$37,500,000
SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of June 7, 2002
by and among
INSIGNIA FINANCIAL GROUP, INC.,
as Borrower,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Lenders,
and
▇▇▇▇▇▇▇▇▇ L.L.C.,
as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................................................1
Section 1.01 Certain Defined Terms..................................................................1
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Section 1.02 Computation of Time Periods...........................................................21
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Section 1.03 Terms Generally.......................................................................21
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Section 1.04 Accounting Terms......................................................................21
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ARTICLE II THE LOANS..................................................................................22
Section 2.01 Commitments...........................................................................22
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Section 2.02 Making the Loans......................................................................22
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Section 2.03 Repayment of Loans....................................................................23
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Section 2.04 Evidence of Debt......................................................................23
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Section 2.05 Termination of Commitments; Prepayment of Loans.......................................24
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ARTICLE III CONVERSION.................................................................................26
Section 3.01 Conversion of Notes...................................................................26
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Section 3.02 Fundamental Changes to Borrower.......................................................26
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Section 3.03 Notice of Adjustments of Conversion Security Conversion Price.........................27
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ARTICLE IV GENERAL LOAN PROVISIONS....................................................................27
Section 4.01 Interest..............................................................................27
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Section 4.02 Fees..................................................................................28
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Section 4.03 Payments..............................................................................28
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Section 4.04 Pro Rata Treatment....................................................................29
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Section 4.05 Computations..........................................................................29
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Section 4.06 Non-Receipt of Funds by the Administrative Agent......................................29
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Section 4.07 Sharing of Payments, Etc..............................................................30
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Section 4.08 Taxes.................................................................................31
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ARTICLE V CONDITIONS OF LENDING......................................................................33
Section 5.01 Conditions Precedent to Closing.......................................................33
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Section 5.02 Conditions Precedent to the Loans.....................................................36
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ARTICLE VI REPRESENTATIONS AND WARRANTIES.............................................................37
Section 6.01 Representations and Warranties of the Borrower........................................37
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Section 6.02 Survival of Representations and Warranties, Etc.......................................44
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ARTICLE VII FINANCIAL INFORMATION AND NOTICES..........................................................44
Section 7.01 Financial Statements and Projections..................................................44
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Section 7.02 Officer's Compliance Certificate......................................................45
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Section 7.03 Accountants' Certificate..............................................................45
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Section 7.04 Other Reports.........................................................................45
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Section 7.05 Notice of Litigation and Other Matters................................................45
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Section 7.06 Accuracy of Information...............................................................46
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ARTICLE VIII AFFIRMATIVE COVENANTS......................................................................46
Section 8.01 Preservation of Corporate Existence and Related Matters...............................47
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Section 8.02 Maintenance of Property...............................................................47
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Section 8.03 Insurance.............................................................................47
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Section 8.04 Accounting Methods and Financial Records..............................................47
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Section 8.05 Payment and Performance of Obligations................................................47
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Section 8.06 Compliance With Laws and Approvals....................................................47
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Section 8.07 Environmental Laws....................................................................47
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Section 8.08 Compliance with ERISA.................................................................48
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Section 8.09 Compliance With Agreements............................................................48
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Section 8.10 Conduct of Business...................................................................48
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Section 8.11 Visits and Inspections................................................................48
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Section 8.12 Subsidiaries..........................................................................49
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Section 8.13 Further Assurances....................................................................49
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ARTICLE IX FINANCIAL COVENANTS........................................................................49
Section 9.01 Leverage Ratio........................................................................49
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Section 9.02 Maximum Total Debt....................................................................49
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ARTICLE X NEGATIVE COVENANTS.........................................................................50
Section 10.01 Limitations on Debt...................................................................50
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Section 10.02 Limitation on Restricted Payments.....................................................52
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Section 10.03 Limitation on Dividends and Other Payment Restrictions Affecting
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Restricted Subsidiaries...............................................................53
Section 10.04 Limitation on Issuances and Sales of Capital Stock of Restricted
Subsidiaries..........................................................................54
Section 10.05 Limitation on Other Senior Subordinated Indebtedness..................................54
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Section 10.06 Limitation on Unrestricted Subsidiaries...............................................54
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Section 10.07 Limitation on Liens...................................................................55
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Section 10.08 Limitation on Transactions with Affiliates............................................55
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Section 10.09 Limitation on Certain Asset Sales.....................................................55
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Section 10.10 Consolidation, Merger and Sale of Assets..............................................56
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Section 10.11 Limitation on Investments.............................................................58
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Section 10.12 Amendments; Payments and Prepayments of Subordinated Debt.............................58
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Section 10.13 Real Estate Development...............................................................59
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Section 10.14 Lines of Business.....................................................................59
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ARTICLE XI EVENTS OF DEFAULT..........................................................................59
Section 11.01 Events of Default.....................................................................59
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Section 11.02 Remedies..............................................................................61
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Section 11.03 Rights and Remedies Cumulative; Non-Waiver; Etc.......................................62
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ARTICLE XII SUBORDINATION OF NOTES.....................................................................62
Section 12.01 Obligations Subordinate to Senior Debt................................................62
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Section 12.02 Payment Over of Proceeds Upon Dissolution, Etc........................................62
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Section 12.03 Blockage, Etc.........................................................................63
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Section 12.04 Limitation on Remedies................................................................63
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Section 12.05 Payment in Full.......................................................................64
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Section 12.06 When Distribution Must Be Paid Over...................................................64
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Section 12.07 Rights and Covenants of Lenders.......................................................64
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Section 12.08 Rights of Subrogation.................................................................65
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Section 12.09 Proof of Claim........................................................................65
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Section 12.10 Obligations of Borrower Unconditional.................................................66
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Section 12.11 Rights of Holders of Senior Debt Not to Be Impaired...................................67
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Section 12.12 Continuing Agreement; Assignments Under the Senior Credit Agreement...................67
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Section 12.13 Reinstatement.........................................................................67
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Section 12.14 Certain Conversions Deemed Payment....................................................68
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Section 12.15 In Furtherance of Subordination.......................................................68
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ARTICLE XIII THE ADMINISTRATIVE AGENT...................................................................68
Section 13.01 Appointment, Powers and Immunities....................................................68
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Section 13.02 Reliance by Administrative Agent......................................................69
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Section 13.03 Defaults..............................................................................69
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Section 13.04 Rights as a Lender....................................................................69
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Section 13.05 Indemnification.......................................................................69
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Section 13.06 Non-Reliance on Administrative Agent and Other Lenders................................70
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Section 13.07 Failure to Act........................................................................70
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Section 13.08 Resignation or Removal of Administrative Agent........................................70
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Section 13.09 Consents Under Other Credit Documents.................................................71
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ARTICLE XIV MISCELLANEOUS..............................................................................71
Section 14.01 Amendments, Etc.......................................................................71
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Section 14.02 Notices, Etc..........................................................................72
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Section 14.03 No Waiver; Remedies...................................................................73
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Section 14.04 Costs, Expenses; Indemnification......................................................73
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Section 14.05 Right of Set-off......................................................................74
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Section 14.06 Binding Effect........................................................................75
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Section 14.07 Assignments and Participations........................................................75
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Section 14.08 Confidential Information..............................................................77
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Section 14.09 Execution in Counterparts.............................................................77
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Section 14.10 Jurisdiction, Etc.....................................................................78
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Section 14.11 Governing Law.........................................................................78
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Section 14.12 Waiver of Jury Trial..................................................................78
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Section 14.13 Authority.............................................................................78
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SCHEDULES
Schedule 2.01 - Lenders and Lenders' Commitments
Schedule 6.01(a) - Organization
Schedule 6.01(b) - Subsidiaries
Schedule 6.01(h) - ERISA
Schedule 6.01(i) - Use of Proceeds
Schedule 6.01(p) - Debt
Schedule 6.01(q) - Litigation
Schedule 10.07 - Existing Liens
Schedule 10.08 - Affiliate Transactions
Schedule 10.09 - Asset Sales
Schedule 10.11 - Investments
EXHIBITS
Exhibit A - Form of Tranche A Note
Exhibit B - Form of Tranche B Note
Exhibit C - Form of Tranche C Note
Exhibit D - Form of Senior Subordinated Guaranty Agreement
Exhibit E - Form of Notice of Borrowing
Exhibit F - Form of Opinion of Borrower's Counsel
Exhibit G - Form of Financial Condition Certificate
Exhibit H - Form of Compliance Certificate
Exhibit I - Form of Assignment Agreement
Exhibit J - Form of Exchange Agreement
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SENIOR SUBORDINATED CREDIT AGREEMENT
SENIOR SUBORDINATED CREDIT AGREEMENT, dated as of June 7, 2002, by and
among INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation (the "Borrower"),
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO (each a "Lender" and
collectively, the "Lenders"), and ▇▇▇▇▇▇▇▇▇ L.L.C., a New York limited liability
company ("▇▇▇▇▇▇▇▇▇"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
PRELIMINARY STATEMENT
The Borrower has requested that the Lenders make loans to the Borrower
available in up to two borrowings in an aggregate amount not to exceed
$37,500,000, the proceeds of which shall be used for general corporate purposes.
The Lenders are willing to make such loans to the Borrower on the terms and
conditions set forth below.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01 Certain Defined Terms. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Debt" means Debt of a Person (a) existing at the time such
Person is merged with or into the Borrower or becomes a Restricted Subsidiary of
the Borrower, (b) assumed in connection with the acquisition of assets from such
Person or (c) secured by a Lien encumbering assets acquired from such Person.
"Actual Knowledge" means information actually known to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, Chairman of the Board and Chief Executive Officer; ▇▇▇▇▇ ▇. Aston, Chief
Financial Officer; ▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Operating Officer and Treasurer; ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Office of the Chairman; ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel and
Secretary; or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President, or any other individual hereafter
holding the office of the Borrower currently held by such individuals, in each
case at the date of determination.
"Administrative Agent" means ▇▇▇▇▇▇▇▇▇ in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 13.08.
"Advance Date" has the meaning assigned thereto in Section 4.06.
"Affiliate" means, as to any Person, any other Person (other than a
Subsidiary of such first Person) that, directly or indirectly, controls, is
controlled by or is under common control with such Person or is a director or
officer of such Person; provided, however, that the
Lenders or any of their Affiliates shall not be deemed to be Affiliates of the
Borrower or any of its Subsidiaries or other Affiliates.
"Agreement" means this Senior Subordinated Credit Agreement, including
all exhibits and schedules hereto.
"Applicable Law" means, in respect of any Person, all provisions of
constitutions, statutes, laws, rules, treaties, regulations and orders of all
Governmental Authorities and all orders and decrees of all courts and
arbitrators applicable to such Person.
"Asset Sale" means any sale, conveyance, transfer, lease or other
disposition (including, without limitation, by way of merger, consolidation or
sale and leaseback transaction) (collectively, a "transfer") by the Borrower or
a Restricted Subsidiary, directly or indirectly, in one or a series of related
transactions, to any Person other than the Borrower or a Restricted Subsidiary
of (a) all or substantially all of the properties and assets of the Borrower and
its Restricted Subsidiaries representing a division or line of business or (b)
any other properties or assets of the Borrower or any of its Restricted
Subsidiaries, other than in the ordinary course of business. For the purposes of
this definition, the term "Asset Sale" does not include any transfer of
properties or assets (i) constituting the Capital Stock of the Borrower or any
of its Restricted Subsidiaries, (ii) between or among the Borrower and any of
its Restricted Subsidiaries pursuant to transactions that do not violate any
provision of this Agreement, or (iii) to an Unrestricted Subsidiary, if
permitted under Section 10.11.
"Assignment and Acceptance" has the meaning assigned thereto in Section
14.07.
"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.
ss. 101, et seq.), as amended, and any successor statute.
"Blockage Notice" has the meaning assigned thereto in Section 12.03.
"Blockage Period" has the meaning assigned thereto in Section 12.03.
"Board of Directors" means, as to any Person, the board of directors or
similar governing body of such Person or any duly authorized committee thereof.
"Borrower" has the meaning assigned thereto in the preamble to this
Agreement.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which commercial banks are required or authorized by law to be
closed in New York, New York or Greenville, South Carolina.
"Capital Lease" means, with respect to the Borrower and its
Subsidiaries, any lease of any property that is, in accordance with GAAP,
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Subsidiaries.
"Capital Stock" of any Person means any and all shares, interests,
partnership interests, participations, rights in or other equivalents (however
designated) of such Person's equity (however designated).
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"Cash Equivalents" means investments of the type permitted pursuant to
clause (a) of the definition of Permitted Investments.
"Change of Control" means any person or group of persons (within the
meaning of Section 13(d) of the Exchange Act) other than ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
any (i) trusts of which he and/or any of his children or spouse are
beneficiaries or (ii) any other Persons of which he or any of his children or
spouse is the controlling beneficial equityholder, and their respective
Affiliates, shall obtain ownership or control in one or more series of
transactions of more than twenty-five percent (25%) of the common stock and
twenty-five percent (25%) of the voting power of the Borrower entitled to vote
in the election of members of the Board of Directors of the Borrower and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ and any trusts of which he and/or any of his children or spouse are
beneficiaries or any other Persons of which he or any of his children or spouse
is the controlling beneficial equityholder, and their respective Affiliates,
cease to own or control fifty-one percent (51%) or more of the voting power of
the Borrower; provided, however, the acquisition of twenty-five percent (25%) of
the common stock and twenty-five percent (25%) of the voting power of the
Borrower by the Lenders and/or their Affiliates by reason of the conversion of
the Series A Convertible Preferred Stock, the Series B Convertible Preferred
Stock and the Notes owned by any of them shall be excluded from the foregoing.
"Change of Control Offer" has the meaning assigned thereto in Section
2.05(c).
"Change of Control Repayment Date" has the meaning assigned thereto in
Section 2.05(c).
"Closing Date" means the date, on or before June 15, 2002, when each of
the conditions precedent set forth in Section 5.01 have been satisfied in a
manner reasonably satisfactory to the Administrative Agent and the Lenders.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented from time to time.
"Co-Investment Entity" means any corporation, limited liability
company, partnership or other form of entity (i) in which the Borrower or a
Subsidiary of the Borrower owns an equity interest pursuant to a joint venture
or similar arrangement with one or more Persons who own more than fifty percent
(50%) of the ownership or other equity interests in such entity, (ii) which has
as its sole business the ownership of real property (or an interest therein
including leasehold interests), the rendering of services and furnishing of
products customarily provided by landlords, or the ownership of the debt
(including the securitization of such debt) of entities which own real property
(or an interest therein including leasehold interests), and (iii) which does not
engage in any real estate development activities for its own account.
"Commitment Fee" has the meaning assigned thereto in Section 4.02(a).
"Commitments" means, with respect to each Lender, such Lender's Tranche
A Loan Commitment, Tranche B Loan Commitment and Tranche C Loan Commitment.
"Common Stock" means the Common Stock of the Borrower, $0.01 par value.
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"Compliance Certificate" has the meaning assigned thereto in Section
7.02.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Borrower and its Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"Consolidated Net Worth" means, at any date of determination, an amount
equal to the sum of the total shareholders' equity (including capital stock,
additional paid-in capital and retained earnings after deducting any treasury
stock) of the Borrower and its Subsidiaries appearing on a Consolidated balance
sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.
"Contingent Obligation" means, with respect to any Person, without
duplication, any obligation, contingent or otherwise, of such Person pursuant to
which such Person has directly or indirectly guaranteed any Debt or other
material asserted payment obligation of any other Person and, without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such first Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by agreement to keep well, to purchase assets, goods, securities or
services or to take-or-pay) or (b) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term Contingent Obligation shall not include (i)
endorsements for collection or deposit in the ordinary course of business, (ii)
earn-out obligations, (iii) usual and customary indemnities under real estate
services contracts which do not include the guaranty of payment of Debt; and
(iv) indemnities and similar obligations customarily excluded from non-recourse
debt agreements, including indemnities against fraud, misapplication of loan
proceeds or other funds by the borrower, failure of the borrower to remit
proceeds, failure of the representations and warranties of the borrower to be
materially true and correct and failure by the borrower to comply with
applicable environmental laws, regulations and requirements (all of such
indemnity and similar obligations being referred to collectively as the
"Indemnified Matters").
"Conversion" has the meaning assigned thereto in Section 3.01.
"Conversion Securities" means the Trust Convertible Preferred
Securities and the Series C Convertible Preferred Stock.
"Conversion Shares" means the Trust Convertible Preferred Conversion
Shares and the Series C Preferred Conversion Shares.
"Credit Documents" means, collectively, this Agreement, the Notes, the
Guaranty Agreement and any other agreement, instrument or other document
executed by the Borrower, its Subsidiaries or their counsel in connection with
this Agreement or otherwise referred to herein or contemplated hereby.
"Credit Parties" means the Borrower and the Guarantors.
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"Debt" means, with respect to the Borrower and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all Debt for Money Borrowed, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
payables arising in the ordinary course of business not more than ninety (90)
days past due, (c) all obligations of any Person secured by a Lien on any asset
of the Borrower and its Restricted Subsidiaries, (d) all Contingent Obligations
of any such Person, including any asserted claim with respect to any Indemnified
Matter, (e) obligations in the form of earn-out obligations to be paid in cash,
but only to the extent such earn-out obligations have been incurred and are
required to be included on a Consolidated balance sheet of the Borrower and its
Restricted Subsidiaries prepared in accordance with GAAP, (f) all obligations of
any such Person under Capital Leases, (g) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, including, without limitation, any reimbursement
obligation with respect thereto, (h) all net obligations incurred by any such
Person pursuant to Hedging Agreements and (i) all Disqualified Stock of the
Borrower and its Restricted Subsidiaries valued at its maximum fixed repurchase
price. For purposes of this definition, the "maximum fixed repurchase price" of
any Disqualified Stock that does not have a fixed repurchase price will be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were repurchased on any date on which Debt is required to be
determined pursuant to this Agreement, and if such price is based upon, or
measured by, the Fair Market Value of such Disqualified Stock. Notwithstanding
the foregoing, there shall be excluded from the definition of Debt: (a) all
obligations for the deferred purchase price of property to the extent the
obligation of the Borrower or any of its Subsidiaries is secured by cash
deposits access to which is restricted to the seller of such property, or any
third party guarantor, or any of their respective successors and assigns; (b)
obligations incurred in connection with any arbitrage loan facility between the
Borrower and any Lender or any other commercial bank organized under, or which
has a branch or agency licensed under, the laws of (i) the United States or any
state thereof, (ii) the United Kingdom of Great Britain and Northern Ireland or
(iii) any participating member state of the European Union (as so described in
any legislative measure of the Council of European Union) in an aggregate amount
not to exceed $50,000,000, to the extent the obligation of the Borrower to repay
advances under such loan facility is fully collateralized at all times by cash
or Cash Equivalents funded with the proceeds of such loan facility; (c)
guarantee obligations of the Borrower of up to $10,000,000 on account of First
Ohio Mortgage Corporation or any other Unrestricted Subsidiary with respect to
lines of credit, the proceeds of which are used solely to fund mortgage loans;
and (d) the obligation for the deferred purchase price in a transaction which
has been identified to the Lenders as of the date of this Agreement to the
extent that the obligation of the Borrower or any of its Subsidiaries is to be
fulfilled by the transfer of a segregated cash account established or assumed by
the Borrower or any of its Subsidiaries for the purpose of the payment of such
deferred purchase price, in an amount not to exceed $15 million.
"Debt for Money Borrowed" means, with respect to the Borrower and its
Subsidiaries at any date and without duplication, the sum of the following
calculated in accordance with GAAP: (a) all liabilities, obligations and
indebtedness for borrowed money, including, but not limited to, obligations
evidenced by bonds, debentures, notes or other similar instruments of any
Person, (b) all obligations of any Person as lessee under Capital Leases, (c)
all Contingent Obligations of any such Person with respect to Debt for Money
Borrowed, and (d) all obligations, contingent or otherwise, of any such Person
relative to the unexpired face amount of
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letters of credit, whether or not drawn, and banker's acceptances issued for the
account of any such Person.
"Default" means any of the events specified in Section 11.01 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Disqualified Stock" means any class or series of Capital Stock that,
either by its terms or by the terms of any security into which it is convertible
or exchangeable or by contract or otherwise, (a) is or upon the happening of an
event or passage of time would be, required to be redeemed prior to one year
after the Maturity Date, (b) is redeemable at the option of the holder thereof
at any time prior to one year after the Maturity Date or (c) at the option of
the holder thereof, is convertible into or exchangeable for debt securities at
any time prior to one year after the Maturity Date; provided that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to cause the issuer thereof to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Maturity Date will not constitute Disqualified
Stock if the "asset sale" or "change of control" provisions applicable to such
Capital Stock are no more favorable to the holders of such Capital Stock than
the provisions contained in Sections 10.09 and 2.05(c) and such Capital Stock
specifically provides that the issuer will not repurchase or redeem any such
stock pursuant to such provision prior to the Borrower's repayment of the Loans
as required pursuant to Sections 10.09 and 2.05(c).
"Distribution Event" has the meaning assigned thereto in Section 12.02.
"Dollars" and "$" means lawful money of the United States.
"EBITDA" means, with respect to the Borrower and its Restricted
Subsidiaries, for any period, (a) Net Income for such period plus (b) the sum of
the following to the extent deducted in the determination of Net Income for such
period: (i) income and franchise taxes, (ii) Interest Expense for such period,
(iii) amortization, depreciation and other non-cash charges (including
amortization of goodwill, transaction expenses, covenants not to compete,
compensation paid in equity securities, other intangible assets and deferred
charges) , (iv) extraordinary expenses and non-recurring expenses (including the
non-cash expenses associated with prepayment of Debt) and (v) losses resulting
from currency translations minus (c) extraordinary gains and gains resulting
from currency translations. For purposes of calculating EBITDA,
(a) Pro forma effect will be given for acquisitions by the Borrower and
its Restricted Subsidiaries. Historical cash flows for the acquired assets will
be included in the cash flows of the Borrower and its Restricted Subsidiaries
for the portion of the calculation period, if any, that the assets were not
owned by the Borrower or its Restricted Subsidiaries, subject to receipt by the
Administrative Agent of financial information acceptable to the Administrative
Agent, in its reasonable discretion.
- 6 -
(b) Retroactive effect will be given for dispositions of assets by the
Borrower or its Restricted Subsidiaries by excluding all cash flows for assets
that are disposed of during the calculation period in determining EBITDA at any
time after the date of disposition.
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under, or which has a
branch or agency licensed under, the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
commercial bank organized under the laws of any other country that is a member
of the Organization of Economic Cooperation and Development, or a political
subdivision of any such country, having combined capital and surplus in excess
of $500,000,000, (c) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $500,000,000 or its
equivalent in the currency of such Person's jurisdiction of organization or
operation, (d) a Lender hereunder (whether as an original party to this
Agreement or as the assignee of another Lender), (e) the successor (whether by
transfer of assets, merger or otherwise) to all or substantially all of the
commercial lending business of the assigning Lender, (f) any special purpose
investment funds which are organized for the specific purpose of making or
acquiring participations in or investing in loans of the type made pursuant to
this Agreement, (g) any Affiliate of the assigning Lender or a fund or account
managed by the assigning Lender or an Affiliate of the assigning Lender that is
not a competitor of the Borrower and is engaged in the business of making
commercial loans in the ordinary course of its business, or (h) any other Person
that has been approved in writing as an Eligible Assignee by the Administrative
Agent and the Borrower, which approval by the Borrower shall not be unreasonably
withheld or delayed. Notwithstanding the foregoing, if a Lender proposes to
assign its rights, interest and obligations hereunder to a Person that is at the
time of such assignment either (i) a competitor of the Borrower, or (ii) an
Affiliate of a competitor of the Borrower or a Person who is not engaged in the
business of making commercial loans in the ordinary course of its business, then
it shall be within the Borrower's sole discretion whether such Person is an
Eligible Assignee.
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrower or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. ss. 331 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C.
ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. ss. 300, et seq.), the
Environmental Protection Agency's regulations relating to
- 7 -
underground storage tanks (40 C.F.R. Parts 280 and 281), and the Occupational
Safety and Health Act (29 U.S.C. ss. 651 et seq.), analogous state statutes, and
the rules and regulations promulgated under the foregoing as such statutes are
amended or modified from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended or modified from time to
time.
"ERISA Affiliate" means any Person which is a Restricted Subsidiary and
which, together with the Borrower, is treated as a single employer within the
meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of
ERISA. For purposes of the definition of "Termination Event," the definition of
"Multiemployer Plan" and clause (iv) of Section 6.01(h), however, the meaning of
"ERISA Affiliate" shall be determined by disregarding the phrase "which is a
Restricted Subsidiary and" in the immediately preceding sentence.
"Event of Default" means any of the events specified in Section 11.01,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" means the Exchange Agreement among the Borrower
and the Lenders, substantially in the form of Exhibit J hereto.
"Existing Convertible Preferred Stock" means the Convertible Preferred
Stock of the Borrower, par value $.01 per share, having a liquidation preference
of $100.00 per share and such other rights and preferences as are set forth in
the Certificate of Designation filed with the Secretary of State of the State of
Delaware on February 3, 2000.
"Fair Market Value" means, with respect to any asset or property, the
price which would be negotiated in an arm's-length free market transaction, for
cash, between an informed willing seller and an informed willing buyer neither
of which is under pressure or compulsion to buy.
"FASB-142" means Financial Accounting Standards Board Statement No.
142, as in effect on the Closing Date, specifying applicable accounting
principles with respect to goodwill.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be the average
rate charged to JPMorgan Chase Bank on such Business Day on such transactions as
determined by the Administrative Agent.
- 8 -
"Fiscal Year" means any fiscal year of the Borrower and its
Subsidiaries ending on December 31.
"Fixed Charge Coverage Ratio" means, at any date, the ratio of (a)
EBITDA for the four fiscal quarter period of the Borrower ending on the last day
of the most recent fiscal quarter of the Borrower for which internal financial
statements of the Borrower are available to (b) Interest Expense for such
period.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants or the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower, provided, however,
that any accounting principle or practice required to be changed by the American
Institute of Certified Public Accountants or the Financial Accounting Standards
Board (or other appropriate board or committee of either) in order to continue
as a generally accepted accounting principle or practice may be so changed.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantor" means each Restricted Subsidiary party to a Guaranty
Agreement.
"Guaranty Agreement" means the collective reference to the Senior
Subordinated Guaranty Agreement of even date herewith, executed by the
Guarantors party thereto in favor of the Administrative Agent for the benefit of
the Lenders, substantially in the form of Exhibit D, and each supplement to the
Guaranty Agreement delivered after the Closing Date pursuant to Section 8.12.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law, (d) the discharge or emission or release of which
requires a permit or license under any Environmental Law or other Governmental
Approval, (e) which are deemed by a court of law or a Governmental Authority to
constitute a nuisance or a trespass or pose a health or safety hazard to persons
or neighboring properties, (f) which are materials consisting of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain asbestos, polychlorinated biphenyls, urea
formaldehyde foam
- 9 -
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement, all as amended or modified.
"Indemnified Party" has the meaning assigned thereto in Section
14.04(b).
"Interest Expense" means, with respect to the Borrower and its
Restricted Subsidiaries for any period, the gross interest expense (including,
but not limited to, interest expense attributable to Capital Leases) of the
Borrower and its Restricted Subsidiaries, all determined for such period on a
Consolidated basis, without duplication, in accordance with GAAP.
"Investment" in any Person means, without duplication, (a) directly or
indirectly, any advance, loan or other extension of credit (including, without
limitation, by way of guarantee or similar arrangement) or capital contribution
to any Person, the purchase or other acquisition of any stock, bonds, notes,
debentures or other securities issued by such Person or the acquisition (by
purchase or otherwise) of all or substantially all of the business or assets of
such Person or the making of any investment in such Person, (b) the designation
of any Restricted Subsidiary as an Unrestricted Subsidiary and (c) the transfer
of any assets or properties from the Borrower or a Restricted Subsidiary to an
Unrestricted Subsidiary, other than the transfer of assets or properties made in
the ordinary course of business. Investments will exclude extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices.
"Lenders" has the meaning assigned thereto in the preamble to this
Agreement.
"Leverage Ratio" means, at any date, the ratio of (a) Total Debt on the
last day of the then most recent fiscal quarter of the Borrower for which
internal financial statements are available to (b) EBITDA for the four fiscal
quarter period of the Borrower ended on such date; provided that (i) for the
purpose of the calculation hereof for the fiscal quarter ending March 31, 2002,
(A) EBITDA shall equal EBITDA for the period of two (2) consecutive fiscal
quarters ending on such date times two (2) and (B) Total Debt as of such date
shall not exceed $195,000,000; and (ii) for the purpose of the calculation
hereof for the fiscal quarter ending June 30, 2002, (A) EBITDA shall equal
EBITDA for the period of three (3) consecutive fiscal quarters ending on such
date times four-thirds (4/3) and (B) Total Debt as of such date shall not exceed
$195,000,000.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
- 10 -
"Loans" means, collectively, the Tranche A Loan, the Tranche B Loan and
the Tranche C Loan.
"Majority Lenders" means Tranche A Lenders, Tranche B Lenders and
Tranche C Lenders holding at least 66-2/3% of the aggregate unpaid principal
amount of the Loans.
"Material Adverse Effect" means, with respect to the Borrower and its
Restricted Subsidiaries, a material adverse effect on any of (i) the properties,
business, operations or condition (financial or otherwise) of such Persons on a
Consolidated basis taken as a whole, (ii) the ability of any such Person to
perform the payment or other material obligations under the Credit Documents to
which it is a party, (iii) the legality, validity or enforceability of this
Agreement or any other Credit Document, or (iv) the rights and remedies of the
Administrative Agent or any Lender under any Credit Document.
"Maturity Date" means the date that is seven (7) years after the date
of the making of the Tranche A Loan, or such earlier date on which any Loan
shall become due and payable in accordance with the terms of this Agreement and
the other Credit Documents.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001 (a) (3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six years.
"Net Cash Proceeds" means, with respect to any Asset Sale by the
Borrower or any of its Restricted Subsidiaries, the amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
the Borrower or such Restricted Subsidiary, in connection therewith after
deducting therefrom only (i) the amount of any Debt secured by any Lien
permitted by Section 10.07 on any asset (other than Debt assumed by the
purchaser of such asset) which is required to be, and is, repaid in connection
with such Asset Sale (other than Debt under this Agreement), (ii) reasonable
expenses related thereto incurred by the Borrower or such Restricted Subsidiary
in connection therewith, (iii) transfer taxes paid to any taxing authorities by
the Borrower or such Restricted Subsidiary in connection therewith, and (iv) net
income taxes to be paid by the Borrower or such Restricted Subsidiary in
connection with such Asset Sale (after taking into account any tax credits or
deductions and any tax sharing arrangements actually used to offset any gain
attributable to such Asset Sale); in each case of clauses (i) through (iv) to
the extent, but only to the extent, that the amounts so deducted are (x)
actually paid to a Person that, except in the case of reasonable out-of-pocket
expenses, is not an Affiliate of the Borrower or any of its Restricted
Subsidiaries and (y) properly attributable to such transaction or to the asset
that is the subject thereof.
