Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same agreement. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10. Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which the Borrower and each of the Lenders shall have
signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Notice Office of the
Administrative Agent or, in the case
73
of the Lenders, shall have given to the Administrative Agent telephonic
(confirmed in writing), written telex or facsimile transmission notice (actually
received) at such office that the same has been signed and mailed to it.
12.11. Headings Descriptive. The headings of the several sections and
other portions of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
12.12. Amendment or Waiver. Neither this Agreement nor any terms hereof
or thereof may be changed, waived, discharged or terminated unless such change,
waiver, discharge or termination is in writing signed by the Borrower and the
Required Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
affected thereby,
(a) extend any maturity date provided for herein applicable to
a Loan or a Commitment (it being understood that any waiver of the
making, or application of, any mandatory prepayment of the Loans shall
not constitute an extension of the maturity date thereof), reduce the
rate or extend the time of payment of interest (other than as a result
of waiving the applicability of any post-default increase in interest
rates) or Fees thereon, or reduce the principal amount thereof, or
increase the Commitment of any Lender over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default or of any mandatory prepayment or a mandatory reduction in any
Commitment shall not constitute a change in the terms of any Commitment
of any Lender),
(b) release the Borrower from any obligations as a guarantor
of its Subsidiaries' obligations under any Credit Document,
(c) release any Credit Party from the Subsidiary Guaranty,
except in connection with a transaction permitted by section 9.2(d),
(d) release all or any substantial portion of the Collateral,
except strictly in accordance with the provisions of the Credit
Documents,
(e) change the definition of the term "Change of Control" or
any of the provisions of sections 4.3 or 5.2 which are applicable upon
a Change of Control,
(f) change the definition of the term "Permitted Acquisition"
or any of the provisions of section 9.2(c) which are applicable to
Permitted Acquisitions which would have the effect of depriving such
Lender of its rights as contemplated by such definition in the case of
"hostile" acquisitions,
(g) amend, modify or waive any provision of this section
12.12, or section 11.7, 12.1, 12.4, 12.6 or 12.7(b), or any other
provision of any of the Credit Documents pursuant to which the consent
or approval of all Lenders is by the terms of such provision explicitly
required,
(h) reduce the percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(i) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement.
No provision of section 3 or 11 may be amended without the consent of (x) any
Letter of Credit Issuer adversely affected thereby or (y) the Administrative
Agent, respectively.
12.13. Survival of Indemnities. All indemnities set forth herein
including, without limitation, in section 2.9, 2.10, 3.5, 5.4, 11.7 or 12.1
shall survive the execution and delivery of this Agreement and the making and
repayment or prepayment of Loans for the full period of any statute of
limitations applicable thereto.
74
12.14. Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Lender, provided that the Borrower shall not be responsible for costs arising
under section 2.9 resulting from any such transfer (other than a transfer
pursuant to section 2.11) to the extent not otherwise applicable to such Lender
prior to such transfer.
12.15. Confidentiality. Each Lender shall hold all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such by the Borrower in accordance with its customary
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices. Notwithstanding the foregoing, any Lender
may in any event may make disclosures of, and furnish copies of such information
(i) to another Lender; (ii) when reasonably required by any bona fide transferee
or participant in connection with the contemplated transfer of any Loans or
Commitment or participation therein (provided that each such prospective
transferee and/or participant shall execute an agreement for the benefit of the
Borrower with such prospective transferor Lender and/or participant containing
provisions substantially identical to those contained in this section 12.15);
(iii) to its parent corporation or corporations, and to its and their auditors
and attorneys, who shall be apprised of and bound by the confidentiality
provisions contained herein; and (iv) as 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 the Borrower of any request by any governmental agency
or representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information. In no event shall any Lender be obligated or required to
return any materials furnished by or on behalf of the Borrower or any of its
Subsidiaries. The Borrower hereby agrees that the failure of a Lender to comply
with the provisions of this section 12.15 shall not relieve the Borrower of any
of the obligations to such Lender under this Agreement and the other Credit
Documents.