"Net Income" means, with respect to the Borrower and its Restricted
Subsidiaries for any period, the Consolidated net income (or loss) of the
Borrower and its Restricted Subsidiaries for such period determined in
accordance with GAAP; provided that for purposes of the determination of Net
Income pursuant to Section 10.02(a)(iii)(A), (i) the effects of goodwill
- 11 -
impairment adjustments arising out of the initial application of FASB 142 shall
be excluded and (ii) the loss associated with the sale of Realty One, Inc. shall
be excluded.
"Notes" means, collectively, the Tranche A Notes, the Tranche B Notes
and the Tranche C Notes.
"Notice of Borrowing" has the meaning assigned thereto in Section
2.02(a).
"Obligations" means the obligations of the Borrower under the Credit
Documents to which it is a party, including, without limitation (a) the
obligation of the Borrower to pay principal, interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, indemnities and other amounts
payable by the Borrower pursuant to the provisions of such Credit Documents and
(b) the obligation of the Borrower to reimburse any amount in respect of any of
the foregoing that the Administrative Agent or the Lenders, in their sole
discretion and pursuant to any Credit Document, may elect to pay or advance on
behalf of the Borrower.
"Other Taxes" has the meaning assigned thereto in Section 4.08(a)(iv).
"Pari-Passu Debt" means unsecured Debt for Money Borrowed which ranks
pari passu in right of payment with the obligations of the Borrower under this
Agreement and the Notes.
"Participant" has the meaning assigned thereto in Section 14.07(b).
"Payor" has the meaning assigned thereto in Section 4.06.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
(6) years been maintained for the employees of the Borrower or any of its
current or former ERISA Affiliates.
"Permitted Debt" has the meaning assigned thereto in Section 10.01(c).
"Permitted Investment" means any of the following:
(a) Investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) marketable
direct obligations issued by any State of the United States or any political
subdivision of any such State or any public instrumentality thereof maturing
within 120 days from the date of acquisition thereof and, at the time of
acquisition, having the highest or second highest rating obtainable from S&P or
Moody's; (iii) commercial paper maturing within 120 days from the date of the
acquisition thereof, and, at the time of acquisition, having a rating of A-1 or
higher by S&P or P-1 or higher by Moody's, (iv) certificates of deposit maturing
no more than 120 days from the date of creation thereof issued
- 12 -
by any Lender or by commercial banks incorporated or licensed under the laws of
the United States of America, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of A or
better by a nationally recognized rating agency; (v) time deposits maturing no
more than 30 days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder; (vi) eligible bankers'
acceptances, repurchase agreements and tax-exempt municipal bonds having a
maturity of less than one year and in each case having a rating, or being the
full recourse obligation of a Person whose senior debt rating has a rating, of A
or higher by S&P or Moody's; or (vii) any money market fund organized under the
laws of the United States or any State thereof;
(b) Investments by the Borrower or any Restricted Subsidiary in another
Person, if as a result of such Investment (i) such other Person becomes a
Restricted Subsidiary that is a Guarantor or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all of
its assets to, the Borrower or a Restricted Subsidiary that is a Guarantor;
(c) Investments by the Borrower or any Restricted Subsidiary in any
Restricted Subsidiary which is a Guarantor and Investments by any Restricted
Subsidiary in the Borrower;
(d) Investments in assets owned or used in the ordinary course of
business;
(e) Investments in existence on the Closing Date as set forth on
Schedule 10.11;
(f) (i) loans to officers and directors of the Borrower and its
Restricted Subsidiaries to finance the purchase of newly issued Capital Stock of
the Borrower pursuant to its executive stock purchase program and (ii) other
loans to executive officers and directors not to exceed (in the case of this
clause (ii)) an aggregate of $10,000,000 at any time outstanding; and
(g) any other Investments to the extent permitted by the Senior Credit
Agreement; provided that upon payment in full of the Senior Debt, the Borrower
and the Administrative Agent shall negotiate in good faith to revise, by
amendment of this Agreement, this clause (g) in order to set limitations on the
amount and type of Investments that may be made pursuant to this clause (g);
provided, further, that if the Borrower and the Administrative Agent cannot
agree on such limitations, for purposes of this clause (g), the Borrower and its
Restricted Subsidiaries may make and maintain any Investments that were
permitted to be made under the Senior Credit Agreement as in effect immediately
prior to the payment in full of the Senior Debt and the termination of the
Commitments under (and as defined in) the Senior Credit Agreement and in amounts
not in excess of 125% of the amounts permitted thereunder.
"Permitted Lien" means any of the following:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental
- 13 -
Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens securing Debt arising under the Senior Credit Agreement and
the continuance or renewal of any such Liens in connection with any
refinancings, renewals or extensions of the Debt secured thereby;
(f) Existing Liens described on Schedule 10.07 and the continuance or
renewal of any such Liens in connection with any refinancings, renewals or
extensions of the Debt secured thereby;
(g) Liens securing purchase money Debt incurred under Section
10.01(c)(vi); provided that such liens do not at any time encumber any property
other than the property financed by such Debt;
(h) Liens not otherwise permitted hereunder securing Debt permitted
under Section 10.01 in an aggregate principal amount not to exceed $15,000,000
at any one time outstanding;
(i) Liens on assets of Subsidiaries at the time of acquisition by the
Borrower or any Restricted Subsidiary, provided that there is no recourse to the
Borrower or its Restricted Subsidiaries (other than the Restricted Subsidiaries
so acquired and any Person with which such Subsidiaries are merged) with respect
to such Liens; and
(j) Liens on the equity interest in any Co-Investment Entity or
Unrestricted Subsidiary securing obligations of such Co-Investment Entity or
Unrestricted Subsidiary.
"Permitted Securities" has the meaning assigned thereto in Section
12.02.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
- 14 -
"Post-Default Rate" means, with respect to any Obligation, a rate per
annum equal to the lesser of (a) a rate per annum of 4% in excess of the highest
interest rate then in effect for such Obligation and (b) the maximum rate
permitted by applicable law.
"Prime Rate" means the rate of interest publicly announced by JPMorgan
Chase Bank in New York, New York from time to time as its reference rate, base
rate or prime rate. The reference rate, base rate or prime rate is determined
from time to time by JPMorgan Chase Bank as a means of pricing some loans to its
borrowers and neither is tied to any external rate of interest or index nor
necessarily reflects the lowest rate of interest actually charged by the
JPMorgan Chase Bank to any particular class or category of customers. Each
change in the Prime Rate shall be effective from and including the date such
change is publicly announced as being effective.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to fund its portion of the
Tranche A Loan and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's Tranche A
Loan Commitment by (ii) the Total Tranche A Loan Commitment, provided that if
the Total Tranche A Loan Commitment has been reduced to zero, the numerator
shall be the aggregate unpaid principal amount of such Lender's portion of the
Tranche A Loan and the denominator shall be the unpaid principal amount of the
Tranche A Loan;
(b) with respect to a Lender's obligation to fund its portion of the
Tranche B Loan and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's Tranche B
Loan Commitment by (ii) the Total Tranche B Loan Commitment, provided that if
the Total Tranche B Loan Commitment has been reduced to zero, the numerator
shall be the aggregate unpaid principal amount of such Lender's portion of the
Tranche B Loan and the denominator shall be the unpaid principal amount of the
Tranche B Loan;
(c) with respect to a Lender's obligation to fund its portion of the
Tranche C Loan and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's Tranche C
Loan Commitment by (ii) the Total Tranche C Loan Commitment, provided that if
the Total Tranche C Loan Commitment has been reduced to zero, the numerator
shall be the aggregate unpaid principal amount of such Lender's portion of the
Tranche C Loan and the denominator shall be the unpaid principal amount of the
Tranche C Loan; and
(d) with respect to all other matters (including, without limitation,
the indemnification obligations arising under Section 14.04), the percentage
obtained by dividing (i) the unpaid principal amount of such Lender's portion of
the Loans, by (ii) the aggregate unpaid principal amount of the Loans.
"Qualified Equity Interest" means any Qualified Stock and all warrants,
options or other rights to acquire Qualified Stock (but excluding any debt
security that is convertible into or exchangeable for Capital Stock).
- 15 -
"Qualified Stock" of any Person means any and all Capital Stock of such
Person, other than Disqualified Stock.
"Registered Loan" has the meaning assigned thereto in Section 2.04(f).
"Registered Note" has the meaning assigned thereto in Section 2.04(f).
"Required Payment" has the meaning assigned thereto in Section 4.06.
"Restricted Payment" with respect to the Borrower or any of its
Restricted Subsidiaries means:
(a) the declaration or payment of any dividend on, or the making
of any distribution to holders of, any shares of the Capital Stock of the
Borrower or any Restricted Subsidiary, other than (i) dividends or distributions
payable solely in Qualified Equity Interests or (ii) dividends or distributions
by a Restricted Subsidiary payable to the Borrower or a Restricted Subsidiary;
and
(b) the purchase, redemption or other acquisition or retirement
for value, directly or indirectly, of any shares of Capital Stock (or any
options, warrants or other rights to acquire shares of Capital Stock) of (i) the
Borrower or any Unrestricted Subsidiary or (ii) any Restricted Subsidiary held
by any Affiliate of the Borrower (other than, in either case, any such Capital
Stock owned by the Borrower or any Restricted Subsidiary); provided, however,
that the foregoing shall not include any purchase, redemption or other
acquisition or retirement for value of any Capital Stock (or any options,
warrants or rights to acquire shares of Capital Stock) required by the terms of
any acquisition or related agreement pursuant to which any Restricted Subsidiary
was acquired.
"Restricted Subsidiary" means any Subsidiary of the Borrower other than
an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Sale Closing" means the closing of the Sale Transaction.
"Sale Transaction" means the exchange of Existing Preferred Stock for
Series A Convertible Preferred Stock and the sale and purchase of 125,000 shares
of Series B Convertible Preferred Stock (for an aggregate purchase price of
$12,500,000), upon the terms and subject to the conditions specified in the
Subscription Agreement.
"SEC" means the Securities and Exchange Commission, or any successor
agency having jurisdiction to enforce the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
- 16 -
"Senior Agent" means Wachovia Bank, National Association, as
administrative agent for the Senior Lenders party to the Senior Credit
Agreement, and its successors and assigns.
"Senior Covenant Default" has the meaning assigned thereto in Section
12.03.
"Senior Credit Agreement" means the Credit Agreement, dated as of May
4, 2001, as amended by Amendment No. 1 dated as of November 26, 2001 and
Amendment No. 2 dated on or about the date hereof, by and among the Borrower,
the Senior Lenders, ▇▇▇▇▇▇ Commercial Paper, Inc., as syndication agent, Bank of
America, N.A., as documentation agent, and the Senior Agent, and any and all
agreements refinancing or refunding, in whole or in part, the Senior Debt, and
all amendments, renewals, extensions and modifications thereto, including
increases in the principal amount thereof; provided that with respect to any
agreement providing for the refinancing or refunding of the Senior Debt
(including any such agreement which increases the principal amount thereof),
such agreement shall be the Senior Credit Agreement for the purposes of this
definition only if a notice to that effect is delivered by the Borrower or the
Senior Agent to the Administrative Agent and the Lenders.
"Senior Debt" means all obligations now or hereafter incurred pursuant
to and in accordance with the Senior Credit Agreement and the other Loan
Documents (as defined therein), including, without limitation, principal,
interest (including interest accruing in respect of Senior Debt after the
commencement of any bankruptcy, insolvency, receivership or similar proceedings
by or against the Borrower, at the rate applicable to such Senior Debt pursuant
to the Senior Credit Agreement, whether or not such interest is allowed as a
claim enforceable against the Borrower or any Guarantor in any bankruptcy case
and any other interest that would have accrued but for the commencement of such
proceedings), fees, costs, expenses, and all other Obligations (as defined in
the Senior Credit Agreement).
"Senior Lenders" means the lenders under the Senior Credit Agreement.
"Senior Payment Default" has the meaning assigned thereto in Section
12.03.
"Series A Certificate of Designation" means the Certificate of
Designation of Series A Convertible Preferred Stock, in the form of Exhibit A to
the Subscription Agreement.
"Series A Convertible Preferred Stock" means the Series A Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a liquidation
preference of $100.00 per share and such other rights and preferences as are set
forth in the Series A Certificate of Designation.
"Series B Certificate of Designation" means the Certificate of
Designation of Series B Convertible Preferred Stock, in the form of Exhibit B to
the Subscription Agreement.
"Series B Convertible Preferred Stock" means the Series B Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a liquidation
preference of $100.00 per share and such other rights and preferences as are set
forth in the Series B Certificate of Designation.
- 17 -
"Series C Certificate of Designation" means the Certificate of
Designation of Series C Convertible Preferred Stock, in the form of Exhibit B to
the Exchange Agreement.
"Series C Convertible Preferred Stock" means the Series C Convertible
Preferred Stock of the Borrower, par value $.01 per share, having a liquidation
preference of $100.00 per share and such other rights and preferences as are set
forth in the Series C Certificate of Designation.
"Series C Preferred Conversion Shares" means the shares of the
Borrower's Common Stock issuable upon conversion of the Series C Convertible
Preferred Stock in accordance with the terms thereof and hereof and having the
registration rights set forth in the Series C Registration Rights Agreement.
"Series C Registration Rights Agreement" means a Registration Rights
Agreement, substantially in the form of Exhibit D to the Exchange Agreement,
relating to the registration under the Securities Act of the Series C Preferred
Conversion Shares.
"Shareholder Approval" means any approval of the stockholders of the
Borrower required by applicable law, any Governmental Authority or any
self-regulatory agency, including, without limitation, any rule or regulation
promulgated by the New York Stock Exchange, and by section "Eighth" of the
certificate of incorporation of the Borrower (unless amended), to duly authorize
the Conversion.
"Solvent" means, as to the Borrower and its Restricted Subsidiaries on
a particular date, that any such Person (a) has capital sufficient to carry on
its business and transactions and all business and transactions in which it is
about to engage and is able to pay its debts as they mature and (b) is not
"Insolvent" as defined under the Bankruptcy Code or any applicable State
insolvency law.
"Subordinated Debt" means the collective reference to all Debt of the
Borrower and any Restricted Subsidiary which (a) has a scheduled maturity date
more than one year after the Maturity Date, (b) is not subject to any scheduled
amortization or mandatory redemption feature of any kind (other than a mandatory
redemption upon the occurrence of an event which constitutes an Event of Default
hereunder), and (c) is subordinated with respect to payment, remedies and
covenants to the Obligations and otherwise subordinated thereto to the
reasonable satisfaction of the Administrative Agent and the Majority Lenders.
"Subscription Agreement" means the Stock Subscription and Exchange
Agreement, dated as of June 7, 2002, by and among the Borrower and the
purchasers specified on the signature pages thereof with respect to the exchange
of Existing Preferred Stock for Series A Convertible Preferred Stock and the
sale and purchase of the Series B Convertible Preferred Stock.
"Subsidiary" means, as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by or the management is otherwise
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controlled by such Person (irrespective of whether, at such time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified, references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Borrower.
"Surviving Entity" has the meaning assigned thereto in Section
10.10(a).
"Taxes" has the meaning assigned thereto in Section 4.08(a)(iv).
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA for which notice has not been waived which results in a
Material Adverse Effect, or (b) the withdrawal of the Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (a) (2) of ERISA which results in a
Material Adverse Effect, or (c) the institution of proceedings to terminate, or
the appointment of a trustee with respect to, any Pension Plan by the PBGC which
results in a Material Adverse Effect, or (d) any other event or condition which
would constitute grounds under Section 4042(a) of ERISA for the termination of,
or the appointment of a trustee to administer, any Pension Plan, or (e) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA
which results in a Material Adverse Effect, or (f) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA which results in a Material Adverse Effect, or
(g) any event or condition which results in the termination of a Multiemployer
Plan under Section 4041A of ERISA or the institution by the PBGC of proceedings
to terminate a Multiemployer Plan under Section 4042 of ERISA which results in a
Material Adverse Effect.
"Total Commitment" means the sum of the Total Tranche A Loan
Commitment, the Total Tranche B Loan Commitment and the Total Tranche C Loan
Commitment.
"Total Debt" means, at any date of determination, the aggregate amount
of Debt of the Borrower and its Restricted Subsidiaries determined on a
Consolidated basis as of such date.
"Total Tranche A Loan Commitment" means the sum of the amounts of the
Lenders' Tranche A Loan Commitments.
"Total Tranche B Loan Commitment" means the sum of the amounts of the
Lenders' Tranche B Loan Commitments.
"Total Tranche C Loan Commitment" means the sum of the amounts of the
Lenders' Tranche C Loan Commitments.
"Tranche A Lender" means a Lender with a Tranche A Loan Commitment.
"Tranche A Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make available to the Borrower its portion of the
Tranche A Loan up to the amount set forth in Schedule 2.01 hereto, as the same
may be terminated or reduced from time to time in accordance with the terms of
this Agreement.
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"Tranche A Loan" means the loan made by the Tranche A Lenders to the
Borrower within 90 days of the Closing Date pursuant to Section 2.01(a).
"Tranche A Notes" means the promissory notes provided for by Section
2.04(a) and all promissory notes delivered in substitution or exchange therefor.
"Tranche B Lender" means a Lender with a Tranche B Loan Commitment.
"Tranche B Loan" means the loan made by the Tranche B Lenders to the
Borrower within eighteen (18) months of the Closing Date pursuant to Section
2.01(b).
"Tranche B Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make available to the Borrower its portion of the
Tranche B Loan up to an amount equal to the amount set forth in Schedule 2.01
hereto, as the same may be terminated or reduced from time to time in accordance
with the terms of this Agreement.
"Tranche B Notes" means the promissory notes provided for by Section
2.04(b) and all promissory notes delivered in substitution or exchange therefor.
"Tranche C Lender" means a Lender with a Tranche C Loan Commitment.
"Tranche C Loan" means the loan made by the Tranche C Lenders to the
Borrower simultaneously with or after the making of the Tranche B Loan but
within eighteen (18) months of the Closing Date pursuant to Section 2.01(c).
"Tranche C Loan Commitment" means, with respect to each Lender, the
commitment of such Lender to make available to the Borrower its portion of the
Tranche C Loan up to an amount equal to the amount set forth in Schedule 2.01
hereto, as the same may be terminated or reduced from time to time in accordance
with the terms of this Agreement.
"Tranche C Notes" means the promissory notes provided for by Section
2.04(c) and all promissory notes delivered in substitution or exchange therefor.
"Trust Convertible Preferred Securities" means the 10% Trust
Convertible Preferred Securities of the Borrower, issued pursuant to and having
the terms, rights and privileges set forth in the trust documents substantially
in the forms attached as exhibits to the Exchange Agreement.
"Trust Convertible Conversion Shares" means the share of the Borrower's
Common Stock issuable upon conversion of the Trust Convertible Preferred
Securities in accordance with the terms thereof and hereof.
"Unused Loan Fee" has the meaning assigned thereto in Section 4.02(b).
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under any
laws of the United States or any State thereof, or any estate or trust that is
subject to Federal income taxation regardless of the source of its income.
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"United States" means the United States of America.
"Unrestricted Subsidiary" means (a) any Subsidiary that is designated
by the Borrower as an Unrestricted Subsidiary in accordance with Section 10.06
and (b) any Subsidiary of an Unrestricted Subsidiary. As of the Closing Date,
the Unrestricted Subsidiaries are those set forth as such on Schedule 6.01(b).
"Voting Interests" means shares of capital stock issued by a
corporation, or equivalent interests in any other Person, the holders of which
are ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such Person,
even if the right so to vote has been suspended by the happening of such a
contingency.
"Weighted Average Life" means, as of the date of determination with
respect to any Debt or Disqualified Stock, the quotient obtained by dividing (a)
the sum of the products of (i) the number of years from the date of
determination to the date or dates of each successive scheduled principal or
liquidation value payment of such Debt or Disqualified Stock, respectively,
multiplied by (ii) the amount of each such principal or liquidation value
payment by (b) the sum of all such principal or liquidation value payments.
Section 1.02 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
mean "to but excluding".
Section 1.03 Terms Generally. 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 Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules 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
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
Section 1.04 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP and consistent with
those applied in the preparation of the Consolidated balance sheet referred to
in Section 7.01(b). In the event of changes in GAAP in accordance with the
definition thereof, the Borrower and the Lenders will thereafter negotiate in
good faith to revise, by amendment of this Agreement, any covenants of this
Agreement in order to make such covenants consistent with GAAP then in effect.
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ARTICLE II
THE LOANS
Section 2.01 Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:
(a) Tranche A Loan. Each Tranche A Lender severally agrees to make
its portion of the Tranche A Loan to the Borrower in an aggregate principal
amount not to exceed the amount of such Lender's Tranche A Loan Commitment. The
aggregate principal amount of the Tranche A Loan must be drawn in one (1)
borrowing on a Business Day within ninety (90) days of the Closing Date and
shall not exceed the Total Tranche A Loan Commitment. Any principal amount of
the Tranche A Loan which is repaid or prepaid may not be reborrowed.
(b) Tranche B Loan. Each Tranche B Lender severally agrees to make
its portion of the Tranche B Loan to the Borrower in an aggregate principal
amount not to exceed the amount of such Lender's Tranche B Loan Commitment. The
aggregate principal amount of the Tranche B Loan must be drawn in one (1)
borrowing on a Business Day within eighteen (18) months of the Closing Date and
shall not exceed the Total Tranche B Loan Commitment. Any principal amount of
the Tranche B Loan which is repaid or prepaid may not be reborrowed.
(c) Tranche C Loan. Each Tranche C Lender severally agrees to make
its portion of the Tranche C Loan to the Borrower in an aggregate principal
amount not to exceed the amount of such Lender's Tranche C Loan Commitment. The
aggregate principal amount of the Tranche C Loan must be drawn in one (1)
borrowing on a Business Day simultaneously with or after the making of the
Tranche B Loan but within eighteen (18) months of the Closing Date and shall not
exceed the Total Tranche C Loan Commitment. Any principal amount of the Tranche
C Loan which is repaid or prepaid may not be reborrowed.
Section 2.02 Making the Loans.
(a) The Borrower shall give the Administrative Agent prior written
notice, in substantially the form of Exhibit E hereto (a "Notice of Borrowing"),
not later than 12:00 noon (New York City time) on the date which is five (5)
Business Days prior to the date of the proposed Loan. Such Notice of Borrowing
shall be irrevocable and shall specify (i) the principal amount of the proposed
Loan and (ii) the proposed borrowing date, which must be a Business Day. The
Administrative Agent and the Lenders may act without liability upon the basis of
written notice believed by the Administrative Agent in good faith to be from the
Borrower. The Administrative Agent and the Lenders shall have no duty to verify
the authenticity of the signature appearing on any written Notice of Borrowing.
(b) All Loans constituting a single borrowing under this Agreement
shall be made by the Lenders simultaneously and proportionately to their Pro
Rata Shares of the Total Tranche A Loan Commitment, the Total Tranche B Loan
Commitment and the Total Tranche C Loan Commitment, as the case may be, it being
understood that no Lender shall be responsible for any default by any other
Lender in that other Lender's obligations to make a Loan requested
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hereunder, nor shall the Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender's obligation to
make a Loan requested hereunder, and each Lender shall be obligated to make the
Loans required to be made by it by the terms of this Agreement regardless of the
failure by any other Lender.
(c) The Administrative Agent will make the proceeds of a Loan
available to the Borrower on the day of the proposed Loan by causing an amount,
in immediately available funds, equal to the proceeds of all Loans received by
the Administrative Agent from the Lenders to be deposited in an account
designated by the Borrower.
Section 2.03 Repayment of Loans.
(a) Tranche A Loan. The Borrower hereby promises to pay to the
Administrative Agent for account of the Lenders the principal of the Tranche A
Loan, and the Tranche A Loan shall mature, on the Maturity Date.
(b) Tranche B Loan. The Borrower hereby promises to pay to the
Administrative Agent for account of the Lenders the principal of the Tranche B
Loan, and the Tranche B Loan shall mature, on the Maturity Date.
(c) Tranche C Loan. The Borrower hereby promises to pay to the
Administrative Agent for account of the Lenders the principal of the Tranche C
Loan, and the Tranche C Loan shall mature, on the Maturity Date.
Section 2.04 Evidence of Debt.
(a) The Tranche A Loan (other than Registered Loans) of each
Lender shall be evidenced by a promissory note of the Borrower substantially in
the form of Exhibit A hereto, dated the date of the making of the Tranche A
Loan, payable to such Lender in a principal amount equal to the original
principal amount of the Tranche A Loan held by it and otherwise duly completed.
(b) The Tranche B Loan (other than Registered Loans) of each
Lender shall be evidenced by a promissory note of the Borrower substantially in
the form of Exhibit B hereto, dated the date of the making of the Tranche B
Loan, payable to such Lender in a principal amount equal to the original
principal amount of the Tranche B Loan held by it and otherwise duly completed.
(c) The Tranche C Loan (other than Registered Loans) of each
Lender shall be evidenced by a promissory note of the Borrower substantially in
the form of Exhibit C hereto, dated the date of the making of the Tranche C
Loan, payable to such Lender in a principal amount equal to the original
principal amount of the Tranche C Loan held by it and otherwise duly completed.
(d) The amount of each Loan of each Lender, and each payment made
on account of the principal thereof, shall be recorded by such Lender on its
books and, prior to any transfer of any Note evidencing such Loan held by it,
endorsed by such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such
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Lender to make any such recordation or endorsement shall not affect the
obligations of the Borrower to make a payment when due of any amount owing
hereunder or under such Note in respect of such Loan.
(e) No Lender shall be entitled to have its Notes substituted or
exchanged for any reason, or subdivided for promissory notes of lesser
denominations, except in connection with a permitted assignment of all or any
portion of such Lender's relevant Loans and Notes pursuant to Section 14.07 and
except as provided in paragraph (f) below (and, if requested by any Lender, the
Borrower agrees to so exchange any Note).
(f) Notwithstanding the foregoing, any Lender that is not a U.S.
Person and is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code may request the Administrative Agent to record on the Register referred to
in Section 14.07(e) any Loans held by such Lender under this Agreement. Loans
recorded on the Register ("Registered Loans") may not be evidenced by promissory
notes other than Registered Notes as defined below and, upon the registration of
any Loan, any promissory note (other than a Registered Note) evidencing the same
shall be null and void and shall be returned to the Borrower. The Borrower
agrees, at the request of any Lender that is the holder of Registered Loans, to
execute and deliver to such Lender a promissory note in registered form to
evidence such Registered Loans (i.e. containing the optional registered note
language as indicated in Exhibits A, B and C hereto, as the case may be) and
registered as provided in Section 14.07(e) (herein, a "Registered Note"), dated
the date of such Loan, payable to such Lender and otherwise duly completed. A
Loan once recorded on the Register may not be removed from the Register so long
as it remains outstanding and a Registered Note may not be exchanged for a
promissory note that is not a Registered Note.
Section 2.05 Termination of Commitments; Prepayment of Loans.
(a) Termination of Commitments.
(i) Tranche A Loan. The Total Tranche A Loan Commitment shall
terminate at 5:00 p.m. (New York City time) on the date that is ninety
(90) days from the Closing Date.
(ii) Tranche B Loan. The Total Tranche B Loan Commitment
shall terminate at 5:00 p.m. (New York City time) on the date that is
eighteen (18) months from the Closing Date.
(iii) Tranche C Loan. The Total Tranche C Loan Commitment
shall terminate at 5:00 p.m. (New York City time) on the date that is
eighteen (18) months from the Closing Date.
(b) Optional Prepayment.
(i) Subject in all respects to the limitations contained in
the Senior Credit Agreement and Article XII of this Agreement, the
Borrower may, upon not less than five (5) and not more than fifteen
(15) days' notice, prepay any Loan, in whole at any time or in part at
any time and from time to time.
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(ii) Notwithstanding any delivery of notice of prepayment,
the Loans shall remain convertible pursuant to Article III until
prepaid or paid in full.
(c) Mandatory Prepayment Upon a Change of Control.
(i) Upon the occurrence of a Change of Control, the
Administrative Agent and the Lenders shall have the right to terminate
or reduce the Commitments and require the Borrower to prepay all or any
portion of the outstanding principal amount of the Loans in full.
Within ten (10) days following any Change of Control, the Borrower
shall deliver a notice to the Administrative Agent describing in
reasonable detail the transaction or transactions that constitute the
Change of Control and offering to prepay the Loans (the "Change of
Control Offer") on the date specified in such notice, which date shall
be no earlier than thirty (30) and no later than sixty (60) days from
the date of such notice (the "Change of Control Repayment Date"). Any
Lender that elects to have all or a portion of the outstanding
principal amount of its Loans prepaid as part of the Change of Control
Offer shall deliver notice to the Borrower of its election at least
five (5) days prior to the scheduled Change of Control Repayment Date.
Any Lender that does not deliver to the Company notice accepting the
Change of Control Offer at least five (5) days prior to the Change of
Control Repayment Date shall be deemed to have rejected such Change of
Control Offer. Notwithstanding the foregoing provisions of this clause
(i), the failure of the Borrower to deliver the notice referred to in
the second sentence of this clause (i) to any Lender shall not affect
or impair the obligation of the Borrower to prepay all or any portion
of the outstanding principal amount of such Lender's Loans on the
applicable Change of Control Repayment Date.
(ii) If as of the date of any Change of Control Offer, the
terms of the Senior Credit Agreement prohibit prepayment of the Loans
under clause (i) above, then the Borrower shall, prior to the making of
any such prepayment on the Change of Control Repayment Date, either (A)
obtain the written consent of the Senior Agent and the requisite Senior
Lenders to prepay the Loans or (B) repay all outstanding Senior Debt in
full. Notwithstanding anything to the contrary contained in this
Agreement, if the Borrower is required to and fails to comply with the
immediately preceding sentence, then an Event of Default shall occur
under Section 11.01(a) as of the applicable Change of Control Repayment
Date.
(d) Application of Payments. Any prepayment made pursuant to this
Section 2.05 shall be applied, first, to the Tranche A Loan, second, to the
Tranche B Loan, and third, to the Tranche C Loan.
(e) Interest and Fees. Any prepayment made pursuant to this
Section 2.05 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment, and if such prepayment would reduce the
amount of the outstanding Loans to zero at a time when the Commitments have been
terminated, such prepayment shall be accompanied by the payment of all interest
and fees accrued to such date.
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(f) Cumulative Prepayments. Except as otherwise expressly provided
in this Section 2.05, payments with respect to any subsection of this Section
2.05 are in addition to payments made or required to be made under any other
subsection of this Section 2.05.
ARTICLE III
CONVERSION
Section 3.01 Conversion of Notes. So long as no Default or Event of
Default shall have occurred and be continuing, the Borrower shall have the
option at any time during the period from the date of the making of the Tranche
A Loan to the date that is eighteen (18) months after the date the Borrower
receives Shareholder Approval, but in no event later than June 7, 2005, to
convert all (but not less than all) of the Notes, together and simultaneously
with the Series A Convertible Preferred Stock and the Series B Convertible
Preferred Stock, into a single type of security (the "Conversion"), as set forth
in the Exchange Agreement.
Section 3.02 Fundamental Changes to Borrower.
(a) Change of Control. In the event of a Change of Control, the
rights of the Borrower to convert the Notes pursuant to this Article III shall
terminate immediately, unless the Lenders elect not to require the Borrower to
prepay the Loans in accordance with the provisions of Section 2.05(c).
(b) Consolidation, Merger or Sale of Assets. In the event of any
consolidation of the Borrower with, or merger of the Borrower into, another
Person, or the case of any merger of another Person into the Borrower (other
than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock of the Borrower),
or in the case of any sale or transfer of all or substantially all of the assets
of the Borrower (collectively hereinafter referred to as a "Fundamental
Change"), the Borrower shall, as a condition precedent to such Fundamental
Change, (i) if the Borrower has not previously delivered to the Administrative
Agent a notice of Conversion in accordance with the Exchange Agreement,
irrevocably waive its right to at any time thereafter deliver such notice and
effect a Conversion or (ii) cause effective provisions to be made so that the
Lenders shall have the right thereafter, to receive upon conversion of the Notes
(A) trust convertible preferred securities carrying like terms as the Trust
Convertible Preferred Securities, which trust convertible preferred securities
would be convertible into the kind and amount of shares of Capital Stock and
other property (including cash) receivable upon such Fundamental Change by the
Lenders assuming (1) the Notes had been converted to Trust Convertible Preferred
Securities and (2) the Trust Convertible Preferred Securities had been converted
immediately prior to such Fundamental Change, or (B) convertible preferred stock
with the rights, preferences and privileges set forth in the Series C
Certificate of Designation, which convertible preferred stock would be
convertible into the kind and amount of shares of Capital Stock and other
property (including cash) receivable upon such Fundamental Change by the Lenders
assuming (1) the Notes had been converted to Series C Convertible Preferred
Stock and (2) the Series C Convertible Preferred Stock has been converted
immediately prior to such Fundamental Change.
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Section 3.03 Notice of Adjustments of Conversion Security Conversion
Price. So long as any Notes are outstanding, whenever the conversion price with
respect to any Conversion Security is adjusted in accordance therewith:
(a) the Borrower shall compute the adjusted conversion price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Borrower setting forth the adjusted conversion price and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall forthwith be delivered to the Administrative Agent; and
(b) a notice stating the conversion price has been adjusted and
setting forth the adjusted conversion price shall as soon as practicable be
mailed by the Borrower to each Lender.
ARTICLE IV
GENERAL LOAN PROVISIONS
Section 4.01 Interest.
(a) Tranche A Loan. The Tranche A Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Tranche A Loan until such principal amount becomes due, (i) for the period from
the date of the making of the Tranche A Loan until the date of the making of the
Tranche B Loan, at a rate per annum equal to 11.25% and (ii) thereafter, at a
rate per annum equal to 12.25%.
(b) Tranche B Loan. The Tranche B Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Tranche B Loan until such principal amount becomes due, at a rate per annum
equal to 12.25%.
(c) Tranche C Loan. The Tranche C Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Tranche C Loan until such principal amount becomes due, at a rate per annum
equal to 12.25%.
(d) Interest Payment. Accrued interest on each Loan shall be
payable quarterly, in arrears, on the first Business Day of each February, May,
August and November, commencing on the first Business Day of the quarter
following the quarter in which such Loan is made and at maturity (whether upon
demand, by acceleration or otherwise).
(e) Default Interest. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, all Loans, fees, indemnities or any
other Obligations of the Credit Parties under this Agreement and the other
Credit Documents, shall bear interest, from the date such Event of Default
occurred until the date such Event of Default is cured or waived in writing in
accordance herewith, at a rate per annum equal at all times to the Post-Default
Rate. Interest payable at the Post-Default Rate shall be payable from time to
time on demand.
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Section 4.02 Fees.
(a) Commitment Fee. On or prior to the Closing Date, the Borrower
shall pay to the Administrative Agent for the account of the Lenders, in
accordance with their Pro Rata Shares, a non-refundable commitment fee (the
"Commitment Fee") equal to $187,500, which shall be deemed fully earned when
paid.
(b) Unused Loan Fee. From and after the date that is six (6)
months following the Closing Date and until the date that is eighteen (18)
months following the Closing Date, the Borrower shall pay to the Administrative
Agent for the account of the Lenders, in accordance with their Pro Rata Shares,
an unused loan fee (the "Unused Loan Fee"), which shall accrue at the rate per
annum of 1.0% on the excess, if any, of the Total Commitment over the principal
amount of the Loans outstanding from time to time and shall be payable quarterly
in arrears on the first day of each calendar quarter commencing on January 1,
2003.
Section 4.03 Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the Borrower under this
Agreement and the Notes, and, except to the extent otherwise provided therein,
all payments to be made by the Borrower under any Credit Document, shall be made
in Dollars, in immediately available funds, without deduction, set-off or
counterclaim, for the account of the Administrative Agent to an address
designated by the Administrative Agent by notice hereunder to the Borrower, not
later than 1:00 p.m. New York City time on the date on which such payment shall
become due (each such payment made after such time on any such due date which is
a Business Day to be deemed to have been made on the next succeeding Business
Day).
(b) Any Lender for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Borrower with such
Lender (with notice to the Borrower and the Administrative Agent), provided that
such Lender's failure to give such notice shall not affect the validity thereof.
(c) The Borrower shall, at the time of making each payment under
this Agreement, any Note or any other Credit Document for the account of any
Lender, specify to the Administrative Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by the Borrower
hereunder or thereunder to which such payment is to be applied (and in the event
that the Borrower fails to so specify, or if an Event of Default has occurred
and is continuing, the Administrative Agent may distribute such payment to the
Lenders for application in such manner as it or the Majority Lenders, subject to
Section 4.06, may determine to be appropriate).
(d) Each payment received by the Administrative Agent under this
Agreement, any Note or any other Credit Document for account of any Lender shall
be paid by the Administrative Agent promptly to such Lender, in immediately
available funds, for the Loan or other obligation in respect of which such
payment is made.
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(e) If the due date of any payment under this Agreement, any Note
or any other Credit Document would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding Business Day,
and interest shall be payable for any principal or other amount so extended for
the period of such extension.
Section 4.04 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each payment of principal of the Tranche A Loan, the
Tranche B Loan or the Tranche C Loan by the Borrower shall be made for the
account of the relevant Lenders in accordance with their Pro Rata Shares; and
(b) each payment of interest on the Tranche A Loan, the Tranche B Loan and the
Tranche C Loan by the Borrower shall be made for the account of the relevant
Lenders in accordance with their Pro Rata Shares.
Section 4.05 Computations. Interest on Loans shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
Section 4.06 Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Lender or the Borrower
(the "Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by such Lender hereunder or (in the case of the Borrower) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date (the "Advance Date") such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day and, if
such recipient(s) shall fail promptly to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, provided that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Administrative Agent
within three (3) Business Days of the Advance Date, then, retroactively to the
Advance Date, the Payor and the recipient(s) shall each be obligated to pay
interest on the Required Payment as follows:
(i) if the Required Payment shall represent a payment to be
made by the Borrower to the Lenders, the Borrower and the recipient(s)
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment at the Post-Default Rate
(without duplication of the obligation of the Borrower under Section
4.01 to pay interest on the Required Payment at the Post-Default Rate),
it being understood that the return by the recipient(s) of the Required
Payment to the Administrative Agent shall not limit such obligation of
the Borrower under said Section 4.01 to pay interest at the
Post-Default Rate in respect of the Required Payment; and
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(ii) if the Required Payment shall represent proceeds of a
Loan to be made by a Lender to the Borrower, the Payor and the Borrower
shall each be obligated retroactively to the Advance Date to pay
interest in respect of the Required Payment pursuant to whichever of
the rates specified in Section 4.01 is applicable to such Loan, it
being understood that the return by the Borrower of the Required
Payment to the Administrative Agent shall not limit any claim the
Borrower may have against the Payor in respect of such Required
Payment.
Section 4.07 Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option (to the fullest
extent permitted by law), to set-off and apply any deposit (general or special,
time or demand, provisional or final), or other Debt, held by it for the credit
or account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans or
any other amount payable to such Lender under this Agreement or any other Credit
Document, that is not paid when due in accordance with the terms of this
Agreement (regardless of whether such deposit or other Debt are then due to the
Borrower), in which case it shall promptly notify the Borrower and the
Administrative Agent thereof, provided that such Lender's failure to give such
notice shall not affect the validity thereof.
(b) If any Lender shall obtain from the Borrower payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any other Credit Document through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or otherwise
(other than from the Administrative Agent as provided herein), and, as a result
of such payment, such Lender shall have received a greater percentage of the
principal of or interest on the Tranche A Loan, the Tranche B Loan or the
Tranche C Loan, as the case may be, or such other amounts then due hereunder or
thereunder by the Borrower to such Lender than the percentage received by any
other Lender, it shall promptly purchase from such other Lenders participations
in (or, if and to the extent specified by such Lender, direct interests in) the
Tranche A Loan, the Tranche B Loan or the Tranche C Loan, as the case may be, or
such other amounts, respectively, owing to such other Lenders (or in interest
due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses that
may be incurred by such Lender in obtaining or preserving such excess payment)
in accordance with their Pro Rata Shares. To such end all Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.
(c) The Borrower agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
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(d) Nothing contained in this Section 4.07 shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other Debt or obligation of the Borrower. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured claim
in lieu of a set-off to which this Section 4.07 applies, such Lender shall, to
the extent practicable, exercise its rights in respect of such secured claim in
a manner consistent with the rights of the Lenders entitled under this Section
4.07 to share in the benefits of any recovery on such secured claim.
Section 4.08 Taxes. (a) All payments made by the Borrower hereunder or
under any other Credit Document shall be made without set-off, counterclaim,
deduction or other defense. All such payments shall be made free and clear of
and without deduction for any present or future income, franchise, sales, use,
excise, stamp or other taxes, levies, imposts, deductions, charges, fees,
withholdings, restrictions or conditions of any nature now or hereafter imposed,
levied, collected, withheld or assessed by any jurisdiction (whether pursuant to
Federal, state, local or foreign law) or by any political subdivision or taxing
authority thereof or therein, and all interest, penalties or additional amounts,
excluding taxes on the net income of the Administrative Agent or any Lender
imposed by the jurisdiction in which the Administrative Agent or such Lender is
organized or any political subdivision thereof or taxing authority thereof or
any jurisdiction in which such Person's principal office is located or any
political subdivision thereof or taxing authority thereof (such nonexcluded
taxes, levies, imposts, deductions, charges, fees, withholdings, restrictions,
conditions, interest, penalties and additional amounts being hereinafter
collectively referred to as "Taxes"). If any Taxes are required to be deducted
or withheld from or in respect of any amount payable hereunder or under any
other Credit Document,
(i) the amount so payable shall be increased so that after
making all required deductions and withholdings (including Taxes on
amounts payable pursuant to this sentence) the Administrative Agent or
the Lenders, as the case may be, receive an amount equal to the sum
they would have received had no such deduction or withholding been
made,
(ii) the Borrower shall make such deduction or withholding,
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxation authority in accordance with
applicable law, and
(iv) as promptly as possible thereafter, the Borrower shall
send the Administrative Agent and the Lenders an official receipt (or,
if an official receipt is not available, such other documentation as
shall be satisfactory to the Administrative Agent and the Lenders)
evidencing payment of the amount or amounts so deducted or withheld. In
addition, the Borrower agrees to pay any present or future taxes,
charges or similar levies which arise from any payment made hereunder
or from the execution, delivery, performance, recordation or filing of,
or otherwise with respect to, this Agreement or any other Credit
Document other than the foregoing excluded taxes (hereinafter referred
to as "Other Taxes").
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(b) The Borrower hereby indemnifies and agrees to hold the
Administrative Agent and the Lenders harmless from and against Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.08) paid by the
Administrative Agent or any Lender and any liability (including penalties,
interest and expenses for nonpayment, late payment or otherwise) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted; provided, however, that, if the Borrower so
requests in writing, the Administrative Agent and the Lenders shall contest the
imposition of any such Tax or Other Tax at the Borrower's sole reasonable
expense with counsel reasonably satisfactory to the Borrower; provided, further,
however, that the Administrative Agent or any such Lender, as the case may be,
shall not have any obligation to contest any such Tax or Other Tax unless (i)
the Administrative Agent or such Lender determines that such Tax or Other Tax
may be contested separately from the contest of any tax or other claim not
indemnified against by the Borrower hereunder, (ii) the Administrative Agent or
such Lender may either pay the Tax or Other Tax claimed and ▇▇▇ for a refund or
contest the claim in any permissible forum, (iii) prior to undertaking any such
contest, the Borrower shall have agreed to pay any reasonable costs, expenses
and other liabilities incurred by the Administrative Agent or such Lender in
connection with such contest, (iv) if so requested by the Administrative Agent
or such Lender, the Borrower shall have delivered to the Administrative Agent or
such Lender an opinion of independent counsel to the effect that such contest
has a substantial probability of success, (v) if the Administrative Agent or
such Lender shall determine to pay the Tax or Other Tax and ▇▇▇ for a refund,
the Borrower shall advance sufficient funds to pay such Tax or Other Tax at no
net after-tax cost to the Administrative Agent or such Lender, (vi) no Event of
Default shall have occurred and be continuing, (vii) the amount of Tax or Other
Tax that would be contested exceeds $10,000, (viii) the Borrower's counsel shall
be permitted to participate in the contest, and (ix) settlement of the contest
shall be subject to the Borrower's consent, which consent shall not be
unreasonably withheld or delayed. Such indemnification shall be paid within ten
(10) days from the date on which the Administrative Agent or any such Lender
makes written demand therefor, which demand shall identify in reasonable detail
the nature and amount of such Taxes or Other Taxes.
(c) Each Lender that is organized in a jurisdiction outside the
United States hereby agrees that it shall, no later than the Closing Date or, in
the case of a Lender which becomes a party hereto pursuant to Section 14.07
after the Closing Date, the date upon which such Lender becomes a party hereto
(and from time to time thereafter upon the reasonable request of the Borrower,
but only if such Lender is legally able to do so), deliver to the Borrower
either (i) two accurate, complete and signed copies of either (x) U.S. Internal
Revenue Service Form W-8ECI or any successor form, or (y) U.S. Internal Revenue
Service Form W-8BEN or U.S. Internal Revenue Service Form W-8IMY, or any
successor form, in each case, indicating that such Lender is on the date of
delivery thereof entitled to receive payments of interest hereunder free from,
or subject to a reduced rate of, withholding of United States Federal income tax
or (ii) in the case of such a Lender that is entitled to claim exemption from
withholding of United States Federal income tax under Section 871(h) or Section
881(c) of the Code, (x) a certificate to the effect that such Lender is (A) not
a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (B) not a "10
percent shareholder" of the Borrower within the meaning of Section 881(c)(3)(B)
of the Code and (C) not a controlled foreign corporation receiving interest from
a related person within the meaning of Section 881(c)(3)(C) of the Code and (y)
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two accurate, complete and signed copies of U.S. Internal Revenue Service Form
W-8BEN or U.S. Internal Revenue Service Form W-8IMY, or any successor form.
(d) Notwithstanding anything to the contrary herein, the Borrower
shall not be required to pay any additional amounts to a Lender in respect of
U.S. Federal withholding taxes pursuant to Section 4.08(a) or (b) to the extent
that such additional amounts would not have been payable but for a failure by
such Lender to perform its obligations under Section 4.08(c).
(e) If the Borrower fails to perform any of its obligations under
this Section 4.08, the Borrower shall indemnify the Administrative Agent and the
Lenders for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of the Borrower under this Section 4.08
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
ARTICLE V
CONDITIONS OF LENDING
Section 5.01 Conditions Precedent to Closing. This Agreement shall
become effective as of the Business Day when each of the following conditions
precedent shall have been satisfied in a manner reasonably satisfactory to the
Administrative Agent and the Lenders:
(a) Delivery of Documents. The Administrative Agent shall have
received the following documents, each dated the Closing Date (except as
otherwise specified below) and in form and substance satisfactory to the Lender:
(i) this Agreement, dated as of June 7, 2002, duly executed
by the Borrower;
(ii) the Guaranty Agreement, duly executed by each Subsidiary
of the Borrower that is a Subsidiary Guarantor (as defined in the
Senior Credit Agreement);
(iii) a copy of the charter, certificate of limited
partnership or certificate of limited liability company, including all
amendments thereto, of each Credit Party, certified as of a recent date
by the Secretary of State of the state in which such Person is
organized, and a certificate as to the good standing of each such
Person as of a recent date from such Secretary of State;
(iv) a certificate of a duly authorized officer of each
Credit Party certifying as to (A) the absence of any amendments to the
charter, certificate of limited partnership or certificate of limited
liability company of such Person since the date of the Secretary of
State's certificate referred to in clause (iv) above; (B) a true and
correct copy of the bylaws of such Person as in effect on the Closing
Date; (C) the due organization and good standing of such Person under
the laws of the State of its organization, and the absence of any
proceeding for the dissolution or liquidation of such Person; (D) the
truth of the representations and warranties contained in each Credit
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Document to which it is a party as though made on and as of the date of
the Closing Date; (E) the absence of any event occurring and
continuing, or resulting from the Loans or the application of the
proceeds therefrom, that constitutes a Default or an Event of Default;
(F) the absence of any event or development since December 31, 2001
which could reasonably be expected to have a Material Adverse Effect;
(G) a true and complete copy of the resolutions and other authorization
documents of such Person authorizing the execution, delivery and
performance by such Person of each Credit Document to which it is a
party and the consummation of the transactions contemplated thereby
and, in the case of the Borrower, the borrowings hereunder, and that
such authorization documents have not been modified, rescinded or
amended and are in full force and effect and (H) the incumbency and
specimen signature of each officer or other representative executing
any Credit Document or any other document delivered in connection
herewith on behalf of such Person, together with a certificate of
another officer or other representative of such Person as to the
incumbency and specimen signature of the officer or other
representative of such Person executing such certificate;
(v) the written opinion of Proskauer Rose LLP, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit F,
and the Borrower hereby instructs such counsel to deliver such opinion
to the Administrative Agent and the Lenders;
(vi) a certificate of the Borrower, signed on behalf of the
Borrower by a duly authorized officer in substantially the form of
Exhibit G, certifying that (A) the Borrower and each of its
Subsidiaries are Solvent, (B) the material payables of the Borrower and
each Guarantor are current and not past due, and (C) attached thereto
is a pro forma balance sheet of the Borrower and its Subsidiaries
setting forth on a pro forma basis the financial condition of the
Borrower and its Subsidiaries on a Consolidated basis as of the Closing
Date, reflecting on a pro forma basis the effect of the transactions
contemplated herein, including all fees and expenses in connection
therewith, and evidencing compliance on a pro forma basis with the
covenant contained in Section 9.02;
(vii) copies of the Consolidated balance sheet, year to date
income statement or statement of operations and year to date statement
of cash flows for the Borrower and its Subsidiaries dated as of March
31, 2002 and prepared in accordance with GAAP;
(viii) copies of each of the agreements or other documents
comprising or delivered in connection with the Senior Credit Agreement,
together with a certificate of a duly authorized officer of the
Borrower stating that such copies are true and correct copies thereof
and that such agreements remain in full force and effect and that, to
the Actual Knowledge of such duly authorized officer, none of the
Credit Parties has breached or defaulted in any of its obligations
under such agreements;
(ix) an amendment, duly executed by the Senior Agent and the
requisite Senior Lenders under the Senior Credit Agreement, consenting
to the execution, delivery and performance by the Credit Parties of the
Credit Documents and confirming
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that the Obligations constitute Subordinated Debt (as defined in the Senior
Credit Agreement);
(x) certified copies of all consents, approvals and
authorizations of, and notices to and other actions by, all
governmental and regulatory authorities and other Persons with whom any
of the Borrower and the Borrower's Subsidiaries has any contractual
obligations, as shall be required for the execution, delivery or
performance of the Credit Documents or the consummation of the
transactions contemplated thereby; and
(xi) such other agreements, instruments and other documents
as the Administrative Agent or any Lender may reasonably request.
(b) Consummation of Sale Transaction. Each of the Borrower and the
purchasers party thereto shall have fully performed all of the obligations to be
performed by it under, and the Sale Transaction shall have been consummated in
accordance with, the Subscription Agreement as in effect on the Closing Date.
(c) Litigation. There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened against the Borrower or any of
its Subsidiaries in any court or before any arbitrator or governmental or
regulatory authority that (i) could reasonably be expected to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of any Credit Document or the transactions contemplated thereby.
(d) Due Diligence. The Administrative Agent and the Lenders shall
have completed a due diligence investigation with respect to the Borrower and
its Subsidiaries, and with results, satisfactory to the Administrative Agent and
the Lenders and shall have been given such access to the management, records,
books of account, contracts and properties of all such Persons and shall have
received such financial, business and other information regarding such Persons
as the Administrative Agent and the Lenders shall have requested, including,
without limitation, information as to possible contingent liabilities, tax
matters, environmental matters, arrangements with employees and financial
statements.
(e) Representations and Warranties. Except for such
representations and warranties as are made as of a specific date (which
representations and warranties shall be true and correct as of such date), the
representations and warranties contained in this Agreement and the other Credit
Documents shall be true and correct on and as of the Closing Date, as though
made on and as of such date.
(f) Material Adverse Effect. No event or development shall have
occurred since December 31, 2001 which could reasonably be expected to have a
Material Adverse Effect.
(g) No Event of Default. No event shall have occurred and be
continuing that constitutes a Default or an Event of Default.
(h) Payment of Fees, Etc. All accrued fees and expenses of the
Administrative Agent and the Lenders then due and payable (including the
reasonable fees and expenses of counsel to the Administrative Agent and
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the Lenders) shall have been paid; provided that the Borrower shall not be
required to pay in excess of $200,000 in the aggregate in respect of the fees
and expenses of counsel for the Administrative Agent and the Lenders in
connection with the preparation, execution and delivery of this Agreement and
the Subscription Agreement.
Section 5.02 Conditions Precedent to the Loans. The obligation of the
Lenders to make any Loan shall be subject to the following conditions precedent:
(a) Delivery of Documents. The Administrative Agent shall have
received the following documents, each dated the date of such Loan (except as
otherwise specified below) and in form and substance reasonably satisfactory to
the Administrative Agent and the Lenders:
(i) a Tranche A Note, Tranche B Note or a Tranche C Note, as
the case may be, payable to each Tranche A Lender, Tranche B Lender or
Tranche C Lender, as appropriate, and duly executed by the Borrower;
(ii) a Notice of Borrowing with respect to such Loan, duly
executed by the Borrower;
(iii) a certificate of the Borrower, signed on behalf of the
Borrower by a duly authorized officer (the statements made in which
certificate shall be true on and as of such date), certifying as to (A)
the due organization and good standing of the Borrower and each of the
Borrower's Restricted Subsidiaries in its jurisdiction of organization
and the absence of any proceeding for the dissolution or liquidation of
any such Person; (B) the completeness and accuracy in all material
respects of all of the representations and warranties made by the
Borrower in this Agreement, before and after giving effect to such Loan
and to the application of the proceeds thereof as contemplated by
Section 6.01(i), as though made on and as of such date; (C) the absence
of any event occurring and continuing, or resulting from making of such
Loan or the consummation of any of the other transactions contemplated
hereby, that constitutes a Default or an Event of Default; (D) the
absence of any event or development since the Closing Date which could
reasonably be expected to have a Material Adverse Effect; (E) except as
otherwise permitted by this Agreement, none of the Borrower and the
Borrower's Subsidiaries having changed its jurisdiction of
organization, having been a party to any merger, consolidation or other
similar transaction or having issued or sold any shares of its capital
stock (or other ownership or profit interests therein), or any
warrants, options or other rights therefor, at any time and (F) the
satisfaction of all conditions precedent to the making of such Loan on
such date; and
(iv) such other agreements, instruments and other documents
as the Lenders may reasonably request.
(b) Litigation. There shall exist no action, suit, investigation,
litigation or proceeding pending or threatened against the Borrower or any of
its Subsidiaries in any court or before any arbitrator or governmental or
regulatory authority that (i) could reasonably be
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expected to have a Material Adverse Effect or (ii) purports to affect the
legality, validity or enforceability of any Credit Document or the transactions
contemplated thereby.
(c) Representations and Warranties. Except for such
representations and warranties of the Borrower as are made as of a specific date
(which representations and warranties shall be true and correct as of such
date), the representations and warranties contained in this Agreement shall be
true and correct in all material respects (i) on and as of the date of such
Notice of Borrowing with respect to such Loan and (ii) on and as of the date of
such Loan, before and after giving effect to such Loan and to the application of
the proceeds therefrom, as though made on and as of such date.
(d) Material Adverse Effect. No event or development shall have
occurred since the Closing Date which could reasonably be expected to have a
Material Adverse Effect.
(e) No Event of Default. No event shall have occurred and be
continuing, or would result from the making of such Loan or from the application
of the proceeds therefrom, that constitutes a Default or an Event of Default.
(f) Payment of Fees, Etc. All accrued fees and expenses of the
Administrative Agent and the Lenders then due and payable (including the
reasonable fees and expenses of counsel to the Administrative Agent and the
Lenders) shall have been paid (or shall, contemporaneously with such Loan, be
paid).
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties of the Borrower. In order
to induce the Administrative Agent and the Lenders to enter into this Agreement
and the Lenders to make the Loans, the Borrower hereby represents and warrants
to the Administrative Agent and the Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and
its Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, has the power
and authority to own its properties and to carry on its business as now being
and hereafter proposed to be conducted and is duly qualified and authorized to
do business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect. The jurisdictions in which the Borrower and its
Subsidiaries are organized are described on Schedule 6.01(a).
(b) Ownership. Each Restricted Subsidiary and each Unrestricted
Subsidiary as of the Closing Date is listed on Schedule 6.01(b). All outstanding
shares or other equity interests have been duly authorized and validly issued
and, with respect to Capital Stock, are fully paid and nonassessable. The
holders of the Capital Stock of the Subsidiaries of the Borrower as of the
Closing Date are, and the amount of Capital Stock owned by each as of the
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Closing Date is, described on Schedule 6.01(b). As of the Closing Date, there
are no outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of Capital Stock of the Borrower or its Subsidiaries, except as
described on Schedule 6.01(b). Each Co-Investment Entity as of the Closing Date
is listed on Schedule 6.01(b).
(c) Authorization of Agreement, Credit Documents and Borrowing.
Each of the Borrower and its Subsidiaries has the right, power and authority and
has taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Credit
Documents to which it is a party, the borrowings hereunder and the transactions
contemplated hereby and thereby, in each case in accordance with their
respective terms. This Agreement and each of the other Credit Documents have
been duly executed and delivered by the duly authorized officers of the Borrower
and each of its Subsidiaries party thereto, and each such document constitutes
the legal, valid and binding obligation of the Borrower or its Subsidiary party
thereto, enforceable in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Credit Documents and Borrowing with
Laws, Etc. The execution, delivery and performance by the Borrower and its
Subsidiaries of the Credit Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby and thereby do not and will not, by the passage
of time, the giving of notice or otherwise, (i) require any Governmental
Approval which has not been obtained or violate any Applicable Law relating to
the Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach
of or constitute a default under the articles of incorporation, bylaws or other
organizational documents of the Borrower or any of its Subsidiaries or any
material indenture, agreement or other instrument to which such Person is a
party or by which any of its properties may be bound or any material
Governmental Approval relating to such Person, or (iii) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens permitted hereunder.
(e) Compliance with Law; Governmental Approvals. Each of the
Borrower and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except for such Governmental Approvals the absence of
which could not reasonably be expected to have a Material Adverse Effect and
(ii) is in compliance with each Governmental Approval applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties, except in each case where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its
Subsidiaries has duly filed or caused to be filed all material federal, state,
local and other tax returns required by Applicable Law to be filed, and has
paid, or made adequate provision for the
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payment of, all material federal, state, local and other taxes, assessments and
governmental charges or levies upon it and its property, income, profits and
assets which are due and payable except any nonpayment permitted under Section
8.05. No Governmental Authority has asserted any Lien or other material claim
against the Borrower or any Subsidiary with respect to unpaid taxes which could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
federal, state, local and other taxes for all Fiscal Years and portions thereof
since the organization of the Borrower and its Subsidiaries are in the judgment
of the Borrower adequate, and the Borrower does not anticipate any additional
taxes or assessments for any of such years, the result of which could reasonably
be expected to have a Material Adverse Effect.
(g) Environmental Matters.
(i) To the Borrower's Actual Knowledge, the properties owned
or managed by the Borrower and its Subsidiaries do not contain, and to
their Actual Knowledge have not previously contained, any Hazardous
Materials in amounts or concentrations which (A) constitute or
constituted a violation of, or (B) could give rise to liability under,
applicable Environmental Laws, in each case which could reasonably be
expected to have a Material Adverse Effect;
(ii) To the Borrower's Actual Knowledge, such properties and
all operations of the Borrower and its Subsidiaries are conducted in
compliance in all respects, and have been in compliance in all
respects, with all applicable Environmental Laws the violation of which
could reasonably be expected to have a Material Adverse Effect, and the
Borrower and its Subsidiaries have not caused contamination at, under
or about such properties or such operations which could reasonably be
expected to have a Material Adverse Effect;
(iii) Neither the Borrower nor any Subsidiary (A) has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of their
properties or their operations, or (B) have Actual Knowledge that any
such notice will be received or is being overtly threatened, in each
case which could reasonably be expected to have a Material Adverse
Effect;
(iv) To the Borrower's Actual Knowledge, the Borrower and its
Subsidiaries have not caused Hazardous Materials to be transported or
disposed of from the properties of the Borrower and its Subsidiaries in
violation of, or in a manner or to a location which gives rise to
liability under, Environmental Laws, which violation or liability could
reasonably be expected to have a Material Adverse Effect, nor to the
Borrower's Actual Knowledge have the Borrower and its Subsidiaries
caused any Hazardous Materials to be generated, treated, stored or
disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws which could reasonably be expected to have a
Material Adverse Effect;
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(v) No judicial proceedings or governmental or administrative
action is pending, or, to the Actual Knowledge of the Borrower, overtly
threatened, under any Environmental Law to which the Borrower or any
Subsidiary is or will be named as a party with respect to such
properties or operations of the Borrower and its Subsidiaries conducted
thereon, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with
respect to such properties or such operations which in each case could
reasonably be expected to have a Material Adverse Effect; and
(vi) To its Actual Knowledge, neither the Borrower nor its
Subsidiaries have caused any release, or to the Borrower's Actual
Knowledge, the threat of release, of Hazardous Materials at or from
such properties, in violation of or in amounts or in a manner that
gives rise to liability under Environmental Laws, in each case which
could reasonably be expected to have a Material Adverse Effect.
(h) ERISA.