12.16. Lender Register. The Borrower hereby designates the
Administrative Agent to serve as its agent, solely for purposes of this section
12.16, to maintain a register (the "Lender Register") on or in which it will
record the names and addresses of the Lenders, and the Commitments from time to
time of each of the Lenders, the Loans made to the Borrower by each of the
Lenders and each repayment and prepayment in respect of the principal amount of
such Loans of each such Lender. Failure to make any such recordation, or (absent
manifest error) any error in such recordation, shall not affect the Borrower's
obligations in respect of such Loans. With respect to any Lender, the transfer
of the Commitment of such Lender and the rights to the principal of, and
interest on, any Loan made pursuant to such Commitment shall not be effective
until such transfer is recorded on the Lender Register maintained by the
Administrative Agent with respect to ownership of such Commitment and Loans and
prior to such recordation all amounts owing to the transferor with respect to
such Commitment and Loans shall remain owing to the transferor. The registration
of assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to section 12.4(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this section 12.16. The Lender Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
12.17. Limitations on Liability of the Letter of Credit Issuers. The
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letters of
Credit. Neither any Letter of Credit Issuer nor any of its officers or directors
shall be liable or responsible for: (a) the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by a
Letter of Credit Issuer against presentation of documents that do not comply
with the terms of a Letter of Credit, including failure of any documents to bear
any reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except that the Borrower (or a Subsidiary which is the account party
in respect of the Letter of Credit in question) shall have a claim against a
Letter of Credit Issuer, and a Letter of Credit Issuer shall be liable to the
Borrower (or such Subsidiary), to
75
the extent of any direct, but not consequential, damages suffered by the
Borrower (or such Subsidiary) which the Borrower (or such Subsidiary) proves
were caused by (i) such Letter of Credit Issuer's willful misconduct or gross
negligence in determining whether documents presented under a Letter of Credit
comply with the terms of such Letter of Credit or (ii) such Letter of Credit
Issuer's willful failure to make lawful payment under any Letter of Credit after
the presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. In furtherance and not in limitation of the
foregoing, a Letter of Credit Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation.
12.18. General Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Administrative Agent, any Letter of Credit Issuer or
any other person against the Administrative Agent, any Letter of Credit Issuer,
or any other Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any damages other than actual compensatory damages
in respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by this Agreement or
any of the other Credit Documents, or any act, omission or event occurring in
connection therewith; and each of the Borrower, each Lender, the Administrative
Agent and each Letter of Credit Issuer hereby, to the fullest extent permitted
under applicable law, waives, releases and agrees not to ▇▇▇ or counterclaim
upon any such claim for any special, consequential or punitive damages, whether
or not accrued and whether or not known or suspected to exist in its favor.
12.19. No Duty. All attorneys, accountants, appraisers, consultants and
other professional persons (including the firms or other entities on behalf of
which any such person may act) retained by the Administrative Agent, the
Documentation Agent or any Lender with respect to the transactions contemplated
by the Credit Documents shall have the right to act exclusively in the interest
of the Administrative Agent, the Documentation Agent or such Lender, as the case
may be, and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to the Borrower, to
any of its Subsidiaries, or to any other person, with respect to any matters
within the scope of such representation or related to their activities in
connection with such representation.
12.20. Lenders and Agent Not Fiduciary to Borrower, etc. The
relationship among the Borrower and its Subsidiaries, on the one hand, and the
Administrative Agent, each Letter of Credit Issuer and the Lenders, on the other
hand, is solely that of debtor and creditor, and the Administrative Agent, each
Letter of Credit Issuer and the Lenders, on the one hand, have no fiduciary or
other special relationship with the Borrower and its Subsidiaries, on the other
hand, and no term or provision of any Credit Document, no course of dealing, no
written or oral communication, or other action, shall be construed so as to deem
such relationship to be other than that of debtor and creditor.