(i) Neither the Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit Plans
other than those identified on Schedule 6.01(h);
(ii) the Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all Employee
Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet
expired. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties
with respect to any Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan of the Borrower has been terminated,
and to the knowledge of the Borrower no Pension Plan of any ERISA
Affiliate has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been
received or requested with respect to any Pension Plan, nor has the
Borrower or any ERISA Affiliate failed to make any contributions or to
pay any amounts due and owing as required by Section 412 of the Code,
Section 302 of ERISA or the terms of any Pension Plan prior to the due
dates of such contributions under Section 412 of the Code or Section
302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c) (3) (C) or 4063(a) of ERISA with respect to any
Pension Plan, in each case which could reasonably be expected to result
in a Material Adverse Effect;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406
of the ERISA or Section 4975 of the Code, (B) incurred any liability to
the PBGC which remains outstanding other than the payment of premiums
and there are no premium payments
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which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required
installment or other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or, to the
knowledge of the Borrower, is reasonably expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation
(other than routine claims for benefits in the ordinary course) is
existing or, to the best knowledge of the Borrower after due inquiry,
threatened concerning or involving any (A) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or
contributed to by the Borrower or any ERISA Affiliate or (B) Pension
Plan.
(i) Use of Proceeds. The Borrower shall use the proceeds of the
Loans as set forth on Schedule 6.01(i). No part of the proceeds of any of the
Loans will be used for purchasing or carrying margin stock or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
(j) Government Regulation. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Borrower nor any Subsidiary thereof is, or
after giving effect to any Loan will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby. None of the making of any Loans
hereunder, the application of the proceeds or repayment thereof by the Borrower,
the issuance of the Conversion Securities or the Conversion Shares or the
consummation of the other transactions contemplated hereby will violate any
provision of the Securities Act, any rule, regulation or order of the Securities
and Exchange Commission thereunder or any state securities law.
(k) Financial Statements. The Consolidated balance sheet of the
Borrower and its Subsidiaries as of December 31, 2001 and the related statements
of income and retained earnings and cash flows for the Fiscal Year then ended,
copies of which have been furnished to the Administrative Agent and each Lender,
are complete and correct and fairly present in all material respects the assets,
liabilities and financial position of the Borrower and its Subsidiaries as at
such dates, and the results of the operations and changes of financial position
for the periods then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP. The
Borrower and its Subsidiaries have no Debt, obligation or other unusual forward
or long-term commitment which is not fairly reflected in the foregoing financial
statements or in the notes thereto.
(l) No Material Adverse Change. Since December 31, 2001, there has
been no material adverse change in the business, operations, prospects, or
condition (financial or otherwise) of the Borrower and its Subsidiaries, taken
as a whole and no event has occurred or condition arisen that could reasonably
be expected to have a Material Adverse Effect.
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(m) Solvency. As of the Closing Date and after giving effect to
each Loan hereunder, the Borrower and each of its Subsidiaries is and will be
Solvent.
(n) Titles to Properties. Each of the Borrower and its
Subsidiaries has such title to the real property owned by it as is necessary or
desirable to the conduct of its business and valid and legal title to all of its
personal property and assets, including, but not limited to, those reflected on
the balance sheets of the Borrower and its Subsidiaries referred to in Section
6.01(k), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(o) Liens. None of the properties and assets of the Borrower or
any Subsidiary is subject to any Lien, except Liens permitted pursuant to
Section 10.07.
(p) Debt and Contingent Obligations. Schedule 6.01(p) is a
complete and correct listing of all Debt and Contingent Obligations of the
Borrower and its Subsidiaries as of the Closing Date in excess of $1,000,000.
The Borrower and its Subsidiaries have performed and are in material compliance
with all of the terms of such Debt and Contingent Obligations and all
instruments and agreements relating thereto.
(q) Litigation. Except for matters existing as of the Closing Date
and set forth either in the public filings of the Borrower with the Securities
and Exchange Commission made prior to the Closing Date or on Schedule 6.01(q),
there are no actions, suits or proceedings pending nor, to the knowledge of the
Borrower, threatened against or in any other way relating adversely to or
affecting the Borrower or any Subsidiary thereof or any of their respective
properties in any court or before any arbitrator of any kind or before or by any
Governmental Authority which individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect.
(r) Absence of Defaults. No event has occurred or is continuing
which constitutes a Default or an Event of Default, or (ii) constitutes, or
which with the passage of time or giving of notice or both would constitute, a
default or event of default by the Borrower or any Subsidiary thereof under any
judgment, decree or order to which the Borrower or its Subsidiaries is a party
or by which the Borrower or its Subsidiaries or any of their respective
properties may be bound, which could reasonably be expected to have a Material
Adverse Effect or which would require the Borrower or any of its Subsidiaries to
make any payment thereunder in excess of $1,000,000 prior to the scheduled
maturity date therefor.
(s) Subordination. Except for the Senior Debt, the Obligations
under this Agreement and the other Credit Documents rank pari-passu with, or
senior to, all other Debt of the Borrower as to right of payment.
(t) Solicitation, Brokers, Etc. No form of general solicitation or
general advertising was used by the Borrower or any other Person acting on its
behalf in respect of this Agreement or the Notes or in connection with the
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financing contemplated hereby. The Borrower has not dealt with any broker,
finder, or other similar person in connection with the transactions contemplated
by this Agreement, and the Borrower is not under any obligation to pay any
broker's fee, finder's fee or commission in connection with such transactions.
(u) Minute Books. The minute books of the Borrower contain a
complete summary of all meetings of directors and stockholders since the time of
incorporation and reflect accurately in all material respects all transactions
referred to in such minutes.
(v) Authorization and Issuance of Notes, Trust Convertible
Preferred Securities, Series C Convertible Preferred Stock, Trust Convertible
Preferred Conversion Shares, and Series C Preferred Conversion Shares. The
issuance of the Notes has been duly authorized and when executed by the Borrower
and delivered to the Lenders in accordance with the terms of this Agreement,
will be valid and binding obligations of the Borrower and will be free of
preemptive or similar rights. The issuance of the Trust Convertible Preferred
Securities will be, upon receipt by the Borrower of Shareholder Approval, duly
authorized and, when executed by the Borrower and delivered to the Lenders upon
conversion of the Notes will be valid and binding obligations of the Borrower
and will be free of preemptive or similar rights. The issuance of the Series C
Convertible Preferred Stock will be, upon receipt by the Borrower of Shareholder
Approval, duly authorized and, when issued pursuant to the terms of this
Agreement will be duly authorized, validly issued, fully paid and nonassessable
and free of preemptive or similar rights. The issuance of the Trust Convertible
Preferred Conversion Shares will be, upon receipt by the Borrower of Shareholder
Approval, duly authorized and, when issued upon conversion of the Trust
Convertible Preferred Securities in accordance with the terms thereof, the Trust
Convertible Preferred Conversion Shares will have been validly issued and fully
paid and will be nonassessable and free of preemptive or similar rights. The
issuance of the Series C Preferred Conversion Shares will be, upon receipt by
the Borrower of Shareholder Approval, duly authorized and when issued upon
conversion of the Series C Convertible Preferred Stock in accordance with the
Series C Certificate of Designation, the Series C Preferred Conversion Shares
will have been validly issued and fully paid and will be nonassessable and free
of preemptive or similar rights. Upon the issuance of the Conversion Securities,
the Borrower will have duly authorized and reserved sufficient shares of Common
Stock for issuance as Conversion Shares, and the Notes, the Conversion
Securities and the Conversion Shares will be free of any liens or encumbrances
other than those created by or imposed upon the holders thereof through no
action of the Borrower; provided, however, that the Notes, the Conversion
Securities and the Conversion Shares may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein.
(w) Accuracy and Completeness of Information. The factual
statements contained in the financial statements referred to in Sections 7.01(a)
or (b) and the Credit Documents (including the schedules thereto), and any other
certificates or documents furnished or to be furnished to the Administrative
Agent or the Lenders from time to time in connection with this Agreement, taken
as a whole, did not as of the date when made, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which the same were made, all except as otherwise qualified herein or therein;
provided that, with respect to factual statements made by Persons other than the
Borrower or any of its Subsidiaries, such representation and warranty is made
only to the knowledge of the Borrower.
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Section 6.02 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties of the Borrower and its Subsidiaries contained in
any certificate, or any of the Credit Documents (including but not limited to
any such representation or warranty made in or in connection with any amendment
thereto) shall constitute representations and warranties made under this
Agreement. All representations and warranties made under this Agreement shall be
made or deemed to be made at and as of the Closing Date (except those that are
expressly made as of a specific date), shall survive the Closing Date and shall
not be waived by the execution and delivery of this Agreement, any investigation
made by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all of the Obligations have been paid and satisfied in full
and the Commitments terminated, unless consent has been obtained in the manner
set forth in Section 14.01, the Borrower will furnish or cause to be furnished
to the Administrative Agent and the Lenders:
Section 7.01 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable
and in any event within forty-five (45) days after the end of each fiscal
quarter (other than the last fiscal quarter of each Fiscal Year), an unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such fiscal quarter and unaudited Consolidated statements of income, retained
earnings and cash flows for the fiscal quarter then ended and that portion of
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures for the
corresponding date and periods in the preceding Fiscal Year and prepared by the
Borrower in accordance with GAAP and, if applicable, containing disclosure of
the effect on the financial position or results of operations of any change in
the application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its
Subsidiaries as of their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then ended, subject to
normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and
in any event within one hundred twenty (120) days after the end of each Fiscal
Year, an audited Consolidated balance sheet filed by the Borrower and its
Subsidiaries as of the close of such Fiscal Year and audited Consolidated
statements of income, retained earnings and cash flows for the Fiscal Year then
ended, including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures as of the end of and for the
preceding Fiscal Year and prepared by an independent certified public accounting
firm reasonably acceptable to the Administrative Agent in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
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such certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Subsidiaries or with respect
to accounting principles followed by the Borrower or any of its Subsidiaries not
in accordance with GAAP.
(c) Annual Budget. As soon as practicable and in any event
not later than March 30 of each Fiscal Year, a budget of the Borrower and its
Subsidiaries for such Fiscal Year, such budget to be prepared in a form and on a
basis similar to the budget(s) previously furnished to the Lenders and to
include, on a quarterly basis, the following: an operating and capital budget,
an income statement, a statement of cash flows and a balance sheet, accompanied
by a certificate from the chief financial officer of the Borrower, on behalf of
the Borrower, to the effect that, to the best of such officer's knowledge, such
information is a good faith estimate of the financial condition and operations
of the Borrower and its Subsidiaries for such period.
Section 7.02 Officer's Compliance Certificate. At each time
reports are delivered pursuant to Sections 7.01(a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of the Borrower in the form of Exhibit
H attached hereto (a "Compliance Certificate"), which shall include a schedule
of all earn-out obligations and the expiration of each earn-out period.
Section 7.03 Accountants' Certificate. Each time financial
statements are delivered pursuant to Section 7.01(b), a certificate of the
independent public accountants certifying such statements addressed to the
Administrative Agent for the benefit of the Lenders stating that in making the
examination necessary for the certification of such financial statements, they
obtained no knowledge of any default by the Borrower and its Restricted
Subsidiaries in the performance or observance of any covenant or agreement
contained in Article IX or, if such is not the case, specifying such default in
its nature and period of existence.
Section 7.04 Other Reports.
(a) Promptly but in any event within ten (10) Business Days
after the filing thereof, a copy of (i) each report or other filing made by the
Borrower or any of its Subsidiaries with the SEC and required by the SEC to be
delivered to the shareholders of the Borrower or any of its Subsidiaries, and
(ii) each report made by the Borrower or any of its Subsidiaries to the SEC on
Form 8-K and each final registration statement of the Borrower or any of its
Subsidiaries filed with the SEC (excluding any registration statement on Form
S-8 or its equivalent); and
(b) Such other information regarding the operations, business
affairs and financial condition of the Borrower or any of its Subsidiaries as
the Administrative Agent or any Lender (acting through the Administrative Agent)
may reasonably request.
Section 7.05 Notice of Litigation and Other Matters. Prompt (but
in no event later than ten (10) days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by
or before any Governmental Authority and all actions and proceedings in any
court or before any arbitrator against or involving the Borrower or any
Subsidiary or any of their respective
- 45 -
properties, assets or businesses which if determined adversely to the Borrower
or such Subsidiary, individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect;
(b) any notice of any violation received by the Borrower or
any Subsidiary from any Governmental Authority (including, without limitation,
any notice of violation of Environmental Laws) which in any such case could
reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens
to result in, a strike against the Borrower or any Subsidiary;
(d) any Default or Event of Default;
(e) (i) any unfavorable determination letter from the
Internal Revenue Service regarding the qualification of an Employee Benefit Plan
under Section 401(a) of the Code (along with a copy thereof), (ii) all notices
received by the Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (iii) all notices received by the Borrower or any ERISA Affiliate
from a Multiemployer Plan sponsor concerning the imposition or amount of
withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Borrower
obtaining knowledge or reason to know that the Borrower or any ERISA Affiliate
has filed or intends to file a notice of intent to terminate any Pension Plan
under a distress termination within the meaning of Section 4041(c) of ERISA; and
(f) any event which makes any of the representations set
forth in Section 6.01 inaccurate in any material respect or any event which
could reasonably be expected to have a Material Adverse Effect (other than in
connection with the Senior Credit Agreement), and any asserted claim for an
amount in excess of $500,000 with respect to any Indemnified Matter.
Section 7.06 Accuracy of Information. All written information,
reports, statements and other papers and data furnished by or on behalf of the
Borrower to the Administrative Agent or any Lender (other than financial
forecasts) whether pursuant to Article VII or any other provision of this
Agreement, or any of the other Credit Documents, shall be, at the time the same
is so furnished, complete and correct in all material respects to the extent
necessary to give the Administrative Agent or any Lender complete, true and
accurate knowledge of the subject matter based on the Borrower's knowledge
thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been finally paid and satisfied
in full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 14.01, the Borrower will, and will cause each of its
Subsidiaries to:
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Section 8.01 Preservation of Corporate Existence and Related
Matters. Except as permitted by Section 10.10, preserve and maintain its
separate existence as a corporation, partnership or other applicable form of
business entity and all rights, franchises, licenses and privileges necessary to
the conduct of its business, and qualify and remain qualified as a foreign
corporation, partnership or other such entity and authorized to do business in
each jurisdiction in which the failure to so qualify could reasonably be
expected to have a Material Adverse Effect.
Section 8.02 Maintenance of Property. Protect and preserve all
properties useful in and material to its business, including copyrights,
patents, trade names and trademarks and service marks; maintain in good working
order and condition all buildings, equipment and other tangible real and
personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; except in each case where
the failure to take such action could not reasonably be expected to have a
Material Adverse Effect.
Section 8.03 Insurance. Maintain insurance with financially sound
and reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law, and from time to time deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
Section 8.04 Accounting Methods and Financial Records. Maintain a
system of accounting, and keep such books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
Section 8.05 Payment and Performance of Obligations. Pay and
perform all Obligations under this Agreement and the other Credit Documents, and
pay or perform (a) all material taxes, assessments and other governmental
charges that may be levied or assessed upon it or any of its property, and (b)
all other material indebtedness (other than the Senior Debt), obligations and
liabilities in accordance with customary trade practices; provided, that the
Borrower or such Subsidiary may contest any item described in clauses (a) or (b)
of this Section 8.05 in good faith so long as adequate reserves are maintained
with respect thereto in accordance with GAAP.
Section 8.06 Compliance With Laws and Approvals. Subject to
Section 8.07, observe and remain in compliance with all Applicable Laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to the conduct of its business except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
Section 8.07 Environmental Laws. (a) Use reasonable commercial
efforts to comply with all applicable Environmental Laws and use reasonable
commercial efforts to obtain, comply with and maintain any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws, in each case where the failure to so obtain or
- 47 -
comply with which could reasonably be expected to have a Material Adverse
Effect, and (b) defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements authorized by the Borrower, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of, noncompliance with
or liability under any Environmental Laws applicable to the operations of the
Borrower or its Restricted Subsidiaries, or any orders, requirements or demands
of Governmental Authorities related thereto, including, without limitation,
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor. Notwithstanding
anything in this Agreement to the contrary, the obligations of the Borrower
under this Section 8.07 shall survive the payment in full of the Obligations and
the termination of the Commitments.
Section 8.08 Compliance with ERISA. In addition to and without
limiting the generality of Section 8.06, and to the extent any of the following,
individually or in the aggregate, results or could reasonably be expected to
result in a Material Adverse Effect, (a) comply in all material respects with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans, (b) not
take any action or fail to take action the result of which could be a liability
to the PBGC or to a Multiemployer Plan, (c) not participate in any prohibited
transaction that could result in any material civil penalty under ERISA or tax
under the Code, (d) operate each Employee Benefit Plan in such a manner that
will not incur any material tax liability under Section 4980B of the Code or any
liability to any qualified beneficiary as defined in Section 4980B of the Code
and (e) furnish to the Administrative Agent upon the Administrative Agent's
request such additional information about any Employee Benefit Plan as may be
reasonably requested by the Administrative Agent.
Section 8.09 Compliance With Agreements. Comply in all respects
with each term, condition and provision of all leases, agreements (other than
the Senior Credit Agreement and the Loan Documents (as defined therein)) and
other instruments entered into in the conduct of its business, except where the
failure to comply could not reasonably be expected to have a Material Adverse
Effect; provided, that the Borrower or such Subsidiary may contest any such
lease, agreement or other instrument in good faith through applicable
proceedings so long as adequate reserves are maintained in accordance with GAAP.
Section 8.10 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date
and those related thereto.
Section 8.11 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender (acting through the Administrative Agent),
from time to time, upon reasonable prior notice, during normal business hours
and, so long as no Default or Event of Default shall have occurred and be
continuing, at the sole cost of the Administrative Agent or such Lender, to (a)
visit and inspect its properties; (b) inspect, audit and make extracts from its
books, records and files, including, but not limited to, management letters
prepared by independent accountants; and (c) discuss with its principal
officers, and its independent accountants,
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its business, assets, liabilities, financial condition, results of operations
and business prospects.
Section 8.12 Subsidiaries. Concurrently with the creation or
acquisition of any Subsidiary, (a) if such Subsidiary is a domestic Restricted
Subsidiary (unless such Subsidiary has no material assets other than capital
stock of foreign Subsidiaries), cause it to execute and deliver to the
Administrative Agent a supplement to the Guaranty Agreement delivered on the
Closing Date substantially in the form of Exhibit A to such Guaranty Agreement
and (b) regardless of whether such Restricted Subsidiary is a domestic
Subsidiary, cause to be delivered to the Administrative Agent such other
documents as the Administrative Agent or the Majority Lenders shall reasonably
request in connection therewith, including without limitation, officers'
certificates, financial statements, opinions of counsel, resolutions, charter
documents, certificates of existence and authority to do business and any other
closing certificates and documents described in Section 5.01.
Section 8.13 Further Assurances. Make, execute and deliver all
such additional and further acts, things, deeds and instruments as the
Administrative Agent or any Lender acting through the Administrative Agent may
reasonably require to document and consummate the transactions contemplated
hereby and to vest completely in and insure the Administrative Agent and the
Lenders their respective rights under this Agreement, the Notes and the other
Credit Documents.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been finally paid and satisfied
in full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 14.01, the Borrower will not:
Section 9.01 Leverage Ratio. Permit the Leverage Ratio, as of the
last day of each fiscal quarter referred to below, to exceed the corresponding
ratio set forth below:
Quarter End Ratio
----------- -----
June 30, 2002 and 4.75 to 1.00
each quater end thereafter
Section 9.02 Maximum Total Debt. Permit, at any time after the
third anniversary of the Closing Date (the "Third Anniversary Date"), Total Debt
to exceed the greater of (a) the sum of (i) the Aggregate Commitment under (and
as defined in) the Senior Credit Agreement and (ii) the aggregate amount of Debt
(other than Senior Debt) of the Borrower and its Restricted Subsidiaries
determined on a Consolidated basis, in each case of (i) and (ii), on the Third
Anniversary Date and (b) $400,000,000.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been finally paid and satisfied
in full and the Commitments terminated, unless consent has been obtained in the
manner set forth in Section 14.01, the Borrower will not and will not permit any
of its Restricted Subsidiaries to:
Section 10.01 Limitations on Debt.
(a) The Borrower shall not, and shall not permit any
Restricted Subsidiary to, create, issue, assume, guarantee or otherwise become
directly or indirectly liable, contingently or otherwise, for the payment of, or
otherwise incur (collectively, "incur"), any Debt (including Acquired Debt and
the issuance of Disqualified Stock), except that the Borrower or a Guarantor may
incur Debt or issue Disqualified Stock if, at the time of such event, (i) no
Default or Event of Default has occurred and is continuing or result as a
consequence of the incurrence of any such Debt, (ii) the Leverage Ratio would
have been not more than 4.5 to 1.0 and (iii) the Fixed Charge Coverage Ratio
would have been not less than 2.5 to 1.0.
(b) In making the foregoing calculation, pro forma effect
will be given to: (i) the incurrence of such Debt and (if applicable) the
application of the net proceeds therefrom, including to refinance other Debt as
if the additional Debt had been incurred and the application of proceeds
therefrom occurred on the first day of such four-quarter period immediately
preceding the date on which such additional Debt had actually been incurred,
(ii) the incurrence, repayment or retirement of any other Debt by the Borrower
or any Restricted Subsidiary since the first day of such four-quarter period as
if such Debt was incurred, repaid or retired at the beginning of such
four-quarter period and (iii) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any company,
entity or business acquired or disposed of by the Borrower or any Restricted
Subsidiary, as the case may be, since the first day of such four quarter period,
as if such acquisition or disposition occurred at the beginning of such
four-quarter period. In making a computation under the foregoing clause (i) or
(ii), (A) the amount of Debt under a revolving credit facility will be computed
based upon the average daily balance of such Debt during such four-quarter
period, (B) interest on Debt bearing a floating interest rate will be computed
as if the rate in effect on the date of computation had been the applicable rate
for the entire period, and (C) if such Debt bears, at the option of the
Borrower, a fixed or floating rate of interest, interest thereon will be
computed by applying, at the option of the Borrower, either the fixed or
floating rate.
(c) Notwithstanding the foregoing, the Borrower may, and may,
to the extent expressly permitted below, permit any Restricted Subsidiary to,
incur any of the following Debt ("Permitted Debt"):
(i) Debt of the Borrower under the Senior Credit
Agreement in an aggregate principal amount not to exceed the sum of (A)
$230,000,000 plus (B) any additional amounts that may be incurred in
compliance with the provisions of Section 9.02 and Section 10.01(a);
- 49 -
(ii) Debt of the Borrower or any Restricted Subsidiary
that is outstanding on the Closing Date and listed in Schedule 6.01(p),
other than Debt described in clause (i) above;
(iii) Debt owed by any Guarantor to the Borrower or any
other Guarantor (provided that such Debt is held by the Borrower or
such Guarantor) or owed to the Borrower by a Restricted Subsidiary that
is not a Guarantor, provided such Debt would not violate the provisions
of Section 10.11;
(iv) Debt represented by the Notes and the Guaranty
Agreement;
(v) Debt incurred in connection with Hedging Agreements
of the Borrower or any of its Restricted Subsidiaries entered into in
the ordinary course of business;
(vi) either (A) Debt incurred in connection with Capital
Leases of the Borrower or any Restricted Subsidiary or (B) Debt secured
by purchase money security interests so long as (1) such Debt is not
secured by any property or assets of the Borrower or any Restricted
Subsidiary other than the property or assets so acquired and (2) such
Debt is created within 60 days of the acquisition of the related
property; provided that the Borrower on a pro forma basis could incur
$1.00 of additional Debt pursuant to subsection (a) of this Section
10.01;
(vii) Acquired Debt of a Person, other than Debt
incurred in connection with, or in contemplation of, such Person
becoming a Restricted Subsidiary or the acquisition of assets from such
Person, as the case may be, provided that the Borrower on a pro forma
basis could incur $1.00 of additional Debt pursuant to subsection (a)
of this Section 10.01; and
(viii) any renewals, extensions, substitutions,
refinancings or replacements (each, for purposes of this clause, a
"refinancing") of any outstanding Debt incurred pursuant to clause (ii)
or (vii) above, including any successive refinancings thereof, so long
as (A) any such new Debt is in a principal amount that does not exceed
the principal amount so refinanced, plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Debt refinanced, (B) in the case of any refinancing of
Subordinated Debt, such new Debt is made subordinate to the Notes at
least to the same extent as the Debt being refinanced, (C) such
refinancing Debt does not have a Weighted Average Life less than the
Weighted Average Life of the Debt being refinanced, and does not have a
final scheduled maturity earlier than the final scheduled maturity, or
permit redemption at the option of the holder earlier than the earliest
date of redemption at the option of the holder, of the Debt being
refinanced and (D) the obligor with respect to such new Debt was an
obligor, to the same extent, with respect to the Debt being refinanced.
- 50 -
Section 10.02 Limitation on Restricted Payments.
(a) The Borrower shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, make any Restricted Payment
unless at the time of, and immediately after giving effect to, the proposed
Restricted Payment:
(i) no Default or Event of Default has occurred and is
continuing or would otherwise occur as a consequence thereof,
(ii) the Borrower could incur at least $1.00 of
additional Debt pursuant to subsection (a) of Section 10.01, and
(iii) the aggregate amount of all Restricted Payments
declared or made does not exceed (without duplication):
(A) during any fiscal quarter, twenty-five percent
(25%) of Net Income for the immediately preceding fiscal
quarter (provided that any amounts available for Restricted
Payments in any quarter which are not so declared or made
during such quarter may be carried over to the next
succeeding four fiscal quarters); plus
(B) during the period from the Closing Date to the
Maturity Date, fifty percent (50%) of the amount realized by
the Borrower from the exercise subsequent to May 4, 2001 by
third Persons of stock options granted by the Borrower plus
$7,500,000.
(b) Notwithstanding the foregoing, the Borrower and any
Restricted Subsidiary may take any of the following actions:
(i) make any dividend payment within 60 days after the
date of declaration thereof, if at the declaration date such payment
would not have been prohibited by Section 10.02(a);
(ii) so long as no Default or Event of Default has
occurred and is continuing or would occur, repurchase, redeem or
otherwise acquire or retire for value any shares of Capital Stock of
the Borrower, in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent issuance and sale (other than to a Subsidiary
of the Borrower) of, Qualified Equity Interests of the Borrower;
(iii) purchase, redeem, acquire, cancel or otherwise
retire for value shares of Capital Stock of the Borrower, options on
any such shares or related stock appreciation rights or similar
securities held by officers or employees or former officers or
employees (or their estates or beneficiaries under their estates) or by
any employee benefit plan, upon death, disability, retirement or
termination of employment or pursuant to the terms of any employee
benefit plan or any other agreement under which such shares of stock or
related rights were issued; provided that the aggregate cash
consideration paid for such purchase, redemption, acquisition,
cancellation or other
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retirement of such shares of Capital Stock after the Closing Date does not
exceed $5,000,000 in any Fiscal Year of the Borrower.
(c) The payments described in clauses (ii) and (iii) of
subsection (b) above will be Restricted Payments that shall be permitted to be
taken in accordance with this Section 10.02 but shall reduce the amount that
would otherwise be available for Restricted Payments under Section 10.02(a)(iii)
and the payments described in clause (i) of subsection (b) above shall be
Restricted Payments that shall be permitted to be taken in accordance with this
Section 10.02 and shall not reduce the amount that would otherwise be available
for Restricted Payments under Section 10.02(a)(iii).
Section 10.03 Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries. The Borrower will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any of its Restricted
Subsidiaries to (a) pay dividends, in cash or otherwise, or make any other
distributions on or in respect of its Capital Stock, (b) pay any Debt owed to
the Borrower or any other Restricted Subsidiary of the Borrower, (c) make loans
or advances to the Borrower or any other Restricted Subsidiary of the Borrower
or (d) transfer any of its properties or assets to the Borrower or any other
Restricted Subsidiary of the Borrower, except for such encumbrances or
restrictions existing under or by reason of any of the following:
(i) (A) the Senior Credit Agreement and (B) any other
agreement in effect on the Closing Date;
(ii) customary non-assignment provisions of any lease
governing a leasehold interest of the Borrower or any of its Restricted
Subsidiaries;
(iii) any agreement or other instrument of a Person
acquired by the Borrower or any of its Restricted Subsidiaries in
existence at the time of such acquisition (but not created in
contemplation thereof), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person,
other than the Person, or the property or assets of the Person, so
acquired;
(iv) any encumbrance or restriction pursuant to an
agreement effecting a refinancing of Debt incurred pursuant to an
agreement referred to in clause (i) or (iii) or contained in any
amendment to an agreement referred to in clause (i) or (iii); provided,
however, that the encumbrances and restrictions with respect to such
Restricted Subsidiary contained in any such agreement or amendment
(except for any agreement or amendment refinancing the Senior Credit
Agreement as to which this proviso shall not apply) are no more
restrictive than encumbrances and restrictions with respect to such
Restricted Subsidiary contained in such predecessor agreement;
(v) any agreement providing for the incurrence of Debt
by a Restricted Subsidiary of the Borrower in compliance with Section
10.01(a), provided that either (A) the encumbrance or restriction
applies only in the event of and during the continuance of a payment
default or a default with respect to a financial covenant
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contained in such agreement or (B) the encumbrance or restriction is not
materially more disadvantageous to the Lenders than is customary in comparable
financings or agreements (as determined by the Board of Directors in good
faith); and
(vi) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary pending the closing of such
sale or disposition, but only to the extent that such sale or
disposition is not prohibited by this Agreement.
Section 10.04 Limitation on Issuances and Sales of Capital Stock
of Restricted Subsidiaries. The Borrower shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, (a) issue or sell, any shares
of Capital Stock of a Restricted Subsidiary or any options, warrants or other
rights to purchase shares of such Capital Stock except (i) to the Borrower or a
Restricted Subsidiary, (ii) issuances or sales to directors of directors'
qualifying shares, (iii) to employees of the Borrower or any Restricted
Subsidiary as incentive compensation, (iv) if, immediately after giving effect
to such issuance or sale, (A) neither the Borrower nor any of its Subsidiaries
owns any shares of Capital Stock of such Restricted Subsidiary or any options,
warrants or other rights to purchase shares of such Capital Stock and (B) such
issuance or sale is made in compliance with this Agreement, to the extent that,
immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer be a Restricted Subsidiary and any Investment in such
Person remaining after giving effect to such issuance or sale would have been
permitted to be made under Section 10.11 if made on the date of such issuance or
sale, and (v) so long as the Senior Debt is outstanding, if the requisite
holders of the Senior Debt have consented to such issuance and/or sale or (b)
sell, transfer or otherwise dispose of any of its properties or assets to an
Unrestricted Subsidiary other than in the ordinary course of business.
Section 10.05 Limitation on Other Senior Subordinated
Indebtedness. The Borrower shall not, and shall not permit any Guarantor to,
directly or indirectly, incur or otherwise permit to exist any Debt that is
subordinate in right of payment to the Senior Debt of the Borrower or such
Guarantor, as the case may be, unless such Debt is also subordinate in right of
payment to the Notes or the Guaranty Agreement, as the case may be, to at least
the same extent as the Notes or the Guaranty Agreement are subordinate in right
of payment to the Senior Debt or all senior debt of such Guarantor, as the case
may be, as set forth in this Agreement.
Section 10.06 Limitation on Unrestricted Subsidiaries.
(a) The Borrower may designate any of its Subsidiaries
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary so long as (i) neither the Borrower nor any Restricted Subsidiary is
directly or indirectly liable for any Debt of such Subsidiary, (ii) no default
with respect to any Debt of such Subsidiary would permit (upon notice, lapse of
time or otherwise) any holder of any other Debt of the Borrower or any
Restricted Subsidiary to declare a default on such other Debt or cause the
payment thereof to be accelerated or payable prior to its stated maturity, (iii)
any Investment in such Subsidiary made as a result of designating such
Subsidiary an Unrestricted Subsidiary will not violate the provisions of Section
10.11, (iv) neither the Borrower nor any Restricted Subsidiary has a contract,
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agreement, arrangement, understanding or obligation of any kind, whether written
or oral, with such Subsidiary other than those that might be obtained in
accordance with Section 10.08 and (v) neither the Borrower nor any Restricted
Subsidiary has any obligation to subscribe for additional shares of Capital
Stock in such Subsidiary, or to maintain or preserve such Subsidiary's financial
condition or to cause such Subsidiary to achieve certain levels of operating
results. Notwithstanding the foregoing, the Borrower may not designate any
Subsidiary of the Borrower which is a Restricted Subsidiary under the Senior
Credit Agreement as an Unrestricted Subsidiary under this Agreement.
(b) The Borrower may designate any Unrestricted Subsidiary as
a Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Debt by such Restricted Subsidiary of any outstanding Debt of such
Unrestricted Subsidiary and such designation shall only be permitted if (i) such
Debt is permitted under Section 10.01 and (ii) no Default or Event of Default
shall have occurred and be continuing following such designation.
Section 10.07 Limitation on Liens. The Borrower shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, create,
incur or otherwise permit to exist any Lien (other than Permitted Liens) of any
kind against or upon any property or assets of the Borrower or any Restricted
Subsidiary now owned or acquired after the Closing Date, or any proceeds
therefrom, or assign or otherwise convey any right to receive income or profits
therefrom unless:
(a) in the case of Liens securing Subordinated Debt, the
Notes are secured by a Lien on such property, assets or proceeds that is senior
in priority to such Liens; and
(b) in the case of Liens securing Pari-Passu Debt, the Notes
are equally and ratably secured by a Lien on such property, assets, proceeds,
income or profits.
Section 10.08 Limitation on Transactions with Affiliates. Except
(a) as set forth on Schedule 10.08, (b) with respect to service agreements with
Co-Investment Entities and (c) as otherwise expressly permitted hereunder,
directly or indirectly: (i) make any loan or advance to, or purchase or assume
any note or other obligation to or from, any of its officers, directors,
shareholders or other Affiliates, or to or from any member of the immediate
family of any of its officers, directors, shareholders or other Affiliates, or
subcontract any operations to any of its Affiliates, or (ii) enter into, or be a
party to, any transaction with any of its Affiliates, in both cases except upon
fair and reasonable terms no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
Section 10.09 Limitation on Certain Asset Sales. The Borrower
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, consummate any Asset Sale, except:
(a) the sale of all or substantially all of the business or
assets of any Restricted Subsidiary to the extent that such business or assets
are conveyed, sold, assigned, leased, transferred, or otherwise disposed of, in
one transaction or a series of transactions, to the Borrower or any other
Restricted Subsidiary;
- 54 -
(b) the sale of obsolete assets no longer used or usable in
the business of the Borrower or any of its Subsidiaries;
(c) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection with the
compromise or collection thereof;
(d) Asset Sales, other than as otherwise permitted by this
Section 10.09, not exceeding $7,500,000 in any Fiscal Year; provided that, to
the extent the allowance for sale of assets provided for in this subsection (d)
is not utilized, the same may be carried over cumulatively to the next
succeeding Fiscal Year, provided that the allowance shall in no event exceed
$15,000,000 in any Fiscal Year (Asset Sales shall be permitted in excess of the
limitation provided for in this subsection (d), provided that 100% of the amount
of the Net Cash Proceeds from any such Asset Sales are applied, first, to the
payment of the Senior Debt until the Senior Debt has been paid in full and to
reduce the Commitments under (and as defined in) the Senior Credit Agreement
and, second, after such Commitments have been terminated, to the payment of the
outstanding principal amount of the Loans (in accordance with Section 2.05(d));
(e) the sale of real property and other assets owned by and
interests in Co-Investment Entities and the sale of assets owned by and
interests in Unrestricted Subsidiaries;
(f) the sale of assets listed on Schedule 10.09; and
(g) the disposition of any Hedging Agreement permitted
hereunder.
Section 10.10 Consolidation, Merger and Sale of Assets.
(a) The Borrower shall not consolidate with or merge with or
into any other Person or, directly or indirectly, convey, transfer or lease its
properties and assets substantially as an entirety to any Person or Persons (in
one transaction or a series of related transactions), unless each of the
following conditions is satisfied:
(i) Either (A) the Borrower is the surviving entity or
(B) the Person (if other than the Borrower) formed by such
consolidation or into which the Borrower is merged or the Person that
acquires by sale, assignment, transfer, lease or other disposition of
the properties and assets of the Borrower substantially as an entirety
(the "Surviving Entity") (1) is an entity organized and validly
existing under the laws of the United States, any state thereof or the
District of Columbia and (2) expressly assumes all of the Borrower's
obligations under this Agreement and the other Credit Documents;
(ii) Immediately after giving effect to such transaction
and treating any obligation of the Borrower or a Restricted Subsidiary
in connection with or as a result of such transaction as having been
incurred at the time of such transaction, no Default or Event of
Default has occurred and is continuing;
(iii) Immediately after giving effect to such
transaction on a pro forma basis, the Borrower (or the Surviving Entity
if the Borrower is not the continuing obligor under this Agreement) has
a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Borrower immediately prior to the closing of such
transaction;
(iv) Immediately after giving effect to such transaction
on a pro forma basis (on the assumption that the transaction occurred
at the beginning of the most recently ended four full fiscal quarter
period for which internal financial statements are available), the
Borrower (or the Surviving Entity if the Borrower is not the continuing
obligor under this Agreement) could incur at least $1.00 of additional
Debt pursuant to Section 10.01(a);
(v) If the Borrower is not the continuing obligor under
this Agreement, each Guarantor, unless it is the other party to the
transaction described above, has confirmed that the Guaranty Agreement
applies to the Surviving Entity's obligations under this Agreement and
the other Credit Documents;
(vi) If any of the property or assets of the Borrower or
any Restricted Subsidiary would thereupon become subject to any Lien,
the provisions of Section 10.07 are complied with; and
(vii) The Borrower delivers, or causes to be delivered,
to the Administrative Agent, in form and substance reasonably
satisfactory to the Administrative Agent, an officers' certificate and
an opinion of counsel, each stating that such transaction complies with
the requirements of this Agreement.
(b) In the event of any transaction described in and complying
with the conditions of subsection (a) above in which the Borrower is not the
continuing obligor under this Agreement, the Surviving Entity shall succeed to,
and be substituted for, and may exercise every right and power of, the Borrower
under this Agreement and the other Credit Documents and thereafter the Borrower
shall, except in the case of a lease, be discharged from all its obligations and
covenants under this Agreement and the other Credit Documents.
(c) The Borrower shall not permit any Guarantor to consolidate
with or merge with or into any other Person or, directly or indirectly, convey,
transfer or lease its properties and assets substantially as an entirety to any
Person or Persons other than (x) the Borrower or another Guarantor (in one
transaction or a series of related transactions) or (y) in connection with the
merger of any Guarantor into the Person such Guarantor was formed to acquire in
connection with an acquisition permitted under Section 10.11, unless each of the
following conditions is satisfied:
(i) the Person (if other than such Guarantor) formed by
such consolidation or into which such Guarantor is merged or the Person
that acquires by sale, assignment, transfer, lease or other disposition
of the properties and assets of such Guarantor substantially as an
entirety (A) is an entity organized and validly existing under the laws
of the United States, any state thereof or the District of Columbia and
(B) expressly assumes all of such Guarantor's obligations under the
Guaranty Agreement;
(ii) Immediately after giving effect to such transaction
and treating any obligation of the Borrower or a Restricted Subsidiary
in connection with or as a result of such transaction as having been
incurred at the time of such transaction, no Default or Event of
Default has occurred and is continuing;
(iii) Immediately after giving effect to such
transaction on a pro forma basis, the Borrower has a Consolidated Net
Worth equal to or greater than the
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Consolidated Net Worth of the Borrower immediately prior to the closing
of such transaction;
(iv) Immediately after giving effect to such transaction on a pro
forma basis (on the assumption that the transaction occurred at the
beginning of the most recently ended four full fiscal quarter period
for which internal financial statements are available), the Borrower
could incur at least $1.00 of additional Debt pursuant to Section
10.01(a);
(v) If any of the property or assets of the Borrower or any
Restricted Subsidiary would thereupon become subject to any Lien, the
provisions of Section 10.07 are complied with; and
(vi) The Borrower delivers, or causes to be delivered, to the
Administrative Agent, in form and substance reasonably satisfactory to
the Administrative Agent, an officers' certificate and an opinion of
counsel, each stating that such transaction complies with the
requirements of this Agreement.
Section 10.11 Limitation on Investments. The Borrower shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, make any
Investments other than Permitted Investments. Notwithstanding the foregoing, in
the event that the Senior Agent and the Senior Lenders waive any default or
event of default under the Senior Credit Agreement resulting from a failure by
the Borrower or any Restricted Subsidiary to comply with the terms of Section
10.4 of the Senior Credit Agreement, the Administrative Agent and the Lenders
shall, upon the same terms and conditions as such waiver by the Senior Agent and
the Senior Lenders, waive any Default or Event of Default arising under Section
11.01(d) by reason of a default under this Section 10.11 resulting solely from
the failure of the Borrower or any Restricted Subsidiary to comply with clause
(g) of the definition of Permitted Investments.
Section 10.12 Amendments; Payments and Prepayments of Subordinated
Debt.
(a) The Borrower shall not, and shall not permit any Restricted
Subsidiary to amend or modify (or permit the modification or amendment of) any
of the terms or provisions of any Subordinated Debt in any manner which would
reasonably be expected to have an adverse effect upon the rights or interests of
the Administrative Agent or the Lenders, or make any voluntary or optional
payment or prepayment on, or redeem or acquire or retire for value (including
without limitation by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due) any
Subordinated Debt.
(b) Notwithstanding the foregoing, the Borrower and any Restricted
Subsidiary may take any of the following actions:
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(i) so long as no Default or Event of Default has
occurred and is continuing or would occur, repurchase, redeem, or
otherwise acquire or retire for value Subordinated Debt in exchange
for, or out of the Net Cash Proceeds of, a substantially concurrent
issuance or sale (other than to a Subsidiary of the Borrower) of,
Subordinated Debt, so long as the Borrower or a Restricted Subsidiary
would be permitted to refinance such original Subordinated Debt with
such new Subordinated Debt pursuant to clause (viii) of Section
10.01(c); and
(ii) repurchase any Subordinated Debt at a purchase
price not greater than 101% of the principal amount of such
Subordinated Debt in the event of a "change of control" in accordance
with provisions similar to Section 2.05(c); provided that, prior to
such repurchase, the Borrower has made the Change of Control Offer as
provided in such Section with respect to the Notes and has repaid all
Loans required to be repaid in connection with such Change of Control
Offer.
Section 10.13 Real Estate Development. Engage in any real estate
development activities for its own account.
Section 10.14 Lines of Business. Change the lines of business in
which it currently is engaged or change, directly or indirectly, or
substantially alter its method of doing business in a manner which would have a
Material Adverse Effect.
ARTICLE XI
EVENTS OF DEFAULT
Section 11.01 Events of Default. Each of the following shall
constitute an Event of Default, whatever the reason for such event and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment or order of any court or any order, rule or regulation
of any Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans. The Borrower
shall default in any payment of principal of any Loan or Note when and as due
(whether at maturity, by reason of acceleration or otherwise)
(b) Other Payment Default. The Borrower shall default in the
payment when and as due (whether at maturity, by reason of acceleration or
otherwise) of interest on any Loan or Note or the payment of any other
Obligation (other than payments of principal) and such payment shall not have
been made within thirty (30) days after such payment becomes due.
(c) Misrepresentation. Any representation or warranty made or
deemed to be made by the Borrower or any of its Subsidiaries under this
Agreement, any other Credit Document or any amendment hereto or thereto, shall
at any time prove to have been incorrect or misleading in any material respect
when made or deemed made.
(d) Default in Performance of Covenants and Conditions. The
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term,
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covenant, condition or agreement contained in this Agreement (other than as
specifically provided for otherwise in this Section 11.01) or any other Credit
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrower by the Administrative
Agent except that no such notice shall be required with respect to any default
in the performance or observance of any covenant or agreement contained in
Sections 7.05(d) or 8.12 or Articles IX or X.
(e) Debt Cross-Default. The Borrower or any of its Restricted
Subsidiaries shall (i) default in any payment with respect to any Debt for
Borrowed Money (other than the Obligations and the Senior Debt), or having an
aggregate unpaid principal amount of $10,000,000 or greater, and such default
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt for Borrowed Money; (ii) default
in any payment with respect to any Senior Debt, and such default shall continue
for a period of ten (10) days after the applicable grace period, if any,
specified in the Senior Credit Agreement relating to such Senior Debt; or (iii)
default in the observance or performance of any agreement or condition relating
to any such Debt for Borrowed Money 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 that such Debt for Borrowed Money of the Borrower or any of its
Restricted Subsidiaries shall be declared to be, or shall otherwise become, due
and payable, or shall be required to be prepaid (other than by a regularly
scheduled required prepayment or redemption), in each case, prior to the stated
maturity thereof.
(f) Voluntary Bankruptcy Proceeding. The Borrower or any
Restricted Subsidiary shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(g) Involuntary Bankruptcy Proceeding. A case or other
proceeding shall be commenced against the Borrower or any Restricted Subsidiary
thereof in any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for the Borrower or any Restricted Subsidiary
thereof or for all or any substantial part of their respective assets, domestic
or foreign, and such case or proceeding shall continue undismissed or unstayed
for a period of ninety (90) consecutive days, or an order granting the relief
requested in such case or proceeding (including, but not limited to, an order
for relief under such federal bankruptcy laws) shall be entered.
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(h) Failure of Agreements. Any material provision of this
Agreement or of any other Credit Document shall for any reason cease to be valid
and binding on the Borrower or Restricted Subsidiary party thereto or any such
Person shall so state in writing.
(i) Termination Event. The occurrence of any of the following
events: (i) the Borrower or any ERISA Affiliate fails to make full payment when
due of all amounts which, under the provisions of any Pension Plan or Section
412 of the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto which results in a Material Adverse Effect, (ii) an
accumulated funding deficiency in excess of $500,000 occurs or exists, whether
or not waived, with respect to any Pension Plan, (iii) a Termination Event or
(iv) the Borrower or any ERISA Affiliate as employers under one or more
Multiemployer Plan makes a complete or partial withdrawal from any such
Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies
such withdrawing employer that such employer has incurred a withdrawal liability
requiring payments in an amount which in the aggregate with all other withdrawal
liabilities then due and payable exceeds $10,000,000.
(j) Judgment. A judgment or order for the payment of money
not covered by insurance which causes the aggregate amount of such undischarged,
unstayed and not removed judgments to exceed $10,000,000 in any Fiscal Year
shall be entered against the Borrower or any of its Restricted Subsidiaries by
any court and such judgment or order shall continue undischarged, unstayed or
not removed to bond for a period of thirty (30) days.
Section 11.02 Remedies. Upon the occurrence of an Event of
Default, with the consent of the Majority Lenders, the Administrative Agent may,
or upon the request of the Majority Lenders, the Administrative Agent shall, by
notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare all or
any portion of the principal of and interest on the Loans and the Notes at the
time outstanding, and all other amounts owed to the Administrative Agent and the
Lenders under this Agreement or any of the other Credit Documents and all other
Obligations, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Credit Documents to the contrary notwithstanding, and
terminate or reduce the Commitments and any right of the Borrower to request
borrowings hereunder, whereupon the Commitments shall immediately be so
terminated or reduced; provided, that upon the occurrence of an Event of Default
specified in Section 11.01(f) or (g), without any notice to any Credit Party or
any other Person or any act by the Administrative Agent or any Lender, all
Commitments shall automatically terminate and all Obligations shall
automatically become due and payable without presentment, demand, protest or
other notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Credit Documents to the contrary notwithstanding.
(b) Rights of Collection. Exercise on behalf of the Lenders
all of its other rights and remedies under this Agreement, the other Credit
Documents and Applicable Law, in order to satisfy all of the Borrower's
Obligations.
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Section 11.03 Rights and Remedies Cumulative; Non-Waiver;
Etc. The enumeration of the rights and remedies of the Administrative Agent and
the Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and Lenders of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which shall be
cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Credit Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Credit Documents or to
constitute a waiver of any Event of Default.
ARTICLE XII
SUBORDINATION OF NOTES
Section 12.01 Obligations Subordinate to Senior Debt.
Notwithstanding anything to the contrary contained in this Agreement or any
other Credit Document, the Borrower, the Administrative Agent and each Lender
party hereto agree and each Lender acquiring any Note or any interest therein or
herein shall be deemed to have agreed by such acquisition, that all Obligations
of the Credit Parties under the Credit Documents are subordinate in right of
payment to the prior payment in full of all Senior Debt, whether outstanding on
the Closing Date or thereafter incurred, all in accordance with this Article XII
and that each holder of any such Senior Debt shall be deemed to have acquired
such Senior Debt in reliance upon the covenants and provisions contained in this
Article XII.
Section 12.02 Payment Over of Proceeds Upon Dissolution, Etc.
Upon any payment or distribution of assets of the Borrower to creditors upon any
dissolution, winding up, liquidation, arrangement, reorganization, adjustment,
protection, relief or composition of the Borrower or its debts, whether
voluntary or involuntary, in any bankruptcy, insolvency, arrangement,
reorganization, receivership, relief or other similar case or proceeding under
any federal or state bankruptcy or similar law or upon an assignment for the
benefit of creditors or any other marshalling of the assets and liabilities of
the Borrower, in each case whether total or partial (each, a "Distribution
Event"), the holders of Senior Debt will first be paid, in full, all amounts due
or to become due on or in respect of the Senior Debt before the Lenders are
entitled to receive any payment on the Obligations under the Credit Documents
(other than equity or subordinated securities of the Borrower provided for in a
plan of reorganization or readjustment that, in the case of subordinated
securities, are subordinated in right of payment to the Senior Debt to at least
the same extent as the Obligations under the Credit Documents are so
subordinated ("Permitted Securities"). In the event that, notwithstanding the
foregoing, any Lender receives any payment or distribution of assets of the
Borrower of any kind or character (other than Permitted Securities) in
connection with any such Distribution Event before all of the Senior Debt is
paid in full, then each such payment or distribution will be held in trust and
paid over or delivered forthwith by each such Lender to the Senior Agent for
application to the
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payment of the Senior Debt remaining unpaid, to the extent necessary to pay the
Senior Debt in full. Upon any payment or distribution referred to in this
Section 12.02, the Administrative Agent and the Lenders shall be entitled to
rely upon any order or decree of a court of competent jurisdiction in which such
Distribution Event proceedings are pending; provided, that such order or decree
expressly gives effect to the provisions of this Article XII.
Section 12.03 Blockage, Etc.
(a) Neither the Borrower nor any Person acting on behalf of
the Borrower may make any direct or indirect payments on account of the
Obligations outstanding under the Credit Documents, and neither the
Administrative Agent nor any Lender will accept any such payment from any source
(in cash, property, securities, by set-off, pursuant to a Guaranty Agreement or
otherwise), if a default in the payment of any Senior Debt has occurred and is
continuing (a "Senior Payment Default").
(b) In addition, if any default has occurred and is
continuing (other than a Senior Payment Default) under the Senior Credit
Agreement (a "Senior Covenant Default"), and the Senior Agent shall have
delivered written notice thereof to the Borrower and the Administrative Agent (a
"Blockage Notice"), then neither the Borrower nor any Person acting on behalf of
the Borrower may make any direct or indirect payments on account of the
Obligations outstanding under the Credit Documents, and neither the
Administrative Agent nor any Lender will accept any such payment from any source
(in cash, property, securities, by set-off, pursuant to a Guaranty Agreement or
otherwise), for a period (a "Blockage Period") commencing on the date the
Borrower receives such Blockage Notice and ending on the earliest of (i) 180
days after the date of receipt by the Borrower and the Administrative Agent of
such Blockage Notice, unless a Senior Payment Default has occurred and is
continuing at the end of such 180-day period, (ii) the date on which such Senior
Covenant Default is cured or effectively waived in writing by the requisite
holders of the Senior Debt or the Senior Debt is paid in full and (iii) the date
on which such Blockage Period has been terminated by written notice to the
Borrower and the Administrative Agent from the Senior Agent, after which the
Borrower shall promptly resume making any and all required payments in respect
of the Credit Documents, including any missed payments. In any event, (A) there
must be a period of at least 180 days in each period of 360 consecutive days
when no Blockage Period is in effect and (B) only two (2) Blockage Periods may
be commenced within any 360-day period. No Senior Covenant Default that existed
or was continuing on the date of the commencement of any Blockage Period will
be, or can be, made the basis for the commencement of a subsequent Blockage
Period, unless such default has been cured or waived for a period of not less
than 90 consecutive days. The Borrower shall deliver a notice to the
Administrative Agent and the Lenders promptly after the date on which any Senior
Covenant Default is cured or waived or on which the Senior Debt related thereto
is paid in full. In the event that, notwithstanding the foregoing, the Borrower
makes any payment to any Lender prohibited by these blockage provisions, then
such payment will be held in trust for the Senior Agent and the Senior Lenders
and will be paid over and delivered forthwith to the Senior Agent for the
benefit of the Senior Agent and the Senior Lenders.
Section 12.04 Limitation on Remedies. So long as any Senior Debt
remains outstanding, neither the Administrative Agent nor any Lender shall
declare or join in any
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declaration of any of the Notes or Obligations to be due and payable pursuant to
the provisions of Section 11.02 or otherwise take or cause to be taken any
action against the Borrower, any Guarantor or any of their respective assets
(including, without limitation, commencing any legal or equitable action or
filing or joining in the filing of any insolvency petition) until the earliest
of (i) the date on which an Event of Default has occurred under Sections
11.01(f) or (g) with respect to the Borrower; or (ii) the date on which the
maturity of any Senior Debt under the Senior Credit Agreement is accelerated by
the requisite Senior Lenders (it being understood that the Administrative Agent
agrees to notify the Senior Agent promptly after making any such declaration or
taking any such other action, provided that the failure to give such notice
shall not affect the validity of such declaration or other action); or (iii) one
hundred and eighty (180) days after the date a written notice of intention to
exercise remedies on account of the occurrence of an Event of Default shall have
been given by the Administrative Agent to the Borrower and to the Senior Agent.
Section 12.05 Payment in Full. For purposes of this Agreement, the
Senior Debt shall not be deemed to have been paid in full, and the Senior Debt
shall be deemed to remain outstanding, until the Commitments under (and as
defined in) the Senior Credit Agreement shall have been terminated and all
Obligations (as defined therein) thereunder (other than contingent amounts in
respect of indemnification, cost reimbursement and similar amounts for which no
claim has been made) have been paid in full in cash.
Section 12.06 When Distribution Must Be Paid Over. If any payment
or distribution is made to the Administrative Agent or any Lender that pursuant
to this Article XII should not have been made pursuant to this Article XII to
such Person, the Administrative Agent or such Lender shall pay it over to the
Senior Agent for distribution among the Senior Agent and the Senior Lenders in
accordance with their interests therein and, if such distribution should not
have been made, such Person shall hold such distribution in trust and pay it
over to the Senior Agent for distribution among the Senior Agent and the Senior
Lenders to the extent necessary to pay the Senior Debt in full. Section 12.07
Rights and Covenants of Lenders.
(a) Except as set forth in Section 12.04, nothing contained
in this Article XII will limit the right of the Administrative Agent and the
Lenders to take any action to accelerate the maturity of the Loans pursuant to
Section 11.02 or to pursue any rights or remedies hereunder against the
Borrower, provided that, to the extent provided in this Article XII, all Senior
Debt shall be entitled to first be paid in full before the Administrative Agent
and the Lenders are entitled to receive any payment on account of the
Obligations under the Credit Documents.
(b) Except as set forth in this Article XII, nothing
contained in this Article XII shall prevent (i) the Borrower from making
payments at any time on account of the Obligations under the Credit Documents or
(ii) the application by the Administrative Agent and the Lenders of such
permitted payments.
(c) No Lender shall hereafter (i) give any further
subordination to any other creditor in respect of the Notes, (ii) except as set
forth in Section 10.07, take any security
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or collateral to secure the Notes or (iii) sell, assign, transfer or pledge the
Notes or any part thereof unless expressly subject to the terms of this Article
XII.
(d) No Lender shall release, exchange, extend the time of
payment of, compromise, set off or otherwise discharge any Obligations arising
under the Credit Documents or modify or amend the Credit Documents in such a
manner as to have a material adverse effect upon the rights of the holders of
the Senior Debt.
(e) Each Lender hereby undertakes and agrees for the benefit
of the holders of the Senior Debt that, upon the occurrence and during the
continuance of a Senior Payment Default or a Senior Covenant Default, it shall
take any actions reasonably requested by the Senior Agent to effectuate the full
benefit of the subordination contained herein.
(f) Any declaration of acceleration of the Obligations
pursuant to Section 11.01(e) due to the acceleration of any Senior Debt shall be
automatically annulled if the holders of such Senior Debt have rescinded their
declaration of acceleration, provided that there was at the time of such
declaration of acceleration no other independent basis under Section 11.01
therefor.
(g) Each of the Administrative Agent and the Lenders agree
not to challenge or question in any proceeding the priority or validity of the
Liens granted to the holders of the Senior Debt.
Section 12.08 Rights of Subrogation. After the payment in full of
the Senior Debt, the Administrative Agent and the Lenders shall be subrogated,
to the extent of the payments or distributions made to the Senior Agent and the
Senior Lenders which otherwise would have been paid in respect of the
Obligations but for the provisions of this Article XII, to the rights of the
Senior Agent and the Senior Lenders to receive payments and distributions of
cash, property and securities applicable to the Senior Debt until all of the
Obligations hereunder shall have been paid in full. For purposes of such
subrogation, no payments or distributions to the Senior Agent and the Senior
Lenders of any cash, property or securities to which the Administrative Agent or
the Lenders would be entitled except for the provisions of this Article XII, and
no payments over pursuant to the provisions of this Article XII to the Senior
Agent and the Senior Lenders by the Administrative Agent or the Lenders, shall,
as among the Borrower, its creditors other than Senior Agent and the Senior
Lenders and the Lenders, be deemed to be a payment or distribution by the
Borrower to or on account of the Senior Debt.
Section 12.09 Proof of Claim.
(a) If the Administrative Agent fails to file a proof of
claim or other statement or demand in respect of its claims in any case or
proceeding described in Section 12.02 prior to the 30th day preceding any bar
date or other deadline for filing a proof of claim or other such statement or
demand therein, or if any such proof of claim, statement or demand filed by the
Administrative Agent prior to such day is in any respect inadequate or
insufficient (in the good faith opinion of the Senior Agent), then the Senior
Agent shall have the right, but not the obligation, to execute and deliver (in
the name of the Administrative Agent or in its own name but on behalf of the
Administrative Agent, as the Senior Agent may elect) and file in such case
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or proceeding any proof of claim, statement or demand which the Senior Agent may
determine to be required or appropriate in respect of such claim.
(b) To the extent necessary or reasonably appropriate to
permit the Senior Agent to exercise the right granted to it under this Section
12.09, the Administrative Agent hereby constitutes and appoints the Senior Agent
as its attorney-in-fact and agent, with full power of substitution and
delegation, to execute, deliver and file any such proof of claim, statement or
demand as herein provided and to amend any such claim filed by the Senior Agent,
and the power of attorney granted herein (being coupled with an interest) is and
shall be in all respects irrevocable.
(c) The Senior Agent shall not, by executing, delivering or
filing any such proof of claim, statement or demand, become liable or
responsible in any respect for the legality, adequacy or sufficiency thereof.
(d) The Senior Agent shall deliver or mail a copy of any such
proof of claim, statement or demand to the Administrative Agent at least 10 days
prior to filing such proof of claim, statement or demand, but the failure to
deliver or mail such copy shall not in any respect (i) impose any liability on
the Senior Agent or (ii) destroy, affect or impair the subordination provided in
this Article XII or any right, power or benefit hereby granted to the Senior
Agent and the Senior Lenders.
(e) The Senior Agent shall not have the right, as a holder of
the Senior Debt or by reason of the subordination provided in this Article XII,
to vote any claim for the Administrative Agent or any Lender in any such case or
proceeding.
Section 12.10 Obligations of Borrower Unconditional.
(a) Nothing contained in this Article XII is intended to or
shall impair, as between the Borrower and the Lenders, the obligations of the
Borrower, which are absolute and unconditional, to make any payment to the
Administrative Agent or any Lender on account of the Obligations under the
Credit Documents as and when the same shall become due and payable in accordance
with the terms of the Credit Documents, or is intended to or shall affect the
relative rights of the Administrative Agent and the Lenders and creditors of the
Borrower other than the Senior Agent and the Senior Lenders.
(b) The failure to make a payment on account of the
Obligations under the Credit Documents by reason of any provision of this
Article XII shall not be construed as preventing the occurrence of an Event of
Default under Section 11.01.
(c) Until all of the Obligations have been paid and satisfied
in full and the Commitments terminated, the Borrower will furnish or cause to be
furnished (or the Senior Agent may furnish on the Borrower's behalf) to the
Administrative Agent and the Lenders, promptly (but in no event later than ten
(10) days after an officer of the Borrower obtains knowledge thereof) telephonic
and written notice of any Event of Default as defined in the Senior Credit
Agreement or any other event in connection with the Senior Credit Agreement
which could reasonably be expected to have a Material Adverse Effect.
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Section 12.11 Rights of Holders of Senior Debt Not to Be Impaired.
(a) No right of any present or future holder of the Senior
Debt to enforce the subordination provisions of this Article XII shall at any
time in any way be prejudiced or impaired by any act or failure to act by any
such holder, or by any noncompliance by the Borrower, with the terms and
provisions and covenants herein regardless of any knowledge thereof any such
holder may have or otherwise be charged with. Without in any way limiting the
generality of the foregoing sentence, such holders of Senior Debt may, at any
time and from time to time without impairing or releasing the subordination
provided in this Article XII or the obligations of the Lenders hereunder to the
holders of Senior Debt, do any one or more of the following: (a) change the
manner, place, terms or time of payment of, or renew or alter, Senior Debt or
otherwise amend or supplement in any manner Senior Debt or any instrument
evidencing the same or any agreement under which any Senior Debt is outstanding;
(b) sell, exchange, release, or otherwise deal with any property pledged,
mortgaged, or otherwise securing Senior Debt or fail to perfect or delay in
perfecting the security interest in such property; (c) release any Person liable
in any manner for the collection of Senior Debt; and (d) exercise or refrain
from exercising any rights against the Borrower or any other Person. Each Lender
by accepting a Note waives any and all notice of the creation, modification,
renewal, extension or accrual of any Senior Debt and notice of or proof of
reliance by any holder or owner of Senior Debt upon this Article XII and the
Senior Debt shall conclusively be deemed to have been incurred in reliance upon
this Article XII, and all dealings between the Borrower, the Guarantors and the
holders and owners of the Senior Debt shall be deemed to have been consummated
in reliance upon this Article XII.