12.21. Survival of Representations and Warranties. All representations
and warranties herein shall survive the making of Loans and the issuance of
Letters of Credit hereunder, the execution and delivery of this Agreement, the
Notes and the other documents the forms of which are attached as Exhibits
hereto, the issue and delivery of the Notes, any disposition thereof by any
holder thereof, and any investigation made by the Administrative Agent or any
Lender or any other holder of any of the Notes or on its behalf. All statements
contained in any certificate or other document delivered to the Administrative
Agent or any Lender or any holder of any Notes by or on behalf of the Borrower
or of its Subsidiaries pursuant hereto or otherwise specifically for use in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder, made as of the
respective dates specified therein or, if no date is specified, as of the
respective dates furnished to the Administrative Agent or any Lender.
[The balance of this page is intentionally blank;
the next page is the signature page.]
76
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered as of the date first above
written.
MIAMI COMPUTER SUPPLY CORPORATION PNC BANK, NATIONAL ASSOCIATION,
individually as a Lender, a
Letter of Credit Issuer, the
Swing Line Lender and as
By:_________________________________ Administrative Agent
Title:
By:_________________________________
Vice President
NATIONAL CITY BANK,
individually as a Lender and
as Documentation Agent
By:_________________________________
Title:
KEY CORPORATE CAPITAL INC.
By:_________________________________
Title:
NBD BANK, N. A.
By:_________________________________
Title:
STAR BANK, NATIONAL ASSOCIATION
By:_________________________________
Title:
77
ANNEX I
INFORMATION AS TO LENDERS
---------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
---------------------------------------------------------------------------------------------------------------------
PNC Bank, PNC Bank, National Association PNC Bank, National Association
National General ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Commitment:
Contacts/Notification Methods:
$25,000,000 ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
PNC Bank, National Association
Swing Line ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Commitment: Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
$5,000,000
Agency Services (Billing and
General Inquiries and to receive
copies of financial information):
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President
22nd Floor
PNC Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
PNC Bank, National Association
Cincinnati, Ohio
ABA # 042 000 398
Ref.: Miami Computer Supply
Corporation
Attention: Commercial Loan
Operations
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
---------------------------------------------------------------------------------------------------------------------
National City National City Bank National City Bank
Bank General ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Commitment:
Contacts/ Notification Methods:
$25,000,000 Hunter ▇. ▇▇▇▇▇▇
Vice President
Direct Dial: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Borrowings, Payments,
etc.:
▇▇▇▇▇▇▇ Sexted
Direct Dial: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Information:
ABA # 041 000 124
Ref.: Miami Computer Supply
Corporation
Attention: Commercial Loan
Operations (RFB DZ1)
A/C # 151804
---------------------------------------------------------------------------------------------------------------------
2
---------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
---------------------------------------------------------------------------------------------------------------------
Key Corporate Key Corporate Capital Inc. Key Corporate Capital Inc.
Capital Inc. General ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Commitment:
Contacts/Notification Methods:
$25,000,000 ▇▇▇▇ ▇▇▇▇▇
Vice President
KeyStructured Finance
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Borrowings, Payments,
etc.:
Michaelena ("▇▇▇▇▇") ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
KeyBank
ABA # 0410 0103 9
Attention: Commercial Loan
Operations
Reference: Miami Computer Supply
Corporation (wire info for L/Cs:
must direct to International
Operations--Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇; ref:
Miami Computer Supply)
---------------------------------------------------------------------------------------------------------------------
3
---------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
---------------------------------------------------------------------------------------------------------------------
NBD Bank, NBD Bank, N. A. NBD Bank, N. A.