(b) The provisions of this Article XII are intended to be for
the benefit of, and shall be enforceable directly by, the holders of the Senior
Debt by suit, either in equity or at law, for specific performance of any
agreement contained in this Article XII or for judgment at law and any other
relief whatsoever appropriate to such action or procedure.
Section 12.12 Continuing Agreement; Assignments Under the Senior
Credit Agreement. The provisions of this Article XII constitute a continuing
agreement and shall (a) remain in full force and effect until the payment in
full of the Senior Debt, (b) be binding upon the Administrative Agent, the
Lenders, the Borrower and their respective successors and assigns, and (c) inure
to the benefit of, and be enforceable by, the Senior Agent, the Senior Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), each Senior Lender may assign or
otherwise transfer all or any portion of its rights and obligations under the
Senior Credit Agreement (including, without limitation, all or any portion of
any promissory note to be held by it) to any other Person, and such other Person
shall thereupon become vested with all the rights in respect thereof granted to
such Senior Lender herein.
Section 12.13 Reinstatement. The provisions of this Article XII
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Debt is rescinded or must otherwise be
returned by the Senior Agent or any Senior Lender upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
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Section 12.14 Certain Conversions Deemed Payment. For the purposes
of this Article XII only, (a) the issuance and delivery of Conversion Securities
upon Conversion of the Notes in accordance with Article III shall not be deemed
to constitute a payment or distribution on account of the principal of or
premium or interest on the Notes and (b) the payment, issuance or delivery of
cash, property or securities (other than Conversion Securities) upon Conversion
of a Note shall be deemed to constitute payment on account of the principal of
such Note.
Section 12.15 In Furtherance of Subordination. Each Lender
authorizes and directs the Administrative Agent on its behalf to take such
action as may be necessary or appropriate to effectuate, as between the Lenders
and the Senior Agent and the Senior Lenders, the subordination as provided in
this Article XII and appoints the Administrative Agent its attorney-in-fact for
any and all such purposes.
ARTICLE XIII
THE ADMINISTRATIVE AGENT.
Section 13.01 Appointment, Powers and Immunities. Each Lender
hereby appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Credit Documents, with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and of the other Credit Documents, together with such other powers as
are reasonably incidental thereto. The Administrative Agent (which term as used
in this sentence and in Section 13.05 and the first sentence of Section 13.06
shall include reference to its affiliates and its own and its affiliates'
officers, directors, employees and agents):
(a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and in the other Credit Documents, and
shall not by reason of this Agreement or any other Credit Document be a trustee
for any Lender;
(b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or in any
other Credit Document, or in any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Credit Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any other Credit
Document or any other document referred to or provided for herein or therein or
for any failure by the Borrower or any other Person to perform any of its
obligations hereunder or thereunder;
(c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Credit
Document; and
(d) shall not be responsible for any action taken or omitted
to be taken by it hereunder or under any other Credit Document or under any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence or willful
misconduct.
The Administrative Agent may employ agents and attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee (or Registered
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Holder, as the case may be) of a Note as the holder thereof for all purposes
hereof unless and until a notice of the assignment or transfer thereof shall
have been filed with the Administrative Agent.
Section 13.02 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely upon any certification, notice or other
communication (including, without limitation, any thereof by telephone,
telecopy, telegram or cable) reasonably believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Administrative Agent. As to any matters not
expressly provided for by this Agreement or any other Credit Document, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with instructions
given by the Majority Lenders, or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders.
Section 13.03 Defaults. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of a Default unless the
Administrative Agent has received notice from a Lender or the Borrower
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Administrative Agent receives such a notice of the
occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section
13.07) take such action with respect to such Default as shall be directed by the
Majority 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 as it shall deem advisable in the best interest of the Lenders
except to the extent that this Agreement expressly requires that such action be
taken, or not be taken, only with the consent or upon the authorization of the
Majority Lenders, or all of the Lenders.
Section 13.04 Rights as a Lender. With respect to its Loans,
▇▇▇▇▇▇▇▇▇ (and any successor acting as Administrative Agent) in its capacity as
a Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. ▇▇▇▇▇▇▇▇▇ (and any successor acting as Administrative Agent) and its
affiliates may (without having to account therefor to any Lender) lend money to,
make investments in and generally engage in any kind of lending, trust or other
business with the Borrower (and any of their Subsidiaries or Affiliates) as if
it were not acting as the Administrative Agent, and ▇▇▇▇▇▇▇▇▇ (and any such
successor) and its affiliates may accept fees and other consideration from the
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.
Section 13.05 Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed under Section 14.04, but
without limiting the obligations of the Borrower under said Section 14.04)
ratably in accordance with their Pro Rata Shares for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind and nature whatsoever that may be imposed
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on, incurred by or asserted against the Administrative Agent (including by any
Lender) arising out of or by reason of any investigation in or in any way
relating to or arising out of this Agreement or any other Credit Document or any
other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby (including, without limitation, the
costs and expenses that the Borrower is obligated to pay under Section 14.04,
but excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified.
Section 13.06 Non-Reliance on Administrative Agent and Other
Lenders. Each Lender agrees that it has, independently and without reliance on
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its Subsidiaries and decision to enter into this Agreement and 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 analysis and decisions in
taking or not taking action under this Agreement or under any other Credit
Document. The Administrative Agent shall not be required to keep itself informed
as to the performance or observance by the Borrower of this Agreement or any of
the other Credit Documents or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrower or any
of its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
of its Subsidiaries (or any of its Affiliates) that may come into the possession
of the Administrative Agent or any of its affiliates.
Section 13.07 Failure to Act. Except for action expressly required
of the Administrative Agent hereunder and under the other Credit Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 13.05 against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
Section 13.08 Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving notice
thereof to the Lenders and the Borrower, and the Administrative Agent may be
removed at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Majority Lenders' removal of the retiring
Administrative Agent, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with
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all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After any retiring Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article
XIII shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.
Section 13.09 Consents Under Other Credit Documents. Except as
otherwise provided in Section 14.01 with respect to this Agreement, the
Administrative Agent may, with the prior consent of the Majority Lenders (but
not otherwise), consent to any modification, supplement or waiver under any of
the Credit Documents.
ARTICLE XIV
MISCELLANEOUS
Section 14.01 Amendments, Etc. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement may be modified or
supplemented only by an instrument in writing signed by the Borrower and the
Majority Lenders, or by the Borrower and the Administrative Agent acting with
the consent of the Majority Lenders, and any provision of this Agreement may be
waived by the Majority Lenders or by the Administrative Agent acting with the
consent of the Majority Lenders; provided that:
(a) no modification, supplement or waiver shall, unless by an
instrument signed by all of the Lenders or by the Administrative Agent acting
with the consent of all of the Lenders: (i) alter the manner in which payments
of principal, interest or other amounts hereunder shall be applied as between
the Tranche A Loan, the Tranche B Loan and the Tranche C Loan, (iii) alter the
terms of this Section 14.01, (iv) modify the definition of the term "Majority
Lenders", or modify in any other manner the number or percentage of the Lenders
required to make any determinations or waive any rights hereunder or to modify
any provision hereof, or (vi) waive any of the conditions precedent set forth in
Article V;
(b) no modification, supplement or waiver shall, unless
signed by all of the Tranche A Lenders or by the Administrative Agent acting
with the consent of all of the Tranche A Lenders (i) extend the date fixed for
the payment of principal of or interest on the Tranche A Loan, (ii) reduce the
amount of any such payment of principal, or (iii) reduce the rate at which
interest is payable thereon, and no such modification, supplement or waiver
shall require the consent of any Tranche B Lender or Tranche C Lender;
(c) no modification, supplement or waiver shall, unless
signed by all of the Tranche B Lenders or by the Administrative Agent acting
with the consent of all of the Tranche B Lenders: (i) extend the date fixed for
the payment of principal of or interest on the Tranche B Loan, (ii) reduce the
amount of any such payment of principal, (iii) reduce the rate at which interest
is payable thereon, and no such modification, supplement or waiver shall require
the consent of any Tranche A Lender or Tranche C Lender;
(d) no modification, supplement or waiver shall, unless
signed by all of the
Tranche C Lenders or by the Administrative Agent acting with the consent of all
of the Tranche C Lenders: (i) extend the date fixed for the payment of principal
of or interest on the Tranche C Loan, (ii) reduce the amount of any such payment
of principal, (iii) reduce the rate at which interest is payable thereon, and no
such modification, supplement or waiver shall require the consent of any Tranche
A Lender or Tranche B Lender;
(e) Any amendment, waiver, modification or supplement of
Article XII in any manner shall require the prior written consent of the Senior
Agent and the requisite Senior Lenders under the Senior Credit Agreement; and
(f) any modification or supplement of Article XIII, or of any
of the rights or duties of the Administrative Agent hereunder, shall require the
consent of the Administrative Agent.
Section 14.02 Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Credit Party, at the following address:
Insignia Financial Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Insignia Financial Group, Inc.
▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Aston
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Administrative Agent, to it at the following
address:
▇▇▇▇▇▇▇▇▇ L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
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with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties complying as
to delivery with the terms of this Section 14.02. All such notices and other
communications shall be effective, (i) if mailed, when received or three days
after deposited in the mails, whichever occurs first, (ii) if telecopied, when
transmitted and confirmation received, or (iii) if delivered, upon delivery,
except that notices to the Administrative Agent pursuant to Article II shall not
be effective until received by the Administrative Agent.
Section 14.03 No Waiver; Remedies.
(a) No failure on the part of the Administrative Agent or any
Lender to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
(b) The Borrower irrevocably waives, to the fullest extent
permitted by applicable law, any claim that any action or proceeding commenced
by the Administrative Agent or any Lender relating in any way to this Agreement
should be dismissed or stayed by reason, or pending the resolution, of any
action or proceeding commenced by the Borrower relating in any way to this
Agreement whether or not commenced earlier. To the fullest extent permitted by
applicable law, the Borrower shall take all measures necessary for any such
action or proceeding commenced by the Administrative Agent or any Lender to
proceed to judgment prior to the entry of judgment in any such action or
proceeding commenced by the Borrower.
Section 14.04 Costs, Expenses; Indemnification.
(a) The Borrower agrees to pay on demand (i) all reasonable
costs and expenses of the Administrative Agent and each of the Lenders in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Credit Documents (including, without
limitation, (A) all due diligence, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for the Administrative Agent and the Lenders with respect thereto, with respect
to advising the Administrative Agent and the Lenders as to their rights and
responsibilities, or protection or preservation of rights or interests, under
the Credit Documents, with respect to negotiations with the Borrower or with
other creditors of the Borrower or any of its Subsidiaries arising out of any
Event of Default or any
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events or circumstances that give rise to a Default and with respect to
presenting claims in or otherwise participating in or monitoring any bankruptcy,
insolvency or other similar proceeding involving creditors' rights generally and
any proceeding ancillary thereto) and all other reasonable out-of-pocket
expenses incurred by the Administrative Agent and the Lenders relating to the
transactions contemplated by this Agreement and (ii) all reasonable costs and
expenses of the Administrative Agent and the Lenders in connection with the
enforcement of the Credit Documents, whether in any action, suit or litigation,
any bankruptcy, insolvency or other similar proceeding affecting creditors'
rights generally (including, without limitation, the reasonable fees and
expenses of counsel for the Administrative Agent and the Lenders with respect
thereto). Notwithstanding the foregoing, the Borrower shall not be required to
pay in excess of $200,000 in the aggregate in respect of the fees and expenses
of counsel for the Administrative Agent and the Lenders in connection with the
preparation, execution and delivery of this Agreement and the Subscription
Agreement.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and their Affiliates and its officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, other than consequential damages, that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of, or in connection with the
preparation for a defense of, any investigation, litigation or proceeding
arising out of, related to or in connection with (i) the Credit Documents or any
of the transactions contemplated thereby, (ii) the actual or alleged presence of
Hazardous Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, or (iii) any use or intended use of the proceeds of any Loan, in
each case, whether or not such investigation, litigation or proceeding is
brought by the Borrower, any of its shareholders or creditors or an Indemnified
Party or an Indemnified Party is otherwise a party thereto and whether nor not
the transactions contemplated by this Agreement and the other Credit Documents
are consummated, except to the extent such claim is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such party's gross negligence or willful misconduct.
(c) If the Borrower fails to pay when due any costs, expenses
or other amounts payable by it under any Credit Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may be
paid on behalf of the Borrower by the Administrative Agent or any Lender, in its
sole discretion.
(d) Without prejudice to the survival of any other agreement
of the Borrower hereunder or under any other Credit Document, the agreements and
obligations of the Borrower contained in this Section 14.04 shall survive the
payment in full of the Obligations and the termination of the Commitments.
Section 14.05 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent and the Lenders
are hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and otherwise apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Debt at any time owing by the Administrative Agent and the Lenders or any
Affiliates thereof to or for the credit or the account of the Borrower against
any and all of the Obligations
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or the obligations of the Borrower now or hereafter existing under this
Agreement, the Notes and the other Credit Documents, irrespective of whether the
Administrative Agent or any Lender shall have made any demand under this
Agreement, the Notes or any other Credit Documents and although such obligations
may be unmatured. The Administrative Agent and the Lenders agree promptly to
notify the Borrower after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Administrative Agent and the Lenders
and their respective Affiliates under this Section 14.05 are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that the Administrative Agent and the Lenders and their respective
Affiliates may have.
Section 14.06 Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower, the Administrative
Agent and the Lenders and thereafter shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent, the Lenders and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of all of the Administrative Agent and the Lenders.
Section 14.07 Assignments and Participations.
(a) Each Lender may, with the consent of the Administrative
Agent, which consent shall not be unreasonably withheld or delayed, assign to
one or more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Loans at the time owing to it and the Notes held by it); provided
that
(i) each such assignment by a Lender of its Tranche A
Loan or Tranche A Note shall be made in such a manner so that the same
portion of its Tranche A Loan and Tranche A Note is assigned to the
respective assignee;
(ii) each such assignment by a Lender of its Tranche B
Loan or Tranche B Note shall be made in such manner so that the same
portion of its Tranche B Loan and Tranche B Note is assigned to the
respective assignee;
(iii) each such assignment by a Lender of its Tranche C
Loan or Tranche C Note shall be made in such manner so that the same
portion of its Tranche C Loan and Tranche C Note is assigned to the
respective assignee;
(iv) each such assignment shall be effected pursuant to
an assignment agreement (an "Assignment and Acceptance"), substantially
in the form of Exhibit I hereto, or in such other form of assignment
agreement as shall be agreed upon between the assignor and assignee;
and
(v) each such assignment shall be subject to the terms
of Article XII.
Upon execution and delivery by the assignor and the assignee to the Borrower and
the Administrative Agent of such assignment agreement, and upon consent thereto
by the
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Administrative Agent to the extent required above, the Borrower shall exchange
the assigned note for a new note, and the assignee shall have, to the extent of
such assignment (unless otherwise consented to by the Borrower and the
Administrative Agent), the obligations, rights and benefits of a Lender
hereunder holding the Loans (or portions thereof) assigned to it and specified
in such notice of assignment (in addition to the Loans, if any, theretofore held
by such assignee). Upon each such assignment the assigning Lender shall pay the
Administrative Agent an assignment fee of $5,000 (except the payment of such fee
shall not be required in connection with an assignment by a Lender to an
Affiliate of such Lender or a fund or account managed by such Lender or an
Affiliate of such Lender).
(b) A Lender may sell or agree to sell to one or more other
Persons (each a "Participant") a participation in all or any part of any Loans
held by it without the consent of the Borrower, the Administrative Agent or any
other Lender, provided that such Participant shall not have any rights or
obligations under this Agreement or any Note or any other Credit Document (the
Participant's rights against such Lender in respect of such participation to be
those set forth in the agreements executed by such Lender in favor of the
Participant). In no event shall a Lender that sells a participation agree with
the Participant to take or refrain from taking any action hereunder or under any
other Credit Document except that such Lender may agree with the Participant
that it will not, without the consent of the Participant, agree to (i) extend
the date fixed for the payment of principal of or interest on the related Loan
or Loans or any portion of any fee hereunder payable to the Participant, (ii)
reduce the amount of any such payment of principal, (iii) reduce the rate at
which interest is payable thereon, or any fee hereunder payable to the
Participant, to a level below the rate at which the Participant is entitled to
receive such interest or fee or (iv) consent to any modification, supplement or
waiver hereof or of any of the other Credit Documents to the extent that the
same, under Section 13.09 or 14.01, requires the consent of each Lender.
(c) A Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 14.08.
(d) Anything in this Section 14.07 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan
held by it hereunder to the Borrower or any of its Affiliates or Subsidiaries
without the prior consent of each Lender.
(e) At the request of any Lender that is not a U.S. Person
and is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code, the
Administrative Agent shall maintain, or cause, a register (the "Register") on
which it enters the name of such Lender as the registered owner of each
Registered Loan held by such Lender. A Registered Loan (and the Registered Note,
if any, evidencing the same) may be assigned or otherwise transferred in whole
or in part by registration of such assignment or transfer on the Register (and
each Registered Note shall expressly so provide). Any assignment or transfer of
all or part of such Loan (and the Registered Note, if any, evidencing the same)
may be effected by registration of such assignment or transfer on the Register,
together with the surrender of the Registered Note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or
transfer duly executed by) the holder of such Registered Note, whereupon, at the
request of the designated assignee(s) or transferee(s), one or more new
Registered Notes in the same aggregate principal amount shall be issued to the
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designated assignee(s) or transferee(s). Prior to the registration of assignment
or transfer of any Registered Loan (and the Registered Note, if any evidencing
the same), the Borrower, the Administrative Agent and the Lenders shall treat
the Person in whose name such Loan (and the Registered Note, if any, evidencing
the same) is registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding notice to the
contrary.
(f) The Register shall be available for inspection by the
Borrower or Lender at any reasonable time upon reasonable prior notice.
Section 14.08 Confidential Information. The Administrative Agent
and each Lender agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with their customary procedures
for handling confidential information of the same nature and in accordance with
the safe and sound lending practices, any non-public information supplied to it
by the Borrower or any of its Subsidiaries pursuant to this Agreement that is
identified by such Person in writing as being confidential at the time the same
is delivered to the Administrative Agent or any Lender, provided that nothing
herein shall limit the disclosure of any such information (i) after such
information shall have become public (other than through a violation of this
Section 14.08), (ii) to the extent required by statute, rule, regulation or
judicial process, (iii) to counsel for the Administration Agent or any of the
Lenders, (iv) to bank examiners (or any other regulatory authority having
jurisdiction over the Administrative Agent or any Lender), or to auditors or
accountants, (v) to the Administrative Agent or any other Lender, (vi) in
connection with any litigation to which the Administrative Agent or the any one
or more of the Lenders is a party, or in connection with the enforcement of
rights or remedies hereunder or under any other Credit Document, (vii) to a
subsidiary or affiliate of the Administrative Agent or any Lender or (viii) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender an acknowledgment to the effect
that it is bound by the provisions of this Section 14.08, which acknowledgment
may be included as part of the respective assignment or participation agreement
pursuant to which such assignee or participant acquires an interest in the Loans
hereunder, provided, further that in no event shall the Administrative Agent or
any Lender be obligated or required to return any materials furnished by the
Borrower or any of its Subsidiaries. The obligations of the Administrative Agent
and each Lender under this Section 14.08 shall supersede and replace the
obligations of the Administrative Agent and such Lender under any
confidentiality letter in respect of this financing signed and delivered by the
Administrative Agent or such Lender to the Borrower prior to the date hereof.
Section 14.09 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
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Section 14.10 Jurisdiction, Etc.
(a) Each of the parties hereto hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of any New York State court or federal court of the United States
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or any of the
other Credit Documents to which it is a party, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Credit Documents in the courts of
any jurisdiction.
(b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any of the other Credit Documents to which it is a party in any New York State
or federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
Section 14.11 Governing Law. This Agreement and the Note shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 14.12 Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lenders irrevocably waives all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to any of the Credit Documents, the
Loans or the actions of the Administrative Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.
Section 14.13 Authority. Each of the signatories who has signed
below represents that he or she is duly authorized to execute and deliver this
Agreement on behalf of, and that this Agreement is the binding obligation of,
the Person for which he or she has signed.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
BORROWER:
INSIGNIA FINANCIAL GROUP, INC.
By: /s/
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
ADMINISTRATIVE AGENT AND LENDER:
▇▇▇▇▇▇▇▇▇ L.L.C.
By: /s/
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
SCHEDULE 2.01
Lenders and Lenders' Commitments
Tranche A Loan Tranche B Loan Tranche C Loan Total
Lenders Commitment Commitment Commitment Commitment
---------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ L.L.C. $15,000,000 $12,500,000 $10,000,000 $37,500,000
TOTAL: $15,000,000 $12,500,000 $10,000,000 $37,500,000
----------- ----------- ----------- -----------
EXHIBIT A
---------
FORM OF TRANCHE A NOTE
$____________ New York, New York
________ ___, 2002
FOR VALUE RECEIVED, INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation
(the "Borrower"), HEREBY PROMISES TO PAY to the order of __________________ (the
"Lender") (i) the principal amount of ____________________ DOLLARS
($__________), or if less, the aggregate unpaid principal amount of the Tranche
A Loan (as defined in the Credit Agreement hereinafter referred to) made by the
Lender to the Borrower, payable in such installments and at such times as are
specified in the Credit Agreement, and (ii) interest on the unpaid principal
amount hereof from the date hereof until all such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
Notwithstanding any other provision of this Tranche A Note, interest paid
or becoming due hereunder shall in no event exceed the maximum rate permitted by
applicable law. Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to ▇▇▇▇▇▇▇▇▇ L.L.C., as
administrative agent (the "Administrative Agent"), at its office located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the
Administrative Agent may designate.
The Tranche A Loan made by the Lender to the Borrower pursuant to the
Credit Agreement, and all payments made on account of principal hereof, shall be
recorded by the Lender and, prior to any transfer hereof, indorsed on the
schedule attached hereto which is a part of this Tranche A Note.
[This Tranche A Note is a Registered Note and, as provided in and subject
to the terms of the Credit Agreement, this Tranche A Note and the Tranche A Loan
evidenced hereby may be transferred in whole or in part only upon surrender of
this Tranche A Note to the Administrative Agent for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer, duly executed by
the registered holder of this Tranche A Note or its attorney duly authorized in
writing), at which time a new Tranche A Note for a like principal amount will be
issued to, and registered in the name of, the permitted transferee as provided
in Section 14.07 of the Credit Agreement. Reference in this Tranche A Note to a
"holder" shall mean the person or entity in whose name this Tranche A Note is at
the time registered in the register maintained by the Administrative Agent as
provided in Section 14.07(e) of the Credit Agreement and, prior to due
presentment for registration of transfer, the Borrower, the Administrative Agent
and the Lenders may treat such person or entity as the owner of this Tranche A
Note for the purpose of receiving payment and all other purposes,
notwithstanding notice to the contrary.]
This Tranche A Note is one of the Tranche A Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of June 7, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement"), by and
among the Borrower, the financial institutions from time to time party to the
Credit Agreement (each a "Lender" and collectively, the "Lenders") and the
Administrative Agent. The Credit Agreement, among other things, contains
provisions for the acceleration of the maturity of the unpaid principal amount
of this Tranche A Note upon the happening of certain stated events of default
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions specified therein. The Borrower hereby
waives presentment for payment, demand, protest and notice of dishonor of this
Tranche A Note.
This Tranche A Note shall, at the election of the Borrower, be convertible
into Conversion Securities (as defined in the Credit Agreement) of the Borrower,
subject to and in accordance with Article III of the Credit Agreement.
The indebtedness evidenced by this Tranche A Note is subordinate and junior
in right of payment to the Senior Debt (as defined in the Credit Agreement) of
the Borrower to the extent provided in the Credit Agreement.
[The remainder of this page intentionally left blank]
-2-
This Tranche A Note shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York applicable to
contracts made and to be performed therein without consideration as to choice of
law.
INSIGNIA FINANCIAL GROUP, INC.
By:
----------------------------------
Name:
Title:
-3-
INSIGNIA FINANCIAL GROUP, INC.
TRANCHE A LOAN
AND REPAYMENT OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Principal Principal Notation
of Tranche A Loan Paid or Prepaid Balance Made By
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EXHIBIT B
---------
FORM OF TRANCHE B NOTE
$____________ New York, New York
________ ___, 2002
FOR VALUE RECEIVED, INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation
(the "Borrower"), HEREBY PROMISES TO PAY to the order of __________________ (the
"Lender") (i) the principal amount of ____________________ DOLLARS
($__________), or if less, the aggregate unpaid principal amount of the Tranche
B Loan (as defined in the Credit Agreement hereinafter referred to) made by the
Lender to the Borrower, payable in such installments and at such times as are
specified in the Credit Agreement, and (ii) interest on the unpaid principal
amount hereof from the date hereof until all such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
Notwithstanding any other provision of this Tranche B Note, interest paid
or becoming due hereunder shall in no event exceed the maximum rate permitted by
applicable law. Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to ▇▇▇▇▇▇▇▇▇ L.L.C., as
administrative agent (the "Administrative Agent"), at its office located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the
Administrative Agent may designate.
The Tranche B Loan made by the Lender to the Borrower pursuant to the
Credit Agreement, and all payments made on account of principal hereof, shall be
recorded by the Lender and, prior to any transfer hereof, indorsed on the
schedule attached hereto which is a part of this Tranche B Note.
[This Tranche B Note is a Registered Note and, as provided in and subject
to the terms of the Credit Agreement, this Tranche B Note and the Tranche B Loan
evidenced hereby may be transferred in whole or in part only upon surrender of
this Tranche B Note to the Administrative Agent for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer, duly executed by
the registered holder of this Tranche B Note or its attorney duly authorized in
writing), at which time a new Tranche B Note for a like principal amount will be
issued to, and registered in the name of, the permitted transferee as provided
in Section 14.07 of the Credit Agreement. Reference in this Tranche B Note to a
"holder" shall mean the person or entity in whose name this Tranche B Note is at
the time registered in the register maintained by the Administrative Agent as
provided in Section 14.07(e) of the Credit Agreement and, prior to due
presentment for registration of transfer, the Borrower, the Administrative Agent
and the Lenders may treat such person or entity as the owner of this Tranche B
Note for the purpose of receiving payment and all other purposes,
notwithstanding notice to the contrary.]
This Tranche B Note is one of the Tranche B Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of June 7, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement"), by and
among the Borrower, the financial institutions from time to time party to the
Credit Agreement (each a "Lender" and collectively, the "Lenders") and the
Administrative Agent. The Credit Agreement, among other things, contains
provisions for the acceleration of the maturity of the unpaid principal amount
of this Tranche B Note upon the happening of certain stated events of default
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions specified therein. The Borrower hereby
waives presentment for payment, demand, protest and notice of dishonor of this
Tranche B Note.
This Tranche B Note shall, at the election of the Borrower, be convertible
into Conversion Securities (as defined in the Credit Agreement) of the Borrower,
subject to and in accordance with Article III of the Credit Agreement.
The indebtedness evidenced by this Tranche B Note is subordinate and junior
in right of payment to the Senior Debt (as defined in the Credit Agreement) of
the Borrower to the extent provided in the Credit Agreement.
[The remainder of this page intentionally left blank]
-2-
This Tranche B Note shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York applicable to
contracts made and to be performed therein without consideration as to choice of
law.
INSIGNIA FINANCIAL GROUP, INC.
By:
---------------------------------
Name:
Title:
-3-
INSIGNIA FINANCIAL GROUP, INC.
TRANCHE B LOAN
AND REPAYMENT OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Principal Principal Notation
of Tranche B Loan Paid or Prepaid Balance Made By
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EXHIBIT C
---------
FORM OF TRANCHE C NOTE
$____________ New York, New York
________ ___, 2002
FOR VALUE RECEIVED, INSIGNIA FINANCIAL GROUP, INC., a Delaware corporation
(the "Borrower"), HEREBY PROMISES TO PAY to the order of __________________ (the
"Lender") (i) the principal amount of ____________________ DOLLARS
($__________), or if less, the aggregate unpaid principal amount of the Tranche
C Loan (as defined in the Credit Agreement hereinafter referred to) made by the
Lender to the Borrower, payable in such installments and at such times as are
specified in the Credit Agreement, and (ii) interest on the unpaid principal
amount hereof from the date hereof until all such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
Notwithstanding any other provision of this Tranche C Note, interest paid
or becoming due hereunder shall in no event exceed the maximum rate permitted by
applicable law. Both principal and interest are payable in lawful money of the
United States of America in immediately available funds to ▇▇▇▇▇▇▇▇▇ L.L.C., as
administrative agent (the "Administrative Agent"), at its office located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office as the
Administrative Agent may designate.
The Tranche C Loan made by the Lender to the Borrower pursuant to the
Credit Agreement, and all payments made on account of principal hereof, shall be
recorded by the Lender and, prior to any transfer hereof, indorsed on the
schedule attached hereto which is a part of this Tranche C Note.
[This Tranche C Note is a Registered Note and, as provided in and subject
to the terms of the Credit Agreement, this Tranche C Note and the Tranche C Loan
evidenced hereby may be transferred in whole or in part only upon surrender of
this Tranche C Note to the Administrative Agent for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer, duly executed by
the registered holder of this Tranche C Note or its attorney duly authorized in
writing), at which time a new Tranche C Note for a like principal amount will be
issued to, and registered in the name of, the permitted transferee as provided
in Section 14.07 of the Credit Agreement. Reference in this Tranche C Note to a
"holder" shall mean the person or entity in whose name this Tranche C Note is at
the time registered in the register maintained by the Administrative Agent as
provided in Section 14.07(e) of the Credit Agreement and, prior to due
presentment for registration of transfer, the Borrower, the Administrative Agent
and the Lenders may treat such person or entity as the owner of this Tranche C
Note for the purpose of receiving payment and all other purposes,
notwithstanding notice to the contrary.]
This Tranche C Note is one of the Tranche C Notes referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of June 7, 2002 (as
amended or otherwise modified from time to time, the "Credit Agreement"), by and
among the Borrower, the financial institutions from time to time party to the
Credit Agreement (each a "Lender" and collectively, the "Lenders") and the
Administrative Agent. The Credit Agreement, among other things, contains
provisions for the acceleration of the maturity of the unpaid principal amount
of this Tranche C Note upon the happening of certain stated events of default
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions specified therein. The Borrower hereby
waives presentment for payment, demand, protest and notice of dishonor of this
Tranche C Note.
This Tranche C Note shall, at the election of the Borrower, be convertible
into Conversion Securities (as defined in the Credit Agreement) of the Borrower,
subject to and in accordance with Article III of the Credit Agreement.
The indebtedness evidenced by this Tranche C Note is subordinate and junior
in right of payment to the Senior Debt (as defined in the Credit Agreement) of
the Borrower to the extent provided in the Credit Agreement.
[The remainder of this page intentionally left blank]
-2-
This Tranche C Note shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York applicable to
contracts made and to be performed therein without consideration as to choice of
law.
INSIGNIA FINANCIAL GROUP, INC.
By:
------------------------------
Name:
Title:
-3-
INSIGNIA FINANCIAL GROUP, INC.
TRANCHE C LOAN
AND REPAYMENT OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
Amount Principal Principal Notation
of Tranche C Loan Paid or Prepaid Balance Made By
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EXHIBIT D
---------
FORM OF SENIOR SUBORDINATED GUARANTY AGREEMENT
----------------------------------------------
THIS SENIOR SUBORDINATED GUARANTY AGREEMENT (this "Guaranty"), dated as of
June ___, 2002, made by each of the Guarantors listed on the signature pages
hereto (the "Guarantors"), in favor of ▇▇▇▇▇▇▇▇▇ L.L.C., a New York limited
liability company, as administrative agent (the "Administrative Agent"), for the
benefit of the Lenders party to the Credit Agreement, dated as of June 7, 2002,
by and among Insignia Financial Group, Inc., a Delaware corporation (the
"Borrower"), the Lenders, and the Administrative Agent (as amended, modified,
restated or supplemented, the "Credit Agreement").
STATEMENT OF PURPOSE
--------------------
Pursuant to the terms of the Credit Agreement, the Lenders have agreed to
make Loans to the Borrower available in up to three borrowings in an aggregate
principal amount of up to the Total Commitment. The Borrower and the Guarantors
comprise one integrated financial enterprise, and the Loans to or for the
benefit of the Borrower will inure, directly or indirectly, to the benefit of
each of the Guarantors.
In connection with the transactions contemplated by the Credit Agreement,
the Lenders have requested, and each of the Guarantors has agreed to execute and
deliver, this Guaranty.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein, and to induce the Lenders to make the Loans pursuant to the
Credit Agreement, it is agreed as follows:
SECTION 1. Definitions. Capitalized terms used herein (including the
preamble hereof) shall have the meanings assigned to them in the Credit
Agreement, unless the context otherwise requires or unless otherwise defined
herein. References in the Credit Agreement to a "Guaranty Agreement" or herein
to this "Guaranty" shall include and mean this Guaranty, including all
amendments and supplements hereto now or hereafter in effect.
SECTION 2. Terms of the Guaranty.
(a) Obligations of Guarantors. Each Guarantor hereby, jointly and
severally with the other Guarantors, absolutely, irrevocably and unconditionally
guarantees to the Administrative Agent for the ratable benefit of itself and the
Lenders, and their respective permitted successors, endorsees, transferees and
assigns, the prompt payment and performance of all Obligations of the Borrower
under the Credit Agreement, whether primary or secondary (whether by way of
endorsement or otherwise), whether now existing or hereafter arising, whether or
not from time to time reduced or extinguished (except by payment thereof) or
hereafter increased or incurred, whether enforceable or unenforceable as against
the Borrower, whether or not discharged, stayed or otherwise affected by any
bankruptcy, insolvency or other similar law or proceeding, whether created
directly with the Administrative Agent or any Lender
or acquired by the Administrative Agent or any Lender through assignment or
endorsement, whether matured or unmatured, whether joint or several, as and when
the same become due and payable (whether at maturity or earlier, by reason of
acceleration, mandatory repayment or otherwise), in accordance with the terms of
any such instruments evidencing any such Obligations, including all renewals,
extensions or modifications thereof (all Obligations of the Borrower to the
Administrative Agent or any Lender under the Credit Agreement, including all of
the foregoing, being hereinafter collectively referred to as the "Guaranteed
Obligations").
(b) Bankruptcy Limitations on Guarantors. Notwithstanding anything to
the contrary contained in paragraph (a) above, it is the intention of each
Guarantor and the Lenders that, in any proceeding involving the bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors, dissolution
or insolvency or any similar proceeding with respect to any Guarantor or its
assets, the amount of such Guarantor's obligations with respect to the
Guaranteed Obligations shall be in, but not in excess of, the maximum amount
thereof not subject to avoidance or recovery by operation of applicable law
governing bankruptcy, reorganization, arrangement, adjustment of debts, relief
of debtors, dissolution, insolvency, fraudulent transfers or conveyances or
other similar laws (including, without limitation, 11 U.S.C. (Section) 547,
(Section) 548, (Section) 550 and other "avoidance" provisions of Title 11 of the
United States Code) applicable in any such proceeding to such Guarantor and this
Guaranty (collectively, "Applicable Insolvency Laws"). To that end, but only in
the event and to the extent that such Guarantor's obligations with respect to
the Guaranteed Obligations or any payment made pursuant to the Guaranteed
Obligations would, but for the operation of the first sentence of this
subsection (b), be subject to avoidance or recovery in any such proceeding under
Applicable Insolvency Laws, the amount of such Guarantor's obligations with
respect to the Guaranteed Obligations shall be limited to the largest amount
which, after giving effect thereto, would not, under Applicable Insolvency Laws,
render such Guarantor's obligations with respect to such Guaranteed Obligations
unenforceable or avoidable or otherwise subject to recovery under Applicable
Insolvency Laws. To the extent any payment actually made pursuant to the
Guaranteed Obligations exceeds the limitation of the first sentence of this
subsection (b) and is otherwise subject to avoidance and recovery in any such
proceeding under Applicable Insolvency Laws, the amount subject to avoidance
shall in all events be limited to the amount by which such actual payment
exceeds such limitation and the Guaranteed Obligations as limited by the first
sentence of this subsection (b) shall in all events remain in full force and
effect and be fully enforceable against such Guarantor. The first sentence of
this subsection (b) is intended solely to preserve the rights of the
Administrative Agent and the Lenders hereunder against such Guarantor in such
proceeding to the maximum extent permitted by Applicable Insolvency Laws and
neither such Guarantor, the Borrower, any other guarantor nor any other Person
shall have any right or claim under such sentence that would not otherwise be
available under Applicable Insolvency Laws in such proceeding.
(c) Mutual Grant of Present Right of Contribution and Indemnity. To the
extent that the value as of the time of execution of this Guaranty of the
benefits received by any Guarantor by reason of matters stated in the preamble
(whether determined under a standard of "fair value," "reasonably equivalent
value" or any other valuation standard under Applicable Law) is less than the
sum of the Guaranteed Obligations incurred by such Guarantor to the
Administrative Agent and the Lenders plus such Guarantor's liability under this
Section 2(c), then subject only to Section 11 hereof and in addition to all
other rights and
2
remedies such Guarantor has or may have under Applicable Law, each remaining
Guarantor respectively agrees that such Guarantor has the present right to
recover the amount of such excess from the remaining Guarantors, which right
shall be enforceable jointly and severally against the remaining Guarantors to
the full extent that the Guaranteed Obligations are enforceable against such
Guarantor. Without limiting the foregoing, in the event any Guarantor is
required, by reason of this Guaranty, to pay an amount in excess of the value of
the benefit such Guarantor is deemed to have received by reason of matters
described in the preamble of this Guaranty, the remaining Guarantors jointly and
severally agree to pay such Guarantor, upon demand, the amount of such excess.
Subject only to the provisions of Section 11 hereof, such Guarantor shall be
subrogated to any and all rights of the Administrative Agent and the Lenders
against the remaining Guarantors to the extent of such excess payment.
SECTION 3. Nature of Guaranty. Each Guarantor agrees that this Guaranty is
a continuing, unconditional, absolute and irrevocable guaranty of payment and
performance and not of collection, and that its obligations under this Guaranty
shall be primary, absolute, irrevocable and unconditional, irrespective of, and
unaffected by:
(a) the genuineness, validity, regularity, enforceability or any future
amendment of, or change in, the Credit Agreement or any other Loan Document or
any other agreement, document or instrument to which the Borrower or any
Subsidiary thereof is or may become a party;
(b) the absence of any action to enforce this Guaranty, the Credit
Agreement or any other Credit Document or any waiver or consent by the Lender
with respect to any of the provisions of this Guaranty, the Credit Agreement or
any other Credit Document; or
(c) Intentionally left bank
(d) any other action or circumstances which might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor; it being
agreed by each Guarantor that, subject to Section 2(b) hereof, its obligations
under this Guaranty shall not be discharged until the final and indefeasible
payment and performance, in full, of the Guaranteed Obligations and the
termination of the Commitments. To the extent permitted by law, each Guarantor
expressly waives all rights it may now or in the future have under any statute,
or at law or in equity, or otherwise, to compel the Administration Agent or any
Lender to proceed in respect of the Guaranteed Obligations against the Borrower
or any other party or against any security for or other guaranty of the payment
and performance of the Guaranteed Obligations before proceeding against, or as a
condition to proceeding against, such Guarantor. To the extent permitted by law,
each Guarantor further expressly waives and agrees not to assert or take
advantage of any defense based upon the failure of the Administration Agent or
any Lender to commence an action in respect of the Guaranteed Obligations
against the Borrower, any other guarantor or any other party or any security for
the payment and performance of the Guaranteed Obligations. Each Guarantor agrees
that any notice or directive given at any time to the Administrative Agent or
any Lender which is inconsistent with the waivers in the preceding two sentences
shall be null and void and may be ignored by the Administrative Agent or any
Lender, and, in addition, may not be pleaded or introduced as evidence in any
litigation relating
3
to this Guaranty for the reason that such pleading or introduction would be at
variance with the written terms of this Guaranty, unless the Administrative
Agent and the Majority Lenders have specifically agreed otherwise in writing.
The foregoing waivers are of the essence of the transaction contemplated by the
Credit Documents and, but for this Guaranty and such waivers, the Administrative
Agent and the Lenders would decline to enter into the Credit Agreement and the
other Credit Documents.
SECTION 4. Demand by the Administrative Agent. In addition to the terms set
forth in Section 3, and in no manner imposing any limitation on such terms, if
all or any portion of the then outstanding Guaranteed Obligations under the
Credit Agreement are declared to be or shall automatically become immediately
due and payable, then the Guarantors shall, upon demand in writing therefor by
the Administrative Agent to the Guarantors, pay all or such portion of the
outstanding Guaranteed Obligations then declared due and payable. Payment by the
Guarantors shall be made to the Administrative Agent, to be credited and applied
upon the Guaranteed Obligations, in immediately available federal funds to an
account designated by the Administrative Agent or at the address referenced
herein for the giving of notice to the Administrative Agent or at any other
address that may be specified in writing from time to time by the Administrative
Agent.
SECTION 5. Waivers. In addition to the waivers contained in Section 3, each
Guarantor, to the extent permitted by law, waives and agrees that it shall not
at any time insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, extension, marshalling of
assets or redemption laws, or exemption, whether now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance by such
Guarantor of its obligations under, or the enforcement by the Administrative
Agent or the Lenders of, this Guaranty. Each Guarantor further hereby waives
diligence, presentment, demand, protest and notice of whatever kind or nature
with respect to any of the Guaranteed Obligations and waives the benefit of all
provisions of law which are or might be in conflict with the terms of this
Guaranty. Each Guarantor represents, warrants and agrees that its obligations
under this Guaranty are not and shall not be subject to any counterclaims,
offsets or defenses of any kind against the Administrative Agent, the Lenders or
the Borrower whether now existing or which may arise in the future.
SECTION 6. Benefits of Guaranty. The provisions of this Guaranty are for
the benefit of the Administrative Agent and the Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between the Borrower, the Administrative Agent and the Lenders,
the obligations of the Borrower under the Credit Documents. In the event all or
any part of the Guaranteed Obligations are transferred, endorsed or assigned by
the Administration Agent or any Lender to any Person or Persons, any reference
to the "Administrative Agent" or "Lender" herein shall be deemed to refer
equally to such Person or Persons.
SECTION 7. Modification of Credit Documents etc. If the Administrative
Agent or the Lenders shall at any time or from time to time, with or without the
consent of, or notice to, the Guarantors:
4
(a) change or extend the manner, place or terms of payment of, or renew
or alter all or any portion of, the Guaranteed Obligations;
(b) take any action under or in respect of the Credit Documents in the
exercise of any remedy, power or privilege contained therein or available to it
at law, in equity or otherwise, or waive or refrain from exercising any such
remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, any Credit Document;
(d) extend or waive the time for performance by any Guarantor, any
other guarantor, the Borrower or any other Person of, or compliance with, any
term, covenant or agreement on its part to be performed or observed under a
Credit Document (other than this Guaranty), or waive such performance or
compliance or consent to a failure of, or departure from, such performance or
compliance;
(e) release anyone who may be liable in any manner for the payment of
any amounts owed by any Guarantor, any other guarantor or the Borrower to any
Lender;
(f) modify or terminate the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of any Guarantor, any
other guarantor or the Borrower are subordinated to the claims of the
Administrative Agent or any Lender; or
(g) apply any sums by whomever paid or however realized to any amounts
owing by any Guarantor, any other guarantor or the Borrower to any Lender in
such manner as the Administration Agent or any Lender shall determine in its
reasonable discretion;
then neither the Administration Agent nor any Lender shall incur any liability
to any Guarantor as a result thereof, and no such action shall impair or release
the obligations of any Guarantor under this Guaranty.
SECTION 8. Reinstatement. Each Guarantor agrees that, if any payment made
by the Borrower or any other Person applied to the Obligations is at any time
annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, its estate,
trustee, receiver or any other party, including, without limitation, any
Guarantor, under any Applicable Law or equitable cause, then, to the extent of
such payment or repayment, each Guarantor's liability hereunder shall be and
remain in full force and effect, as fully as if such payment had never been
made, and, if prior thereto, this Guaranty shall have been canceled or
surrendered, this Guaranty shall be reinstated in full force and effect, and
such prior cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of such Guarantor in respect of the
amount of such payment.
SECTION 9. Representations, Warranties and Covenants. To induce the Lenders
to execute the Credit Agreement and make the Loans, each Guarantor hereby
represents, warrants, covenants and agrees on a joint and several basis that:
5
(a) such Guarantor has the corporate or company, as applicable, right,
power and authority to execute, deliver and perform this Guaranty and has taken
all necessary action to authorize its execution, delivery and performance of
this Guaranty;
(b) this Guaranty constitutes the legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies;
(c) all payments under this Guaranty shall be made in the currency
required by the Credit Agreement (the "Currency") in immediately available funds
and no obligation or liability of the Guarantors under this Guaranty shall be
released or discharged by any judgment in a currency other than the Currency;
provided that if any such judgment or order of any court or other governmental
department, commission, board, bureau, instrumentality or agency which is given
or made for the payment of any amount due under this Guaranty in a currency
other than the Currency and such Guarantor indemnifies and holds harmless the
Administrative Agent and the Lenders against any loss incurred by the
Administrative Agent and the Lenders as a result of any such judgment or order
and as a result of any variation having occurred in rates of exchange between
the date of any such amount becoming due under this Guaranty and the date of
actual payment thereof, then such obligation or liability of such Guarantor may
be released. The foregoing indemnity shall constitute a separate and independent
obligation of each Guarantor and shall continue in full force and effect
notwithstanding any such judgment or order. The rate of exchange used shall be
that at which in accordance with normal banking procedures the Administrative
Agent could purchase the Currency with the judgment currency on the Business Day
succeeding that on which the final judgment is given;
(d) any and all payments made by such Guarantor hereunder shall be made
without set-off, counterclaim, deduction or other defense. All such payments
shall be made free and clear of and without deduction for any present or future
income, franchise, sales, use, excise, stamp or other taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions or conditions of any
nature now or hereafter imposed, levied, collected, withheld or assessed by any
jurisdiction (whether pursuant to Federal, state, local or foreign law) or by
any political subdivision or taxing authority thereof or therein, and all
interest, penalties or additional amounts, excluding taxes on the net income of
the Administrative Agent or any Lender imposed by the jurisdiction in which the
Administrative Agent or such Lender is organized or any political subdivision
thereof or taxing authority thereof or any jurisdiction in which such Person's
principal office is located or any political subdivision thereof or taxing
authority thereof (such nonexcluded taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions, conditions, interest, penalties and additional
amounts being hereinafter collectively referred to as "Taxes"). If any Taxes are
required to be deducted or withheld from or in respect of any amount payable
hereunder,
(i) the amount so payable shall be increased so that after making all
required deductions and withholdings (including Taxes on amounts payable
pursuant to this sentence) the Administrative Agent or the Lenders, as the case
may be, receive an amount equal to the sum they would have received had no such
deduction or withholding been made,
6
(ii) such Guarantor shall make such deduction or withholding,
(iii) such Guarantor shall pay the full amount deducted or withheld to the
relevant taxation authority in accordance with applicable law, and
(iv) as promptly as possible thereafter, such Guarantor shall send the
Administrative Agent and the Lenders an official receipt (or, if an official
receipt is not available, such other documentation as shall be satisfactory to
the Administrative Agent and the Lenders) evidencing payment of the amount or
amounts so deducted or withheld. In addition, such Guarantor agrees to pay any
present or future taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery, performance, recordation or
filing of, or otherwise with respect to, this Guaranty other than the foregoing
excluded taxes (hereinafter referred to as "Other Taxes");
(e) such Guarantor hereby indemnifies and agrees to hold the
Administrative Agent and the Lenders harmless from and against Taxes or Other
Taxes (including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under Section 9(d) and this 9(e)) paid by the
Administrative Agent or any Lender and any liability (including penalties,
interest and expenses for nonpayment, late payment or otherwise) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted; provided, however, that, if such Guarantor so
requests in writing, the Administrative Agent and the Lenders shall contest the
imposition of any such Tax or Other Tax at such Guarantor's sole reasonable
expense with counsel reasonably satisfactory to such Guarantor; provided,
further, however, that the Administrative Agent or any such Lender, as the case
may be, shall not have any obligation to contest any such Tax or Other Tax
unless (i) the Administrative Agent or such Lender determines that such Tax or
Other Tax may be contested separately from the contest of any tax or other claim
not indemnified against by the Guarantors hereunder, (ii) the Administrative
Agent or such Lender may either pay the Tax or Other Tax claimed and ▇▇▇ for a
refund or contest the claim in any permissible forum, (iii) prior to undertaking
any such contest, such Guarantor shall have agreed to pay any reasonable costs,
expenses and other liabilities incurred by the Administrative Agent or such
Lender in connection with such contest, (iv) if so requested by the
Administrative Agent or such Lender, such Guarantor shall have delivered to the
Administrative Agent or such Lender an opinion of independent counsel to the
effect that such contest has a substantial probability of success, (v) if the
Administrative Agent or such Lender shall determine to pay the Tax or Other Tax
and ▇▇▇ for a refund, such Guarantor shall advance sufficient funds to pay such
Tax or Other Tax at no net after-tax cost to the Administrative Agent or such
Lender, (vi) no Event of Default shall have occurred and be continuing, (vii)
the amount of Tax or Other Tax that would be contested exceeds $10,000, (viii)
such Guarantor's counsel shall be permitted to participate in the contest, and
(ix) settlement of the contest shall be subject to such Guarantor's consent,
which consent shall not be unreasonably withheld or delayed. Such
indemnification shall be paid within ten (10) days from the date on which the
Administrative Agent or any such Lender makes written demand therefor, which
demand shall identify in reasonable detail the nature and amount of such Taxes
or Other Taxes;
(f) if such Guarantor fails to perform any of its obligations under
Sections 9(d) and 9(e), such Guarantor shall indemnify the Administrative Agent
and the
7
Lenders for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of such Guarantor under Sections 9(c),
9(d), 9(e) and this Section 9(f) shall survive the termination of this Guaranty
and the payment in full of the Guaranteed Obligations and the termination of the
Commitments;
(g) such Guarantor hereby agrees that a final judgment in any
proceeding brought in any of the courts referred to in Section 13(g) shall be
conclusive and binding upon each Guarantor and may be enforced in the courts of
the United States of America, the State of New York or any other courts to the
jurisdiction of which such Guarantor is subject, by a suit upon judgment,
provided that service of process is effected on such Guarantor in one of the
manners specified in Section 13(g) or as otherwise permitted by law;
(h) to the extent that such Guarantor has or hereafter may acquire any
immunity from suit, jurisdiction of any court or any legal process (whether
through attachment prior to judgment, attachment in aid of execution, execution
of a judgment, or from any other legal process or remedy) with respect to itself
or its property, such Guarantor hereby irrevocably waives such immunity in
respect of the Guaranteed Obligations and its obligations hereunder;
(i) such Guarantor shall abide by and be bound by each and every
covenant in the Credit Agreement which by its terms is applicable to such
Guarantor; and
(j) the representations and warranties contained in Article VI of the
Credit Agreement which relate to such Guarantor are true and correct in all
material respects.
In the event any Lender receives a refund or credit with respect to
withholding taxes paid by such Guarantor, such Lender shall promptly repay such
amounts to such Guarantor.
SECTION 10. Remedies.
(a) Upon the occurrence and continuance of any Event of Default, with
the consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall enforce against
the Guarantors their respective obligations and liabilities hereunder and
exercise such other rights and remedies as may be available to the
Administrative Agent and the Lenders, or any of them, hereunder, under the other
Credit Documents or otherwise.
(b) No right or remedy herein conferred upon the Administrative Agent
and the Lenders is intended to be exclusive of any other right or remedy
contained herein or in any other Credit Document or otherwise, and every such
right or remedy contained herein and therein or now or hereafter existing at
law, or in equity, or by statute, or otherwise shall be cumulative. The Lenders
may instruct the Administrative Agent to pursue, or refrain from pursuing, any
remedy available to the Administrative Agent and the Lenders at such times and
in such order as the Lenders shall determine, and the Lenders' election as to
such remedies shall not impair any remedies against any Guarantor not then
exercised. In addition, any election of remedies which results in the denial or
impairment of the right of the
8
Administrative Agent or any Lender to seek a deficiency judgment against the
Borrower shall not impair any Guarantor's obligation to pay the full amount of
the Guaranteed Obligations.
SECTION 11. No Subrogation. Notwithstanding any payment or payments by any
of the Guarantors hereunder, or any set-off or application of funds of any of
the Guarantors by the Administrative Agent or any Lender, or the receipt of any
amounts by the Administrative Agent or any Lender with respect to any of the
Guaranteed Obligations, none of the Guarantors shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or the other Guarantors or any other guarantors for the
payment of the Guaranteed Obligations nor shall any of the Guarantors seek any
reimbursement from the Borrower or any of the other Guarantors in respect of
payments made by such Guarantor in connection with the Guaranteed Obligations,
until all amounts owing to the Administrative Agent and the Lenders on account
of the Guaranteed Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Guaranteed Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, in the exact form received by such Guarantor (duly endorsed by such
Guarantor to the Administrative Agent, if required) to be applied against the
Guaranteed Obligations, whether matured or unmatured, in such order as set forth
in the Credit Agreement.
SECTION 12. Expenses. All costs and expenses (including reasonable
attorneys' fees, legal expenses and court costs) incurred by the Administrative
Agent or any Lender in enforcing or protecting their rights or remedies
hereunder shall be payable by the Guarantors on demand and shall bear interest
(after as well as before judgment) until paid at the interest rate then
applicable to the Loans under the Credit Agreement and shall be additional
Guaranteed Obligations hereunder.
SECTION 13. Miscellaneous.
(a) Entire Agreement; Amendments. This Guaranty, together with the
other Credit Documents, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements
with respect to the subject matter hereof and may not be amended or supplemented
except by a writing signed by each Guarantor and the Administrative Agent, with
the consent of the Majority Lenders.
(b) Headings. Titles and captions of sections and subsections in this
Guaranty are for convenience of reference only, and neither limit or amp1ify the
provisions of this Guaranty.
(c) Notices. All notices and communications hereunder shall be given in
accordance with Section 14.02 of the Credit Agreement.
(d) Binding Effect. This Guaranty shall bind each Guarantor and shall
inure to the benefit of the Administrative Agent and the Lenders and their
respective successors and assigns. No Guarantor may assign this Guaranty or
delegate any of its duties
9
hereunder, other than in connection with the merger of such Guarantor into such
other Person as permitted by Section 10.09 of the Credit Agreement or with the
consent of the Administrative Agent, with the consent of the Majority Lenders.
(e) Non-Waiver. The failure of the Administrative Agent or any Lender
to enforce any right or remedy hereunder, or promptly to enforce any such right
or remedy, shall not constitute a waiver thereof, nor give rise to any estoppel
against the Administrative Agent or any Lender, nor excuse any Guarantor from
its obligations hereunder. Any waiver of any such right or remedy by the
Administrative Agent and the Lenders must be in writing and signed by the
Administrative Agent, with the consent of the Majority Lenders.
(f) Governing Law. This Guaranty shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without reference
to the conflicts or choice of law principles thereof.
(g) Consent to Jurisdiction. Each Guarantor hereby irrevocably consents
to the personal jurisdiction of the state and federal courts sitting in New York
City, New York, in any action, claim or other proceeding arising out of any
dispute in connection with this Guaranty, any rights or obligations hereunder,
or the performance of such rights and obligations. To the maximum extent
permitted by law, each Guarantor waives any right which such Guarantor may have
to assert the doctrine of forum non conveniens or to object to venue. Each
Guarantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Guaranty, any rights
or obligations hereunder, or the performance of such rights and obligations, on
behalf of itself or its property, by registered or certified mail, return
receipt requested, otherwise in the manner referenced in Section 13(c). Nothing
in this Section 13(g) shall affect the right of the Administrative Agent or any
Lender to serve legal process in any other manner permitted by Applicable Law or
affect the right of the Administrative Agent or any Lender to bring any action
or proceeding against any Guarantor or its properties in the courts of any other
jurisdictions.
(h) Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH GUARANTOR HEREBY IRREVOCABLY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
(i) Limitation of Liability. Neither the Administrative Agent, the
Lenders nor any Affiliate thereof shall have any liability with respect to, and
each Guarantor hereby waives, releases and agrees not to ▇▇▇ upon, any claim for
any special, indirect, punitive, exemplary or consequential damages suffered by
such Guarantor in connection with, arising out of, or in any way related to this
Guaranty and the other Credit Documents, the transactions contemplated herein or
therein, or any act, omission or event occurring in connection herewith or
therewith.
10
(j) Severability of Provisions. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
SECTION 14. Subordination.
(a) The obligations of the Guarantors under this Guaranty shall be
junior and subordinated in right of payment to all Senior Debt of the Guarantors
on the same terms and in the same manner as the Notes are junior and
subordinated in right of payment to the Senior Debt as set forth in the Credit
Agreement; provided, however, that the Administrative Agent and the Lenders
shall have the right to receive and/or retain payments by the Guarantors only at
such times as they may receive and/or retain payments in respect of the Notes
pursuant to the Credit Agreement. For the purposes of this Section 14, "Senior
Debt" shall mean Debt of the Guarantors under the Guaranty Agreement (as defined
in the Senior Credit Agreement).
(b) Any payment made by a Guarantor under this Guaranty in respect of
the Guaranteed Obligations which, pursuant to Article XII of the Credit
Agreement, is required to be paid over to the Senior Agent and the Senior
Lenders in respect of the Senior Debt shall not constitute a payment in respect
of the Guaranteed Obligations, but instead shall be treated for all purposes
under this Guaranty as though such payment had not been made by such Guarantor.
Unless and until the Administrative Agent and the Lenders shall have received
from the Guarantors moneys which the Administrative Agent and the Lenders are
entitled to retain for their own account, equal in the aggregate to the full
amount of the Guaranteed Obligations, the Guarantors shall remain liable on this
Guaranty and shall not be subrogated to any of the rights of the Administrative
Agent and the Lenders against the Borrower or any other Person for the payment
of the Guaranteed Obligations.
(c) The provisions of Article XII of the Credit Agreement are
incorporated into this Section 14 mutatis mutandis.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
11
IN WITNESS WHEREOF, each of the Guarantors has executed and delivered
this Guaranty under seal as of the date first above written.
IFS SECURITIES, INC.
INSIGNIA FINANCIAL SERVICES, INC.
INSIGNIA INVESTMENT MANAGEMENT, INC.
INSIGNIA OPPORTUNITY DIRECTIVES II, LLC
By: Insignia Financial Services, Inc., Member
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇ VILLAGE PROPERTIES, INC.
RAQZ CORP.
WESTVILLE PROPERTIES, INC.
By:
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
▇▇▇▇▇ COMMERCIAL REALTY, INC.
CONSTRUCTION INTERIORS, INC.
E.S.G. OPERATING CO., INC.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ MANAGEMENT
CORPORATION
FIRST ▇▇▇▇▇▇▇ PROPERTIES, L.P.
By: Insignia Commercial Investments Group, Inc.
its General Partner
I/ESG KENSINGTON INVESTORS, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
I/ESG OCTANE HOLDINGS, LLC
By: Insignia/ESG, Inc.,
its Managing Member
IBTHAI, INC.
IBT II, INC.
IBT III, INC.
IBT IV, INC.
IBT V, INC.
IBT VI, INC.
ICIG 101 MARIETTA, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG COUNTRY CLUB MANOR, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG FRESH ▇▇▇▇▇▇▇, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
S-1
ICIG MOCKINGBIRD, L.L.C
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICIG OAKHILL DIRECTIVES, L.L.C.
By: Insignia/ESG, Inc., its Managing Member
ICIG SANTA ▇▇▇▇, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
ICII-WV HOLDINGS, LLC
By: Insignia Capital Investments, Inc.,
its Managing Member
IFC ACQUISITION CORP. I
IFC ACQUISITION CORP. II
IFS ACQUISITION LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC II
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC III
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION LLC IV
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS ACQUISITION DIRECTIVES, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
IFS SOUTHLAND INVESTORS LLC
By: Insignia Realty Investors, LLC,
its Managing Member
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA/ESG, INC.
INSIGNIA/ESG OF COLORADO, INC.
INSIGNIA/ESG CAPITAL CORPORATION
INSIGNIA/ESG NORTHEAST, INC.
INSIGNIA ACQUISITION CORPORATION
INSIGNIA CAPITAL INVESTMENTS, INC.
INSIGNIA CLINTON DIRECTIVES, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA COMMERCIAL INVESTMENTS
GROUP, INC.
INSIGNIA COMMERCIAL MANAGEMENT, INC.
INSIGNIA DEVELOPMENT GROUP, INC.
S-2
INSIGNIA ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC
By: Insignia Residential Group, Inc.,
its Managing Member
INSIGNIA HOTELS III, L.L.C.
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA ML PROPERTIES, LLC
By: Insignia/ESG, Inc., its Managing Member
INSIGNIA NAUTICA, INC.
INSIGNIA RO, INC.
INSIGNIA REALTY INVESTORS, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA REALTY INVESTORS II, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA REALTY INVESTORS III, LLC
By: Insignia Commercial Investments Group, Inc.,
its Managing Member
INSIGNIA RESIDENTIAL GROUP, INC.
INSIGNIA RESIDENTIAL INVESTMENT CORPORATION
▇▇▇▇▇▇▇ ROAD, L.P.
By: Insignia Commercial Investments Group, Inc.,
its General Partner
PAYROLL SERVICES, INC.