N.A. General ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Revolving ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Commitment:
$25,000,000 Contacts/Notification Methods:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
First Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Borrowings, Payments,
etc.:
▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
ABA # 074 000 052
a/c 212115
Attention: Commercial Loan
Operations
Reference: Miami Computer Supply
Corporation
---------------------------------------------------------------------------------------------------------------------
4
---------------------------------------------------------------------------------------------------------------------
Name of Lender Commitment Domestic Lending Office Eurodollar Lending Office
---------------------------------------------------------------------------------------------------------------------
Star Bank, Star Bank, National Association Star Bank, National Association
National General ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇
Association Revolving ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
$25,000,000 Contacts/Notification Methods:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Contact for Borrowings, Payments,
etc.:
▇▇▇▇▇ ▇▇▇▇▇▇▇
Star Bank, National Association
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
ABA # 042 000 013
a/c 9901893
Attention: Commercial Loan
Operations
Reference: Miami Computer Supply
Corporation
---------------------------------------------------------------------------------------------------------------------
5
ANNEX II
INFORMATION AS TO SUBSIDIARIES
(as of December 1, 1998)
-------------------------------------------------------------------------------------------------------------------
Percentage of
Outstanding Stock
Name of Type of Jurisdiction or other Equity
Subsidiary Organization Where Interests Owned
Organized (Indicating whether
owned by the
Borrower or a
specified Subsidiary)
-------------------------------------------------------------------------------------------------------------------
Diversified Data Products, Inc. ("DDP") corporation Michigan 100%, by the Borrower
Force 4 D. P. Supplies, Inc. corporation Oregon 100%, by the Borrower
NTI Data Products, Inc. corporation New 100%, by the Borrower
Hampshire
BRITCO, Inc. corporation Texas 100%, by the Borrower
Diversified Data Products (UK) Limited company U. K. 99%, by DDP
CEM (Overseas) Limited company British Virgin 100%, by DDP
Islands
Minnesota Western, Inc. corporation California 100%, by the Borrower
Computer Showcase, Inc. corporation Georgia 100%, by the Borrower
Electronic Image Systems, Inc. corporation Washington 100%, by the Borrower
Consolidated Media Systems, Inc. corporation Tennessee 100%, by the Borrower
▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. corporation Illinois 100%, by the Borrower
TBS Printware Corporation corporation California 100%, by the Borrower
-------------------------------------------------------------------------------------------------------------------
ANNEX III
DESCRIPTION OF EXISTING INDEBTEDNESS
1. Loans outstanding under the Original Credit Agreement, to be refinanced
hereunder.
2. Capitalized Lease Obligations as reflected in most recent balance
sheet.
3. Outstanding Letter of Credit (see Annex VI).
ANNEX IV
DESCRIPTION OF EXISTING LIENS
1. See Annex A to the Security Agreement.
ANNEX V
DESCRIPTION OF EXISTING ADVANCES, LOANS, INVESTMENTS AND GUARANTEES
1. Contingent additional contingent consideration payable in connection
with the acquisition of TBS in the maximum aggregate amount of
$2,200,000, payable 55% in stock and the balance in cash.
2. Contingent additional contingent consideration payable in connection
with the acquisition of ▇▇▇ in the maximum aggregate amount of
$200,000, payable 100% in stock.
3. Contingent additional contingent consideration payable in connection
with the acquisition of EIS in the maximum aggregate amount of
$1,000,000, payable 50% in stock and the balance in cash.
4. Contingent additional contingent consideration payable in connection
with the acquisition of CMS in the maximum aggregate amount of
$2,100,000, payable 50% in stock and the balance in cash.
5. Contingent additional contingent consideration payable in connection
with the acquisition of ▇▇▇▇ ▇▇▇▇▇ in the maximum aggregate amount of
$100,000, payable 50% in stock and the balance in cash.
6. Contingent additional contingent consideration payable in connection
with the acquisition of Optical Express in the maximum aggregate amount
of $300,000, payable 50% in stock and the balance in cash.
ANNEX VI
DESCRIPTION OF LETTERS OF CREDIT DEEMED ISSUED UNDER
THE CREDIT AGREEMENT
--------------------------------------------------------------------------------------------------------------
LETTER OF ORIGINAL DATE AND NO./ EXPIRATION
CREDIT ISSUER APPLICANT BENEFICIARY AMOUNT DATE
--------------------------------------------------------------------------------------------------------------
National City Bank, Miami Computer Supply, May 10, 1993, as amended Reduced to May 2, 1998
Dayton Inc. through April 25, 1997, for $78,000 on
the benefit of ▇▇▇▇▇▇ April 25, 1998
Dienstag, former owner of
Datron Computer Products,
Inc.
SB93038
--------------------------------------------------------------------------------------------------------------