SECURED INVESTMENT CORPORATION
WV FINANCING, LLC
By: Insignia Capital Investments, Inc.,
its Managing Member
By:
---------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
S-3
EXHIBIT A
---------
UNCONDITIONAL GUARANTY AGREEMENT SUPPLEMENT
-------------------------------------------
UNCONDITIONAL GUARANTY AGREEMENT SUPPLEMENT, dated as of ____ _, 200_ (the
"Supplement"), made by [INSERT NAME OF NEW SUBSIDIARY], a ________________(the
"New Guarantor"), in favor of ▇▇▇▇▇▇▇▇▇ L.L.C., as administrative agent (in such
capacity, the "Administrative Agent") under the Credit Agreement (as defined in
the Guaranty Agreement referred to below) for the benefit of the Lenders (as so
defined).
1. Reference is hereby made to the Unconditional Guaranty Agreement dated
as of June ___, 2002, made by the Subsidiaries of Insignia Financial Group, Inc.
party thereto (the "Guarantors"), in favor of the Administrative Agent for the
benefit of itself and the Lenders (as amended, supplemented or otherwise
modified as of the date hereof, the "Guaranty Agreement"). This Supplement
supplements the Guaranty Agreement, forms a part thereof and is subject to the
terms thereof. Capitalized terms used and not defined herein shall have the
meanings given thereto or referenced in the Guaranty Agreement.
2. The New Guarantor hereby unconditionally guarantees to the
Administrative Agent for the ratable benefit of itself and the Lenders, and
their respective successors, endorsees, transferees and assigns, the prompt
payment (whether at stated maturity, by acceleration or otherwise) and
performance of all Obligations of the Borrower to the same extent and upon the
same terms and conditions as are contained in the Guaranty Agreement.
3. The New Guarantor hereby agrees that it is a party to the Guaranty
Agreement as if a signatory thereto on the Closing Date of the Credit Agreement,
and the New Guarantor shall comply with all of the terms, covenants, conditions
and agreements and hereby makes each representation and warranty, in each case
set forth in the Guaranty Agreement. The New Guarantor agrees that the "Guaranty
Agreement" or "Guaranty" as used therein or in any other Credit Documents shall
mean the Guaranty Agreement as supplemented hereby.
4. The New Guarantor hereby acknowledges it has received a copy of the
Guaranty Agreement and that it has read and understands the terms thereof.
IN WITNESS WHEREOF, the undersigned hereby causes this Supplement to be
executed and delivered as of the date first above written.
[CORPORATE SEAL] [INSERT NAME OF NEW SUBSIDIARY]
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
EXHIBIT E
---------
FORM OF NOTICE OF BORROWING
[LETTERHEAD OF INSIGNIA FINANCIAL GROUP, INC.]
____ __, 200_
▇▇▇▇▇▇▇▇▇ L.L.C., as Administrative Agent
under the below-referenced Credit Agreement
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: _______________
Ladies and Gentlemen:
The undersigned, Insignia Financial Group, Inc., a Delaware corporation
(the "Borrower"), refers to the Credit Agreement, dated as of June 7, 2002 (as
the same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among the Borrower, the financial
institutions from time to time party thereto (each a "Lender" and collectively,
the "Lenders"), and ▇▇▇▇▇▇▇▇▇ L.L.C., as administrative agent for the Lenders
(in such capacity, the "Administrative Agent"), and hereby gives you notice
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests the [Tranche A][Tranche B][Tranche C] Loan under the Credit Agreement,
and in that connection sets forth below the information relating to such Loan
(the "Proposed Loan") as required by Section 2.02 of the Credit Agreement. All
capitalized terms used but not defined herein have the same meanings herein as
set forth in the Credit Agreement.
(i) The aggregate principal amount of the Proposed Loan is $____________.
(ii) The borrowing date of the Proposed Loan is ____________.
(iii) The proceeds of the Proposed Loan should be made available to the
undersigned by wire transferring such proceeds in accordance with the payment
instructions attached hereto as Exhibit A.
The undersigned certifies that (i) the representations and warranties
contained in Article VI of the Credit Agreement and in each other Credit
Document and certificate or other writing delivered to the Administrative Agent
or any Lender pursuant thereto on or prior to the date hereof are true and
correct on and as of the date hereof as though made on and as of the date
hereof, (ii) no Default or Event of Default has occurred and is continuing or
will result from the making of the Proposed Loan or will occur or will be
continuing on the date of the Proposed Loan and (iii) all applicable conditions
set forth in Article V of the Credit Agreement have been satisfied as of the
date hereof.
Very truly yours,
INSIGNIA FINANCIAL GROUP, INC.
By:
---------------------------------
Name:
Title:
-2-
EXHIBIT A
Payment Instructions
--------------------
EXHIBIT F
---------
Form of Proskauer Opinion
June 18, 2002
▇▇▇▇▇▇▇▇▇ L.L.C.,
as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
and
To each of the Lenders
party to the Credit Agreement
referred to below
Ladies and Gentlemen:
We have acted as special counsel to (a) Insignia Financial Group, Inc., a
Delaware corporation (the "Borrower"), and (b) each of its Subsidiaries listed
on Schedule I attached hereto (those listed Subsidiaries which are indicated as
having been organized under the laws of the State of New York or the State of
Delaware being hereinafter referred to collectively as the "Specified
Guarantors"; the other Subsidiaries of the Borrower which are Guarantors being
hereinafter referred to collectively as the "Other Guarantors") in connection
with (x) the Senior Subordinated Credit Agreement, dated as of even date
herewith (the "Credit Agreement"; capitalized terms used herein but not defined
herein shall have the meanings ascribed thereto in the Credit Agreement), by and
among the Borrower, the financial institutions from time to time party thereto
(each a "Lender" and collectively, the "Lenders"), ▇▇▇▇▇▇▇▇▇ L.L.C., a New York
limited liability company, as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders, (y) the Notes and (z) the Guaranty
Agreement. This opinion is being delivered to you pursuant to Section
5.01(a)(v).
For the purposes of this opinion, we have examined
(a) the Credit Agreement;
(b) the Notes; and
(c) the Guaranty Agreement (the documents expressly listed in (a) through
(c) inclusive are hereinafter collectively referred to as the "Credit
Documents" (which term excludes all agreements, instruments,
certificates and documents referred to in the documents listed in (a)
through (c) inclusive which are not themselves the documents expressly
listed in (a) through (c) inclusive)).
We have also examined such corporate documents and records of the Credit
Parties and such other instruments and certificates of public officials,
officers and representatives of the Credit Parties and other Persons, and we
have made such investigation of law as we have deemed necessary or appropriate
for the purposes of this opinion.
In giving this opinion, we have assumed, with your permission, the
genuineness of all signatures, the legal capacity of natural persons and the
authenticity of all documents we have examined. As to questions of fact relevant
to this opinion, with your permission and without any independent investigation
or verification, we have relied upon, and assumed the accuracy of, the
representations and warranties of each party in the Credit Documents and have
relied upon certificates of officers of the Credit Parties and written
statements of certain public officials. We also have assumed, with your
permission and without any independent verification, compliance by each party to
the Credit Documents with its agreements in the respective Credit Documents, and
that each Credit Document constitutes the legal, valid and binding obligation of
each party to it (other than the Credit Parties) and is enforceable against each
such party (other than the Credit Parties) in accordance with its terms.
In addition, we have assumed, with your permission and without any
independent verification, that (a) the execution, delivery and performance of
each of the Credit Parties' obligations under the Credit Documents does not and
will not violate, breach or constitute a default under, or require any consent
under, (i) any agreement or instrument to which the Credit Parties or their
properties are subject (other than those agreements and instruments as to which
we express our opinion in subparagraph 7(d) below); (ii) any statute, rule, law
or regulation to which the Credit Parties are subject (other than statutes,
rules and regulations as to which we express our opinion in subparagraph 7(b)
below); (iii) any order, writ, injunction or decree of any governmental
authority or any arbitral award (other than orders, writs, injunctions or
decrees as to which we express our opinion in subparagraph 7(c) below); and (b)
no approval, authorization or other action by, or filing with, any governmental
authority (other than those as to which we express our opinion in paragraph 6
below) is required to authorize or is required in connection with the execution,
delivery or performance by the Credit Parties of the Credit Documents or the
transactions contemplated by the Credit Documents.
For purposes of this opinion, we have assumed, with your consent, that (i)
each of the Other Guarantors is a corporation or limited liability company, as
the case may be, duly organized or formed, validly existing and in good standing
under the laws of its jurisdiction of incorporation; (ii) each of the Other
Guarantors has the requisite corporate or limited liability
company, as the case may be, power and authority to execute, deliver and perform
each Credit Document to which it is a party; (iii) the execution, delivery and
performance by each of the Other Guarantors of the Credit Documents to which it
is a party have been duly authorized by all requisite corporate or limited
liability company, as the case may be, action on the part of each Other
Guarantor; and (iv) each Credit Document to which each of the Other Guarantors
is a party has been duly executed and delivered by each of the Other Guarantors.
Whenever in this opinion any statement is made to "our knowledge" or any
statement refers to matters "known to us," it means that none of the attorneys
in our firm who has been directly involved in acting as special counsel to the
Credit Parties in connection with the transactions provided for in the Credit
Agreement and the other Credit Documents presently has actual knowledge and
conscious awareness of any fact that would render the statement inaccurate.
Based upon and subject to the foregoing and the comments and qualifications
set forth below, we are of the opinion that:
1. The Borrower and each of the Specified Guarantors (a) is validly
existing and in good standing under the laws of the jurisdiction of its
organization and (b) has the requisite corporate or limited liability
company, as the case may be, power and authority to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged as described in the Annual Report
on Form 10-K of the Borrower for the fiscal year ended December 31, 2001
(the "Form 10-K").
2. Each of the Borrower and the Specified Guarantors has the requisite
corporate or limited liability company power and authority, as the case may
be, to enter into and perform each Credit Document to which it is a party.
3. The execution, delivery and performance by the Borrower and each
Specified Guarantor of each Credit Document to which it is a party has been
duly authorized by all requisite corporate or limited liability company
action on the part of such Credit Party.
4. Each Credit Document has been duly executed and delivered by the
Borrower and each Specified Guarantor that is a party to it.
5. Each Credit Document executed and delivered on the date hereof by the
applicable Credit Party signatory thereto constitutes a legal, valid and
binding obligation of each such Credit Party, enforceable against it in
accordance with its terms.
6. Except for the filing of a Form 8-K describing the consummation of the
transactions contemplated by the Credit Documents, no approval,
authorization or other action by, or filing with, any United States
federal, state of New York or State of
Delaware General Corporation Law governmental authority is required in
connection with the execution, delivery or performance of the Credit
Documents by any Credit Party.
7. The execution, delivery and performance by each Credit Party of the
Credit Documents to which it is a party do not (a) conflict with or violate
the charter, by-laws, certificate or formation or limited liability
operating company agreement of Borrower or any Specified Guarantor, (b)
conflict with or violate any United States federal (including Regulations
T, U and X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 224 and 221), or New York state statute, rule or regulation or
Delaware General Corporation Law applicable to the Credit Parties, which,
in our experience, is typically applicable to transactions of the nature
contemplated by the Credit Documents or otherwise known to us to be
applicable to the Credit Parties, (c) to our knowledge, violate any order,
writ, injunction or decrees of a court or Governmental Authority applicable
to the Credit Parties or (d) result in a breach of, constitute a default
under, require any consent under, result in the acceleration or required
prepayment of any indebtedness pursuant to, or result in the creation or
imposition of any Lien upon any property of any Credit Party pursuant to,
any contraact or agreement to which any Credit Party is a party and which
is filed as an Exhibit to the Form 10-K (collectively, the "Material
Contracts") (it being understood, however, that we express no opinion with
respect to any financial covenant in any Material Contract, insofar as the
covenant requires a computation).
8. Except as set forth in Schedule 6.01(q), we have no knowledge of any
legal or arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority, now pending or threatened in writing
against any Credit Party.
9. The Debt created by the Credit Agreement constitutes Subordinated Debt
(as such term is defined in that certain Credit Agreement, dated as of May
4, 2001, as amended by Amendments No. 1 and 2 dated as of November 26, 2001
and [May __,] 2002, respectively, by and among Borrower, the Senior
Lenders, ▇▇▇▇▇▇ Commercial Paper, Inc., as syndication agent, Bank of
America, N.A., as documentation agent, and Wachovia Bank, National
Association, as administrative agent).
The foregoing opinions are subject to the following comments and
qualifications:
A. The enforceability of each Credit Document against any Credit Party that
is a party to it may be limited or affected by (i) bankruptcy, insolvency,
fraudulent conveyance, fraudulent transfer, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and
by general equitable principles (regardless of whether enforcement is
sought in equity or at law), including, without limitation, principles
regarding good faith and fair dealing, or other laws affecting the
enforcement of creditors' rights and remedies generally, and (ii) the
unavailability of, or
limitation on the availability of, a particular right or remedy (whether in
a proceeding in equity or at law) because of an equitable principle or a
requirement as to commercial reasonableness, conscionability or good faith
(independent of any contractual definitions of such terms). In addition, we
express no opinion as to the enforceability of (i) self-help provisions,
(ii) provisions that purport to establish evidentiary standards, (iii)
provisions exculpating a party from, or indemnifying a party for (or
entitling a party to contribution in a case involving), its own gross
negligence, willful misconduct or violation of securities or other laws,
(iv) provisions relating to the availability of specific remedies or
relief, or the release or waiver of any remedies or rights or time periods
in which claims are required to be asserted, (v) provisions that allow
cumulative remedies. Our opinion with respect to the enforceability of the
choice of New York law and choice of New York forum provisions of the
Credit Documents is rendered in reliance on N.Y. Gen. Oblig. Law
ss.ss.5-1401 and 1402, to the extent applicable, and is based on the
assumptions that each Credit Document would be interpreted by a New York
State court located in, and applying the law of, the State of New York.
B. The enforceability of certain remedial provisions contained in the
Credit Documents may be limited by (i) provisions for recovery of
attorneys' fees in excess of those that are reasonable under the
circumstances and (ii) waivers of statutes of limitations, appraisal,
valuation, stay, execution, and redemption. Moreover, the availability of
specific performance and other equitable remedies may be subject to
judicial discretion.
C. Insofar as the opinion in paragraph 5 relates to the guarantees by each
of the Guarantors, we have with your permission assumed the adequacy of the
consideration that supports the obligations of such Guarantors and the
solvency and adequacy of capital of such Guarantors.
D. We express no opinion as to (i) provisions of any Credit Document that
authorize Lender to set off and apply any deposits at any time held, and
any other indebtedness at any time owing, by that Lender to and for the
account of any of the Credit Parties; (ii) section 11.1(b) of the Credit
Agreement and any similar provision in the other Credit Documents, insofar
as that section relates to the subject matter jurisdiction of any United
States District Court sitting in the State of New York to adjudicate any
controversy relating to the Credit Documents; and (iii) provisions in the
Credit Agreement and any similar provision in the other Credit Documents,
insofar as that provision provides for any Credit Party's indemnity to
Lender against any loss in obtaining Dollars from a court judgment in
another currency.
E. We express no opinion with respect to the effect of any provision of the
Credit Documents which is intended to permit modification thereof only by
means of an agreement signed in writing by the parties thereto. We express
no opinion with respect to
the effect of any provision of the Credit Documents insofar as it provides
that any Person purchasing a participation from a Lender or other Person
may exercise set-off or similar rights with respect to such participation.
F. We express no opinion with respect to the effect of any provision of the
Credit Documents imposing penalties or forfeitures.
G. We express no opinion with respect to the enforceability of any
provision of any of the Credit Documents to the extent that such provision
constitutes a waiver of illegality as a defense to performance of contract
obligations.
H. The above opinions are hereby specifically qualified by reference to and
are based solely upon laws, rulings and regulations in effect on the date
hereof, and are subject to modification to the extent that such laws,
rulings and regulations may be changed in the future. We undertake no
obligation to advise you of facts or changes in law occurring after the
date of this opinion letter which might affect the opinions expressed
herein.
I. No opinion is expressed with respect to compliance with any state or
federal securities laws other than as expressly provided in paragraph 6
above.
For purposes of the opinions expressed herein, we have assumed with your
consent:
i. All terms and conditions of, or relating to, the transactions
contemplated by the Credit Documents are correctly and completely embodied in
the Credit Documents.
ii. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress or undue influence.
iii. All parties have complied with any requirement of good faith, fair
dealing and conscionability.
iv. The constitutionality and validity of all relevant laws, regulations
and agency actions unless a reported case has otherwise held or widespread
concern has been expressed by commentators as reflected in materials which
lawyers routinely consult.
This opinion is limited to the federal law of the United States, the
Delaware General Corporation Law and the law of the state of New York.
This opinion is addressed to you and is solely for your benefit and the
benefit of your assigns as permitted in accordance with the terms of the Credit
Documents, and only in connection with the transactions contemplated by the
Credit Documents. This opinion may not be relied upon by you for any other
purpose or furnished to, circulated, quoted or relied upon by any other person
or entity for any purpose without our prior written consent; provided, however,
that this opinion may be delivered to your regulators and may be used in
connection with any legal or regulatory proceeding to which you or your
permitted assigns is a party relating to the subject matter of this opinion.
Very truly yours,
SCHEDULE I
----------------------------------------------------------------------------------------------------------------------
GUARANTOR STATE OF FORMATION
--------- ------------------
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Construction Interiors, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
Insignia ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
E.S.G. Operating Co., Inc. New York
----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Management Corporation New York
----------------------------------------------------------------------------------------------------------------------
First ▇▇▇▇▇▇▇ Properties, L.P. Delaware
----------------------------------------------------------------------------------------------------------------------
I/ESG Kensington Investors, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
I/ESG Octane Holdings, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
IBTHAI, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
IBT II, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
IBT III, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
IBT IV, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
IBT V, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
IBT VI, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG 101 Marietta, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG Country Club Manor, L.L.C. Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG Fresh ▇▇▇▇▇▇▇, L.L.C. Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG Mockingbird, L.L.C. Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG Oakhill Directives, L.L.C. Delaware
----------------------------------------------------------------------------------------------------------------------
ICIG Santa ▇▇▇▇, L.L.C. Delaware
----------------------------------------------------------------------------------------------------------------------
ICII-WV Holdings, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
IFC Acquisition Corp. I Delaware
----------------------------------------------------------------------------------------------------------------------
IFC Acquisition Corp. II Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Acquisition LLC Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Acquisition LLC II Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Acquisition LLC III Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Acquisition LLC IV Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Acquisition Directives, LLC Delaware
----------------------------------------------------------------------------------------------------------------------
IFS Securities, Inc. Delaware
----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
IFS Southland Investors LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Financial Services, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Investment Management, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Opportunity Directives, II, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Development Group, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Hotels III, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Residential Investment Corporation Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia/ESG, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia/ESG Capital Corporation Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Acquisition Corporation Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Capital Investments, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Clinton Directives, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Commercial Investments Group, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Commercial Management, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia ML Properties, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia/ESG Northeast, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia RO, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Realty Investors, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Realty Investors II, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Realty Investors III, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Residential Group, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
Insignia Nautica, Inc. Delaware
-----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Road, L.P. Delaware
-----------------------------------------------------------------------------------------------------------------------
WV Financing, LLC Delaware
-----------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇-▇▇▇▇ Village Properties, Inc. New York
-----------------------------------------------------------------------------------------------------------------------
RAQZ Corp. New York
-----------------------------------------------------------------------------------------------------------------------
Secured Investment Corporation Delaware
-----------------------------------------------------------------------------------------------------------------------
Westville Properties, Inc. New York
-----------------------------------------------------------------------------------------------------------------------
EXHIBIT G
---------
FORM OF FINANCIAL CONDITION CERTIFICATE
INSIGNIA FINANCIAL GROUP, INC. as Borrower pursuant to the Credit Agreement
referred to below, hereby certifies to ▇▇▇▇▇▇▇▇▇ L.L.C., as Administrative
Agent, and to the Lenders referred to below:
1. This Certificate is given pursuant to Section 5.01(a)(vi) of the Credit
Agreement, dated as of June 7, 2002 (as amended, restated or otherwise modified,
the "Credit Agreement"), by and among the Borrower, the Lenders party thereto
and the Administrative Agent. The undersigned acknowledges that (a) in entering
into the Credit Agreement, the Administrative Agent and the Lenders are entitled
to rely and have, in fact, relied upon the information contained herein and (b)
any successor or assign of the Administrative Agent and the Lenders is entitled
to rely upon the information contained herein. Capitalized terms used herein and
not defined herein shall have the meanings assigned thereto in the Credit
Agreement.
2. As of the date hereof, the Borrower and its Subsidiaries are Solvent.
3. As of the date hereof, the Borrower and each Guarantor's material
payables are current and not past due.
4. Attached hereto is a pro forma balance sheet of the Borrower and its
Subsidiaries setting forth on a pro forma basis the financial condition of the
Borrower and its Subsidiaries on a Consolidated basis as of the date hereof, and
reflecting on a pro forma basis the effect of the transactions contemplated by
the Credit Agreement, including all fees and expenses in connection therewith,
and evidencing compliance on a pro forma basis with the covenants contained in
Article IX of the Credit Agreement.
5. Attached hereto are the financial projections previously delivered to
the Administrative Agent representing the good faith opinions of the Borrower
and senior management thereof as to the projected results contained therein.
WITNESS the following signature as of the ____ day of June, 2002.
INSIGNIA FINANCIAL GROUP, INC.
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
EXHIBIT H
---------
FORM OF COMPLIANCE CERTIFICATE
The undersigned, on behalf of INSIGNIA FINANCIAL GROUP, INC. (the
"Borrower"), hereby certifies to the Administrative Agent and the Lenders (each
as defined in the Credit Agreement referred to below), as follows:
1. This Certificate is delivered to you pursuant to Section 7.02 of the
Credit Agreement dated as of June 7, 2002 (as amended, restated or otherwise
modified, the "Credit Agreement"), by and among the Borrower, the lenders party
thereto (the "Lenders"), and ▇▇▇▇▇▇▇▇▇ L.L.C., as Administrative Agent.
Capitalized terms used herein and not defined herein shall have the respective
meanings assigned thereto in the Credit Agreement.
2. I have reviewed the financial statements of the Borrower and its
Subsidiaries dated as _____________________ and for the ________________
period[s] then ended and such statements fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations and cash flows for the period[s]
indicated.
3. I have reviewed the terms of the Credit Agreement and the related Credit
Documents and have made, or caused to be made under my supervision, a review in
reasonable detail of the transactions and the condition of the Borrower and its
Subsidiaries during the accounting period covered by the financial statements
referred to in Paragraph 2 above. Such review has not disclosed the existence
during or at the end of such accounting period of any condition or event that
constitutes a Default or an Event of Default, nor do I have any knowledge of the
existence of any such condition or event as at the date of this Certificate
[except, if such condition or event existed or exists, describe the nature and
period of existence thereof and what action the Borrower has taken, is taking
and proposes to take with respect thereto].
4. The Borrower and its Subsidiaries are in compliance with the financial
covenants contained in Article IX of the Credit Agreement as shown on Schedule 1
hereto and the Borrower and its Subsidiaries on a consolidated basis are in
compliance with the other covenants and restrictions contained in the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Compliance
Certificate on behalf of the Borrower as of the ____ day of ______________,
____.
INSIGNIA FINANCIAL GROUP, INC.
By:
------------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT I
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated ________ __, 200_
Reference is made to the Credit Agreement, dated as of June 7, 2002 (as the
same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among Insignia Financial Group, Inc. (the
"Borrower"), the financial institutions from time to time party thereto
(collectively, the "Lenders"), and ▇▇▇▇▇▇▇▇▇ L.L.C., as administrative agent for
the Lenders (the "Administrative Agent"). Terms defined in the Credit Agreement
are used herein as therein defined.
_____________ (solely in its capacity as a Lender under the Credit
Agreement) (the "Assignor") and ______________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse,
representation or warranty, and the Assignee hereby purchases and assumes from
the Assignor, a ___%* interest (the "Assigned Interest") in and to all of the
Assignor's rights and obligations, solely as a Lender, of the Assignor's
[Tranche A Loan] [Tranche B Loan] [and] [Tranche C Loan] under the Credit
Agreement as of the Effective Date (as defined below) (including, without
limitation, (i) the outstanding principal amount of the [Tranche A Loan]
[Tranche B Loan] [and] [Tranche C Loan] made by the Assignor and (ii) the Notes,
if any, evidencing such Loans).
2. The Assignor (i) represents and warrants as of the date hereof that [the
outstanding principal amount of its Tranche A Loan is $_______] [the outstanding
principal amount of its Tranche B Loan is $_______] [and] [the outstanding
principal amount of its Tranche C Loan is $_______] (without giving effect to
assignments thereof which have not yet become effective); (ii) represents and
warrants that it is the legal and beneficial owner of the interest it is
assigning hereunder; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made by or in connection with the Credit Agreement or any other Credit Document
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any other Credit Document, or any other
instrument or document furnished pursuant thereto; (iv) makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Credit Parties or the performance or observance by any Credit
Party of any of its obligations under the Credit Agreement, any other Credit
Document or any other instrument or document furnished pursuant thereto; and (v)
attaches the Notes referred to in paragraph 1 above, and requests that the
Borrower exchange the Notes for new Notes (appropriately dated so that no loss
of interest accrued prior to the Effective Date shall result with respect to the
portion of the Loans assigned or the portion of the Loans retained by the
Assignor), consisting of a [Tranche A Note in the principal amount of
$______________], [a Tranche B Note in the principal amount of $______________],
[and] [a Tranche C Note in the principal amount of $_____________],
-------------------
* Specify percentage to no more than 4 decimal points.
payable to the order of the Assignee, and a [Tranche A Note in the principal
amount of $___________], [a Tranche B Note in the principal amount of
$______________], [and] [a Tranche C Note in the principal amount of
$___________], payable to the order of the Assignor.
(a) The Assignee represents and warrants that it has become a party
hereto solely in reliance upon its own independent investigation of the
financial and other circumstances surrounding the Credit Parties, the Loans and
all aspects of the transactions evidenced by or referred to in the Credit
Documents, or has otherwise satisfied itself thereto, and that it is not relying
upon any representation, warranty or statement (except any such representation,
warranty or statement expressly set forth in this Agreement) of the Assignor in
connection with the assignment made under this Agreement. The Assignee further
acknowledges that the Assignee will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based upon the
Assignee's review of such documents and information as the Assignee deems
appropriate at the time, make and continue to make its own credit decisions in
entering into this Agreement and taking or not taking action under the Credit
Documents. The Assignor shall have no duty or responsibility either initially or
on a continuing basis to make any such investigation or any such appraisal on
behalf of the Assignee or to provide the Assignee with any credit or other
information with respect thereto, whether coming into its possession before the
making of the initial extension of credit under the Credit Agreement or at any
time or times thereafter.
(b) The Assignee represents and warrants to the Assignor that it has
experience and expertise in the making of loans such as the Loans or with
respect to the other types of credit which may be extended under the Credit
Agreement; that it has acquired its Assigned Interest for its own account and
not with any intention of selling all or any portion of such interest; and that
it has received, reviewed and approved copies of all Credit Documents.
(c) The Assignor shall not be responsible to the Assignee for the
execution, effectiveness, accuracy, completeness, legal effect, genuineness,
validity, enforceability, collectibility or sufficiency of any of the Credit
Documents or for any representations, warranties, recitals or statements made
therein or in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made available by the Assignor to the Assignee or by or on behalf
of the Credit Parties to the Assignor or the Assignee in connection with the
Credit Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Credit Parties or any other Person liable
for the payment of any Loans or payment of amounts owed in connection with other
extensions of credit under the Credit Agreement or any other matter. The
Assignor shall not be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of the
Loans or other extensions of credit under the Credit Agreement or as to the
existence or possible existence of any Event of Default or Default.
(d) Each party to this Agreement represents and warrants to the other
party to this Agreement that it has full power and authority to enter into this
Agreement and to perform its obligations under this Agreement in accordance with
the provisions of this Agreement, that this Agreement has been duly authorized,
executed and delivered by such party and that this Agreement constitutes a
legal, valid and binding obligation of such party,
-2-
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, moratorium or other similar laws affecting
creditors' rights generally and by general equitable principles.
(e) Each party to this Agreement represents and warrants that the
making and performance by it of this Agreement do not and will not violate any
law or regulation of the jurisdiction of its incorporation or any other law or
regulation applicable to it.
(f) Each party to this Agreement represents and warrants that all
consents, licenses, approvals, authorizations, exemptions, registrations,
filings, opinions and declarations from or with any agency, department,
administrative authority, statutory corporation or judicial entity necessary for
the validity or enforceability of its obligations under this Agreement have been
obtained, and no governmental authorizations other than any already obtained are
required in connection with its execution, delivery and performance of this
Agreement.
(g) The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned and that such interest is free
and clear of any Lien.
(h) The Assignor makes no representation or warranty and assumes no
responsibility with respect to the operations, condition (financial or
otherwise), business or assets of the Credit Parties or the performance or
observance by the Credit Parities of any of their obligations under the Credit
Agreement or any other Credit Document.
(i) The Assignee appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Credit Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto.
(j) The Assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement and the
other Credit Documents are required to be performed by it as a Lender.
(k) The Assignee confirms that it has received all documents and
information it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement.
(l) The Assignee specifies as its address for notices the office set
forth beneath its name on the signature pages hereof.
3. The effective date for this Assignment and Acceptance shall be
___________ (the "Effective Date"), which date is at least three (3) Business
Days after the execution of this Assignment and Acceptance and the delivery
hereof to the Administrative Agent for acceptance.
-3-
4. Upon such acceptance, as of the Effective Date (i) the Assignee shall,
in addition to the rights and obligations under the Credit Agreement and the
other Credit Documents held by it immediately prior to the Effective Date, have
the rights and obligations under the Credit Agreement and the other Credit
Documents that have been assigned to it pursuant to this Agreement, and (ii) the
Assignor shall, to the extent provided in this Agreement, relinquish its rights
and be released from its obligations under the Credit Agreement and the other
Credit Documents that have been assigned by the Assignor to the Assignee
pursuant to this Agreement.
5. Upon such acceptance, from and after the Effective Date, the
Administrative Agent shall make all payments under the Credit Agreement and the
Notes in respect of the rights assigned hereby (including, without limitation,
all payments of principal, interest, and fees with respect thereto) to the
Assignee. If the Assignor receives or collects any payment of interest or fees
attributable to the interests assigned to Assignee by this Agreement which has
accrued after the Effective Date, the Assignor shall distribute to the Assignee
such payment. If the Assignee receives or collects any payment of interest or
fees which is not attributable to the interests assigned to the Assignee by this
Agreement or which has accrued on or prior to the Effective Date, the Assignee
shall distribute to the Assignor such payment.
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6. This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York applicable to contracts made
and to be performed entirely therein without consideration as to choice of law.
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
Title:
Date:
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNOR
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Telephone No.
---------------------------
Telecopy No.
----------------------------
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
Title:
Date:
NOTICE ADDRESS AND PAYMENT
INSTRUCTIONS FOR ASSIGNEE
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Telephone No.
---------------------------
Telecopy No.
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ACCEPTED this _____ day
of ______________, 200_
▇▇▇▇▇▇▇▇▇ L.L.C.,
as Administrative Agent
By:
----------------------------
Name:
Title: