Exhibit 10.3
EXECUTION
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF OCTOBER 22, 1998
AMONG
DIMAC CORPORATION,
AS BORROWER,
DIMAC HOLDINGS, INC.,
AS A GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
CREDIT SUISSE FIRST BOSTON,
AS ADMINISTRATIVE AGENT
AND ARRANGER,
WARBURG DILLON READ LLC,
AS SYNDICATION AGENT,
AND
FIRST UNION NATIONAL BANK,
AS DOCUMENTATION AGENT
DIMAC CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1.
DEFINITIONS................................................. 2
1.1 Certain Defined Terms................................................................ 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement...................................................................... 39
1.3 Other Definitional Provisions........................................................ 39
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................................. 39
2.1 Commitments; Loans................................................................... 39
2.2 Interest on the Loans................................................................ 48
2.3 Fees................................................................................. 52
2.4 Repayments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments........................................................ 53
2.5 Use of Proceeds...................................................................... 63
2.6 Special Provisions Governing Eurodollar Rate Loans................................... 64
2.7 Increased Costs; Taxes; Capital Adequacy............................................. 66
2.8 Obligation of Lenders and Issuing Lenders to Mitigate................................ 70
SECTION 3.
LETTERS OF CREDIT.............................................. 71
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.............................................................................. 71
3.2 Letter of Credit Fees................................................................ 74
3.3 Drawings and Payments and Reimbursement of Amounts Drawn or Paid
Under Letters of Credit.............................................................. 75
3.4 Obligations Absolute................................................................. 77
3.5 Indemnification; Nature of Issuing Lender's Duties................................... 78
3.6 Increased Costs and Taxes Relating to Letters of Credit.............................. 80
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT.................................. 81
4.1 Conditions to Effectiveness of Amendment and Restatement............................. 81
4.2 Conditions to All Loans.............................................................. 87
4.3 Conditions to Letters of Credit...................................................... 88
(i)
Page
SECTION 5.
REPRESENTATIONS AND WARRANTIES........................................ 89
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries......................................................................... 89
5.2 Authorization of Borrowing, etc...................................................... 90
5.3 Financial Condition; Projections..................................................... 91
5.4 No Material Adverse Change; No Restricted Junior Payments............................ 92
5.5 Title to Properties; Liens; Real Property............................................ 93
5.6 Litigation; Adverse Facts............................................................ 93
5.7 Payment of Taxes..................................................................... 94
5.8 Performance of Agreements; Materially Adverse Agreements............................. 94
5.9 Governmental Regulation.............................................................. 94
5.10 Securities Activities................................................................ 94
5.11 Employee Benefit Plans............................................................... 94
5.12 Certain Fees......................................................................... 95
5.13 Environmental Protection............................................................. 95
5.14 Employee Matters..................................................................... 97
5.15 Solvency............................................................................. 97
5.16 Related Agreements................................................................... 97
5.17 Disclosure........................................................................... 97
5.18 Subordination of Subordinated Indebtedness........................................... 98
5.19 Year 2000 Problems................................................................... 98
SECTION 6.
AFFIRMATIVE COVENANTS............................................ 99
6.1 Financial Statements and Other Reports............................................... 99
6.2 Corporate Existence..................................................................104
6.3 Payment of Taxes and Claims; Tax Consolidation.......................................104
6.4 Maintenance of Properties; Insurance.................................................104
6.5 Inspection; Lender Meeting...........................................................105
6.6 Compliance with Laws, etc............................................................105
6.7 Environmental Disclosure and Inspection..............................................105
6.8 Company's Remedial Action Regarding Hazardous Materials..............................107
6.9 Execution of Subsidiary Guaranty and Collateral Documents by Subsidiar-
ies and Future Subsidiaries..........................................................107
6.10 Interest Rate Protection.............................................................108
6.11 Further Assurances...................................................................108
6.12 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral..................................................................109
6.13 Year 2000 Problems...................................................................111
(ii)
Page
SECTION 7.
NEGATIVE COVENANTS..............................................112
7.1 Indebtedness.........................................................................112
7.2 Liens and Related Matters............................................................113
7.3 Investments; Joint Ventures..........................................................115
7.4 Contingent Obligations...............................................................116
7.5 Restricted Junior Payments...........................................................117
7.6 Financial Covenants..................................................................117
7.7 Restriction on Fundamental Changes; Asset Sales......................................121
7.8 Sales and Lease-Backs................................................................122
7.9 Sale or Discount of Receivables......................................................123
7.10 Transactions with Shareholders and Affiliates........................................123
7.11 Disposal of Subsidiary Stock.........................................................123
7.12 Conduct of Business of Company.......................................................123
7.13 Amendments or Waivers of Related Agreements..........................................124
7.14 Fiscal Year..........................................................................124
7.15 Conduct of Business of Holdings......................................................124
SECTION 8.
EVENTS OF DEFAULT..............................................125
8.1 Failure to Make Payments When Due....................................................125
8.2 Default in Other Agreements..........................................................125
8.3 Breach of Certain Covenants..........................................................125
8.4 Breach of Warranty...................................................................126
8.5 Other Defaults Under Loan Documents..................................................126
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.................................126
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...................................126
8.8 Judgments and Attachments............................................................127
8.9 Dissolution..........................................................................127
8.10 Employee Benefit Plans...............................................................127
8.11 Change in Control....................................................................127
8.12 Invalidity of Guaranties.............................................................128
8.13 Failure of Security..................................................................128
SECTION 9.
AGENTS....................................................129
9.1 Appointment..........................................................................129
9.2 Powers; General Immunity.............................................................131
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.....................................................................132
9.4 Right to Indemnity...................................................................132
9.5 Successor Administrative Agent and Swing Line Lender.................................133
9.6 Collateral Documents.................................................................133
(iii)
Page
SECTION 10.
MISCELLANEOUS................................................134
10.1 Assignments and Participations in Loans, Letters of Credit...........................134
10.2 Expenses.............................................................................137
10.3 Indemnity............................................................................137
10.4 Set-Off; Security Interest in Deposit Accounts.......................................138
10.5 Ratable Sharing......................................................................139
10.6 Amendments and Waivers...............................................................139
10.7 Independence of Covenants............................................................141
10.8 Notices..............................................................................141
10.9 Survival of Representations, Warranties and Agreements...............................142
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative................................142
10.11 Marshalling; Payments Set Aside......................................................142
10.12 Severability.........................................................................142
10.13 Obligations Several; Independent Nature of Lenders' Rights...........................143
10.14 Maximum Amount.......................................................................143
10.15 Headings.............................................................................144
10.16 Applicable Law.......................................................................144
10.17 Successors and Assigns...............................................................144
10.18 Consent to Jurisdiction and Service of Process.......................................144
10.19 Waiver of Jury Trial.................................................................145
10.20 Confidentiality......................................................................146
10.21 Counterparts; Effectiveness..........................................................146
Signature pages.....................................................................................S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM A NOTE
V FORM OF TERM B NOTE
VI FORM OF TERM C NOTE
VII FORM OF REVOLVING NOTE
VIII FORM OF SWING LINE NOTE
IX FORM OF SUBSIDIARY GUARANTY
X FORM OF HOLDINGS GUARANTY
XI FORM OF PLEDGE AGREEMENT
XII FORM OF SECURITY AGREEMENT
XIII FORM OF COMPLIANCE CERTIFICATE
XIV [Intentionally Deleted]
XV [Intentionally Deleted]
XVI FORM OF ASSIGNMENT AGREEMENT
XVII FORM OF COLLATERAL ACCOUNT AGREEMENT
XVIII FORM OF CERTIFICATE OF NON-BANK STATUS
XIX FORM OF PERMITTED SELLER PAPER
XX FORM OF MORTGAGE
XXI FORM OF ACKNOWLEDGEMENT AND CONSENT
(v)
SCHEDULES
1.1(i) ADDBACKS TO EBITDA
1.1(ii) CERTAIN EARN OUT AGREEMENTS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
3.1 EXISTING LETTERS OF CREDIT
4.1H CLOSING DATE MORTGAGED PROPERTIES AND CERTAIN LEASEHOLD
INTERESTS
4.1S CORPORATE STRUCTURE; CAPITAL STRUCTURE; OWNERSHIP
5.1 SUBSIDIARIES OF COMPANY
5.5 CERTAIN REAL PROPERTY MATTERS
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2A CERTAIN EXISTING LIENS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.6C EARN OUT AMOUNTS
7.6E STIPULATED CONSOLIDATED ADJUSTED EBITDA
7.7 PERMITTED SALES OF ASSETS
7.8 CERTAIN EXCLUDED SALE LEASE-BACKS
(vi)
EXECUTION
DIMAC CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October 22,
1998 and entered into by and among DIMAC CORPORATION, a Delaware corporation
(formerly known as DMAC Acquisition Corp.; the "Company"), DIMAC HOLDINGS, INC.,
a Delaware corporation (formerly known as DMAC Holdings, Inc.; "Holdings"), THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually
referred to herein as a "Lender" and collectively as "Lenders"), CREDIT SUISSE
FIRST BOSTON ("CSFB"), as administrative agent for Lenders (in such capacity,
"Administrative Agent"), and as arranger (in such capacity, "Arranger"), WARBURG
DILLON READ LLC ("WDR"), as syndication agent (in such capacity, "Syndication
Agent"), and FIRST UNION NATIONAL BANK ("First Union"), as documentation agent
(in such capacity, "Documentation Agent").
R E C I T A L S
WHEREAS, Holdings, Company, and certain of the Lenders are parties to
that certain Credit Agreement dated as of June 26, 1998, as amended on July 29,
1998 (as so amended and as it may be heretofore have been further amended,
supplemented or otherwise modified, the "Existing Credit Agreement"), pursuant
to which those Lenders agreed to extend certain facilities to Company the
proceeds of which, together with the proceeds of the Equity Contribution
(capitalized terms used in these Recitals without definition shall have the
respective meanings assigned in subsection 1.1 hereof), were used to finance the
purchase price for the DIMAC Shares payable in connection with the DIMAC
Acquisition, to finance the AmeriComm Merger Consideration, to refinance certain
Indebtedness of DIMAC and its Subsidiaries, to pay related transaction fees and
expenses and to provide financing for working capital and other general
corporate purposes (including acquisitions) of Company and its Subsidiaries;
WHEREAS, Company and Holdings desire that the Lenders amend and restate
the Existing Credit Agreement in its entirety: (i) to set forth in greater
detail certain amendments that were made to the Existing Credit Agreement by the
First Amendment, pursuant to which the loans and commitments under the Existing
Credit Agreement were reallocated among the existing Term A Loan facility, the
existing Term B Loan facility and a newly created Term C Loan facility; (ii) to
increase the Term B Loan facility by an aggregate principal amount of
$10,000,000 and the Term C Loan facility by an aggregate principal amount of
$10,000,000, the proceeds of such additional Term B Loans and such additional
Term C Loans to be used to repay certain Indebtedness incurred in connection
with the AmeriComm Acquisition and to pay
1
transaction fees and expenses related to such refinancing; and (iii) to make
certain other changes as more fully set forth herein, which amendment and
restatement shall become effective upon satisfaction of the conditions precedent
set forth herein;
WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing Credit Agreement or be deemed to be evidence or constitute
repayment of all or any portion of such obligations and liabilities and that
this Agreement amend and restate in its entirety the Existing Credit Agreement
and re-evidence the Obligations of Company outstanding thereunder; and
WHEREAS, it is the intent of Loan Parties to confirm that all
Obligations of Loan Parties under the other Loan Documents shall continue in
full force and effect and that, from and after the Effective Date, all
references to the "Credit Agreement" contained therein shall be deemed to refer
to this Agreement:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree that on the Effective Date the Existing Credit Agreement shall be amended
and restated in its entirety as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acknowledgement and Consent" means that certain
Acknowledgement and Consent executed by Company, Holdings and the
Subsidiary Guarantors dated as of the Effective Date and substantially
in the form of Exhibit XXI annexed hereto, as such Acknowledgement and
Consent may be amended, restated, supplemented or otherwise modified
from time to time.
"Administrative Agent" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any
successor Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Class" has the meaning assigned to that term in
subsection 10.6.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as
applied to any
2
Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities or by
contract or otherwise.
"Agents" means Administrative Agent, Syndication Agent,
Arranger and Documentation Agent.
"Agreement" means this Amended and Restated Credit Agreement
dated as of October 22, 1998, as it may be amended, restated,
supplemented or otherwise modified from time to time.
"AmeriComm" means AmeriComm Direct Marketing, Inc. a Delaware
corporation (formerly known as National Fiberstok Corporation).
"AmeriComm Acquisition" means the transactions contemplated by
the AmeriComm Acquisition Agreement.
"AmeriComm Acquisition Agreement" means that certain Agreement
and Plan of Merger dated as of May 18, 1998, by and among Company,
Merger Corp. and AmeriComm Holdings, as in effect on the Closing Date
and as such agreement may thereafter be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
subsection 7.13A.
"AmeriComm Holdings" means AmeriComm Holdings, Inc., a
Delaware corporation (formerly known as DEC International, Inc.).
"AmeriComm Merger" means the merger of Merger Corp. with and
into AmeriComm Holdings in accordance with the terms of the AmeriComm
Acquisition Agreement and the Certificate of Merger, with AmeriComm
Holdings being the surviving corporation in such merger.
"AmeriComm Merger Consideration" means the aggregate of all
amounts necessary to finance the AmeriComm Merger.
"Anniversary" means each of the dates that is an anniversary
of the Closing Date.
"Applicable Base Rate Margin" means, (i) from the Closing Date
until the later of (x) the delivery of financial statements for the
period ending September 30, 1998 as required pursuant to subsection
6.1(ii) and (y) the date which is six months after the Effective Date,
1.75% per annum for Term A Loans and Revolving Loans, 2.25% per annum
for Term B Loans and 2.50% per annum for Term C Loans, and (ii)
thereafter, a percentage per annum determined by reference to the
Leverage Ratio as set forth below:
3
Applicable Applicable Applicable
Base Rate Base Rate Base Rate
Leverage Ratio Margin for Margin Margin
Term A for for
Loans and Term B Term C
Revolving Loans Loans
Loans
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
5.0:1.0 or greater 1.75% 2.25% 2.50%
-----------------------------------------------------------------------------------------------
4.5:1.0 or greater, 1.50% 2.25% 2.50%
but less than 5.0:1.0
-----------------------------------------------------------------------------------------------
4.0:1.0 or greater,
but less than 4.5:1.0 1.25% 2.00% 2.25%
-----------------------------------------------------------------------------------------------
less than 4.0:1.0 1.00% 2.00% 2.25%
The Applicable Base Rate Margin shall be determined by reference to the
Leverage Ratio in effect from time to time; provided, however, that (x)
no change in the Applicable Base Rate Margin shall be effective until
the date on which Administrative Agent receives financial statements
pursuant to subsection 6.1(ii) and an Officer's Certificate calculating
the Leverage Ratio (or the date of conclusion of the period referred to
in clause (i) of this definition, if later), and (y) the Applicable
Base Rate Margin shall be 1.75% in the case of Term A Loans and
Revolving Loans, 2.25% in the case of Term B Loans and 2.50% in the
case of Term C Loans for so long (but only for so long) as Company has
not submitted to Administrative Agent the information described in
clause (x) of this proviso as and when required under subsection
6.1(ii).
"Applicable Commitment Fee Percentage" means, (i) from the
Closing Date until the later of (x) the delivery of financial
statements for the period ending September 30, 1998 as required
pursuant to subsection 6.1(ii) and (y) the date which is six months
after the Effective Date, 0.50% per annum, and (ii) thereafter, a
percentage per annum determined by reference to the Leverage Ratio as
set forth below:
Applicable Commitment
Leverage Ratio Fee Percentage
-------------------------------------------------------------------------
-------------------------------------------------------------------------
4.0:1.0 or greater 0.50%
-------------------------------------------------------------------------
less than 4.0:1.0 0.375%
The Applicable Commitment Fee Percentage shall be determined by
reference to the Leverage Ratio in effect from time to time; provided,
however, that (x) no change in the Applicable Commitment Fee Percentage
shall be effective until the date on which
4
Administrative Agent receives financial statements pursuant to
subsection 6.1(ii) and an Officer's Certificate calculating the
Leverage Ratio (or the date of conclusion of the period referred to in
clause (i) of this definition, if later), and (y) the Applicable
Commitment Fee Percentage shall be 0.50% for so long (but only for so
long) as Company has not submitted to Administrative Agent the
information described in clause (x) of this proviso as and when
required under subsection 6.1(ii).
"Applicable Eurodollar Rate Margin" means, (i) from the
Closing Date until the later of (x) the delivery of financial
statements for the period ending September 30, 1998 as required
pursuant to subsection 6.1(ii) and (y) the date which is six months
after the Effective Date, 2.75% per annum for Term A Loans and
Revolving Loans, 3.25% per annum for Term B Loans and 3.50% per annum
for Term C Loans, and (ii) thereafter, a percentage per annum
determined by reference to the Leverage Ratio as set forth below:
Applicable Applicable Applicable
Eurodollar Eurodollar Eurodollar
Leverage Ratio Rate Rate Rate
Margin for Margin Margin
Term A for for
Loans and Term B Term C
Revolving Loans Loans
Loans
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
5.0:1.0 or greater 2.75% 3.25% 3.50%
---------------------------------------------------------------------------------------------
4.5:1.0 or greater, 2.50% 3.25% 3.50%
but less than
5.0:1.0
---------------------------------------------------------------------------------------------
4.0:1.0 or greater,
but less than 2.25% 3.00% 3.25%
4.5:1.0
---------------------------------------------------------------------------------------------
less than 4.0:1.0 2.00% 3.00% 3.25%
The Applicable Eurodollar Rate Margin shall be determined by reference
to the ratio in effect on the first day of the Interest Period for the
applicable Eurodollar Rate Loan; provided, however, that (x) no change
in the Applicable Eurodollar Rate Margin shall be effective until the
date on which Administrative Agent receives financial statements
pursuant to subsection 6.1(ii) and an Officer's Certificate calculating
the Leverage Ratio (or the date of conclusion of the period referred to
in clause (i) of this definition, if later), and (y) the Applicable
Eurodollar Rate Margin shall be 2.75% in the case of Term A Loans and
Revolving Loans, 3.25% in the case of Term B Loans and 3.50% in the
case of Term C Loans for so long (but only for so long) as Company has
not submitted to Administrative Agent the information described in
clause (x) of this proviso as and when
5
required under subsection 6.1(ii).
"Applicable Laws" means, collectively, all statutes, laws,
rules, regulations, ordinances, decisions, writs, judgments, decrees,
and injunctions of any federal, state or local governmental authority,
agency or court affecting any Loan Party or the Collateral or any part
thereof, whether now or hereafter enacted and in force, and all
Governmental Authorizations relating thereto, and all covenants,
conditions, and restrictions contained in any instruments, either of
record or known to any Loan Party, at any time in force affecting any
Real Property Asset or any part thereof, including any such covenants,
conditions and restrictions which may (i) require improvements, repairs
or alterations in or to such Real Property Asset or any part thereof or
(ii) in any way limit the use and enjoyment thereof; for the purpose of
usury, Applicable Laws means the law of the State of New York
applicable to maximum rates of interest.
"Arranger" has the meaning assigned to that term in the
Recitals to this Agreement.
"Asset Sale" means the sale by Company or any of its
Subsidiaries to any Person (other than Company or any of its wholly
owned Subsidiaries) of (i) any of the stock of any of Company's
Subsidiaries, (ii) all or substantially all of the assets of any
division or line of business of Company or any of its Subsidiaries, or
(iii) any other assets other than (w) sales of assets in the ordinary
course of business, (x) sales of obsolete equipment, (y) sales of
assets that are replaced in the ordinary course of business with other
similar assets used in the business of Company and its Subsidiaries and
(z) any such other assets to the extent that the aggregate value of
such assets sold (determined in good faith by the board of directors of
Company) is equal to $500,000 or less in any one Fiscal Year.
"Assigned Rights and Obligations" has the meaning assigned to
that term in subsection 2.1F.
"Assignment Agreement" means an assignment agreement in
substantially the form of Exhibit XVI annexed hereto or in such other
form as may be approved by Administrative Agent.
"Assignment of Rents and Leases" means each Assignment of
Rents and Leases executed and delivered by any Loan Party in favor of
Administrative Agent for the benefit of Administrative Agent and the
Lenders in such form as shall be approved by Administrative Agent in
its reasonable discretion, in each case with such changes thereto as
may be reasonably recommended by Administrative Agent's local counsel
based on local laws or customary practice, as any such Assignment of
Rents and Leases may heretofore have been or hereafter may be amended,
restated, supplemented, consolidated, extended or otherwise modified
from time to time in accordance with the terms thereof and hereof.
"Bankruptcy Code" means Title 11 of the United States Code
entitled
6
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection
2.2A.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to close; provided that, with respect to matters
relating to Eurodollar Rate Loans, the term "Business Day" shall mean a
day other than a Saturday, Sunday or other day on which commercial
banks in New York City or London, England, are authorized or required
by law to close.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
that, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the
date of acquisition thereof; (ii) marketable direct obligations issued
by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at
the time of acquisition, having the highest rating obtainable from
either Standard & Poor's, a division of the ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
("S&P"), or ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii)
commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's; (iv) certificates of
deposit or bankers' acceptances maturing within one year from the date
of acquisition thereof and, at the time of acquisition, having a rating
of at least A-1 from S&P or at least P-1 from Moody's, issued by any
Lender or any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia
having unimpaired capital and surplus of not less than $250,000,000
(each Lender and each such commercial bank being herein called a "Cash
Equivalent Bank"); and (v) Eurodollar time deposits having a maturity
of less than one year purchased directly from any Cash Equivalent Bank
(provided such deposit is with such Cash Equivalent Bank or any other
Cash Equivalent Bank).
"Cash Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment
pursuant to, or monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale.
7
"Certificate of Merger" means the Certificate of Merger dated
as of June 26, 1998 by and between Merger Corp. and AmeriComm Holdings,
in the form delivered to Agents and Lenders prior to or concurrently
with their execution of the Existing Credit Agreement and as such
Certificate of Merger may heretofore have been or hereafter may be
amended from time to time thereafter to the extent permitted under
subsection 7.13A.
"Certificate of Non-Bank Status" means a certificate
substantially in the form of Exhibit XVIII annexed hereto delivered by
a Lender to Administrative Agent pursuant to subsection 2.7B(iii).
"Class" means each of the following four classes of Lenders:
(i) Lenders having Term A Loan Exposure, (ii) Lenders having Term B
Loan Exposure, (iii) Lenders having Term C Loan Exposure and (iv)
Lenders having Revolving Loan Exposure.
"Closing Date" means June 26, 1998.
"Closing Date Mortgaged Property" means each Real Property
Asset listed in Part A of Schedule 4.1H annexed hereto
"Closing Date Mortgages" means the Mortgages delivered
pursuant to subsection 4.1H of the Existing Credit Agreement.
"Collateral" means all of the properties and assets (including
capital stock) in which Liens are purported to be granted by the
Collateral Documents.
"Collateral Account" has the meaning assigned to that term in
the Collateral Account Agreement.
"Collateral Account Agreement" means the Collateral Account
Agreement executed and delivered by Company and Administrative Agent on
the Closing Date, substantially in the form of Exhibit XVII annexed
hereto, pursuant to which Company may pledge cash to Administrative
Agent to secure the obligations of Company to reimburse Issuing Lenders
for payments made under one or more Letters of Credit as provided in
subsection 3.3C and in Section 8, as such Collateral Account Agreement
may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time.
"Collateral Documents" means the Pledge Agreement, the
Security Agreement, the Collateral Account Agreement, the Mortgages,
the Assignments of Rents and Leases, and any other documents,
instruments or agreements delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant or
perfect liens on any assets of such Loan Party as security for the
Obligations.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the purpose of providing the primary
payment mechanism in connection with
8
the purchase of any materials, goods or services by Company or any of
its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"Commitments" means (i) with respect to the period prior to
the Effective Date, the commitments of Lenders to make Loans as set
forth in subsection 2.1A of the Existing Credit Agreement and (ii)
thereafter, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of this Agreement.
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit XIII annexed hereto delivered to Administrative
Agent by Company pursuant to subsection 6.1(iv).
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit
of Administrative Agent (which writing has been delivered to
Administrative Agent), whether under the terms of the applicable lease,
under the terms of a Landlord Consent and Estoppel, or otherwise, to
the matters requested by Administrative Agent, which interest, if a
subleasehold or sub-subleasehold interest, is not subject to any
contrary restrictions contained in a superior lease or sublease.
"Condemnation Proceeds" has the meaning assigned to that term
in subsection
2.4B(iii)(d).
"Consent Solicitation" means the solicitation by AmeriComm,
from the holders of outstanding Existing Senior Notes, of consents to
certain amendments to the Existing Senior Note Indenture, the terms and
conditions of which consents and amendments shall be as described in
the Debt Tender Offer Materials and shall otherwise be in form and
substance satisfactory to Administrative Agent and Requisite Lenders.
"Consolidated Adjusted EBITDA" means, for any period, the sum
(without duplication) of the amounts for such period (as determined for
Company and its Subsidiaries on a consolidated basis and in accordance
with subsection 7.6E(ii), if applicable) of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes
based on income, (iv) total depreciation expense, (v) total
amortization expense, (vi) other non-cash items reducing Consolidated
Net Income, (vii) all one-time cash compensation payments made in
connection with the Acquisition, and (viii) those items described on
Schedule 1.1(i) annexed hereto, less (a) other non-cash items
increasing Consolidated Net Income, (b) to the extent not otherwise
deducted in determining Consolidated Net Income, any payments made
under Permitted Earn Out Agreements entered into on or after the
Closing Date and Management Fees, and (c) any payments (net of
indemnification) by Company and its Subsidiaries of any demands,
obligations, interest, penalties, suits, judgments, orders,
liabilities, debts, claims, actions, causes of action, costs and
expenses (including legal, consultants' and witness' fees) in
9
connection with the postal inspection service investigation disclosed
on Schedule 5.14 of the DIMAC Acquisition Agreement. With respect to
the determination of Consolidated Adjusted EBITDA for any period prior
to the completion of four Fiscal Quarters following the Closing Date,
Consolidated Adjusted EBITDA shall be calculated for certain Fiscal
Quarters in the manner set forth in subsection 7.6E(i).
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of
Capital Leases which is capitalized on the consolidated balance sheet
of Company and its Subsidiaries) by Company and its Subsidiaries during
that period that, in conformity with GAAP, are included in "purchases
of property, plant or equipment" (excluding acquisitions permitted
under subsection 7.7(vii)) or comparable items reflected in the
consolidated statement of cash flows of Company and its Subsidiaries.
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets
in conformity with GAAP, excluding Cash, Cash Equivalents and deferred
income taxes to the extent otherwise included in current assets.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on
a consolidated basis which may properly be classified as current
liabilities in conformity with GAAP, other than (i) any liabilities
that are the current portion of Indebtedness classified as long term
liabilities in conformity with GAAP and (ii) deferred income taxes to
the extent otherwise included in current liabilities.
"Consolidated Excess Cash Flow" means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the
amounts for such period of (a) Consolidated Adjusted EBITDA and (b) the
Consolidated Working Capital Adjustment minus (ii) the sum, without
duplication, of the amounts for such period of (a) voluntary and
scheduled cash repayments of Consolidated Total Debt (excluding
repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (net of any proceeds
of any related financings with respect to such expenditures), (c)
Consolidated Interest Expense, (d) to the extent not included in
Consolidated Capital Expenditures, the cash portion of the aggregate
purchase price of acquisitions permitted under subsection 7.7(vii)
during such period (net of any proceeds of any related financings with
respect to such acquisitions), (e) any Cash payments made during such
period with respect to items set forth on Schedule 1.1(i) annexed
hereto, and (f) the provision for taxes based on income of Company and
its Subsidiaries and paid in cash with respect to such period.
"Consolidated Fixed Charges" means, for any period, an amount
equal to the sum, without duplication, of the amounts for such period
as determined for Company and its Subsidiaries on a consolidated basis
of (i) scheduled repayments of principal of all
10
Indebtedness (as reduced by prepayments thereon previously made), (ii)
Consolidated Interest Expense, (iii) Consolidated Capital Expenditures
(other than Designated Capital Expenditures), and (iv) the portion of
taxes based on income actually paid in Cash. With respect to the
calculation of Consolidated Fixed Charges for any period prior to the
completion of four Fiscal Quarters following the Closing Date,
Consolidated Fixed Charges shall only include those amounts otherwise
included pursuant to the foregoing sentence from the Closing Date
through the date of determination, except that Consolidated Interest
Expense shall be calculated for such period in the manner described in
the definition of Consolidated Interest Expense.
"Consolidated Interest Expense" means, for any period (as
determined for Company and its Subsidiaries on a consolidated basis and
in accordance with subsection 7.6E(ii), if applicable), total interest
expense (including that portion attributable to Capital Leases in
accordance with GAAP) payable in cash, including, without limitation,
all commissions, discounts and other fees and charges owed with respect
to letters of credit and bankers' acceptance financing and net costs
under Interest Rate Agreements, but excluding, however, (i) any amounts
referred to in subsection 2.3 of the Existing Credit Agreement payable
to Agents or Lenders on or before the Closing Date and (ii) any
amortized Transaction Costs. With respect to the determination of
Consolidated Interest Expense for any period prior to the completion of
four Fiscal Quarters following the Closing Date, Consolidated Interest
Expense shall be calculated on an annualized basis for the period from
the Closing Date through the date of determination in the manner set
forth in the proviso to subsection 7.6A.
"Consolidated Net Income" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated
basis for such period taken as a single accounting period determined in
conformity with GAAP; provided that there shall be excluded therefrom
(i) the income (or loss) of any Person (other than a Subsidiary of
Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to Company or any of
its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary
of Company or is merged into or consolidated with Company or any of its
Subsidiaries or that Person's assets are acquired by Company or any of
its Subsidiaries, (iii) the income of any Subsidiary of Company to the
extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or
losses attributable to Asset Sales, and (v) (to the extent not included
in clauses (i) through (iv) above) any net extraordinary gains or net
non-cash extraordinary losses.
"Consolidated Total Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all
outstanding Indebtedness (excluding Permitted Earn Out Agreements
entered into on or after the Closing Date) of Company and its
Subsidiaries on a consolidated basis as determined in conformity with
GAAP.
11
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over
Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any
period on a consolidated basis, the amount (which may be a negative
number) by which Consolidated Working Capital as of the beginning of
such period exceeds (or is less than) Consolidated Working Capital as
of the end of such period.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person
(i) with respect to any Indebtedness, lease, dividend or other
obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to
the obligee of such obligation of another that such obligation of
another will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable
for reimbursement of drawings, or (iii) under Interest Rate Agreements.
Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting
with recourse or sale with recourse by such Person of the obligation of
another, (b) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to
an agreement, and (c) any liability of such Person for the obligation
of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any
security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the
solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported or, if less, the amount to which such
Contingent Obligation is specifically limited.
"Continuing Director" shall mean, as of any date of
determination, any member of the Board of Directors of Company who (i)
was a member of such Board of Directors on the Closing Date or (ii) was
nominated for election or elected to such Board of Directors with the
affirmative vote (directly or indirectly) of the MDC Entities.
"Contractual Obligation" means, as applied to any Person, any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any
of its properties is bound or to which it or any of its properties is
subject.
12
"Corporate Loan Party" means any Loan Party which is a
corporation.
"CSFB" means Credit Suisse First Boston.
"Cutoff Date" has the meaning assigned to that term in
subsection 2.4C(iii).
"Debt Tender Offer" means the offer by Company or any of its
Subsidiaries to repurchase up to and including 100% of the outstanding
Existing Senior Notes after the Closing Date pursuant to the Debt
Tender Offer Materials.
"Debt Tender Offer Materials" means an offer to purchase and
other consent solicitation materials relating to the Debt Tender Offer
and any accompanying consent and letter of transmittal.
"Defaulting Lender" means any Lender with respect to which a
Lender Default is in effect.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"Designated Capital Expenditures" means Consolidated Capital
Expenditures in an aggregate amount not in excess of $7,500,000 made
during the period from the Closing Date to December 31, 1999, to the
extent such Consolidated Capital Expenditures represent expenditures of
Company and its Subsidiaries deferred from periods prior to the Closing
Date.
"DIMAC" means DIMAC Marketing Corporation, a Delaware
corporation.
"DIMAC Acquisition" means the transactions contemplated by the
DIMAC Acquisition Agreement.
"DIMAC Acquisition Agreement" means that certain Stock
Purchase Agreement dated as of May 17, 1998, by and between Company and
Heritage, as in effect on the Closing Date and as such agreement may
thereafter have been or may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under
subsection 7.13A.
"DIMAC Shares" means the outstanding capital stock of DIMAC as
of the Closing Date.
"Documentation Agent" has the meaning assigned to that term in
the Introduction to this Agreement.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
13
"Effective Date" means the date on or before October , 1998 on
which the conditions precedent set forth in subsection 4.1 are met and
this Agreement becomes effective.
"Eligible Assignee" means (A) (i) a commercial bank organized
under the laws of the United States or any state thereof; (ii) a
commercial bank organized under the laws of any other country or a
political subdivision thereof; provided that (x) such bank is acting
through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iii) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities
Act) which extends credit or buys loans as one of its businesses
including, but not limited to, insurance companies, mutual funds and
lease financing companies, in each case (under clauses (i) through
(iii) above) that is reasonably acceptable to Administrative Agent; and
(B) any Lender and any Affiliate of any Lender and, with respect to any
Lender that is an investment fund that invests in commercial loans, any
other investment fund that invests in commercial loans and that is
managed by the same investment advisor as such Lender, or by an
Affiliate of such investment advisor; provided that no Affiliate of
Company shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is subject to ERISA and which is
maintained or contributed to by Company or any of its ERISA Affiliates.
"Environmental Claim" means any written accusation,
allegation, notice of violation, claim, demand, abatement order or
other order or direction (conditional or otherwise) by any governmental
authority or any Person for any damage, including, without limitation,
personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for
fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Company,
any of its Subsidiaries, any of their respective Affiliates that are
directly or indirectly controlled by Company, or any Facility.
"Environmental Laws" means all laws, statutes, ordinances,
orders, rules, regulations, plans, policies or decrees relating to (i)
environmental matters, including, without limitation, those relating to
fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials, (ii) the generation, use,
storage, transportation or disposal of Hazardous Materials, or (iii)
occupational safety and health, public health and safety, industrial
hygiene or protection of wetlands, applicable to and binding upon
Company or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601 et seq.), the Hazardous Materials Transportation Act
(49
14
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15
U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. Section 136 et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section
11001 et seq.), each as amended or supplemented, and any
analogous future or present local, state and federal statutes and
regulations promulgated pursuant thereto, each as in effect as of the
date of determination.
"Equity Contribution" means the equity contribution on the
Closing Date by Holdings of $100,000,000 in cash to Company.
"Equity Proceeds" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated
therewith) from the issuance of any equity Securities of Holdings or
Company after the Effective Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of
which that Person is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses
under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is a member; and (iii)
solely for purposes of obligations under Section 412 of the Internal
Revenue Code or under the applicable sections set forth in Section
414(t)(2) of the Internal Revenue Code, any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any corporation described
in clause (i) above or any trade or business described in clause (ii)
above is a member.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043(c) of ERISA and the regulations issued
thereunder with respect to any Pension Plan (excluding those for which
the provision for 30-day notice to the PBGC has been waived by
regulation or with respect to which no penalty will be assessed by the
PBGC for failure to satisfy such notice requirements); (ii) the failure
to meet the minimum funding standard of Section 412 of the Internal
Revenue Code with respect to any Pension Plan (whether or not waived in
accordance with Section 412(d) of the Internal Revenue Code) or the
failure to make by its due date a required installment under Section
412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant
to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the withdrawal by Company or any of its ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan
15
resulting, in either case, in liability pursuant to Section 4063 or
4064 of ERISA, respectively; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan pursuant to Section 4042 of
ERISA; (vi) the imposition of liability on Company or any of its ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of
the application of Section 4212(c) of ERISA; (vii) the withdrawal by
Company or any of its ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan resulting in withdrawal liability pursuant to
Section 4201 of ERISA, or the receipt by Company or any of its ERISA
Affiliates of written notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA,
or that it intends to terminate or has terminated under Section 4042 of
ERISA or under Section 4041A of ERISA if such termination would result
in liability to Company or any of its ERISA Affiliates; (viii) the
imposition on Company or any of its ERISA Affiliates of fines,
penalties or taxes under Chapter 43 of the Internal Revenue Code or
under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the disqualification by the Internal
Revenue Service of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue
Code) under Section 401(a) of the Internal Revenue Code, or the
determination by the Internal Revenue Service that any trust forming
part of any Pension Plan fails to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (x) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurocurrency Reserve Requirements" means, for each Interest
Period for each Eurodollar Rate Loan, the highest reserve percentage
applicable to any Lender during such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System or any successor for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement), with respect to liabilities or
assets consisting of or including Eurocurrency liabilities having a
term equal to such Interest Period.
"Eurodollar Base Rate" means the rate per annum determined by
Administrative Agent at approximately 11:00 A.M. (London time) on the
date which is two Business Days prior to the beginning of the relevant
Interest Period (as specified in the applicable Notice of Borrowing) by
reference to the British Bankers' Association Interest Settlement Rates
for deposits in Dollars (as set forth by any service selected by
Administrative Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the
"Eurodollar Base Rate" shall be the interest rate per annum determined
by Administrative Agent to be the average of the rates per annum at
which deposits in Dollars are offered for such relevant Interest Period
to major banks in the London interbank market in London, England by the
Reference Lenders at approximately 11:00 A.M. (London time) on the date
which is two Business Days prior to the beginning of such Interest
Period. If any of the Reference Lenders shall be unable or shall
otherwise fail to supply such rates to Administrative
16
Agent upon its request, the rate of interest shall be determined on the
basis of the quotations of the remaining Reference Lender.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Reserve Adjusted Eurodollar Rate as
provided in subsection 2.2A.
"Event of Default" means each of the events set forth in
Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Existing AmeriComm Credit Agreement" means that certain
Credit Agreement dated as of June 28, 1996 by and among AmeriComm, the
guarantors named therein, the lenders party thereto, and ▇▇▇▇▇▇
Financial, Inc., as agent, as amended to the Closing Date and as such
agreement may have been or may be further amended, supplemented or
otherwise modified from time to time.
"Existing Credit Agreement" has the meaning assigned to that
term in the Recitals to this Agreement.
"Existing Lenders" means the "Lenders" party to the Existing
Credit Agreement on the Effective Date immediately before the
effectiveness hereof.
"Existing Letters of Credit" has the meaning assigned to that
term in subsection 3.1.
"Existing Loan" or "Existing Loans" means, as the context
requires, one or more of the Existing Term A Loans, Existing Term B
Loans, Existing Term C Loans, or Existing Revolving Loans or any
combination thereof.
"Existing Revolving Loan" or "Existing Revolving Loans" means
Revolving Loans (as defined in the Existing Credit Agreement)
outstanding on the Effective Date.
"Existing Senior Notes" means AmeriComm's $100,000,000 in
original aggregate principal amount of 11-5/8% Senior Notes due 2002,
Series B issued pursuant to the Existing Senior Note Indenture.
"Existing Senior Note Indenture" means that certain Indenture
dated as of June 15, 1996 pursuant to which the Existing Senior Notes
were issued by AmeriComm, as such Indenture may heretofore have been or
hereafter may be amended, supplemented or otherwise modified from time
to time to the extent permitted under subsection 7.13A.
"Existing TCW Notes" means the $35,000,000 in original
aggregate principal amount of AmeriComm Holdings' 12-1/2% Senior Notes
due April 24, 2003.
"Existing Term A Loan" or "Existing Term A Loans" means the
Term A
17
Loans (as defined in the Existing Credit Agreement) outstanding on the
Effective Date.
"Existing Term B Loan" or "Existing Term B Loans" means the
Term B Loans (as defined in the Existing Credit Agreement) outstanding
on the Effective Date.
"Existing Term C Loan" or "Existing Term C Loans" means the
Term C Loans (as defined in the Existing Credit Agreement) outstanding
on the Effective Date.
"Existing Term Loans" means the Existing Term A Loans, the
Existing Term B Loans and the Existing Term C Loans.
"Facilities" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements
located thereon) now, hereafter or heretofore owned, leased, operated
or used by Company or any of its Subsidiaries (but only as to portions
of buildings actually leased or used) or any of their respective
predecessors or any of their respective Affiliates that are directly or
indirectly controlled by Company.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"First Amendment" means that certain First Amendment to Credit
Agreement dated as of July 28, 1998, by and among Company, Holdings,
Administrative Agent, Arranger, Syndication Agent and Lenders.
"First Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that
such Lien is the most senior Lien (other than Permitted Encumbrances
and other Liens permitted pursuant to subsection 7.2A to the extent not
perfected by filing of any UCC financing statements) to which such
Collateral is subject.
"First Union" means First Union National Bank.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its
Subsidiaries ending on December 31 of each calendar year.
"Flood Hazard Property" means a Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as having
special flood or
18
mud slide hazards.
"Funding and Payment Office" means the office of
Administrative Agent located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (or such office of Administrative Agent or any successor
Administrative Agent specified by Administrative Agent or such
successor Administrative Agent in a written notice to Loan Parties and
Lenders).
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the
circumstances as of the date of determination and specifically, terms
used herein applicable to Company and its Subsidiaries defined by
reference to GAAP shall give effect to the subtraction of minority
interests.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or
from any federal, state or local governmental authority, agency or
court.
"Guaranty" means, individually, the Subsidiary Guaranty, the
Holdings Guaranty or any other guaranty of the Obligations, and
"Guaranties" means, collectively, the Subsidiary Guaranty, the Holdings
Guaranty and each other guaranty of the Obligations.
"Guarantor" means, individually, the Subsidiary Guarantors,
Holdings or any other guarantor of the Obligations, and "Guarantors"
means, collectively, the Subsidiary Guarantors, Holdings and each other
guarantor of the Obligations.
"Hazardous Materials" means (i) any chemical, material or
substance defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely
hazardous waste", "restricted hazardous waste", "infectious waste",
"toxic substances" or any other formulations intended to define, list
or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws; (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v)
any radioactive materials; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of fifty
19
parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Heritage" means Heritage Media Corporation, a Delaware
corporation.
"Holdings" has the meaning assigned to that term in the
introduction to this Agreement.
"Holdings Guaranty" means the Holdings Guaranty, substantially
in the form of Exhibit X annexed hereto, executed and delivered by
Holdings on the Closing Date, as such Holdings Guaranty may heretofore
have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time.
"Holdings Note Exchange Offer" means the offer by Holdings to
the holders of outstanding existing Holdings Notes or outstanding
existing Holdings PIK Notes, to exchange such existing Holdings Notes
or existing Holdings PIK Notes for "Series B Notes" in accordance with
(and as such term is defined in) the terms of the Holdings Note
Indenture.
"Holdings Note Indenture" means that certain Indenture dated
as of October 22, 1998 by and among Holdings and Wilmington Trust
Company, as trustee.
"Holdings Note Purchase Agreement" means that certain Purchase
Agreement dated as of October 22, 1998 pursuant to which the Holdings
Notes were issued by Holdings, as such agreement has been amended since
the Effective Date and as such Indenture may have been further amended,
supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.13A.
"Holdings Notes" means (i) $30,000,000 in original aggregate
principal amount of Holdings' 15 1/2% Senior Notes due 2009, issued
pursuant to the Holdings Note Indenture and (ii) any notes issued
pursuant to the Holdings Note Exchange Offer in accordance with the
Holdings Note Indenture to replace any notes issued pursuant to clause
(i).
"Holdings PIK Notes" means (i) any promissory notes issued by
Holdings in favor of the holders of the Holdings Notes, pursuant to the
Holdings Notes to evidence the payment of interest thereunder; (ii) any
additional promissory notes issued by Holdings to the holders of any
notes issued pursuant to clause (i) to evidence the payment of interest
thereunder; and (iii) any notes issued pursuant to the Holdings Note
Exchange Offer in accordance with the Holdings Note Indenture to
replace any notes issued pursuant to clauses (i) or (ii).
"Improvements" means all buildings, structures, fixtures,
tenant improvements, and other improvements of any kind and description
now or hereafter located in or on or attached to any land that is a
Real Property Asset, including all building materials,
water sanitary and storm sewers, drainage, electricity, steam, gas,
telephone and other utility ,
20
facilities, parking areas, roads, driveways, walks and other site
improvements; and all additions and betterments there to and all
renewals, substitutions and replacements thereof.
"Indebtedness" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on
a balance sheet in conformity with GAAP, (iii) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money (other than accounts payable incurred in
the ordinary course of business and accrued expenses incurred in the
ordinary course of business), (iv) any obligation owed for all or any
part of the deferred purchase price of property or services (excluding
any such obligations incurred under ERISA and other trade payables
incurred in the ordinary course of business), including amounts payable
under Permitted Earn Out Agreements, and (v) all indebtedness secured
by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"Indemnitee" has the meaning assigned to that term in
subsection 10.3.
"Insurance Proceeds" has the meaning assigned to that term in
subsec- tion 2.4B(iii)(d).
"Interest Coverage Ratio" has the meaning assigned to that
term in subsec- tion 7.6.
"Interest Payment Date" means (i) with respect to any Base
Rate Loan, the last Business Day in each of March, June, September and
December of each year, commencing on September 30, 1998, and (ii) with
respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each
Interest Period of longer than three months, "Interest Payment Date"
shall also include the date that is three months after the commencement
of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to hedge Company or
any of its Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for
calculating the Reserve Adjusted Eurodollar Rate, for purposes of
determining the interest rate in respect of an Interest Period. The
Interest Rate Determination Date for purposes of calculating the
Reserve Adjusted Eurodollar Rate shall be the second Business Day prior
to the first day of the related Interest Period.
21
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"Investment" means (i) any direct or indirect purchase or
other acquisition by Company or any of its Subsidiaries of, or of a
beneficial interest in, stock or other Securities of any other Person
(other than a Person that, prior to such purchase or acquisition, was a
wholly-owned Subsidiary of Company), or (ii) any direct or indirect
loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital
contribution by Company or any of its Subsidiaries to any other Person
other than a wholly-owned Subsidiary of Company, including all
indebtedness and accounts receivable acquired from that other Person
that are not current assets or did not arise from sales to that other
Person in the ordinary course of business; provided, however, that the
term "Investment" shall not include (a) current trade and customer
accounts receivable for goods furnished or services rendered in the
ordinary course of business and payable in accordance with customary
trade terms, (b) advances and prepayments to suppliers for goods and
services in the ordinary course of business, (c) stock or other
securities acquired in connection with the satisfaction or enforcement
of Indebtedness or claims due or owing to Company or any of its
Subsidiaries or as security for any such Indebtedness or claims, (d)
Cash held in Deposit Accounts with banks, trust companies and Lenders
and (e) shares in a mutual fund that invests solely in Cash
Equivalents. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"Issuing Lender" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter
of Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal
form; provided that in no event shall any corporate Subsidiary of any
Person be considered to be a Joint Venture to which such Person is a
party.
"Landlord Consent and Estoppel" means, with respect to any
Leasehold Property, a letter, certificate or other instrument in
writing from the lessor under the related lease, in form and substance
acceptable to Administrative Agent in its reasonable discretion.
"Leasehold Property" means any leasehold interest of any Loan
Party as lessee under any lease of real property, other than any such
leasehold interest designated from time to time by Administrative Agent
in its sole discretion as not being required to be included in the
Collateral.
"Lender" and "Lenders" means the persons identified as
"Lenders" and
22
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 10.1, and the
term "Lenders" shall include Swing Line Lender unless the context
otherwise requires; provided that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that
Commitment. To the extent the context so requires, the terms "Lender"
and "Lenders" shall include "Lenders" under and as defined in, the
Existing Credit Agreement.
"Lender Default" means (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Loans
(including any Revolving Loans made to pay Refunded Swing Line Loans or
to reimburse drawings under Letters of Credit) in accordance with
subsection 2.1A or its portion of any unreimbursed drawing or payment
under a Letter of Credit in accordance with subsection 3.3C or (ii) a
Lender having notified Company and/or Administrative Agent in writing
that it does not intend to comply with its obligations under subsection
2.1 or subsections 3.1C, 3.3B or 3.3C, as a result of any takeover of
such Lender by any regulatory authority or agency.
"Lending Office" means, as to any Lender, the office or
offices of such Lender specified as the "Lending Office" on Schedule
2.1, or such other office or offices as such Lender may from time to
time notify Company and Administrative Agent.
"Letter of Credit" or "Letters of Credit" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued
by Issuing Lenders for the account of Company pursuant to subsection
3.1.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or
at any time thereafter may become available for drawing under all
Letters of Credit then outstanding plus (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Lenders and not
theretofore reimbursed by Company (including any such reimbursement out
of the proceeds of Revolving Loans pursuant to subsection 3.3B).
"Leverage Ratio" has the meaning assigned to that term in
subsection 7.6.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, fixed or floating charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any security
interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loan" or "Loans" means, as the context requires, one or more
of the Term Loans, Revolving Loans, and Swing Line Loans or any
combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or
other documents or certificates executed by Company in favor of an
Issuing Lender relating to, the Letters of
23
Credit), the Guaranties, the Collateral Documents and the
Acknowledgement and Consent.
"Loan Parties" means Company, Holdings and each Subsidiary
Guarantor.
"Management Fees" means the fees payable by Holdings or any of
its Subsidiaries pursuant to the Management Services Agreement.
"Management Services Agreement" means that certain Advisory
Services Agreement, dated as of the Closing Date between an Affiliate
of the MDC Entities and Holdings and/or any of its Subsidiaries as in
effect on the Closing Date and as it may heretofore have been or
hereafter may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the provisions of subsection
7.13A.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as
in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Holdings and its Subsidiaries, taken as a
whole, (ii) the material impairment of the ability of any Loan Party to
perform the Obligations and (iii) a material adverse effect upon the
legality, validity, binding effect or enforceability against a Loan
Party of a Loan Document to which it is a party; provided that
consummation of the DIMAC Acquisition in accordance with the terms of
the DIMAC Acquisition Agreement and consummation of the AmeriComm
Acquisition in accordance with the terms of the AmeriComm Acquisition
Agreement shall not be deemed to have a Material Adverse Effect for
purposes of subsection 5.4.
"MDC Entities" means ▇▇▇▇▇▇ De Leeuw & Co. IV, L.P., a
California limited partnership, ▇▇▇▇▇▇ De Leeuw & Co. IV Associates,
L.P., a California limited partnership, and Delta Fund LLC, a
California limited liability company.
"Merger Corp." means DMAC Merger Corp., a Delaware
corporation.
"Mortgage" means (i) a security instrument (whether designated
as a deed of trust or a mortgage or by any similar title) executed and
delivered by any Loan Party, substantially in the form of Exhibit XX
annexed hereto or in such other form as may be approved by
Administrative Agent in its sole discretion, in each case with such
changes thereto as may be recommended by Administrative Agent's local
counsel based on local laws or customary local mortgage or deed of
trust practices, or (ii) at Administrative Agent's option, in the case
of an Additional Mortgaged Property (as defined in subsection 6.12), an
amendment to an existing Mortgage, in form satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the
Real Property Assets encumbered by such existing Mortgage, in either
case as such security instrument or amendment may heretofore have been
or hereafter may be amended, supplemented or otherwise modified from
time to time. "Mortgages" means all such instruments,
24
including the Closing Date Mortgages and any Additional Mortgages (as
defined in subsection 6.12), collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property
or an Additional Mortgaged Property (as defined in subsection 6.12).
"Multiemployer Plan" means a "multiemployer plan", as defined
in Section 4001(a)(3) of ERISA which is subject to Title IV of ERISA,
to which Company or any of its ERISA Affiliates is contributing or to
which Company or any of its ERISA Affiliates has an obligation to
contribute.
"Net Cash Proceeds" means, with respect to any Asset Sale,
Cash Proceeds of such Asset Sale net of bona fide direct costs of sale
including, without limitation, (i) income taxes reasonably estimated to
be actually payable as a result of such Asset Sale within two years of
the date of receipt of such Cash Proceeds, (ii) transfer, sales, use
and other taxes payable in connection with such Asset Sale, (iii)
payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset
Sale, and (iv) financial advisor's commissions and reasonable fees and
expenses of counsel and other advisors in connection with such Asset
Sale.
"New Lender" means any Lender which is a party to this
Agreement on the Effective Date which is not an Existing Lender.
"Non-Defaulting Lender" means and includes each Lender other
than a Defaulting Lender.
"Notes" means one or more of the Term Notes, Revolving Notes
or Swing Line Note or any combination thereof.
"Notice of Borrowing" means a notice in the form of Exhibit I
annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Company to Administrative Agent pursuant to subsection 2.2D with
respect to a proposed conversion or continuation of the applicable
basis for determining the interest rate with respect to the Loans
specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the
form of Exhibit III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or any of them
under the Loan Documents,
25
whether for principal, interest, reimbursement of amounts drawn under
Letters of Credit or payments for early termination of Interest Rate
Agreements, fees, expenses, indemnification or otherwise.
"Officer's Certificate" means, with respect to any Person, a
certificate executed on behalf of such Person (x) if such Person is a
partnership, by its chairman of the Board (if an officer) or chief
executive officer or by the chief financial officer of its general
partner and (y) if such Person is a corporation, on behalf of such
corporation by its chairman of the board (if an officer) or chief
executive officer or its chief financial officer or vice president;
provided that every Officer's Certificate with respect to the
compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officer's Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the signer
or signers, they have made or have caused to be made such examination
or investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signer or
signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the
lessee at any time) of any property (whether real, personal or mixed)
that is not a Capital Lease other than any such lease under which that
Person is the lessor.
"Other Investors" means such Persons other than the MDC
Entities as shall hold equity interests in Holdings on or prior to the
Closing Date.
"Partnership Loan Party" means any Loan Party which is a
limited partnership.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA (or any successor
thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA.
"Permitted Earn Out Agreements" means (i) the agreements
containing the earn out arrangements described on Schedule 1.1 annexed
hereto and (ii) any agreement by Company to pay the seller or sellers
of any Person or assets acquired in accordance with the provisions of
subsection 7.7(vii) at any time following the consummation of such
acquisition by reference to the financial performance of the Person or
assets so acquired.
26
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords, statutory Liens of
carriers, warehousemen, mechanics and materialmen and other
Liens imposed by law (other than any such Lien imposed
pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA) incurred in the ordinary course of
business for sums not yet delinquent or being contested in
good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made
therefor;
(iii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
trade contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the
payment of borrowed money);
(iv) any attachment or judgment Lien not constituting
an Event of Default under subsection 8.8;
(v) leases or subleases granted to others not
interfering in any material respect with the ordinary conduct
of the business of Company or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor
defects, encroachments or irregularities in title and other
similar charges or encumbrances not interfering in any
material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries and encumbrances set forth
on the title reports delivered to Administrative Agent (i) on
or before the Closing Date pursuant to subsection 4.1H(v) of
the Existing Credit Agreement and (ii) on or before the
Effective Date pursuant to subsection 4.1P of this Agreement;
(vii) any (a) interest or title of a lessor or
sublessor under any Capital Lease permitted by subsection
7.1(iv) or any operating lease not prohibited by this
Agreement, (b) restriction or encumbrance that the interest or
title of such lessor or sublessor may be subject to, or (c)
subordination of the interest of the lessee or sublessee under
such lease to any restriction or encumbrance referred to in
the preceding clause (b);
(viii) Liens arising from filing UCC financing
statements relating solely to leases permitted by this
Agreement;
(ix) Liens in favor of customs and revenue
authorities arising as a
27
matter of law to secure payment of customs duties in
connection with the importation of goods;
(x) deposits in the ordinary course of business to
secure liabilities to insurance carriers, lessors, utilities
and other service providers; and
(xi) bankers liens and rights of setoff with respect
to customary depository arrangements entered into in the
ordinary course of business.
"Permitted Seller Paper" means any Indebtedness of Company or
Holdings incurred in connection with any acquisition consummated in
accordance with the provisions of subsection 7.7(vii) and payable to
the seller in connection therewith, evidenced by a promissory note
substantially in the form of Exhibit XIX hereto.
"Person" means and includes natural persons, corporations,
limited partnerships, limited liability companies, general
partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts
or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"Phase II Term B Loans" means a portion of the Term B Loans,
in an aggregate principal amount not exceeding $10,000,000, that may be
borrowed by Company on the Effective Date.
"Phase II Term C Loans" means a portion of the Term C Loans,
in an aggregate principal amount not exceeding $35,000,000, that may be
borrowed by Company on the Effective Date.
"Phase II Term Loans" means the Phase II Term B Loans and the
Phase II Term C Loans, collectively.
"Pledge Agreement" means that certain Pledge Agreement entered
into by and among Holdings, Company, Subsidiary Guarantors and
Administrative Agent on and as of the Closing Date, or pursuant to
subsection 6.9, substantially in the form of Exhibit XI annexed hereto
as such Pledge Agreement may heretofore have been or hereafter may be
amended, restated, supplemented or otherwise modified from time to
time.
"Potential Event of Default" means a condition or event that,
after notice or after any applicable grace period has lapsed, or both,
would constitute an Event of Default.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by CSFB as its prime commercial lending
rate in effect at its principal office in New York City. The Prime Rate
is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. CSFB or any other Lender
may make commercial loans or other loans at rates of interest at, above
or below the Prime
28
Rate.
"Pro Forma Basis" means, with respect to compliance with any
test or covenant hereunder, compliance with such covenant or test after
giving effect to any proposed acquisition or other action which
requires compliance on a pro forma basis (including pro forma
adjustments arising out of events which are directly attributable to a
specific transaction, are factually supportable and are expected to
have a continuing impact, in each case determined on a basis consistent
with Article 11 of Regulation S-X of the Securities Act and as
interpreted by the staff of the Securities and Exchange Commission
prior to December 1996 which would include cost savings resulting from
head count reductions, closure of facilities and similar restructuring
charges, which pro forma adjustments shall be certified by the chief
financial officer of Company), using, for purposes of determining such
compliance, the historical financial statements of all entities or
assets so acquired or to be acquired and the consolidated financial
statements of Company and its Subsidiaries which shall be reformulated
as if such acquisition or other action, and any acquisitions which have
been consummated during the period, and any Indebtedness or other
liabilities incurred in connection with any such acquisition had been
consummated at the beginning of such period and assuming that such
Indebtedness bears interest during any portion of the applicable
measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans during
such period, and otherwise in conformity with certain procedures to be
agreed upon between Administrative Agent and Company.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term A Loan Commitment
or the Term A Loan of any Lender, the percentage obtained by dividing
(x) the Term A Loan Exposure of that Lender by (y) the aggregate Term A
Loan Exposure of all Lenders; (ii) with respect to all payments,
computations and other matters relating to the Term B Loan Commitment
or the Term B Loan of any Lender, the percentage obtained by dividing
(x) the Term B Loan Exposure of that Lender by (y) the aggregate Term B
Loan Exposure of all Lenders; (iii) with respect to all payments,
computations and other matters relating to the Term C Loan Commitment
or the Term C Loan of any Lender, the percentage obtained by dividing
(x) the Term C Loan Exposure of that Lender by (y) the aggregate Term C
Loan Exposure of all Lenders; (iv) with respect to all payments,
computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of
Credit issued by any Lender or any participations purchased by any
Lender therein or in any Swing Line Loans, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the
aggregate Revolving Loan Exposure of all Lenders; and (v) for all other
purposes with respect to each Lender, the percentage obtained by
dividing (x) the sum of the Term Loan Exposure of that Lender
and the Revolving Loan Exposure of that Lender by (y) the sum of the
aggregate Term Loan Exposure of all Lenders and the aggregate Revolving
Loan Exposure of all Lenders; in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to
subsection 10.1. The Pro Rata Share of each Lender as of the Effective
Date for purposes of each of clauses (i), (ii), (iii) and (iv) of the
preceding sentence and Section 2.1F hereof is set forth opposite the
name of that Lender in
29
Schedule 2.1 annexed hereto.
"Projections" has the meaning assigned to that term in
subsection 5.3B.
"Purchasing Lender" has the meaning assigned to that term in
subsection 2.1F.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Administrative
Agent's reasonable judgment, to give constructive notice of such
Leasehold Property to third-party purchasers and encumbrancers of the
affected real property. For purposes of this definition, the term
"Record Document" means, with respect to any Leasehold Property, (a)
the lease evidencing such Leasehold Property or a memorandum thereof,
executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased
from the holder of a Recorded Leasehold Interest, the applicable
assignment or sublease document, executed and acknowledged by such
holder, in each case in form sufficient to give such constructive
notice upon recordation and otherwise in form reasonably satisfactory
to Administrative Agent.
"Reference Lenders" means (i) CSFB, (ii) UBS or (iii) First
Union, or, in lieu thereof, another Lender from time to time determined
by Administrative Agent with the consent of Company.
"Refunded Swing Line Loans" has the meaning assigned to that
term in subsection 2.1A(iv).
"Register" has the meaning assigned to that term in subsection
2.1D.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the DIMAC
Acquisition Agreement, the AmeriComm Acquisition Agreement, the
Stockholders Agreement, the Certificate of Merger, the Debt Tender
Offer Materials, the Management Services Agreement, the Senior
Subordinated Note Indenture, the Senior Subordinated Notes, the
Holdings Note Purchase Agreement, the Holdings Note Indenture, the
Holdings Notes, the Holdings PIK Notes and any document pursuant to
which Subordinated Indebtedness is issued or otherwise incurred after
the date of this Agreement and any other documents relating to any of
the foregoing.
30
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Materials into
the indoor or outdoor environment (including, without limitation, the
abandonment or disposal of any barrels, containers or other closed
receptacles containing any Hazardous Materials), or into or out of any
Facility, including the movement of any Hazardous Material through the
air, soil, surface water, groundwater or property.
"Required Prepayment Date" has the meaning assigned to that
term in subsection 2.4C(iii).
"Requisite Class Lenders" means, at any time of determination
(i) for the Class of Lenders having Term A Loan Exposure,
Non-Defaulting Lenders having or holding more than 50% of the sum of
the aggregate Term A Loan Exposure of all Non-Defaulting Lenders, (ii)
for the Class of Lenders having Term B Loan Exposure, Non-Defaulting
Lenders having or holding more than 50% of the aggregate Term B Loan
Exposure of all Non-Defaulting Lenders, (iii) for the Class of Lenders
having Term C Loan Exposure, Non-Defaulting Lenders having or holding
more than 50% of the aggregate Term C Loan Exposure of all
Non-Defaulting Lenders, and (iv) for the Class of Lenders having
Revolving Loan Exposure, Non-Defaulting Lenders having or holding more
than 50% of the aggregate Revolving Loan Exposure of all Non-Defaulting
Lenders.
"Requisite Lenders" means Non-Defaulting Lenders having or
holding more than 50% of the sum of the aggregate Term Loan Exposure of
all Non-Defaulting Lenders and the aggregate Revolving Loan Exposure of
all Non-Defaulting Lenders.
"Reserve Adjusted Eurodollar Rate" means, with respect to each
day during each Interest Period pertaining to a Eurodollar Rate Loan, a
rate per annum determined for such day in accordance with the following
formula:
Eurodollar Base Rate
--------------------------------
1.00 - Eurocurrency Reserve Requirements
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock of Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of stock of Company now or hereafter
outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of stock of Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking fund
or similar payment with respect to, any Subordinated Indebtedness.
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"Revolving Loan Commitment" means the commitment of a Lender
to make or maintain Revolving Loans to Company pursuant to subsection
2.1A(iii) and "Revolving Loan Commitments" means such commitments of
all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means June 30,
2004.
"Revolving Loan Exposure" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Lender's Revolving Loan Commitment and
(ii) after the termination of the Revolving Loan Commitments, the sum
of (a) the aggregate outstanding principal amount of the Revolving
Loans of that Lender plus (b) in the event that Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (net of any participations purchased by
other Lenders in such Letters of Credit) plus (c) the aggregate amount
of all participations purchased by that Lender in any outstanding
Letters of Credit or any unreimbursed drawings under any Letters of
Credit plus (d) the aggregate amount of all participations purchased by
that Lender in any outstanding Swing Line Loans plus (e) in the case of
Swing Line Lender, the sum of the aggregate outstanding principal
amount of all Swing Line Loans (in each case net of any participations
therein purchased by other Lenders).
"Revolving Loans" means the Loans made or maintained by
Lenders to Company pursuant to subsection 2.1A(iii).
"Revolving Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Effective Date, amending and
restating the Revolving Notes issued under the Existing Credit
Agreement, and (ii) any promissory notes issued by Company pursuant to
the last sentence of subsection 10.1B(i) in connection with assignments
of the Revolving Loan Commitment and Revolving Loans of any Lender, in
each case substantially in the form of Exhibit VII annexed hereto, as
they may be amended, restated, supplemented or otherwise modified from
time to time.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in
any profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Security Agreement" means the Security Agreement entered into
by and among Company, the Subsidiary Guarantors and Administrative
Agent on and as of the Closing Date, or pursuant to subsection 6.9,
substantially in the form of Exhibit XII annexed hereto, as such
Security Agreement may heretofore have been or hereafter may be
amended, restated, supplemented or otherwise modified from time to
time.
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"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Selling Lender" has the meaning assigned to that term in
subsection 2.1F.
"Senior Subordinated Notes" means Company's $100,000,000 in
original aggregate principal amount of 12 1/2% Senior Subordinated
Notes due 2008, issued pursuant to the Senior Subordinated Note
Indenture.
"Senior Subordinated Note Indenture" means that certain
Indenture dated as of October 22, 1998 pursuant to which the Senior
Subordinated Notes were issued by Company, as such Indenture has been
amended since the Effective Date and as such Indenture may have been
further amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.13A or 7.13B.
"Solvent" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the
property of such Person is (y) greater than the total amount of
liabilities (including contingent liabilities but excluding amounts
payable under intercompany promissory notes) of such Person and (z) not
less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become
absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (b) such
Person's capital is not unreasonably small in relation to its business
or any contemplated or undertaken transaction; and (c) such Person does
not intend to incur, or believe (nor should it reasonably believe) that
it will incur, debts beyond its ability to pay such debts as they
become due; and (ii) such Person is "solvent" within the meaning given
that term and similar terms under applicable laws relating to
fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Company or any of its Subsidiaries, (ii)
the obligations of third party insurers of Company or any of its
Subsidiaries arising by virtue of the laws of any jurisdiction
requiring third party insurers, (iii) performance, payment, deposit or
surety obligations of Company or any of its Subsidiaries, in any case
if required by law or governmental rule or regulation or in accordance
with custom and practice in the industry, and (iv) such other
obligations of Company and its Subsidiaries as may be reasonably
acceptable to Administrative Agent; provided that Standby Letters of
Credit may not be issued for the purpose of supporting (a) trade
payables or (b) Indebtedness constituting "antecedent debt" (as that
term is used in Section 547 of the Bankruptcy Code).
"Stockholders Agreement" means that certain Stockholders
Agreement to be entered into by and among certain shareholders of
Holdings, which Stockholders
33
Agreement shall be in form and substance reasonably satisfactory to
Agents, as such Stockholders Agreement may heretofore have been or
hereafter may be amended, restated, supplemented or otherwise modified
from time to time in accordance with the provisions of subsection
7.13A.
"Subordinated Indebtedness" means (i) Permitted Seller Paper,
(ii) Senior Subordinated Notes and (iii) other Indebtedness of Holdings
or any of its Subsidiaries subordinated in right of payment to the
Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory
to Administrative Agent and Requisite Lenders.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business
entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause the
direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
"Subsidiary Guarantor" means any Subsidiary of Company that is
a party to the Subsidiary Guaranty on the Closing Date or at any time
after the Closing Date pursuant to subsection 6.9 or subsection 6.9 of
the Existing Credit Agreement.
"Subsidiary Guaranty" means the Subsidiary Guaranty,
substantially in the form of Exhibit IX annexed hereto, executed and
delivered by the existing Subsidiary Guarantors on and as of the
Closing Date or by any additional Subsidiary Guarantor from time to
time thereafter pursuant to subsection 6.9 or Subsection 6.9 of the
Existing Credit Agreement, as such Subsidiary Guaranty may heretofore
have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time.
"Swing Line Lender" means CSFB, or any Person serving as a
successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing
Line Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iv).
"Swing Line Loans" means (i) for the period prior to the
Effective Date the Loans made by Swing Line Lender pursuant to
subsection 2.1A(iv) of the Existing Credit Agreement and (ii) for all
periods on and after the Effective Date, any Loans referred to in
clause (i) which remain outstanding and the Loans made by Swing Line
lender pursuant to subsection 2.1A(iv) of this Agreement.
"Swing Line Note" means (i) the promissory note of Company
issued pursuant to subsection 2.1E on the Effective Date, amending and
restating the Swing Line Note
34
issued under the Existing Credit Agreement and (ii) any promissory note
issued by Company to any successor Swing Line Lender pursuant to the
last sentence of subsection 9.5B, in each case substantially in the
form of Exhibit VIII annexed hereto, as it may be amended, restated,
supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in
the Introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature and
whatever called, by whomsoever, on whomsoever and wherever imposed,
levied, collected, withheld or assessed; provided that "Tax on the
overall net income" of a Person shall be construed as a reference to a
tax imposed by the jurisdiction in which that Person's principal office
(and/or, in the case of a Lender, its relevant Lending Office) is
located or in which that Person is deemed to be doing business on all
or part of the net income, profits or gains of that Person (whether
worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"Term A Loan Commitment" means the commitment of a Lender to
maintain a Term A Loan to Company pursuant to subsection 2.1A(i)(a) of
this Agreement, and "Term A Loan Commitments" means such commitments of
all Lenders in the aggregate.
"Term A Loan Exposure" means, with respect to any Lender, as
of any date of determination, the outstanding principal amount of the
Term A Loan of that Lender.
"Term A Loans" means the Existing Term A Loans maintained
pursuant to subsection 2.1A(i)(a) of this Agreement.
"Term A Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Effective Date, amending and
restating the Term A Notes issued under the Existing Credit Agreement
and (ii) any promissory notes issued by Company pursuant to the last
sentence of subsection 10.1B(i) of this Agreement in connection with
assignments of the Term A Loans of any Lender, in each case
substantially in the form of Exhibit IV annexed hereto, as they may be
amended, restated, supplemented or otherwise modified from time to
time.
"Term B Loan Commitment" means the commitment of a Lender to
maintain a Term B Loan to Company pursuant to subsection 2.1A(i)(b) of
this Agreement and the commitment of a Lender to make a Phase II Term B
Loan to Company pursuant to subsection 2.1A(ii)(a) of this Agreement,
and "Term B Loan Commitments" means such commitments of all Lenders in
the aggregate.
"Term B Loan Exposure" means, with respect to any Lender as of
any date of determination the outstanding principal amount of the Term
B Loan of that Lender, after giving effect to the Phase II Term B Loan
of such Lender.
35
"Term B Loans" means (i) the Existing Term B Loans maintained
pursuant to subsection 2.1A(i)(b) of this Agreement and (ii) the Phase
II Term B Loans made by Lenders to Company pursuant to subsection
2.1A(ii)(a) of this Agreement.
"Term B Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Effective Date, amending and
restating the Term B Notes issued under the Existing Credit Agreement
and (ii) any promissory note issued by Company pursuant to the last
sentence of subsection 10.1B(i) of this Agreement in connection with
assignments of the Term B Loans of any Lender, in each case
substantially in the form of Exhibit V annexed hereto, as they may be
amended, restated, supplemented or otherwise modified from time to
time.
"Term C Loan Commitment" means the commitment of a Lender (i)
to maintain a Term C Loan to Company pursuant to subsection 2.1A(i)(c)
of this Agreement and (ii) to make a Phase II Term C Loan to Company
pursuant to subsection 2.1A(ii)(b) of this Agreement, and "Term C Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Term C Loan Exposure" means, with respect to any Lender as of
any date of determination, the outstanding principal amount of the Term
C Loan of that Lender, after giving effect to the Phase II Term C Loan
of such Lender.
"Term C Loans" means (i) the Existing Term C Loans maintained
pursuant to subsection 2.1A(i)(c) of this Agreement, and (ii) the Phase
II Term C Loans made by Lenders to Company pursuant to 2.1A(ii)(b) of
this Agreement.
"Term C Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E on the Effective Date, amending and
restating the Term C Notes issued under the Existing Credit Agreement
and (ii) any promissory note issued by Company pursuant to the last
sentence of subsection 10.1B(i) of this Agreement in connection with
assignments of the Term C Loans of any Lender, in each case
substantially in the form of Exhibit VI annexed hereto, as they may be
amended, restated, supplemented or otherwise modified from time to
time.
"Term Loan Commitment" means the Term A Loan Commitment, the
Term B Loan Commitment or the Term C Loan Commitment of a Lender, and
"Term Loan Commitments" means such commitments of all Lenders in the
aggregate.
"Term Loan Exposure" means, with respect to any Lender as of
any date of determination, the aggregate Term A Loan Exposure, Term B
Loan Exposure and Term C Loan Exposure of that Lender.
"Term Loans" means the Term A Loans, the Term B Loans and the
Term C Loans.
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"Term Notes" means the Term A Notes, the Term B Notes and the
Term C Notes.
"Title Company" means, collectively, one or more title
insurance companies reasonably satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Revolving Loans (other than Revolving Loans
made for the purpose of repaying any Refunded Swing Line Loans or
reimbursing the applicable Issuing Lender for any amount drawn under
any Letter of Credit but not yet so applied) plus (ii) the aggregate
principal amount of all outstanding Swing Line Loans plus (iii) the
Letter of Credit Usage.
"Transaction Costs" means the fees, costs and expenses (other
than amounts payable to Administrative Agent and Lenders) payable by
Holdings and its Subsidiaries on or before the Closing Date in
connection with the transactions contemplated hereby and by the DIMAC
Acquisition Agreement and the AmeriComm Acquisition Agreement.
"UBS" means UBS AG, Stamford Branch.
"Unfunded Current Liability" means, with respect to any
Pension Plan, the amount, if any, by which the actuarial present value
of the accumulated plan benefits under such Pension Plan as of the
close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement
of Financial Accounting Standards No. 87, based upon the actuarial
assumptions used by such Pension Plan's actuary in the most recent
annual valuation of such Pension Plan.
"Waivable Mandatory Prepayment" has the meaning assigned to
that term in subsection 2.4C(iii).
"WDR" means Warburg Dillon Read LLC.
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"Year 2000 Problems" means limitations in the capacity or
readiness to handle date information for the Year 1999 or years
beginning January 1, 2000 of any of the hardware, firmware or software
systems ("Systems") associated with information processing and
delivery, operations or services (e.g., security and alarms, elevators,
communications, and HVAC) operated by, provided to or otherwise
reasonably necessary to the business or operations of Holdings and its
Subsidiaries.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP
(except, with respect to interim financial statements, normal year-end audit
adjustments and the absence of explanatory footnotes) as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 6.1(v)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements of the Subsidiaries of Holdings referred to in subsection
5.3A.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes," "including" and similar forms used in any Loan
Document shall be construed as if followed by the words "without limitation."
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
A. Commitments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Loan Parties set
forth herein and in the other Loan Documents, each Lender hereby severally
agrees to make (or maintain, as the case may be) the Loans described in
subsections 2.1A(i), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby agrees
to make the Swing Line Loans as described in subsection 2.1A(iv).
Company acknowledges and agrees that there are Existing Revolving
Loans, Existing Term A Loans, Existing Term B Loans and Existing Term C Loans in
the respective principal amounts set forth on Schedule 2.1. Company hereby
represents, warrants, agrees, covenants and (1) reaffirms that it has no (and it
permanently and irrevocably waives and releases Agents and
38
Lenders from any, to the extent arising on or prior to the Effective Date)
defense, set off, claim or counterclaim against any Agent or Lender in regard to
its Obligations in respect of such Existing Loans and (2) reaffirms its
obligations to pay such Existing Loans, and any amounts owed (whether or not
presently due and payable, and including all interest accrued to the Effective
Date) in accordance with the terms and condition of this Agreement and the other
Loan Documents.
(i) Term Loans. Each Lender severally agrees:
(a) to maintain and continue as Term A Loans
hereunder its Pro Rata Share of the principal amount of the
Existing Term A Loans, after giving effect to subsection 2.1F.
The aggregate amount of the Existing Term A Loans is
$55,000,000 and the amount of each Lender's Term A Loan on the
Effective Date is set forth opposite its name on Schedule 2.1
annexed hereto. Amounts repaid or prepaid in respect of Term A
Loans may not be reborrowed.
(b) to maintain and continue as Term B Loans
hereunder its Pro Rata Share of the principal amount of the
Existing Term B Loans, after giving effect to subsection 2.1F.
The aggregate amount of the Existing Term B Loans is
$70,000,000 and the amount of each Lender's Existing Term B
Loan that shall be maintained and continued as a Term B Loan
is set forth opposite its name on Schedule 2.1 annexed hereto.
Amounts repaid or prepaid in respect of Term B Loans may not
be reborrowed.
(c) to maintain and continue as Term C Loans
hereunder its Pro Rata Share of the principal amount of the
Existing Term C Loans, after giving effect to subsection 2.1F.
The aggregate amount of the Existing Term C Loans is
$25,000,000 and the amount of each Lender's Existing Term C
Loan that shall be maintained and continued as a Term C Loan
is set forth opposite its name on Schedule 2.1 annexed hereto.
Amounts repaid or prepaid in respect of Term C Loans may not
be reborrowed.
(ii) Phase II Term Loans.
(a) Each Lender severally agrees to lend to Company
on the Effective Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the unfunded Term B
Loan Commitments, in each case to be used for the purposes
identified in subsection 2.5B. The amount of each Lender's
unfunded Term B Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the
unfunded Term B Loan Commitments is $10,000,000. Each Lender's
unfunded Term B Loan Commitment in respect of the Phase II
Term B Loans shall expire immediately and without further
action on the Effective Date in the event the Phase II Term
B Loans are not made on that date. Amounts borrowed under this
subsection 2.1A(ii)(a) and subsequently repaid or prepaid may
not be reborrowed.
39
(b) Each Lender severally agrees to lend to Company
on the Effective Date an aggregate amount not exceeding its
Pro Rata Share of the aggregate amount of the unfunded Term C
Loan Commitments, in each case to be used for the purposes
identified in subsection 2.5B. The amount of each Lender's
unfunded Term C Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the
unfunded Term C Loan Commitments is $35,000,000. Each Lender's
unfunded Term C Loan Commitment in respect of the Phase II
Term C Loans shall expire immediately and without further
action on the Effective Date in the event the Phase II Term C
Loans are not made on that date. Amounts borrowed under this
subsection 2.1A(ii)(b) and subsequently repaid or prepaid may
not be reborrowed.
(iii) Revolving Loans. Each Lender severally agrees, subject
to the limitations set forth below with respect to the maximum amount
of Revolving Loans permitted to be outstanding from time to time, to
(a) maintain and continue as Revolving Loans hereunder its Pro Rata
Share of the principal amount of Existing Revolving Loans, after giving
effect to subsection 2.1F and (b) to lend to Company from time to time
during the period from the Effective Date to but excluding the
Revolving Loan Commitment Termination Date an aggregate amount
(including the amount of Revolving Loans, if any, maintained by the
applicable Lender pursuant to clause (a)) not exceeding its Pro Rata
Share of the aggregate amount of the Revolving Loan Commitments, to be
used for the purposes identified in subsection 2.5B. The amount of each
Lender's Revolving Loan Commitment on the Effective Date is set forth
opposite its name on Schedule 2.1 annexed hereto and the aggregate
amount of the Revolving Loan Commitments is $75,000,000; provided that
the Revolving Loan Commitments of Lenders shall be adjusted to give
effect to any assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B; provided further that the amount of the Revolving
Loan Commitments shall be reduced from time to time by the amount of
any reductions thereto made pursuant to subsections 2.4A(iv) and 2.4B.
Each Lender's Revolving Loan Commitment shall expire on the Revolving
Loan Commitment Termination Date and all Revolving Loans and all other
amounts owed hereunder with respect to the Revolving Loans and the
Revolving Loan Commitments shall be paid in full no later than that
date. Amounts borrowed under this subsection 2.1A(iii) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Notwithstanding anything contained herein to the contrary, in
no event shall the Total Utilization of Revolving Loan Commitments at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Swing Line Loans. Swing Line Lender hereby agrees,
subject to the limitations set forth below with respect to the maximum
aggregate amount of all Swing Line Loans outstanding from time to time,
to (a) maintain and continue as Swing Line Loans hereunder its "Swing
Line Loans" (as defined in the Existing Credit Agreement) which are
outstanding on the Effective Date and (b) make a portion of the
Revolving Loan Commitments available to Company from time to time
during the period from the Effective Date to but excluding the
Revolving Loan Commitment Termination Date by
40
making Base Rate Loans as Swing Line Loans to Company in an aggregate
amount not to exceed the amount of the Swing Line Loan Commitment, to
be used for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with the sum of
Swing Line Lender's outstanding Revolving Loans and Swing Line Lender's
Pro Rata Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender's Revolving Loan Commitment. The amount of the Swing
Line Loan Commitment on the Effective Date is $5,000,000; provided that
the amounts of the Swing Line Loan Commitment are subject to reduction
as provided in clause (b) of the next paragraph. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment Termination
Date and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than
that date. Amounts borrowed under this subsection 2.1A(iv) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Notwithstanding anything contained herein to the contrary, the
Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the following limitations:
(a) in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect;
(b) any reduction of the Revolving Loan Commitments
made pursuant to subsection 2.4B which reduces the aggregate
Revolving Loan Commitments to an amount less than the then
current sum of the Swing Line Loan Commitment shall result in
an automatic corresponding pro rata reduction of the Swing
Line Loan Commitment such that the sum thereof equals the
amount of the Revolving Loan Commitments, as so reduced,
without any further action on the part of Company,
Administrative Agent or Swing Line Lender; and
(c) Swing Line Lender shall have no obligation to
make any Swing Line Loans during any period when a Lender
Default exists, unless each Swing Line Lender has entered into
arrangements satisfactory to it and Company to eliminate Swing
Line Lender's risk with respect to the Defaulting Lender,
including by cash collateralizing such Defaulting Lender's Pro
Rata Share of the Revolving Loans that may be required to be
made to refund the applicable Swing Line Loan as contemplated
by the immediately following paragraph.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing
Line Lender may, at any time in its sole and absolute discretion,
deliver to Administrative Agent (with a copy to Company), no later than
12:00 Noon (New York time) at least one Business Day in advance of the
proposed Funding Date, a notice (which shall be deemed to be a Notice
of Borrowing given by Company) requesting Lenders to make Revolving
Loans that are Base Rate Loans to Company on such Funding Date in an
amount equal to the amount of such Swing Line Loans (the "Refunded
Swing Line Loans") outstanding on the date such notice is given which
Swing Line Lender requests Lenders to prepay. Anything
41
contained in this Agreement to the contrary notwithstanding, (i) the
proceeds of such Revolving Loans made by Lenders other than Swing Line
Lender shall be immediately delivered by Administrative Agent to Swing
Line Lender (and not to Company) and applied to repay a corresponding
portion of the Refunded Swing Line Loans and (ii) on the day such
Revolving Loans are made, Swing Line Lender's Pro Rata Share of the
Refunded Swing Line Loans shall be deemed to be paid with the proceeds
of a Revolving Loan made by Swing Line Lender to Company, and such
portion of the Swing Line Loans deemed to be so paid shall no longer be
outstanding as Swing Line Loans and shall no longer be due under the
Swing Line Note of Swing Line Lender but shall instead constitute part
of Swing Line Lender's outstanding Revolving Loans to Company and shall
be due under the Revolving Note issued by Company to Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line
Lender (up to the amount available in each such account) in order to
immediately pay Swing Line Lender the amount of the Refunded Swing Line
Loans to the extent the proceeds of such Revolving Loans made by
Lenders, including the Revolving Loan deemed to be made by Swing Line
Lender, are not sufficient to repay in full the Refunded Swing Line
Loans. If any portion of any such amount paid (or deemed to be paid) to
Swing Line Lender should be recovered by or on behalf of Company from
Swing Line Lender in bankruptcy, by assignment for the benefit of
creditors or otherwise, the loss of the amount so recovered shall be
ratably shared among all Lenders in the manner contemplated by
subsection 10.5.
If for any reason Revolving Loans are not made pursuant to
this subsection 2.1A(iv) in an amount sufficient to repay any amounts
owed to Swing Line Lender in respect of any outstanding Swing Line
Loans on or before the third Business Day after demand for payment
thereof by Swing Line Lender, each Lender shall be deemed to, and
hereby agrees to, have purchased a participation in such outstanding
Swing Line Loans, and in an amount equal to its Pro Rata Share of the
applicable unpaid amount together with accrued interest thereon. Upon
one Business Day's notice from Swing Line Lender, each Lender shall
deliver to Swing Line Lender an amount equal to its respective
participation in the applicable unpaid amount in same day funds at the
office of Swing Line Lender located at the Funding and Payment Office.
In order to evidence such participation each Lender agrees to enter
into a participation agreement at the request of Swing Line Lender in
form and substance satisfactory to Swing Line Lender. In the event any
Lender fails to make available to Swing Line Lender the amount of such
Lender's participation as provided in this paragraph, Swing Line Lender
shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the rate customarily used by Swing
Line Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary, (i)
each Lender's obligation to make Revolving Loans for the purpose of
repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Lender's obligation to purchase a participation in
any unpaid Swing Line Loans pursuant to the immediately preceding
paragraph shall be absolute and unconditional and shall not be affected
by any
42
circumstance, including without limitation (a) any set-off,
counterclaim, recoupment, defense or other right which such Lender may
have against Swing Line Lender, Company or any other Person for any
reason whatsoever; (b) the occurrence or continuation of an Event of
Default or a Potential Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided that such
obligations of each Lender are subject to the condition that Swing Line
Lender believed in good faith that all conditions under Section 4 to
the making of the applicable Refunded Swing Line Loans or other unpaid
Swing Line Loans, were satisfied at the time such Refunded Swing Line
Loans or unpaid Swing Line Loans were made, or the satisfaction of any
such condition not satisfied had been waived by Requisite Lenders prior
to or at the time such Refunded Swing Line Loans or other unpaid Swing
Line Loans were made; and (ii) Swing Line Lender shall not be obligated
to make any Swing Line Loans if it has elected not to do so after the
occurrence and during the continuation of a Potential Event of Default
or Event of Default.
B. Borrowing Mechanics. Term Loans or Revolving Loans (including any
such Loans made as Eurodollar Rate Loans with a particular Interest Period) made
on any Funding Date (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iv) for the purpose of repaying
any Refunded Swing Line Loans and Revolving Loans made pursuant to subsection
3.3B for the purpose of reimbursing any Issuing Lender for the amount of a
drawing or payment under a Letter of Credit issued by it) shall be in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 in
excess of that amount; provided that any Eurodollar Rate Loan shall be in a
minimum amount of $2,000,000 and integral multiples of $500,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $100,000 and integral multiples of $50,000 in excess of that
amount. Whenever Company desires that Lenders make Term Loans or Revolving Loans
it shall deliver to Administrative Agent a Notice of Borrowing no later than
12:00 Noon (New York time), at least three Business Days in advance of the
proposed Funding Date in the case of a Eurodollar Rate Loan, or at least one
Business Day in advance of the proposed Funding Date in the case of a Base Rate
Loan. Whenever Company desires that Swing Line Lender make a Swing Line Loan, it
shall deliver to Administrative Agent a Notice of Borrowing no later than 12:00
Noon (New York time) on the proposed Funding Date. The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount and type of Loans requested, (iii) in the case of Swing Line Loans and
Loans made on the Closing Date, that such Loans shall be Base Rate Loans, (iv)
in the case of any Loans other than Swing Line Loans, whether such Loans shall
be Base Rate Loans or Eurodollar Rate Loans, and (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor. Term Loans and Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided
in subsection 2.2D. In lieu of delivering the above-described Notice of
Borrowing, Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection 2.1B; provided
that such notice shall be promptly confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable
43
Funding Date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of any
Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing are no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. Disbursement of Funds. All Term Loans and all Revolving Loans under
this Agreement shall be made by Lenders simultaneously and proportionately to
their respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender or Swing Line
Lender, as the case may be, of the proposed borrowing and of the amount of such
Lender's Pro Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 12:00 Noon (New York time) on the applicable
Funding Date, and Swing Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 2:00 P.M. (New York time) on
the applicable Funding Date, in each case in same day funds, at the Funding and
Payment Office. Except as provided in subsection 2.1A(iv) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line Loans or to
reimburse any Issuing Lender for the amount of an honored drawing or payment
under a Letter of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of Loans made on
the Effective Date) and 4.2 (in the case of all Loans), Administrative Agent
shall make the proceeds of such Loans available to Company on the applicable
Funding Date by causing an amount of same day funds equal to the proceeds of all
such Loans received by Administrative Agent from Lenders or Swing Line Lender,
as the case may be, to be credited to the account of Company at the Funding and
Payment Office.
44
Unless Administrative Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Funding Date, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent, together with interest thereon for each day from such
Funding Date until the date such amount is paid to Administrative Agent at the
rate applicable to such Loan. Nothing in this subsection 2.1C shall be deemed to
relieve any Lender from its obligation to fulfill its Commitments hereunder or
to prejudice any rights that Company may have against any Lender as a result of
any default by such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address
referred to in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "Register"). The Register shall be
available for inspection by Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(ii) Administrative Agent shall record in the Register the
Commitments and the outstanding Loans from time to time of each Lender
and each repayment or prepayment in respect of the principal amount of
the outstanding Loans of each Lender. Any such recordation shall be
conclusive and binding on Company and each Lender, absent manifest
error; provided that failure to make any such recordation, or any error
in such recordation, shall not affect Company's Obligations in respect
of the applicable Loans.
(iii) Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender) the
amount of each Loan made by it and each payment in respect thereof. Any
such recordation shall be conclusive and binding on Company, absent
manifest error; provided that failure to make any such recordation, or
any error in such recordation, shall not affect Company's Obligations
in respect of the applicable Loans; and provided, further that in the
event of any inconsistency between the Register and any Lender's
records, the recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding
45
Commitments and Loans listed therein for all purposes hereof, and no
assignment or transfer of any Commitment or Loan shall be effective, in
each case unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the
Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register
as a Lender shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Commitments or Loans.
(v) Company hereby designates CSFB and any financial
institution serving as a successor Administrative Agent to serve as
Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees that, to
the extent CSFB serves in such capacity, CSFB and its officers,
directors, employees, agents and affiliates shall constitute
Indemnitees for all purposes under subsection 10.3.
E. Notes. Company shall execute and deliver on the Effective Date (i)
to each Lender (or to Administrative Agent for that Lender) (a) a Term A Note
substantially in the form of Exhibit IV annexed hereto, to evidence that
Lender's Term A Loan, in the principal amount of that Lender's Term A Loan and
with other appropriate insertions, (b) a Term B Note substantially in the form
of Exhibit V annexed hereto, to evidence that Lender's Term Loan, in the
principal amount of that Lender's Term B Loan and with other appropriate
insertions, (c) a Term C Note substantially in the form of Exhibit VI annexed
hereto, to evidence that Lender's Term C Loan, in the principal amount of that
Lender's Term C Loan and with other appropriate insertions, and (d) a Revolving
Note substantially in the form of Exhibit VII annexed hereto to evidence that
Lender's Revolving Loans, in the principal amount of that Lender's Revolving
Loan Commitment and with other appropriate insertions, and (ii) to Swing Line
Lender, a Swing Line Note substantially in the form of Exhibit VIII annexed
hereto to evidence Swing Line Lender's Swing Line Loans, in the principal amount
of the Swing Line Loan Commitment and with other appropriate insertions, in each
case with appropriate insertions to effect such Lender's outstanding Term Loans
and Revolving Loans after giving effect to the continuation of the Term Loans
and Revolving Loans pursuant to this Agreement. As promptly after the Effective
Date as practicable, each Existing Lender shall surrender to Company any Term A
Notes, Term B Notes, Term C Notes, Revolving Notes and/or Swing Line Note issued
to such Existing Lender pursuant to the Existing Credit Agreement. The Notes and
the Obligations evidenced thereby shall be governed by, subject to and benefit
from all of the terms and conditions of this Agreement and the other Loan
Documents and shall be guarantied and/or secured by the Collateral as provided
in the Loan Documents.
46
F. Reallocation of Pro Rata Shares. On the Effective Date, each New
Lender and each Existing Lender that will have a greater Pro Rata Share of the
Existing Loans upon the Effective Date, after giving effect to this Agreement,
than its Pro Rata Share (under and as defined in the Existing Credit Agreement)
of the Existing Loans immediately prior to the Effective Date (each a
"Purchasing Lender"), without executing an Assignment Agreement, shall be deemed
to have automatically purchased assignments pro rata from each Lender that will
have a smaller Pro Rata Share of the Existing Loans upon the Effective Date than
its Pro Rata Share (under and as defined in the Existing Credit Agreement) of
the Existing Loans immediately prior to the Effective Date (each a "Selling
Lender") in all such Selling Lender's rights and obligations under this
Agreement and the other Loan Documents, including with respect to the Revolving
Loan Commitments, the commitments of Lenders to purchase participations in the
Letters of Credit and Existing Revolving Loans, and with respect to the Term
Loan Commitments, the unfunded Term Loan Commitments and the Existing Term
Loans, (collectively, except as set forth below, the "Assigned Rights and
Obligations"), so that after giving effect to such assignments, each Lender
shall have its respective Pro Rata Share as set forth in Schedule 2.1 of the
Assigned Rights and Obligations. Each such purchase hereunder shall be at par
for a purchase price equal to the principal amount of such Existing Loan and
without recourse, representation or warranty, except that, each Selling Lender
shall be deemed to represent and warrant to each Purchasing Lender that the
Assigned Rights and Obligations of such Selling Lender are legally and
beneficially owned by such Lender and are not subject to any Liens created by
that Selling Lender.
Administrative Agent shall calculate the net amount to be paid or
received by each Lender in connection with the assignments effected hereunder on
the Effective Date. Each Purchasing Lender required to make a payment shall make
the net amount of its required payment available to Administrative Agent, in
same day funds, at the Funding and Payment Office not later than 12:00 Noon (New
York time) on the Effective Date. Administrative Agent shall distribute on the
Effective Date the proceeds of such amounts to the Selling Lenders entitled to
receive payments, pro rata in proportion to the amount each such Selling Lender
is entitled to receive at the primary address set forth below such Selling
Lender's name on the signature pages hereof or at such other address as such
Selling Lender may request in writing to Administrative Agent.
47
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made to maturity (whether by acceleration
or otherwise) at a rate determined by reference to the Base Rate or the Reserve
Adjusted Eurodollar Rate, as the case may be. Subject to the provisions of
subsection 2.7, each Swing Line Loan shall bear interest on the unpaid principal
amount thereof from the date made to maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate. The applicable
basis for determining the rate of interest with respect to any Loan shall be
selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection 2.1B. The basis for determining the
interest rate with respect to any Term Loan or any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day any Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Term Loans and the Revolving Loans shall bear interest through maturity
as follows:
(a) if a Base Rate Loan, then at the sum of the Base
Rate plus the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the
Reserve Adjusted Eurodollar Rate plus the Applicable
Eurodollar Rate Margin.
(ii) Subject to the provisions of subsections 2.2E and 2.7,
the Swing Line Loans shall bear interest to maturity at the sum of the
Base Rate plus the Applicable Base Rate Margin less the Applicable
Commitment Fee Percentage.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, on behalf of Company select an
interest period (each an "Interest Period") to be applicable to such Loan, which
Interest Period shall be, at Company's option, either a one, two, three or six
month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
48
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Term
A Loans shall extend beyond the sixth Anniversary, no Interest Period
with respect to any portion of the Term B Loans shall extend beyond the
eighth Anniversary, no Interest Period with respect to any portion of
the Term C Loans shall extend beyond December 31, 2006 and no Interest
Period with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date.
(vi) no Interest Period with respect to any portion of the
Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Term A Loans, the Term B
Loans or the Term C Loans, as the case may be, unless the aggregate
principal amount of Term A Loans, Term B Loans or Term C Loans, as the
case may be, that are Base Rate Loans plus the aggregate principal
amount of Term A Loans, Term B Loans or Term C Loans, as the case may
be, that are Eurodollar Rate Loans with Interest Periods expiring on or
before such date equals or exceeds the principal amount required to be
paid on the Term A Loans, Term B Loans or Term C Loans, as the case may
be, on such date;
(vii) there shall be no more than ten Interest Periods
outstanding at any time; and
(viii) in the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Notice of
Borrowing or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event that any Swing Line Loans, any Revolving
Loans or any Term Loans that are Base Rate Loans are prepaid pursuant to
subsection 2.4B(i), interest accrued on such Loans through the date of such
prepayment shall be
49
payable on the next succeeding Interest Payment Date applicable to Base Rate
Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans or Revolving Loans equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount from Loans bearing interest at a
rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis (provided that any Loan being
converted to a Eurodollar Rate Loan shall be in a minimum amount of $2,000,000
and integral multiples of $500,000 in excess of such amount) or (ii) upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $2,000,000 and integral
multiples of $500,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 12:00 Noon (New York time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default
has occurred and is continuing. In lieu of delivering the above-described Notice
of Conversion/Continuation, Company may give Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any liability
to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
E. Post-Default Interest. Upon the occurrence and during the
continuation of any
50
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code, or other applicable bankruptcy or insolvency laws)
payable upon demand at a rate that is 2% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Revolving Loans bearing interest at a rate determined by reference to the Base
Rate); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate equal to 2% per
annum in excess of the interest rates otherwise payable under this Agreement for
Base Rate Loans that are Term A Loans, Term B Loans, Term C Loans or Revolving
Loans, as applicable. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on Loans shall be computed on the
basis of a 360-day year and for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; provided that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share of the
applicable Commitments, commitment fees for the period from and including the
Closing Date to and excluding the Revolving Loan Commitment Termination Date
equal to the average of the daily excess of the Revolving Loan Commitments over
the sum of the aggregate principal amount of Revolving Loans outstanding (but
not any Swing Line Loans outstanding) plus the Letter of Credit Usage multiplied
by the Applicable Commitment Fee Percentage. All such commitment fees shall be
calculated on the basis of a 360-day year and the actual number of days elapsed
and shall be payable quarterly in arrears on the last Business Day in each of
March, June, September and December of each year, commencing in September 1998,
and on the Revolving Loan Commitment Termination Date.
B. Annual Administrative Fee. Company agrees to pay to Administrative
Agent an annual administrative fee in such amounts as may be agreed between them
from time to time.
51
C. Other Agent Fees. Company agrees to pay such other fees as may be
agreed upon from time to time.
2.4 Repayments, Prepayments and Reductions in Commitments; General
Provisions Regarding Payments.
A. Scheduled Payments of Term Loans and Scheduled Reductions of
Revolving Credit Commitments.
(i) Scheduled Payments of Term A Loans. Company shall make
principal payments on the Term A Loans in installments on the dates set
forth below, each such installment to be in an amount equal to the
corresponding percentages set forth below of the principal amount of
the Term A Loans as of the Effective Date:
SCHEDULED REPAYMENT
DATE OF
TERM A LOANS
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
March 31, 2000 4.00%
June 30, 2000 4.00%
September 30, 2000 4.00%
December 31, 2000 4.00%
---------------------------------------------------------------------------------------------
March 31, 2001 4.00%
June 30, 2001 4.00%
September 30, 2001 4.25%
December 31, 2001 4.25%
---------------------------------------------------------------------------------------------
March 31, 2002 6.125%
June 30, 2002 6.125%
September 30, 2002 6.125%
December 31, 2002 6.125%
---------------------------------------------------------------------------------------------
March 31, 2003 6.75%
June 30, 2003 6.75%
September 30, 2003 6.75%
December 31, 2003 6.75%
---------------------------------------------------------------------------------------------
March 31, 2004 8.00%
June 30, 2004 8.00%
; provided that the scheduled installments of principal of the Term A
Loans set forth above shall be reduced in connection with any voluntary
or mandatory prepayments of the Term A Loans in accordance with
subsection 2.4C; and provided, further that the Term A Loans and all
other amounts owed hereunder with respect to the Term A Loans shall be
paid in full no later than the sixth Anniversary of the Closing Date
and the final installment payable by Company in respect of the Term A
Loans on such date shall be in
52
an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term A Loans.
(ii) Scheduled Payments of Term B Loans. Company shall make
principal payments on the Term B Loans in installments on the dates set
forth below, each such installment to be in an amount equal to the
corresponding percentages set forth below of the principal amount of
the Term B Loans, including any Term B Loans which are Phase II Term B
Loans:
SCHEDULED REPAYMENT
DATE OF
TERM B LOANS
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
March 31, 2000 0.25%
June 30, 2000 0.25%
September 30, 2000 0.25%
December 31, 2000 0.25%
---------------------------------------------------------------------------------------------
March 31, 2001 0.25%
June 30, 2001 0.25%
September 30, 2001 0.25%
December 31, 2001 0.25%
---------------------------------------------------------------------------------------------
March 31, 2002 0.25%
June 30, 2002 0.25%
September 30, 2002 0.25%
December 31, 2002 0.25%
---------------------------------------------------------------------------------------------
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
---------------------------------------------------------------------------------------------
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 7.50%
December 31, 2004 7.50%
---------------------------------------------------------------------------------------------
March 31, 2005 7.50%
June 30, 2005 7.50%
September 30, 2005 16.0%
December 31, 2005 16.0%
---------------------------------------------------------------------------------------------
March 31, 2006 16.0%
June 30, 2006 17.5%
; provided that the scheduled installments of principal of the Term B
Loans set forth above shall be reduced in connection with any voluntary
or mandatory prepayments of the Term B Loans in accordance with
subsection 2.4C; and provided, further that the Term B Loans and all
other amounts owed hereunder with respect to the Term B Loans
53
shall be paid in full no later than the eighth Anniversary of the
Closing Date and the final installment payable by Company in respect of
the Term B Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Term B Loans.
(iii) Scheduled Payments of Term C Loans. Company shall make
principal payments on the Term C Loans in installments on the dates set
forth below, each such installment to be in an amount equal to the
corresponding percentages set forth below of the original principal
amount of the Term C Loans, including any Term C Loans which are Phase
II Term C Loans:
54
SCHEDULED REPAYMENT
DATE OF
TERM C LOANS
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
March 31, 2000 0.25%
June 30, 2000 0.25%
September 30, 2000 0.25%
December 31, 2000 0.25%
---------------------------------------------------------------------------------------------
March 31, 2001 0.25%
June 30, 2001 0.25%
September 30, 2001 0.25%
December 31, 2001 0.25%
---------------------------------------------------------------------------------------------
March 31, 2002 0.25%
June 30, 2002 0.25%
September 30, 2002 0.25%
December 31, 2002 0.25%
---------------------------------------------------------------------------------------------
March 31, 2003 0.25%
June 30, 2003 0.25%
September 30, 2003 0.25%
December 31, 2003 0.25%
---------------------------------------------------------------------------------------------
March 31, 2004 0.25%
June 30, 2004 0.25%
September 30, 2004 0.25%
December 31, 2004 0.25%
---------------------------------------------------------------------------------------------
March 31, 2005 0.25%
June 30, 2005 0.25%
September 30, 2005 0.25%
December 31, 2005 0.25%
---------------------------------------------------------------------------------------------
March 31, 2006 0.25%
June 30, 2006 0.25%
September 30, 2006 46.75%
December 31, 2006 46.75%
; provided that the scheduled installments of principal of the Term C
Loans set forth above shall be reduced in connection with any voluntary
or mandatory prepayments of the Term C Loans in accordance with
subsection 2.4C; and provided, further that the Term C Loans and all
other amounts owed hereunder with respect to the Term C Loans shall be
paid in full no later than December 31, 2006 and the final installment
payable by Company in respect of the Term C Loans on such date shall be
in an amount, if such amount is different from that specified above,
sufficient to repay all amounts owing by Company under this Agreement
with respect to the Term C Loans.
(iv) Scheduled Reductions of Revolving Loan Commitments.
Except as set forth in the following proviso, the Revolving Loan
Commitments shall be permanently
55
reduced on the dates and in the amounts set forth below:
SCHEDULED REDUCTION
DATE OF REVOLVING LOAN
COMMITMENTS
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
June 30, 2003 $15,000,000
; provided that the scheduled reductions of the Revolving Loan
Commitments set forth above shall be reduced in connection with any
voluntary or mandatory reductions of the Revolving Loan Commitments in
accordance with subsection 2.4C.
B. Prepayments and Reductions in Commitments.
(i) Voluntary Prepayments. Company may, upon written or
telephonic notice to Administrative Agent on or prior to 12:00 Noon
(New York time) on the date of prepayment, which notice, if telephonic,
shall be promptly confirmed in writing, at any time and from time to
time prepay, without premium or penalty, any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum amount of
$100,000 and integral multiples of $50,000 in excess of that amount. In
addition, so long as no Swing Line Loans are then outstanding, Company
may, upon not less than one Business Day's prior written or telephonic
notice, in the case of Base Rate Loans, and three Business Days' prior
written or telephonic notice, in the case of Eurodollar Rate Loans, in
each case confirmed in writing to Administrative Agent (which notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay,
without premium or penalty, the Loans other than Swing Line Loans on
any Business Day in whole or in part in an aggregate minimum amount of
$1,000,000 and integral multiples of $250,000 in excess of that amount;
provided, however, that in the event Company shall prepay a Eurodollar
Rate Loan other than on the expiration of the Interest Period
applicable thereto, Company shall, at the time of such prepayment, also
pay any amounts payable under subsection 2.6D hereof. Notice of
prepayment having been given as aforesaid, the Loans shall become due
and payable on the prepayment date specified in such notice and in the
aggregate principal amount specified therein. Any voluntary prepayments
pursuant to this subsection 2.4B(i) shall be applied as specified in
subsection 2.4C.
(ii) Voluntary Reductions of Revolving Loan Commitments .
Company may, upon not less than three Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
notice Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time terminate
in whole or permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of Revolving
Loan Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $1,000,000 and
integral multiples of $250,000 in excess of that amount. Company's
56
notice to Administrative Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Loan Commitments shall be effective on the date specified in such
notice and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share. Any such voluntary reduction of
the Revolving Loan Commitments shall be applied as specified in
subsection 2.4C.
(iii) Mandatory Prepayments and Mandatory Reductions of
Commitments.
The Loans shall be prepaid and the Revolving Loan Commitments
shall be reduced in the manner provided in subsection 2.4C upon the
occurrence of the following circumstances:
(a) Prepayments and Reductions from Asset Sales. No
later than the first Business Day following the date of
receipt by Company or any of its Subsidiaries of Cash Proceeds
of any Asset Sale (other than an Asset Sale permitted under
subsection 7.7(v)), Company shall prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) in an amount
equal to the Net Cash Proceeds received. Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to this subsection 2.4B(iii)(a), Company
shall deliver to Administrative Agent an Officer's Certificate
demonstrating the derivation of the Net Cash Proceeds of the
correlative Asset Sale from the gross sales price thereof;
provided that Company shall not be required to make any
prepayment with proceeds to the extent that all or any portion
of such proceeds are reinvested (or scheduled for
reinvestment) in assets used in the business of Company and/or
subsidiaries within 360 days from the date of receipt of such
proceeds; provided further, that the aggregate amount of
proceeds permitted to be excluded pursuant to the immediately
preceding proviso shall not exceed $25,000,000 (measured on a
cumulative basis from the Closing Date). In the event that
Company shall, at any time after receipt of Cash Proceeds of
any Asset Sale requiring a prepayment or a reduction of the
Revolving Loan Commitments pursuant to this subsection
2.4B(iii)(a), determine that the prepayments and/or reductions
of the Revolving Loan Commitments previously made in respect
of such Asset Sale were in an aggregate amount less than that
required by the terms of this subsection 2.4B(iii)(a), Company
shall promptly cause to be made an additional prepayment of
the Loans (and/or reduction in the Revolving Loan Commitments)
in an amount equal to the amount of any such deficit, and
Company shall concurrently therewith deliver to Administrative
Agent an Officer's Certificate demonstrating the derivation of
the additional Net Cash Proceeds resulting in such deficit.
(b) Prepayments and Reductions Due to Issuance of
Debt. On or prior to the first Business Day after receipt by
Company or any of its Subsidiaries of any proceeds of any
Indebtedness (other than the Loans and any other Indebtedness
permitted by this Agreement), Company shall prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) in an
amount equal to the amount
57
of such proceeds; provided that payment or acceptance of the
amounts provided for in this subsection 2.4B(iii)(b) shall not
constitute a waiver of any Event of Default resulting from the
incurrence of such Indebtedness or otherwise prejudice any
rights or remedies of Administrative Agent or any Lender.
(c) Prepayments and Reductions Due to Issuance of
Equity Securities. On or prior to the first Business Day after
receipt by Company or any of its Subsidiaries of any Equity
Proceeds, Company shall prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) in an amount equal to such
Equity Proceeds; provided that such Equity Proceeds shall not
be applied to prepay Loans pursuant to this subsection if (1)
such Equity Proceeds were not derived from a public offering
of Securities and (2) such Equity Proceeds are used within 30
days of receipt thereof by Company or one of its Subsidiaries
for an acquisition permitted under subsection 7.7(vii).
(d) Prepayments and Reductions Due to Insurance and
Condemnation Proceeds. No later than the second Business Day
following the date of receipt by Company or any of its
Subsidiaries of any cash payments under any of the casualty
insurance policies covering damage to or loss of property
maintained pursuant to subsection 6.4 resulting from damage to
or loss of all or any portion of the Collateral or any other
tangible asset (net of actual and documented reasonable costs
incurred by Company or any of its Subsidiaries in connection
with adjustment and settlement thereof, "Insurance Proceeds")
or any proceeds resulting from the taking of assets by the
power of eminent domain, condemnation or otherwise (net of
actual and documented reasonable costs incurred by Company or
any of its Subsidiaries in connection with adjustment and
settlement thereof, "Condemnation Proceeds") (other than any
portion of any such proceeds that is reinvested (or scheduled
for reinvestment) in assets of the general type used in the
business of Company and its Subsidiaries within 270 days from
the date of receipt of such proceeds; provided that no Event
of Default has occurred and is continuing), Company shall
prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) in the amount of such proceeds not so reinvested
(or scheduled for such reinvestment). Company shall, no later
than 270 days after receipt of any such Insurance Proceeds or
Condemnation Proceeds that have not theretofore been applied
to the Obligations, make an additional prepayment of the Loans
(and/or the Revolving Loan Commitments shall be reduced) in
the full amount of all such proceeds that have not then been
reinvested in similar assets.
(e) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall prepay the Swing
Line Loans and/or the Revolving Loans from time to time to the
extent necessary so that (y) the Total Utilization of
Revolving Loan Commitments shall not at any time exceed the
Revolving Loan Commitments then in effect, and (z) the
aggregate principal amount of all outstanding Swing Line Loans
shall not at any time exceed the Swing Line Loan Commitment
then in effect. All Swing Line Loans shall be prepaid in full
prior to the prepayment of any Revolving Loans pursuant to
this
58
subsection 2.4B(iii)(e).
(f) Prepayments and Reductions from Consolidated
Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing
with the Fiscal Year ending December 31, 1999), Company shall,
no later than 100 days after the end of such Fiscal Year,
prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) in an aggregate amount equal to 50% of such
Consolidated Excess Cash Flow if the Leverage Ratio for such
Fiscal Year exceeds 4.0:1.0; provided that no prepayments
shall be required pursuant to this subsection 2.4B(iii)(f)
(and the Revolving Loan Commitments shall not be reduced) if
the Leverage Ratio for such Fiscal Year is less than or equal
to 4.0:1.0.
C. Application of Prepayments and Unscheduled Reductions of
Commitments.
(i) Application of Prepayments by Type of Loans. Any voluntary
prepayments pursuant to subsection 2.4B(i) shall be applied: first to
repay outstanding Swing Line Loans to the full extent thereof, second
to repay outstanding Term Loans and/or Revolving Loans. Any amount
required to be applied as a mandatory prepayment or Commitment
reduction pursuant to subdivisions (a), (b), (c), (d) or (f) of
subsection 2.4B(iii) shall be applied first to ratably prepay the Term
A Loans, the Term B Loans and the Term C Loans to the full extent
thereof, second to prepay Swing Line Loans to the full extent thereof
and to permanently reduce the Revolving Loan Commitment by the amount
of such prepayment, third, to prepay Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, fourth, to prepay
outstanding reimbursement obligations with respect to Letters of
Credit, fifth, to cash collateralize Letters of Credit as provided in
the Collateral Account Agreement and sixth, to the extent of any
remaining amount, to further reduce the Revolving Loan Commitments.
(ii) Application of Prepayments of Term Loans by Order of
Maturity. The amount of any such voluntary prepayments applied to the
Term Loans shall be applied ratably among Term A Loans, Term B Loans
and Term C Loans to ratably reduce each scheduled installment of
principal that is unpaid or the amount of principal payable at
maturity, as the case may be, of Term A Loans, Term B Loans and Term C
Loans. Except as provided in subsection 2.4C(iii) with respect to
prepayments of Term B Loans or Term C Loans that have been waived, any
mandatory prepayments of Term Loans shall be applied ratably among Term
A Loans, the Term B Loans and the Term C Loans to ratably reduce each
scheduled installment of principal set forth in subsection 2.4A(i),
2.4A(ii) or 2.4A(iii) that is unpaid or the amount of principal payable
at maturity, as the case may be.
(iii) Waiver of Certain Mandatory Prepayments. Anything
contained herein to the contrary notwithstanding, so long as any Term A
Loans are outstanding, in the event Company is required to make any
mandatory prepayment (a "Waivable Mandatory Prepayment") of the Term B
Loans and/or Term C Loans pursuant to subsection
59
2.4B(iii), (X) Company shall use reasonable best efforts, not less than
three Business Days prior to the date (the "Required Prepayment Date")
on which Company is required to make such Waivable Mandatory
Prepayment, to notify Administrative Agent of the amount of such
prepayment, and Administrative Agent will promptly thereafter notify
each Lender holding an outstanding Term B Loan or Term C Loan of the
amount of such Lender's Pro Rata Share of such Waivable Mandatory
Prepayment and such Lender's option to refuse such amount, (Y) each
such Lender may exercise such option by giving written notice to
Company and Administrative Agent of its election to do so no later than
the close of business of the date it receives such notice from
Administrative Agent (the "Cutoff Date") (it being understood that any
Lender which does not notify Company and Administrative Agent of its
election to exercise such option on or before the Cutoff Date shall be
deemed to have elected, as of the Cutoff Date, not to exercise such
option), and (Z) on the Required Prepayment Date, Company shall pay to
Administrative Agent the amount of the Waivable Mandatory Prepayment,
which amount shall be applied (1) in an amount equal to that portion of
the Waivable Mandatory Prepayment payable to those Lenders that have
elected not to exercise such option, to prepay the Term B Loans and/or
Term C Loans of such Lenders (which prepayment shall be applied to the
scheduled installments of principal of the Term B Loans and Term C
Loans in accordance with subsection 2.4C(ii)) and (2) in an amount
equal to that portion of the Waivable Mandatory Prepayment otherwise
payable to those Lenders that have elected to exercise such option, to
prepay the Term A Loans and reduce the unpaid scheduled installments of
principal of the Term A Loans set forth in subsection 2.1A(i) on a pro
rata basis.
(iv) Application of Prepayments of Loans to Base Rate Loans
and Eurodollar Rate Loans. Considering Loans constituting Term Loans
and Revolving Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be made
by Company pursuant to subsection 2.6D.
60
(v) Application of Unscheduled Reductions of Revolving Loan
Commitments. Any voluntary or mandatory reduction of the Revolving Loan
Commitments pursuant to subsection 2.4B(ii) or 2.4B(iii) shall be
applied to reduce the scheduled reductions of the Revolving Loan
Commitments set forth in subsection 2.4A(iv) in reverse chronological
order.
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided
in subsection 2.4B(iii)(a) with respect to prepayments from Net Cash
Proceeds, all proceeds received by Administrative Agent in respect of
any sale of, collection from, or other realization upon all or any part
of the Collateral under any Collateral Document may, in the discretion
of Administrative Agent, be held by Administrative Agent as Collateral
for, and/or (then or at any time thereafter) applied in full or in part
by Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of
priority:
(a) To the payment of all costs and expenses of such
sale, collection or other realization, including without
limitation reasonable compensation to Administrative Agent and
its agents and counsel, and all other reasonable expenses,
liabilities and advances made or incurred by Administrative
Agent in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative
Agent thereunder for the account of the applicable Loan Party,
and to the payment of all reasonable costs and expenses paid
or incurred by Administrative Agent in connection with the
exercise of any right or remedy under such Collateral
Document, all in accordance with the terms of this Agreement
and such Collateral Document;
(b) thereafter, to the extent of any excess such
proceeds, to the payment of all other such Secured Obligations
for the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such
proceeds, to the payment to or upon the order of such Loan
Party or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments
received by Administrative Agent under any Guaranty shall be applied
promptly from time to time by Administrative Agent in the following
order of priority:
(a) To the payment of the reasonable costs and
expenses of any collection or other realization under such
Guaranty, including without limitation reasonable compensation
to Administrative Agent and its agents and counsel, and all
expenses, liabilities and advances made or incurred by
Administrative Agent in
61
connection therewith, all in accordance with the terms of this
Agreement and such Guaranty;
(b) thereafter, to the extent of any excess such
payments, to the payment of all other Guarantied Obligations
(as defined in such Guaranty) for the ratable benefit of the
holders thereof; and
(c) thereafter, to the extent of any excess such
payments, to the payment to the applicable Guarantor or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
E. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in same day funds and without defense, setoff or
counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 12:00 Noon (New York time) on the
date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge
its accounts with Administrative Agent in order to cause timely payment
to be made to Administrative Agent of all principal, interest, fees and
expenses due hereunder (subject to sufficient funds being available in
its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued interest
on the principal amount being repaid or prepaid, and all such payments
(and in any event any payments made in respect of any Loan on a date
when interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, in each case proportionately to Lenders'
respective Pro Rata Shares. Administrative Agent shall promptly
distribute to each Lender, at its applicable Lending Office specified
on Schedule 2.1 or at such other address as such Lender may request,
its Pro Rata Share of all such payments received by Administrative
Agent and the commitment fees of such Lender when received by
Administrative Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4E(iii) if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes
Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar Rate
Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(iv) Payments on Business Days. Except if expressly provided
otherwise,
62
whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest hereunder or of
the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
2.5 Use of Proceeds.
A. Term Loans and Initial Revolving Loans. The proceeds of the Existing
Term Loans and the Existing Revolving Loans that were made on the Closing Date
were applied in accordance with the provisions of the Existing Credit Agreement.
B. Phase II Term Loans and Revolving Loans Made On the Effective Date.
The proceeds of $45,000,000 in aggregate principal amount of Phase II Term Loans
and an aggregate principal amount of Revolving Loans not to exceed an amount
acceptable to Agents made to Company on the Effective Date, together with the
net proceeds from the issuance of equity by Holdings on the Effective Date, the
Senior Subordinated Notes and the Holdings Notes shall be applied (i) to finance
the redemption, repurchase or other repayment of outstanding Indebtedness with
respect to the Existing Senior Notes, the Existing TCW Notes and the Existing
AmeriComm Credit Agreement, and (ii) to pay fees, costs and expenses payable by
Holdings and its Subsidiaries on or before the Effective Date in connection with
such refinancing.
C. Revolving Loans; Swing Line Loans. The proceeds of any Revolving
Loans (other than the Revolving Loans referenced in subsection 2.5A and 2.5B)
and any Swing Line Loans shall be applied by Company for working capital and
general corporate purposes (including acquisitions permitted by subsections
7.7(vii)) of Company and its Subsidiaries.
D. Compliance With Laws. Company undertakes that no portion of the
proceeds of any Loans or other extensions of credit under this Agreement shall
be used by any Loan Party in any manner which would be illegal under, or which
would cause the invalidity or unenforceability (in each case in whole or in
part) of any Loan Document under, any applicable law.
E. Margin Regulations. Without limiting the generality of subsection
2.5D, no portion of the proceeds of any borrowing under this Agreement shall be
used by Company or any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation U,
Regulation T or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation of such Board or to violate the Exchange
63
Act, in each case as in effect on the date or dates of such borrowing and such
use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Eurodollar Rate Loans as
to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 11:00 A.M. (New York time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have reasonably determined (which determination shall
be final and conclusive and binding upon all parties hereto), on any Interest
Rate Determination Date with respect to any Eurodollar Rate Loans, that by
reason of circumstances arising after the date of this Agreement affecting the
London interbank market, adequate and fair means do not exist for ascertaining
the interest rate applicable to such Loans on the basis provided for in the
definition of Reserve Adjusted Eurodollar Rate Administrative Agent shall on
such date give notice (by telecopy or by telephone confirmed in writing) to
Company and each Lender of such determination, whereupon (i) no Loans may be
made as, or converted to, Eurodollar Rate Loans, until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist (such notification not to be unreasonably
withheld or delayed) and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the Loans in respect of
which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative Agent)
that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with
any law, treaty, governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation, guideline or order
not having the force of law even though the failure to comply therewith would
not be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of this
Agreement which materially and adversely affect the London interbank market,
then, and in any such event, such Lender shall be an "Affected Lender" and it
shall on that day give notice (by telecopy or by telephone confirmed in writing)
to Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans, shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to
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a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected
Lender shall make such Loan as (or convert such Loan to, as the case may be) a
Base Rate Loan, (c) the Affected Lender's obligation to maintain its outstanding
Eurodollar Rate Loans, as the case may be (the "Affected Loans"), shall be
terminated at the earlier to occur of the expiration of the Interest Period then
in effect with respect to the Affected Loans or when required by law, and (d)
the Affected Loans shall automatically convert into Base Rate Loans on the date
of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a Eurodollar
Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a
Notice of Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by telecopy or by
telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including any prepayment pursuant to subsection 2.4B) or
conversion of any of its Eurodollar Rate Loans occurs on a date that is not the
last day of an Interest Period applicable to that Loan, (iii) if any prepayment
of any of its Eurodollar Rate Loans is not made on any date specified in a
notice of prepayment given by Company, or (iv) as a consequence of any other
default by Company in the repayment of its Eurodollar Rate Loans when required
by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Reserve Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period
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and, through the transfer of such Eurodollar deposit from an offshore office of
that Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B, in the event that any Lender shall determine
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
Closing Date, or compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) results in a change in the basis of taxation of such
Lender (or its applicable lending office) (other than a change with
respect to any Tax on the overall net income of such Lender) with
respect to this Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Reserve Adjusted Eurodollar Rate; or
(iii) imposes any other condition (other than with respect to
a Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder, or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make,
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making or maintaining Eurodollar Rate Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Lender shall promptly notify Company
and Administrative Agent thereof and Company shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender shall reasonably determine) as
may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to such Lender under this subsection 2.7A, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on
the overall net income of any Lender) imposed, levied, collected,
withheld or assessed by or within the United States of America or any
political subdivision in or of the United States of America or any
other jurisdiction from which a payment is made by or on behalf of
Company.
(ii) Withholding of Taxes. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if
the liability to pay is imposed on Company) for its own
account or (if that liability is imposed on Administrative
Agent or such Lender, as the case may be) on behalf of and in
the name of Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which
the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that,
after the making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date
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of payment of any Tax which it is required by clause (b) above
to pay, Company shall deliver to Administrative Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
Closing Date (in the case of each Existing Lender), after the Effective Date (in
the case of each New Lender) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other Lender)
in any such requirement for a deduction, withholding or payment as is mentioned
therein shall result in an increase in the rate of such deduction, withholding
or payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States or any state or
other political subdivision thereof (for purposes of this
subsection 2.7B(iii), a "Non-US Lender") shall deliver to each
of Administrative Agent and Company, on or prior to the
Closing Date (in the case of each Existing Lender), on or
prior to the Effective Date (in the case of each New Lender)
or on or prior to the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in
the determination of Company or Administrative Agent (each in
the reasonable exercise of its discretion), (1) two original
copies of Internal Revenue Service Form 1001 or 4224 (or any
successor forms), accurately completed and duly executed by
such Lender, together with any other certificate or statement
of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of principal, interest, fees or other amounts payable under
any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1)
above, a Certificate re Non-Bank Status together with an
original copy of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the
initial delivery by such Lender of such forms, certificates or
other evidence,
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whenever a lapse in time or change in circumstances renders
such forms, certificates or other evidence obsolete or
inaccurate in any material respect, such Lender shall (1)
deliver to each of Administrative Agent and Company two new
original copies of Internal Revenue Service Form 1001 or 4224,
or a Certificate re Non-Bank Status and an original copy of
Internal Revenue Service Form W-8, as the case may be,
accurately completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to payments to such Lender
under the Loan Documents or (2) immediately notify
Administrative Agent and Company of its inability to deliver
any such forms, certificates or other evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) in respect of deductions or withholdings
of United States federal income taxes if such Lender shall
have failed to satisfy the requirements of subsection
2.7B(iii)(a) or 2.7B(iii)(b); provided that if such Lender
shall have satisfied such requirements on the Closing Date (in
the case of each Existing Lender), on the Effective Date (in
the case of each New Lender), or on the date of the Assignment
Agreement pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection 2.7B(iii)(c)
shall relieve Company of its obligation to pay any additional
amounts pursuant to clause (c) of subsection 2.7B(ii) in the
event that, as a result of any change after the Closing Date
in any applicable law, treaty or governmental rule, regulation
or order, or any change in the interpretation, administration
or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not
subject to withholding as described in subsection 2.7B(iii)(a)
or 2.7B(iii)(b).
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the
Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its applicable
lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of,
or with reference to, such Lender's Loans or Commitments or Letters of
Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that
which such Lender reasonably determines such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness,
phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time,
within fifteen Business Days after receipt by Company from such Lender
of the statement referred to in the next sentence, Company
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shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such controlling corporation on an after-tax
basis for such reduction. Such Lender shall deliver to Company (with a
copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
D. Substitute Lenders. In the event Company is required under
the provisions of this subsection 2.7 to make payments in a material
amount to any Lender or in the event any Lender fails to lend to
Company in accordance with this Agreement, Company may, so long as no
Event of Default or Potential Event of Default shall have occurred and
be continuing, elect to terminate such Lender as a party to this
Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and
other amounts (including without limitation amounts, if any, owed under
this subsection 2.7) due to be paid to such Lender with respect to all
periods through such date of termination, (ii) another financial
institution satisfactory to Company and Administrative Agent (or, in
the event Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) shall agree, as of such date, to become
a Lender for all purposes under this Agreement (whether by assignment
or amendment) and to assume all obligations of the Lender to be
terminated as of such date, and (iii) all documents and supporting
materials necessary, in the judgment of Administrative Agent (or, in
the event Administrative Agent is also the Lender to be terminated, the
successor Administrative Agent) to evidence the substitution of such
Lender shall have been received and approved by Administrative Agent as
of such date.
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2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be, becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that would entitle
such Lender or Issuing Lender to receive payments under subsection 2.7 or
subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office. A certificate
as to the amount of any such expenses payable by Company pursuant to this
subsection 2.8 (setting forth in reasonable detail the basis for requesting such
amount) submitted by such Lender or Issuing Lender to Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
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SECTION 3.
LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. Company acknowledges and confirms that Schedule
3.1 annexed hereto sets forth each letter of credit issued under the Existing
Credit Agreement (collectively, the "Existing Letters of Credit") and
outstanding as of the Effective Date. Company hereby represents, warrants,
agrees, covenants and (a) reaffirms that it has no (and it permanently and
irrevocably waives and releases Agents and Lenders from any, to the extent
arising on or prior to the Effective Date) defense, set off, claim or
counterclaim against any Agent or Lender in regard to its Obligations in respect
of such Existing Letters of Credit and (b) reaffirms its obligation to reimburse
the applicable Issuing Lenders for honored drawings under such Existing Letters
of Credit in accordance with the terms and conditions of this Agreement and the
other Loan Documents applicable to Letters of Credit issued hereunder. Based on
the foregoing, each Lender agrees that (1) each Existing Letter of Credit which
is a Standby Letter of Credit shall, as of the Effective Date, be deemed for all
purposes of this Agreement to be a Standby Letter of Credit issued hereunder,
and (2) each Existing Letter of Credit which is a Commercial Letter of Credit
shall, as of the Effective Date, be deemed for all purposes of this Agreement to
be a Commercial Letter of Credit issued hereunder. In addition to the foregoing
and in addition to Company requesting that Lenders make Revolving Loans pursuant
to subsection 2.1A(iii), and that Swing Line Lender make Swing Line Loans
pursuant to subsection 2.1A(iv), Company may request, in accordance with the
provisions of this subsection 3.1, from time to time during the period from the
Effective Date to but excluding the date which is five days before the Revolving
Loan Commitment Termination Date, that one or more Lenders issue Letters of
Credit for its account for the purposes specified in the definitions of
Commercial Letters of Credit and Standby Letters of Credit. Subject to the terms
and conditions of this Agreement and in reliance upon the representations and
warranties of Loan Parties herein set forth, any one or more Lenders may, but
(except as provided in subsection 3.1B(ii)) shall not be obligated to, issue
such Letters of Credit in accordance with the provisions of this subsection 3.1;
provided that Company shall not request that any Lender issue (and no Lender
shall issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $5,000,000;
(iii) any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment Termination
Date and (b) the date which is one year from the date of issuance of
such Standby Letter of Credit; provided that the immediately preceding
clause (b) shall not prevent any Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless such Issuing
Lender elects not to extend for
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any such additional period; provided further that, unless Requisite
Lenders otherwise consent, such Issuing Lender shall give notice that
it will not extend such Standby Letter of Credit if it has knowledge
that an Event of Default has occurred and is continuing on the last day
on which such Issuing Lender may give notice to the beneficiary that it
will not extend such Standby Letter of Credit;
(iv) any Commercial Letter of Credit (a) having an expiration
date later than the earlier of (X) 30 days prior to the Revolving Loan
Commitment Termination Date and (Y) the date which is 180 days from the
date of issuance of such Commercial Letter of Credit or (b) that is
otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion;
(v) any Letter of Credit denominated in a currency other than
Dollars; or
(vi) any Letter of Credit during any period when a Lender
Default exists, unless each Issuing Lender has entered into
arrangements satisfactory to it and Company to eliminate such Issuing
Lender's risk with respect to the Defaulting Lender, including by cash
collateralizing such Defaulting Lender's Pro Rata Share of the Letter
of Credit Usage (after giving effect to the issuance of the proposed
Letter of Credit).
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent, at the
Funding and Payment Office, a Notice of Issuance of Letter of Credit no
later than 12:00 Noon (New York time) at least five Business Days, or
such shorter period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of issuance. The
Notice of Issuance of Letter of Credit shall specify (a) the proposed
date of issuance (which shall be a Business Day), (b) the face amount
of or maximum aggregate liability under, as applicable, the Letter of
Credit, (c) the expiration date of the Letter of Credit, (d) the name
and address of the beneficiary, and (e) the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents and the verbatim text
of any certificates to be presented by the beneficiary which, if
presented by the beneficiary prior to the expiration date of the Letter
of Credit, would require the Issuing Lender to make payment thereunder;
provided that the Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter of Credit or any
such documents or certificates; provided further that no Letter of
Credit shall require payment against a conforming draft or other
request for payment to be made thereunder on the same business day
(under the laws of the jurisdiction in which the office of the Issuing
Lender to which such draft or other request for payment is required to
be presented is located) that such draft or other request for payment
is presented if such presentation is made after 10:00 A.M. (in the time
zone of such office of the Issuing Lender) on such business day.
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing
Lender) prior to the issuance of any Letter of
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Credit in the event that any of the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit is no longer true and correct as of the proposed date of
issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit, Company shall be deemed to have re-certified, as of the date
of such issuance, as to the matters to which Company is required to
certify in the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
Administrative Agent of a Notice of Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a Letter of
Credit, in the event Administrative Agent elects to issue such Letter
of Credit, Administrative Agent shall promptly so notify Company, and
Administrative Agent shall be the Issuing Lender with respect thereto.
In the event that Administrative Agent, in its sole discretion, elects
not to issue such Letter of Credit, Administrative Agent shall promptly
so notify the Company, whereupon Company may request any other Lender
to issue such Letter of Credit by delivering to such Lender a copy of
the applicable Notice of Issuance of Letter of Credit. Any Lender so
requested to issue such Letter of Credit shall promptly notify Company
and Administrative Agent whether or not, in its sole discretion, it has
elected to issue such Letter of Credit, and any such Lender which so
elects to issue such Letter of Credit shall be the Issuing Lender with
respect thereto. In the event that all other Lenders shall have
declined to issue such Letter of Credit, notwithstanding the prior
election of Administrative Agent not to issue such Letter of Credit,
Administrative Agent shall be obligated to issue such Letter of Credit
and shall be the Issuing Lender with respect thereto, notwithstanding
the fact that the sum of the Letter of Credit Usage with respect to
such Letter of Credit and with respect to all other Letters of Credit
issued by Administrative Agent, when aggregated with Administrative
Agent's outstanding Revolving Loans and Swing Line Loans, may exceed
Administrative Agent's Revolving Loan Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction or
waiver (in accordance with subsection 10.6) of the conditions set forth
in subsection 4.3, the Issuing Lender shall issue the requested Letter
of Credit in accordance with the Issuing Lender's standard operating
procedures (any such issuance by Administrative Agent being effected
through the Funding and Payment Office), and upon its issuance of such
Letter of Credit the Issuing Lender shall promptly notify
Administrative Agent and each Lender of such issuance, which notice
shall be accompanied by a copy of such Letter of Credit.
(iv) Reports to Lenders. Within 30 days after the end of each
calendar quarter ending after the Closing Date, so long as any Letter
of Credit shall have been outstanding during such calendar quarter,
each Issuing Lender shall deliver to Administrative Agent and
Administrative Agent shall deliver to each Lender a report setting
forth for such calendar quarter the daily maximum amount available to
be drawn under the Letters of Credit that were outstanding during such
calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and
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any drawings honored or payments made thereunder in an amount equal to such
Lender's Pro Rata Share (with respect to the Revolving Loan Commitments) of the
maximum amount which is or at any time may become available to be drawn or
required to be paid thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts to each Issuing Lender with
respect to Letters of Credit issued by it for the account of Company:
(i) with respect to each Letter of Credit, (a) a fronting fee
equal to 1/4 of 1.0% per annum of the daily maximum amount available to
be drawn under such Letter of Credit and (b) a Letter of Credit fee
equal to the product of (x) the then Applicable Eurodollar Rate Margin
with respect to Revolving Loans and (y) the daily maximum amount
available to be drawn under such Letter of Credit, in each case payable
in arrears on and to the last Business Day in each of March, June,
September and December of each year, commencing September 1998, and
computed on the basis of a 360-day year for the actual number of days
elapsed; and
(ii) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary
and processing charges in accordance with such Issuing Lender's
standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender having Revolving Loan Exposure its Pro Rata Share of such amount.
3.3 Drawings and Payments and Reimbursement of Amounts Drawn or Paid Under
Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Requests For
Drawings and Payments. In determining whether to honor any drawing or request
for payment under any Letter of Credit by the beneficiary thereof, the Issuing
Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.
B. Reimbursement by Company of Amounts Drawn or Paid Under Letters of
Credit. In the event an Issuing Lender has determined to honor a drawing or
request for payment under a Letter of Credit issued by it, such Issuing Lender
shall immediately notify Company and Administrative Agent, and Company shall
reimburse such Issuing Lender on or before the Business Day immediately
following the date on which such drawing is honored or such payment is made (the
applicable "Reimbursement Date") in an amount in same day funds equal to the
amount of such honored drawing; provided that, anything contained in this
Agreement to the contrary notwithstanding, (i) unless Company shall have
notified Administrative
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Agent and such Issuing Lender prior to 12:00 Noon (New York time) on the date of
such honored drawing or request for payment that Company intends to reimburse
such Issuing Lender for the amount of such honored drawing or payment with funds
other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving Loans which are Base Rate Loans on the applicable Reimbursement
Date in an amount equal to the amount of such honored drawing or payment and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Lenders shall, on the applicable Reimbursement Date, make Revolving Loans
in the amount of such honored drawing or payment, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such Issuing Lender for
the amount of such honored drawing or payment; provided further that if for any
reason proceeds of Revolving Loans are not received by such Issuing Lender on
the applicable Reimbursement Date in an amount equal to the amount of such
honored drawing or payment, Company shall reimburse such Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of such
honored drawing or payment over the aggregate amount of such Revolving Loans, if
any, which are so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Lender from its obligation to make Revolving Loans on the terms and
conditions set forth in this Agreement, and Company shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this subsection 3.3B.
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C. Payment by Lenders of Unreimbursed Drawings or Payments Under
Letters of Credit.
(i) Payment by Lenders. In the event that Company shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any honored drawing
or payment made by such Issuing Lender under a Letter of Credit issued
by it, such Issuing Lender shall promptly notify each other Lender of
the unreimbursed amount of such honored drawing or payment and of such
other Lender's respective participation therein based on such Lender's
Pro Rata Share of the Revolving Loan Commitments. Each Lender shall
make available to such Issuing Lender an amount equal to its respective
participation, in same day funds, at the office of such Issuing Lender
specified in such notice, not later than 2:00 P.M. (New York time) on
the first business day (under the laws of the jurisdiction in which
such office of such Issuing Lender is located) after the date notified
by such Issuing Lender. In the event that any Lender fails to make
available to such Issuing Lender on such business day the amount of
such Lender's participation in such Letter of Credit as provided in
this subsection 3.3C, such Issuing Lender shall be entitled to recover
such amount on demand from such Lender together with interest thereon
at the rate customarily used by such Issuing Lender for the correction
of errors among banks for three Business Days and thereafter at the
Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts
made available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Issuing Lender in respect of
which payment was made by such Lender constituted gross negligence or
willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event any Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of
any honored drawing or payment made by such Issuing Lender under a
Letter of Credit issued by it, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing or payment such
other Lender's Pro Rata Share of all payments subsequently received by
such Issuing Lender from Company in reimbursement of such honored
drawing or payment when such payments are received. Any such
distribution shall be made to a Lender at its primary address set forth
below its name on the appropriate signature page hereof or at such
other address as such Lender may request.
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D. Interest on Amounts Drawn or Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to
each Issuing Lender, with respect to drawings or payments made under
any Letters of Credit issued by it, interest on the amount paid by such
Issuing Lender in respect of each such drawing or payment from the date
such drawing is honored or payment is made to but excluding the date
such amount is reimbursed by Company (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to subsection 3.3B) at
a rate equal to (a) for the period from the date such drawing is
honored or payment is made to but excluding the applicable
Reimbursement Date, the Base Rate plus the Applicable Base Rate Margin
with respect to Revolving Loans, and (b) thereafter, a rate which is 2%
per annum in excess of the rate of interest described in the foregoing
clause (a). Interest payable pursuant to this subsection 3.3D(i) shall
be computed on the basis of a 360-day year for the actual number of
days elapsed in the period during which it accrues and shall be payable
on demand or, if no demand is made, on the date on which the related
drawing or payment under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i), (a) such Issuing Lender shall
distribute to each other Lender, out of the interest received by such
Issuing Lender in respect of the period from the date of the applicable
honored drawing or payment under a Letter of Credit issued by such
Issuing Lender to but excluding the date on which such Issuing Lender
is reimbursed for the amount of such drawing or payment (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the Letter of Credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored or payment
had been made under such Letter of Credit, and (b) in the event such
Issuing Lender shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such drawing or payment,
such Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such drawing or payment such other Lender's Pro Rata Share of any
interest received by such Issuing Lender in respect of that portion of
such drawing or payment so reimbursed by other Lenders for the period
from the date on which such Issuing Lender was so reimbursed by other
Lenders to and including the date on which such portion of such drawing
or payment is reimbursed by Company. Any such distribution shall be
made to a Lender at its Lending Office set forth on Schedule 2.1 or at
such other address as such Lender may request.
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3.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for drawings
honored or payments made under the Letters of Credit issued by it and to repay
any Revolving Loans made by Lenders pursuant to subsection 3.3B and the
obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), any Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
Company whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
underlying transaction between Company or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a demand, draft or certificate or
other document which appears to substantially comply with the terms of
such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document
by any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
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3.5 Indemnification; Nature of Issuing Lender's Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing or other request for payment under any such Letter of Credit as a result
of any act or omission, whether rightful or wrongful, of any present or future
de jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing or
payment under such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including without limitation
any Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection
3.5, Company shall
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retain any and all rights it may have against any Issuing Lender for any
liability arising solely out of the gross negligence or willful misconduct of
such Issuing Lender, as determined by a final judgment of a court of competent
jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that any Issuing Lender or Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the Closing
Date, or compliance by any Issuing Lender or Lender with any guideline, request
or directive issued or made after the Closing Date by any central bank or other
governmental or quasi-governmental authority (whether or not having the force of
law):
(i) results in any change in the basis of taxation of such
Issuing Lender or Lender (or its applicable lending or letter of credit
office) (other than a change with respect to any Tax on the overall net
income of such Issuing Lender or Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or maintaining
of any participations therein or any other obligations under this
Section 3, whether directly or by such being imposed on or suffered by
any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by any Issuing Lender or participations therein purchased by any
Lender; or
(iii) imposes any other condition on or affecting such Issuing
Lender or Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (reasonably determined by such Issuing Lender or
Lender) as may be necessary to compensate such Issuing Lender or Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Such Issuing Lender or Lender shall deliver to Company a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Issuing Lender or Lender under this subsection 3.6, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
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SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make (or maintain, as the case may be)
Loans and the issuance of Letters of Credit hereunder are, in addition to the
conditions precedent specified in subsection 4.3, subject to prior or concurrent
satisfaction of the following conditions.
4.1 Conditions to Effectiveness of Amendment and Restatement.
The effectiveness of this Agreement and the obligations of Lenders to
make the Phase II Term Loans is subject to prior or concurrent satisfaction of
the following conditions:
A. Holdings and Company Documents. On or before the Effective Date,
each of Holdings and Company shall deliver or cause to be delivered to
Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its
counsel):
(i) Certified copies of its Certificate of
Incorporation, together with a good standing certificate from
the Secretary of State of the State of Delaware, each dated a
recent date prior to the Closing Date;
(ii) resolutions of its Board of Directors approving
and authorizing the execution, delivery and performance of
this Agreement and the Acknowledgement and Consent, certified
as of the Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(iii) Signature and incumbency certificates of its
officers executing this Agreement and the other Loan Documents
to which it is a party as of the Closing Date;
(iv) executed originals of this Agreement, the
Acknowledgement and Consent and (to the extent not previously
executed and delivered to Lenders) the other Loan Documents to
which it is a party; and
(v) such other documents as Administrative Agent may
reasonably request.
B. Subsidiary Documents.
(i) On or before the Effective Date, Company shall deliver or
cause to be delivered to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following for each of its
Subsidiaries (other than AmeriComm Holdings and each of its
Subsidiaries),
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each unless otherwise noted, dated a recent date prior to their
delivery to Lenders:
(a) a certificate of its corporate secretary or an
assistant secretary to the effect that there have been no (x)
amendments to its Certificate of Incorporation or Bylaws after
the Closing Date and (y) changes after the Closing Date in the
incumbency of its officers;
(b) resolutions of its Board of Directors approving
and authorizing the execution, delivery and performance of the
Acknowledgement and Consent, certified as of the Effective
Date by its corporate secretary or an assistant secretary as
being in full force and effect without modification or
amendment;
(c) a good standing certificate from the Secretary of
State of the State of its jurisdiction of incorporation, dated
a recent date prior to the Effective Date;
(d) executed originals of the Acknowledgement and
Consent and (to the extent not previously executed and
delivered to Lenders) the other Loan Documents to which it is
a party; and
(e) such other documents as Administrative Agent may
reasonably request.
(ii) On or before the Effective Date, Company shall deliver or
cause to be delivered to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate,
for each Lender and its counsel) the following for AmeriComm Holdings
and each of its Subsidiaries, each, unless otherwise noted, dated the
Closing Date:
(a) Certified copies of the Certificate or Articles
of Incorporation of such Subsidiary, together with a good
standing certificate from the Secretary of State of its
jurisdiction of incorporation and each other state in which it
is qualified as a foreign corporation to do business, each
dated a recent date prior to the Effective Date;
(b) Copies of the Bylaws of such Subsidiary,
certified as of the Effective Date by its corporate secretary
or an assistant secretary as being in full force and effect
without modification or amendment;
(c) Resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery
and performance of the Subsidiary Guaranty, the Pledge
Agreement, the Security Agreement and the other Loan Documents
to which such Subsidiary is party, certified as of the
Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without
modification or amendment;
(d) Signature and incumbency certificates of its
officers executing the
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Subsidiary Guaranty, the Pledge Agreement, the Security
Agreement and the other Loan Documents to which such
Subsidiary is party;
(e) Executed originals of the Subsidiary Guaranty,
the Pledge Agreement, the Security Agreement and the other
Loan Documents to which such Subsidiary is a party; and
(f) Such other documents as Administrative Agent may
reasonably request.
C. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received originally executed copies of one or more
favorable written opinions of White & Case LLP, counsel to Loan
Parties, dated as of the Effective Date, as to the enforceability of
this Agreement, the Notes and the Acknowledgement and Consent and such
other matter as Administrative Agent and its counsel shall reasonably
request, in form and substance satisfactory to Administrative Agent,
and Company hereby requests such counsel for Loan Parties to deliver
such opinions.
D. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the
effect that the representations and warranties in Section 5 hereof are
true and correct in all material respects on and as of the Effective
Date to the same extent as though made on and as of that date and that
Company shall have performed in all material respects all agreements
and satisfied all conditions which this Agreement provides shall be
performed or satisfied by Company on or before the Effective Date,
except as otherwise disclosed to and agreed to in writing by
Administrative Agent.
E. Closing Date Mortgage Amendments. To the extent requested by
Administrative Agent, the delivery to Administrative Agent of fully
executed and acknowledged counterparts to amendments to the Closing
Date Mortgages in form and substance satisfactory to Administrative
Agent (such amendments, collectively, the "Mortgage Amendments") for
each Closing Date Mortgaged Property and the delivery of evidence
satisfactory to Administrative Agent that counterparts of the Mortgage
Amendments have been or will be recorded in all places necessary or
desirable to maintain valid and enforceable first priority Liens on the
fee simple or leasehold interests of Company, as applicable, in the
Closing Date Mortgaged Properties as of the Effective Date in favor of
Administrative Agent, as mortgagee.
F. Date-Down Policies. To the extent requested by Administrative Agent,
the delivery to Administrative Agent of signed endorsements to the
title policies or marked title commitments ("Date-Down Policies")
insuring on the Effective Date fee simple or leasehold title to each of
the Closing Date Mortgaged Properties vested in Company and insuring
the first priority of the Liens created under the Closing Date
Mortgages as amended by the Mortgage Amendments.
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G. Property Certificates or Affidavits. To the extent requested by
Administrative Agent, the delivery to Administrative Agent of such
certificates and affidavits as the Title Company may reasonably
required in connection with the issuance of the Date-Down Policies.
H. Date Down Opinions. The delivery to Administrative Agent of
date-downs of opinions ("Date-Down Opinions") of local counsel in such
states as Administrative Agent may request as to the enforceability of
the Mortgage Amendments to be recorded in such states and such other
matters as Administrative Agent shall reasonably request, which
Date-Down Opinions shall be dated the Effective Date, addressed to
Administrative Agent and the Lenders and otherwise in form and
substance reasonably satisfactory to Administrative Agent.
I. Repayment of Certain Existing Debt. Administrative Agent shall have
received an Officers' Certificate of Company stating that, after giving
effect to the funding of the Phase II Term Loans, all Indebtedness of
Company and its Subsidiaries (including, without limitation all
outstanding Indebtedness of DIMAC and AmeriComm Holdings and their
respective Subsidiaries (other than any Obligations), including
Indebtedness under the Existing Senior Notes, the Existing TCW Notes
and the Existing AmeriComm Credit Agreement and with respect to Capital
Leases) other than Indebtedness permitted to remain outstanding after
the Effective Date pursuant to subsection 7.1 shall have been paid in
full, redeemed or defeased, any commitments to lend thereunder shall
have been terminated, all security interests created to secure the
obligations arising in connection therewith shall have been terminated
or effectively assigned to Administrative Agent for the benefit of
Lenders, all letters of credit of AmeriComm Holdings and its
Subsidiaries (other than Letters of Credit) shall have expired or been
cancelled, and Company shall have delivered to Administrative Agent
UCC-3 termination statements or assignments (or comparable forms) and
any and all other instruments of release, satisfaction, assignment
and/or reconveyance (or evidence of the filing thereof) as may be
necessary or advisable to terminate or assign to Lenders all such
security interests and all other security interests in the Collateral.
J. Consents and Amendment Relating to Senior Note Indenture. All
consents and amendments with respect to the Existing Senior Note
Indenture as may be required to permit the consummation of the
refinancings and other transactions contemplated by the Loan Documents
and the Related Agreements to occur on the Effective Date shall have
been obtained pursuant to the Consent Solicitation.
K. Related Agreements. Administrative Agent shall have received (i) a
fully executed or conformed copy of each Related Agreement entered into
after the Closing Date and all principal documents executed after the
Closing Date in connection therewith, and each such Related Agreement
shall be in full force and effect and no provision thereof shall have
been modified or waived in any respect except as permitted under
subsection 7.13, and (ii) an Officer's Certificate from Company to the
effect set forth in clause (i), and each such Related Agreement shall
be reasonably satisfactory in form and substance to Administrative
Agent.
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L. Perfection of Security Interests. Company shall have taken or caused
to be taken such actions in such a manner so that Administrative Agent
has a valid and perfected First Priority security interest in the
entire personal property and mixed Collateral of AmeriComm Holdings and
its Subsidiaries. Such actions shall include, without limitation: (i)
the delivery pursuant to the applicable Collateral Documents of (a)
such certificates (which certificates shall be registered in the name
of Administrative Agent or properly endorsed in blank for transfer or
accompanied by irrevocable undated stock powers duly endorsed in blank,
all in form and substance satisfactory to Administrative Agent)
representing all of the shares of capital stock required to be pledged
pursuant to the Collateral Documents by AmeriComm Holdings and its
Subsidiaries and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to Administrative
Agent) evidencing any Collateral of AmeriComm Holdings and its
Subsidiaries; (ii) the delivery to Agents of (a) the results of a
recent search, by a Person satisfactory to Agents, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of AmeriComm Holdings and its Subsidiaries, together with
copies of all such filings disclosed by such search; (iii) the delivery
to Administrative Agent of Uniform Commercial Code financing statements
executed by AmeriComm Holdings and its Subsidiaries as to all such
Collateral granted by such Loan Parties for all jurisdictions as may be
necessary or desirable to perfect Administrative Agent's security
interest in such Collateral of AmeriComm Holdings and its Subsidiaries;
and (iv) the delivery to Administrative Agent of evidence reasonably
satisfactory to Administrative Agent that all other filings (including,
without limitation, Uniform Commercial Code termination statements and
filings with the United States Patent and Trademark Office of trademark
assignments and patent assignments for all trademarks and patents,
respectively, used by AmeriComm Holdings and its Subsidiaries
registered in the United States), recordings and other actions
Administrative Agent deems necessary or advisable to establish,
preserve and perfect the First Priority Liens granted to Administrative
Agent in personal and mixed property shall have been made.
M. Transaction Costs. Company shall have delivered to Administrative
Agent and Lenders a schedule, in a form satisfactory to Administrative
Agent, setting forth Company's reasonable best estimate of the fees,
costs and expenses payable by Holdings and its Subsidiaries on or
before the Effective Date in connection with the Debt Tender Offer, the
Consent Solicitation and the refinancings contemplated to occur on the
Effective Date.
N. Environmental Reports. Administrative Agent shall have received such
information, in form, scope and substance reasonably satisfactory to
Administrative Agent, as Administrative Agent may reasonably request
with respect to any environmental liabilities of AmeriComm Holdings or
any of its Subsidiaries.
O. Solvency Appraisal. Company shall have delivered to Administrative
Agent and Lenders, if otherwise required to be delivered in connection
with any refinancings to occur on the Effective Date, an opinion from
an independent valuation consultant, dated
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on or about the Effective Date, addressed to Agents and Lenders and in
form, scope and substance satisfactory to Agents, with appropriate
attachments, demonstrating that after giving effect to the consummation
of the refinancings contemplated to occur on the Effective Date,
Company and its Subsidiaries are Solvent.
P. Real Property. Administrative Agent shall have received from each
applicable Subsidiary of AmeriComm Holdings with respect to any
interest in real property (whether fee or leased) held by such
Subsidiary a Mortgage, Mortgage Policy and any other documents which
would be required to be delivered by such Subsidiary with respect to
such interest in real property pursuant to subsection 6.12 if such
interest had been acquired after the Closing Date by Company or any of
its Subsidiaries other than AmeriComm Holdings or any of its
Subsidiaries.
Q. Proceeds of Debt and Equity Capitalization of Company.
(i) Equity Capitalization. On or before the Effective Date,
Holdings shall have (a) issued and sold for Cash not less than
$30,000,000 in aggregate principal amount of Holdings Notes and shall
have contributed to Company, as common equity, all of the net Cash
proceeds from such issuance to Company and in addition (b) made a Cash,
common equity, contribution to Company of not less than $10,000,000.
(ii) Senior Subordinated Notes. On or before the Effective
Date, Company shall have issued and sold for Cash not less than
$100,000,000 in aggregate principal amount of Senior Subordinated
Notes.
(iii) Use of Proceeds. Company shall have provided evidence
reasonably satisfactory to Administrative Agent that the proceeds of
the debt and equity capitalization of Company described in the
immediately preceding clauses (i) and (ii) have been irrevocably
committed, to (a) finance the redemption, repurchase or other repayment
of outstanding Indebtedness with respect to the Existing Senior Notes,
the Existing TCW Notes and the Existing Americomm Credit Agreement, and
to pay fees, costs and expenses payable by Holdings and its
Subsidiaries on or before the Effective Date in connection with such
refinancing, in accordance with subsection 2.5B.
R. Repayment of Loans under Existing Credit Agreement; Fees; Letters of
Credit.
(i) On or before the Effective Date, Company shall have paid
to Administrative Agent, for distribution (as appropriate) to
Administrative Agent and Lenders, all accrued interest, fees and other
obligations due under the Existing Credit Agreement (including, without
limitation, any compensation payable under subsection 2.6D of the
Existing Credit Agreement).
(ii) No Letters of Credit shall be outstanding under the
Existing Credit Agreement as of the Effective Date.
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S. Opinions of Counsel Delivered Under Related Agreements. To the
extent requested by Administrative Agent, Administrative Agent and its
counsel shall have received copies of each of the opinions of counsel
delivered to the parties under any Related Agreements entered into
after the Closing Date, including, without limitation, the Senior
Subordinated Note Indenture and the Holdings Note Purchase Agreement,
together with a letter from each such counsel authorizing Agents and
Lenders to rely upon such opinion to the same extent as though it were
addressed to Agents and Lenders.
T. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated by this
Agreement and the Existing Credit Agreement and all documents
incidental thereto not previously found acceptable by Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Agent and such counsel, and Agent and such counsel shall
have received all such counterpart originals or certified copies of
such documents as Agent may reasonably request.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that
Funding Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the
chief executive officer or the chief financial officer of Company or by
any executive officer of Company designated by any of the
above-described officers on behalf of Company in a writing delivered to
Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained
herein and in the other Loan Documents shall be true and
correct in all material respects on and as of that Funding
Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties shall have been true and
correct in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing
contemplated by such Notice of Borrowing that would constitute
an Event of Default or a Potential Event of Default;
(iii) Each Loan Party shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement and the other Loan Documents provide
shall be performed or satisfied by it on or before that
Funding Date;
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(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Lender from making the Loans to be made by it,
on that Funding Date;
(v) The making of the Loans requested on such Funding
Date shall not violate any law including, without limitation,
Regulation T, Regulation U or Regulation X of the Board of
Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge
of Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against or affecting
Holdings or any of its Subsidiaries or any property of
Holdings or any of its Subsidiaries that has not been
disclosed by Company in writing and that is required to be so
disclosed pursuant to subsection 5.6 or 6.1(x) prior to the
making of the last preceding Loans, and there shall have
occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be
expected to have a Material Adverse Effect; and no injunction
or other restraining order shall have been issued and no
hearing to cause an injunction or other restraining order to
be issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by
this Agreement or the making of Loans hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, signed by the chief executive officer or the chief financial officer or
by any executive officer of Company designated by any of the above-described
officers on behalf of Company and Company in a writing delivered to
Administrative Agent, together with all other information specified in
subsection 3.1B(i) and such other documents or information as the applicable
Issuing Lender may reasonably require in connection with the issuance of such
Letter of Credit.
B. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
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SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make (or
maintain, as the case may be) the Loans, to induce Issuing Lender to issue (or
maintain, as the case may be) Letters of Credit and to induce other Lenders to
purchase participations therein, each of Holdings and Company represents and
warrants to each Lender, on the date of this Agreement, on the Effective Date,
on each Funding Date, and on the date of issuance of each Letter of Credit, that
the following statements are true and correct.
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Holdings, Company and each Subsidiary of
Holdings which is a corporation are duly organized, validly existing and in good
standing under the laws of their respective states of organization. Each
Subsidiary of Holdings which is a limited partnership is a duly organized and
validly existing limited partnership under the laws of its jurisdiction of
formation and is in good standing in such jurisdiction. Each of Holdings,
Company and their respective Subsidiaries has all requisite corporate or
partnership (as applicable) power and authority to own and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted, and each Loan Party has all requisite corporate or partnership (as
applicable) power and authority to enter into the Loan Documents, to carry out
the transactions contemplated thereby and, in the case of Company, to issue and
pay the Notes.
B. Qualification and Good Standing. Holdings, Company and each
Subsidiary of Holdings which is a corporation are qualified to do business and
in good standing, and each Subsidiary of Holdings which is a limited partnership
is authorized as a foreign limited partnership to do business, in every
jurisdiction where their respective assets are located and wherever necessary to
carry out their respective businesses and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had and will
not have a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.12.
D. Company and Subsidiaries. All of the Subsidiaries of Holdings as of
the Effective Date are identified in Schedule 5.1 annexed hereto, as it may be
supplemented from time to time in accordance with the provisions of subsection
6.9 The capital stock or other equity interests of each of the Subsidiaries
identified in Schedule 5.1 annexed hereto is duly authorized, validly issued,
fully paid and nonassessable and none of such capital stock or other equity
interests constitutes Margin Stock. The limited and general partnership
interests of each of the Subsidiaries of Holdings identified in Schedule 5.1
annexed hereto which are limited partnerships are duly and validly issued.
Holdings and each of the Subsidiaries of Holdings identified in Schedule 5.1
annexed hereto is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization set forth therein, has full
corporate or
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partnership (as applicable) power and authority to own its assets and properties
and to operate its business as presently owned and conducted and as proposed to
be conducted, and is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, in each case except where failure to be so
qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material Adverse Effect. Schedule 5.1 annexed
hereto correctly sets forth the ownership interest of Company in each of its
Subsidiaries identified therein.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the issuance, delivery and payment of the Notes have
been duly authorized by all necessary corporate and/or partnership (as
applicable) action on the part of each of the Loan Parties party thereto.
B. No Conflict. After giving effect to the consummation of the
transactions contemplated hereby to occur on the Effective Date, the execution,
delivery and performance by each of the applicable Loan Parties of the Loan
Documents, the issuance, delivery and payment of the Notes and the consummation
of the transactions contemplated by the Loan Documents do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to Holdings or any of its Subsidiaries, the Certificate or Articles
of Incorporation or Bylaws (or other analogous organizational document) of
Holdings or any of its Subsidiaries or any order, judgment or decree of any
court or other agency of government binding on Holdings or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Holdings or any of its Subsidiaries, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of Holdings or any
of its Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Administrative Agent), or (iv) require any approval of
stockholders or partners or any approval or consent of any Person under any
Contractual Obligation of Holdings or any of its Subsidiaries, except for such
approvals or consents which will be obtained on or before the Effective Date and
disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by
the Loan Parties of the Loan Documents, the issuance, delivery and payment of
the Notes and the consummation of the transactions contemplated by the Loan
Documents do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except to the extent obtained on or
before the Closing Date.
D. Binding Obligation. Each of the Loan Documents has been duly
executed and delivered by each of the Loan Parties party thereto and is the
legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
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E. Collateral Documents. The security interests created in favor of
Administrative Agent under the Collateral Documents will at all times from and
after the Closing Date constitute, as security for the obligations purported to
be secured thereby, a legal, valid and enforceable security interest in and
perfected First Priority Lien on all of the Collateral referred to therein in
favor of Administrative Agent for the benefit of the Lenders. Each Loan Party
has good title to its respective Collateral. No consents, filings or recordings
are required in order to perfect (or maintain the perfection or priority of) the
security interests purported to be created by any of the Collateral Documents,
other than such as have been obtained and which remain in full force and effect
and other than the filing of Uniform Commercial Code Financing Statements
delivered to Administrative Agent for filing but not yet filed, and the periodic
filing of Uniform Commercial Code continuation statements in respect of Uniform
Commercial Code financing statements filed by or on behalf of Administrative
Agent.
F. Absence of Third-Party Filings. Except such as may have been filed
in favor of Administrative Agent as contemplated by subsection 5.2E and except
as set forth on Schedule 7.2A annexed hereto, (i) no effective UCC financing
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office and (ii)
no effective filing covering all or any part of the IP Collateral is on file in
the PTO.
G. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System.
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5.3 Financial Condition; Projections.
A. Financial Statements. Company has heretofore delivered to Lenders,
at Lenders' request, the following financial statements and information: (i) the
audited consolidated balance sheets of DIMAC and its Subsidiaries as at December
31, 1995 and 1997 for the fiscal years then ended and as at December 31, 1996
for the eleven months then ended, and the related audited consolidated
statements of income and cash flows of DIMAC and its Subsidiaries for the
periods then ended, together with the report on such consolidated financial
statements of the applicable certified public accountants setting forth in each
case in comparative form the corresponding figures for the corresponding period
from the previous fiscal year, (ii) the unaudited consolidated balance sheet of
DIMAC and its Subsidiaries as at March 29, 1998 and the related unaudited
consolidated statement of income of DIMAC and its Subsidiaries for the three
months then ended, together with the corresponding figures for the corresponding
period of the previous fiscal year, (iii) the audited consolidated balance
sheets of AmeriComm Holdings and its Subsidiaries as at December 31, 1995, 1996
and 1997, and the related audited consolidated statements of income,
stockholders' equity and cash flows of AmeriComm Holdings and its Subsidiaries
for the periods then ended, together with the report on such consolidated
financial statements of the applicable certified public accountants setting
forth in each case in comparative form the corresponding figures for the
previous fiscal year, and (iv) the unaudited consolidated balance sheet of
AmeriComm Holdings and its Subsidiaries as at March 31, 1998 and the related
unaudited consolidated statements of income, stockholders' equity and cash flows
of AmeriComm Holdings and its Subsidiaries for the three months then ended,
together with the corresponding figures for the corresponding period of the
previous fiscal year. All such statements were prepared in conformity with GAAP
and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments and the absence of
footnote disclosure required in accordance with GAAP. Neither Company nor any of
its Subsidiaries has (and did not immediately following the funding of the
initial Loans under the Existing Credit Agreement, have) any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the most recent
financial statements delivered pursuant to subsection 6.1, the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole.
B. Projections. On and as of the Effective Date, the projections of
Company and its Subsidiaries for the period from January 1, 1998 through
December 31, 2006 previously delivered to Lenders (the "Projections") are based
on good faith estimates and assumptions made by the management of Company, it
being recognized, however, that projections as to future events are not to be
viewed as facts and that the actual results during the period or periods covered
by the Projections may differ from the projected results and that the
differences may be material. Notwithstanding the foregoing, as of the Effective
Date, management of Company believed that the Projections were reasonable and
attainable.
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5.4 No Material Adverse Change; No Restricted Junior Payments.
Since the Closing Date, no event or change has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
Since the Closing Date, neither Company nor any of its Subsidiaries has directly
or indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 7.5.
5.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. After giving effect to the transactions
contemplated by the Existing Credit Agreement to occur on the Closing Date and
the transactions contemplated to occur on the Effective Date, Holdings and its
Subsidiaries have good and marketable fee simple to or a valid leasehold
interest in all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, except for assets
disposed of since the date of such financial statements in the ordinary course
of business or as otherwise permitted under subsection 7.7 and except for such
defects that neither individually nor in the aggregate could reasonably be
expected to have a Material Adverse Effect. Except as permitted by this
Agreement, all such properties and assets are free and clear of Liens.
B. Real Property. As of the Effective Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all fee interests of any Loan
Party in real property and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in Schedule 5.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company does not have knowledge of any material default
that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
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5.6 Litigation; Adverse Facts.
There is no action, suit, proceeding, arbitration or governmental
investigation (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, pending or, to the knowledge of Company,
threatened against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries that, either individually or in
the aggregate together with all other such actions, proceedings and
investigations, has had, or could reasonably be expected to result in, a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries is (i) in
violation of any applicable law that has had, or could reasonably be expected to
result in, a Material Adverse Effect or (ii) subject to or in default with
respect to any final judgment, writ, injunction, decree, rule or regulation of
any court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that
has had, or could reasonably be expected to result in, a Material Adverse
Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all material tax
returns and reports of Holdings and its Subsidiaries required to be filed by any
of them have been timely filed, and all material taxes, assessments, fees and
other governmental charges upon Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Neither Holdings nor Company
knows of any proposed tax assessment against Holdings or any of its Subsidiaries
other than those which are being actively contested by Holdings or such
Subsidiary in good faith and by appropriate proceedings and for which reserves
or other appropriate provisions, if any, as may be required in conformity with
GAAP shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected (based upon
assumptions that are reasonable at the time made) to result in, individually or
in the aggregate, a Material Adverse Effect.
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5.9 Governmental Regulation.
Neither Holdings nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
Neither Holdings nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
5.11 Employee Benefit Plans.
A. Holdings and each of its ERISA Affiliates are in compliance with all
applicable provisions and requirements of ERISA with respect to each Employee
Benefit Plan, and have performed all their obligations under each Employee
Benefit Plan, except to the extent that any non-compliance with ERISA or any
such failure to perform would not result in material liability of Holdings or
any of its ERISA Affiliates.
B. No ERISA Event has occurred which has resulted or is reasonably
likely to result in any material liability of Company or any of its ERISA
Affiliates to the PBGC or to any other Person.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code and/or Section 601 of ERISA, neither Holdings nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employees of Holdings or any of its Subsidiaries other than as set forth on
Schedule 5.11 annexed hereto.
D. No Pension Plan has an Unfunded Current Liability in an amount that
would have a Material Adverse Effect.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, could not reasonably be expected to have a Material Adverse Effect.
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5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the loan transactions contemplated hereby, and
Company hereby indemnifies Lenders against, and agrees that it will hold Lenders
harmless from, any claim, demand or liability for any such broker's or finder's
fees alleged to have been incurred in connection herewith or therewith and any
expenses (including reasonable fees, expenses and disbursements of counsel)
arising in connection with any such claim, demand or liability.
5.13 Environmental Protection.
Except where no Material Adverse Effect could reasonably be expected to
result therefrom:
(i) the operations of Holdings and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in
the Facilities) comply in all material respects with all Environmental
Laws;
(ii) Holdings and each of its Subsidiaries have obtained all
material Governmental Authorizations under Environmental Laws necessary
to their respective operations, and all such Governmental
Authorizations are in good standing, and Holdings and each of its
Subsidiaries are in compliance with all material terms and conditions
of such Governmental Authorizations;
(iii) neither Holdings nor any of its Subsidiaries has
received (a) any notice or claim to the effect that it is or may be
liable to any Person as a result of or in connection with any Hazardous
Materials or (b) any letter or request for information under Section
104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. -section- 9604) or comparable state laws,
and, to the best knowledge of Comp+any, none of the operations of
Holdings or any of its Subsidiaries is the subject of any federal or
state investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location;
(iv) none of the operations of Holdings or any of its
Subsidiaries is subject to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental Laws;
(v) to the knowledge of Holdings or Company, neither Holdings
nor any of its Subsidiaries nor any of their respective Facilities or
operations is subject to any outstanding written order or agreement
with any governmental authority or private party relating to (a) any
Environmental Laws or (b) any Environmental Claims;
(vi) neither Holdings nor any of its Subsidiaries has any
material contingent liability in connection with any Release of any
Hazardous Materials by Holdings or any of its Subsidiaries;
97
(vii) neither Holdings nor any of its Subsidiaries nor, to the
knowledge of Holdings or Company, any predecessor of Holdings or any of
its Subsidiaries has filed any notice or report under any Environmental
Law indicating past or present treatment or Release of Hazardous
Materials at any Facility, and none of Holdings' or any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent;
(viii) to the knowledge of Company, no Hazardous Materials
exist on or under any Facility in a manner that has a reasonable
possibility of giving rise to an Environmental Claim;
(ix) neither Holdings nor any of its Subsidiaries nor, to the
best knowledge of Company, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that has a reasonable
possibility of giving rise to an Environmental Claim;
(x) to the knowledge of Company, no underground storage tanks
or surface impoundments are on or at any Facility; and
(xi) to the knowledge of Company, no Lien in favor of any
Person relating to or in connection with any Environmental Claim has
been filed or has been attached to any Facility.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Holdings or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 Solvency.
Each Loan Party is, and Company and its Subsidiaries, taken as a whole,
are, and, upon the incurrence of any Obligations by any Loan Party on any date
on which this representation is made, will be, Solvent.
5.16 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Agents
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Seller's Warranties. Except to the extent otherwise set forth herein
or in the schedules hereto, to Holdings' and Company's knowledge (i) each of the
representations and warranties given by DIMAC or Heritage to Company in the
DIMAC Acquisition Agreement and (ii) each of the representations and warranties
given by AmeriComm or AmeriComm Holdings to Company in the AmeriComm Acquisition
Agreement was true and correct in all material respects as of the Closing Date
(or as of any earlier date to which such representation and
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warranty specifically relates), in each case subject to the qualifications set
forth in the schedules to the DIMAC Acquisition Agreement and the AmeriComm
Acquisition Agreement, as applicable.
C. Warranties of Company. Subject to the qualifications and the
schedules set forth therein, each of the representations and warranties given by
Company to DIMAC or Heritage in the DIMAC Acquisition Agreement and each of the
representations and warranties given by Company to AmeriComm Holdings in the
AmeriComm Acquisition Agreement was true and correct in all material respects as
of the Closing Date.
D. Survival. Notwithstanding anything in either the DIMAC Acquisition
Agreement or the AmeriComm Acquisition Agreement to the contrary, the
representations and warranties of Company set forth in subsections 5.16B and
5.16C shall, solely for purposes of this Agreement, survive the Closing Date for
the benefit of Agents and Lenders.
5.17 Disclosure.
The representations and warranties of Holdings and its Subsidiaries
contained in the Loan Documents and in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, when taken together, do not contain any untrue statement of a
material fact or omit to state a material fact (known to Holdings or the
applicable Subsidiary, in the case of any document not furnished by it)
necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There is no fact known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that has had, or could reasonably be expected to result
in, a Material Adverse Effect and that has not been disclosed herein or in such
other documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
5.18 Subordination of Subordinated Indebtedness.
The subordination provisions of any Subordinated Indebtedness are
enforceable against the holders thereof, and the Loans and other monetary
Obligations hereunder are and will be within the definition of "Senior
Indebtedness" or "Senior Debt", as the case may be, included in such provisions.
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5.19 Year 2000 Problems.
Company and its Subsidiaries have (i) engaged in a process of
assessment of the existence of the Year 2000 Problems reasonably appropriate to
the scope and complexity of their respective Systems; (ii) adopted and are
successfully implementing a plan of correction ("Plan of Correction") which,
Company reasonably believes will result in a substantial elimination of Year
2000 Problems before any processing failure of a System or of Systems due to
Year 2000 Problems which might have a material effect on the business,
operations or financial performance of Company and, in the case of all Systems
critical to the business or operations of Company and its Subsidiaries,
elimination in all material respects of Year 2000 Problems prior to any
processing failure of a System or Systems due to Year 2000 Problems which might
have a material effect on the business, operations or financial performance of
Company; (iii) adopted and are successfully implementing validation procedures
calculated to test on an ongoing basis the sufficiency of the Plan of
Correction, its implementation, and the correction of Year 2000 Problems in
substantially all Systems and all Systems critical to the business or operations
of Company and its Subsidiaries; (iv) adopted and are successfully implementing
policies and procedures requiring regular reports to, and monitoring by, senior
management of Company concerning the foregoing matters; and (v) provided
Administrative Agent true and correct copies of the written Plan of Correction,
and related implementation budgets, reviewed and approved by Company's Board of
Directors.
SECTION 6.
AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Administrative Agent (with sufficient copies
for delivery to each Lender):
(i) Monthly Financials: as soon as available and in any event
within 30 days after each calendar month-end commencing with September
30, 1998, or in the case of the third month of any fiscal quarter,
within 45 days after the end of such month, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the
end of each fiscal month ending after the Closing Date and the related
consolidated and consolidating statements of income, and consolidated
statement of cash flows of Company and its Subsidiaries for such month
and for the period from the beginning of the then
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current Fiscal Year to the end of such month, setting forth, in the
case of statements of income only, in comparative form the
corresponding figures for the corresponding periods of the previous
fiscal year and the corresponding figures from the consolidated plan
and financial forecast for the current Fiscal Year delivered pursuant
to subsection 6.1(xiii), all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments; and (b) a
narrative report describing the operations of Company and its
Subsidiaries taken as a whole in the form prepared for presentation to
senior management for such month and for the period from the beginning
of the then current Fiscal Year to the end of such month;
(ii) Quarterly Financials: as soon as available and in any
event within 45 days after the end of the Fiscal Quarter ending
September 30, 1998 and of each Fiscal Quarter thereafter, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated and consolidating statements of income and consolidated
statement of cash flows of Company and its Subsidiaries for such Fiscal
Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter, setting forth, in the
case of statements of income only, in comparative form the
corresponding figures for the corresponding periods of the previous
fiscal year and the corresponding figures from the consolidated plan
and financial forecast for the current Fiscal Year delivered pursuant
to subsection 6.1(xiii), all in reasonable detail and certified by the
chief financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b)
to the extent otherwise prepared for presentation to senior management,
a narrative report describing the operations of Company and its
Subsidiaries taken as a whole in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter;
(iii) Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income and consolidated
statement of cash flows of Company and its Subsidiaries for such Fiscal
Year, setting forth, in the case of statements of income only, in
comparative form the corresponding figures for the previous fiscal year
and the corresponding figures from the consolidated plan and financial
forecast delivered pursuant to subsection 6.1(xiii) for the Fiscal Year
covered by such financial statements, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Company and its
Subsidiaries taken as a whole in the form prepared for
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presentation to senior management for such Fiscal Year, and (c) in the
case of such consolidated financial statements, a report thereon of
independent certified public accountants of recognized national
standing selected by Company and reasonably satisfactory to
Administrative Agent, which report shall be unqualified as to going
concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the audit by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (ii) and (iii) above, (a) an Officer's
Certificate of Company stating that the signer has reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in Section 7;
(v) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Company and
its Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or
(xiii) of this subsection 6.1 will differ in any material respect from
the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting
principles and policies been made, then (a) together with the first
delivery of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of Company and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and
(z) the two full fiscal years immediately preceding the Fiscal Year in
which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, a written statement of the chief accounting officer or
chief financial officer of Company setting forth the differences which
would have resulted if such financial statements had been prepared
without giving effect to such change, if reasonably requested by
Administrative Agent;
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(vi) Accountants' Certification: together with each delivery
of consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report thereon (a)
stating that their audit has included a reading of the terms of this
Agreement and the other Loan Documents as they relate to the covenants
set forth in subsection 7.6 and accounting matters, and (b) stating
whether, in connection with their audit examination, any condition or
event, insofar as such condition or event relates to the covenants set
forth in subsection 7.6 or accounting matters, that constitutes an
Event of Default or Potential Event of Default has come to their
attention and, if such a condition or event has come to their
attention, specifying the nature and period of existence thereof;
provided that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the course of their
audit examination;
(vii) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(viii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders, (b) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made
available generally by Holdings or any of its Subsidiaries to the
public concerning material developments in the business of Holdings or
any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Holdings or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officer's Certificate specifying the nature and
period of existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition,
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and what action Holdings or Company has taken, is taking and proposes
to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or
any property of Holdings or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by Company to
Lenders or (Y) any material development in any Proceeding that, in any
case:
(a) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
(b) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as
a result of, the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) within 45 days after the end of each
fiscal quarter of Company, a schedule of all Proceedings involving an
alleged liability of, or claims against or affecting, Holdings or any
of its Subsidiaries equal to or greater than $2,500,000 and promptly
after request by Administrative Agent such other information as may
be reasonably requested by Administrative Agent to enable
Administrative Agent and its counsel to evaluate any of such
Proceedings;
(xi) ERISA Events: promptly upon Company becoming aware of the
occurrence of any ERISA Event that would result in a material liability
of Company or any of its ERISA Affiliates, a written notice specifying
the nature thereof, what action Company or any of its ERISA Affiliates
has taken, is taking or proposes to take with respect thereto and, when
known, any action taken or threatened by the Internal Revenue Service,
the Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a)
all written notices received by Company or any of its ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and (b)
such other documents or governmental reports or filings relating to any
Employee Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any
event no later than the beginning of each Fiscal Year, a monthly
consolidated and consolidating plan and financial forecast for the next
succeeding Fiscal Year, including without limitation (a) forecasted
consolidated balance sheet and forecasted consolidated and
consolidating statements of income and consolidated statement of cash
flows of Company and its Subsidiaries for such Fiscal Year, together
with a pro forma Compliance Certificate for
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such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, and (b) such other information and projections as
Administrative Agent may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
satisfactory to Administrative Agent outlining all material insurance
coverage maintained as of the date of such report by Holdings and its
Subsidiaries and all material insurance coverage planned to be
maintained by Holdings and its Subsidiaries in the immediately
succeeding Fiscal Year;
(xv) Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits and
reports, whether prepared by personnel of Holdings or any of its
Subsidiaries or by independent consultants, with respect to significant
environmental matters at any Facility or which relate to an
Environmental Claim which could result in a Material Adverse Effect;
(xvi) Regulatory Notices: promptly upon receipt, notification
of any non-renewal, cancellation, termination, revocation, suspension,
impairment or material modification of, or of any hearing, proceeding
or investigation regarding, any license held by Holdings or any of its
Subsidiaries which is reasonably likely to have a Material Adverse
Effect;
(xvii) Holdings' Financial Statements: promptly upon their
becoming available, copies of all unaudited and audited financial
statements and reports sent or made available by Holdings to creditors
of Holdings; and
(xviii) Other Information: with reasonable promptness, such
other information and data with respect to Holdings or any of its
Subsidiaries as from time to time may be reasonably requested by
Administrative Agent.
For purposes of subsections 6.1(i), 6.1(ii) and 6.1(iii),
"consolidating" balance sheets of Company and its Subsidiaries refer to balance
sheets consolidating the financial position of the major operating group of
Company's Subsidiaries, which operating groups as of the Effective Date consist
of (1) DIMAC and its Subsidiaries and (2) AmeriComm Holdings and its
Subsidiaries.
6.2 Corporate Existence
Except as permitted under subsection 7.7, each of Holdings and Company
will, and will cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its corporate existence and all rights and franchises
material to the business of Holdings and its Subsidiaries (on a consolidated
basis).
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6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
need be paid if being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than with Holdings, Company or Subsidiaries of Company).
6.4 Maintenance of Properties; Insurance.
Company will, and will cause each of its Subsidiaries to, maintain or
cause to be maintained in good repair, working order and condition, ordinary
wear and tear excepted, all material properties used or useful in the business
of Company and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof. Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and businesses of its Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. Each such
policy of casualty insurance covering damage to or loss of property shall name
Administrative Agent for the benefit of Lenders as the loss payee thereunder for
all losses, subject to application of proceeds as required by subsection
2.4B(iii)(d), and shall provide for at least 30 days' prior written notice to
Administrative Agent of any modification or cancellation of such policy.
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6.5 Inspection; Lender Meeting.
Company shall, and shall cause each of its Subsidiaries to, permit any
authorized representatives designated by any Lender to visit and inspect any of
the properties of Company or any of its Subsidiaries, including its and their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants, all upon reasonable
advance notice and at such reasonable times during normal business hours and as
often as may be reasonably requested. Without in any way limiting the foregoing,
Company will, upon the request of Administrative Agent, participate in a meeting
of Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or such other location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
6.6 Compliance with Laws, etc.
Company shall, and shall cause each of its Subsidiaries to, comply with
the requirements of all applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could reasonably be expected to
cause a Material Adverse Effect.
6.7 Environmental Disclosure and Inspection.
A. Company shall, and shall cause each of its Subsidiaries to, exercise
all due diligence in order to comply and cause (i) all tenants under any leases
or occupancy agreements affecting any portion of the Facilities and (ii) all
other Persons on or occupying such property, to comply with all Environmental
Laws, noncompliance with which could reasonably be expected to cause a Material
Adverse Effect.
B. Company agrees that Administrative Agent may, from time to time,
retain, at Company's expense, an independent professional consultant reasonably
acceptable to Company to review any report relating to Hazardous Materials
prepared by or for Company and to conduct its own investigation of any Facility
currently owned, leased, operated or used by Company or any of its Subsidiaries,
if (x) an Event of Default or Potential Event of Default shall have occurred and
be continuing, or (y) Administrative Agent reasonably believes (1) that an
occurrence relating to such Facility is likely to give rise to an Environmental
Claim or (2) that a violation of an Environmental Law on or around such Facility
has occurred, which could, in either such case, result in a Material Adverse
Effect. Company agrees to use all reasonable efforts to obtain permission for
Administrative Agent's professional consultant to conduct its own investigation
of any such Facility previously owned, leased, operated or used by Company or
any of its Subsidiaries. Company shall use its reasonable efforts to obtain for
Administrative Agent and its agents, employees, consultants and contractors the
right, upon reasonable notice to Company, to enter into or on to the Facilities
currently owned, leased, operated or used by Company or any of its Subsidiaries
to perform such tests on such property as are reasonably necessary to conduct
such a review and/or investigation. Any such investigation of any Facility shall
be conducted, unless otherwise agreed to by Company and Administrative Agent,
during
107
normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at any such
Facility or to cause any damage or loss to any property at such Facility.
Company and Administrative Agent hereby acknowledge and agree that any report of
any investigation conducted at the request of Administrative Agent pursuant to
this subsection 6.7B will be obtained and shall be used by Administrative Agent
and Lenders for the purposes of Lenders' internal credit decisions, to monitor
and police the Loans and to protect Lenders' security interests, if any, created
by the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company acknowledges and agrees
that (i) it will indemnify and hold harmless Administrative Agent and each
Lender from any costs, losses or liabilities relating to Company's use of or
reliance on such report, (ii) neither Agent nor any Lender makes any
representation or warranty with respect to such report, and (iii) by delivering
such report to Company, neither Administrative Agent nor any Lender is requiring
or recommending the implementation of any suggestions or recommendations
contained in such report.
C. Company shall promptly advise Administrative Agent in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state, local or foreign governmental or regulatory
agency under any applicable Environmental Laws, (ii) any and all written
communications with respect to any Environmental Claims that have a reasonable
possibility of giving rise to a Material Adverse Effect or with respect to any
Release of Hazardous Materials required to be reported to any federal, state or
local governmental or regulatory agency, (iii) any remedial action taken by
Company or any other Person in response to (x) any Hazardous Materials on, under
or about any Facility, the existence of which has a reasonable possibility of
resulting in an Environmental Claim having a Material Adverse Effect, or (y) any
Environmental Claim that could have a Material Adverse Effect, (iv) Company's
discovery of any occurrence or condition on any real property adjoining or in
the vicinity of any Facility that could cause such Facility or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use thereof under any Environmental Laws, and (v) any request for information
from any governmental agency that fairly suggests such agency is investigating
whether Company or any of its Subsidiaries may be potentially responsible for a
Release of Hazardous Materials.
D. Company shall promptly notify Administrative Agent of (i) any
proposed acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to expose Company or any of its
Subsidiaries to, or result in, Environmental Claims that could have a Material
Adverse Effect or that could reasonably be expected to have a material adverse
effect on any Governmental Authorization then held by Company or any of its
Subsidiaries and (ii) any proposed action to be taken by Company or any of its
Subsidiaries to commence manufacturing, industrial or other similar operations
that could reasonably be expected to subject Company or any of its Subsidiaries
to additional laws, rules or regulations, including, without limitation, laws,
rules and regulations requiring additional environmental permits or licenses,
that are materially different from the laws, rules and regulations applicable to
the operations of Company and its Subsidiaries as of the Closing Date.
E. Company shall, at its own expense, provide copies of such documents
or information as Administrative Agent may reasonably request in relation to any
matters disclosed
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pursuant to this subsection 6.7.
6.8 Company's Remedial Action Regarding Hazardous Materials.
Company shall promptly take, and shall cause each of its Subsidiaries
promptly to take, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on or under any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations unless the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. In
the event Company or any of its Subsidiaries undertakes any remedial action with
respect to any Hazardous Materials on or under any Facility, Company or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities except when, and only to the extent that, Company's or such
Subsidiary's liability for such presence, storage, use, disposal, transportation
or discharge of any Hazardous Materials is being contested in good faith by
Company or such Subsidiary.
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6.9 Execution of Subsidiary Guaranty and Collateral Documents by
Subsidiaries and Future Subsidiaries.
In the event that any Person that becomes a Subsidiary after the date
hereof in accordance with the provisions of subsection 7.7(vii) or (viii),
Company will promptly notify Administrative Agent of that fact and cause such
Subsidiary (at the time it becomes a Subsidiary) to execute and deliver to
Administrative Agent a counterpart of the Subsidiary Guaranty, the Pledge
Agreement and the Security Agreement, and to take all such further action and
execute all such further documents and instruments as may be required to grant
and perfect in favor of Administrative Agent, for the benefit of Lenders, a
First Priority security interest in all of the real, mixed and personal property
assets of such Subsidiary. Company shall deliver to Administrative Agent,
together with such Loan Documents, (i) (x) if such Subsidiary is a corporation,
(a) certified copies of such Subsidiary's Articles or Certificate of
Incorporation, together, if applicable, with a good standing certificate from
the Secretary of State of the jurisdiction of its incorporation, each to be
dated a recent date prior to their delivery to Administrative Agent, (b) a copy,
if applicable, of such Subsidiary's Bylaws, certified by its corporate secretary
or an assistant corporate secretary as of a recent date prior to their delivery
to Administrative Agent, (c) a certificate executed by the secretary or an
assistant secretary of such Subsidiary as to (i) the incumbency and signatures
of the officers of such Subsidiary executing the Subsidiary Guaranty, the
Collateral Documents and the other Loan Documents to which such Subsidiary is a
party and (ii) the fact that the attached resolutions of the Board of Directors
of such Subsidiary authorizing the execution, delivery and performance of the
Subsidiary Guaranty, such Collateral Documents and such other Loan Documents are
in full force and effect and have not been modified or rescinded, (y) if such
Subsidiary is a limited partnership, (a) from or with respect to such
Subsidiary's general partner, each of the items required to be delivered under
item (a) of clause (x) above if such Subsidiary were a corporation, (b)
certified copies of its Certificate of Limited Partnership, together with a good
standing certificate from the Secretary of State of its jurisdiction, each dated
a recent date prior to their delivery to Administrative Agent, and (c) copies of
its limited partnership agreement, certified as true, correct and in full force
and effect as of the date of its delivery to Administrative Agent, with no
amendments, modifications or supplements thereto, by the corporate secretary or
an assistant secretary of its general partner, and (iv) a favorable opinion of
counsel to such Subsidiary, in form and substance satisfactory to Administrative
Agent and its counsel, as to (a) the due organization and good standing of such
Subsidiary, (b) the due authorization, execution and delivery by such Subsidiary
of the Subsidiary Guaranty, the Collateral Documents and any other Loan
Documents to which it is a party and (c) the enforceability of the Subsidiary
Guaranty and such Collateral Documents against such Subsidiary, and (d) such
other matters as Administrative Agent may reasonably request, all of the
foregoing to be reasonably satisfactory in form and substance to Administrative
Agent and its counsel. In addition, Company shall promptly deliver a supplement
to Schedule 5.1 to Administrative Agent if any Subsidiary is created or acquired
pursuant to subsection 7.7(vii) or (viii).
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6.10 Interest Rate Protection.
At all times Company shall maintain in effect one or more Interest Rate
Agreements in form and substance satisfactory to Administrative Agent to the
extent necessary so that the sum of (i) the aggregate notional principal amount
of Indebtedness covered by such Interest Rate Agreements plus (ii) the aggregate
principal amount of Indebtedness of Company bearing interest at fixed rates,
equals or exceeds $100,000,000.
6.11 Further Assurances.
At any time or from time to time upon the request of Administrative
Agent, Company will, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as Administrative Agent
may reasonably request in order to effect fully the purposes of the Loan
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement, the Notes and the other Loan Documents. In furtherance
and not in limitation of the foregoing, Company shall take, and cause each of
its Subsidiaries to take, such actions as Administrative Agent may reasonably
request from time to time (including, without limitation, the execution and
delivery of guaranties, security agreements, pledge agreements, mortgages, deeds
of trust, landlord's consents and estoppels, stock powers, financing statements
and other documents, the filing or recording of any of the foregoing, title
insurance with respect to any of the foregoing that relates to an interest in
real property, and the delivery of stock certificates and other collateral with
respect to which perfection is obtained by possession) to ensure that the
Obligations are guarantied by the Guarantors and are secured by substantially
all of the assets of Company and its Subsidiaries and all of the outstanding
capital stock of Company.
6.12 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral.
A. Notice of Property Acquisition. As promptly as practicable and in
any event no later than the date of acquisition by Company or any of its
Subsidiaries of any interest in real property (whether fee or leased), Company
shall deliver written notice to Administrative Agent of such acquisition.
B. Conforming Leasehold Interests. If Company or any of its
Subsidiaries acquires any Leasehold Property, Company shall, or shall cause such
Subsidiary to, use its best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material obligations
or to expend more than a nominal amount of money over and above the
reimbursement, if required, of the landlord's out-of-pocket costs, including
attorneys fees) to cause such Leasehold Property to be a Conforming Leasehold
Interest.
C. Additional Mortgages, Etc. From and after the Closing Date, in the
event that (i) Company or any of its Subsidiaries acquires any fee interest in
real property (ii) Company or any of its Subsidiaries acquires any leasehold
property (other than any leased property (a) with respect to which the aggregate
payments under the term of the lease are less than $150,000 per
111
annum, (b) that does not contain any financial records not contained elsewhere,
(c) that does not have any property with an aggregate value in excess of
$250,000 and (d) that is not material to the operation of the business of
Company or any of its Subsidiaries (each such property being an "Excluded Leased
Asset"), or (iii) at the time any Person becomes a Subsidiary Guarantor, such
Person owns or holds any fee interest in real property or any leasehold interest
(other than an Excluded Leased Asset) (any such real property asset described in
the foregoing clauses (i), (ii) or (iii) being an "Additional Mortgaged
Property"), Company or such Subsidiary shall deliver to Administrative Agent, as
soon as practicable after such Person acquires such Additional Mortgaged
Property the following:
(i) Additional Mortgage and Assignment of Rents and Leases. A
fully executed and notarized Mortgage (an "Additional Mortgage") and a
fully executed and notarized Assignment of Rents and Leases, each in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering the interest of such Loan Party in such
Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel
to such Loan Party, in form and substance satisfactory to
Administrative Agent and its counsel, as to the due authorization,
execution and delivery by such Loan Party of such Additional Mortgage
and such other matters as Administrative Agent may reasonably request,
and (b) if required by Administrative Agent, an opinion of counsel
(which counsel shall be reasonably satisfactory to Administrative
Agent) in the state in which such Additional Mortgaged Property is
located with respect to the enforceability of the form of Additional
Mortgage to be recorded in such state and such other matters (including
without limitation any matters governed by the laws of such state
regarding personal property security interests in respect of any
Collateral) as Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to Administrative
Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold
Interest. In the case of any Additional Mortgaged Property consisting
of a Leasehold Property, (a) a Landlord Consent and Estoppel and (b)
evidence that such Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) An ALTA standard form mortgagee
title insurance policy or an unconditional commitment therefor (an
"Additional Mortgage Policy") issued by the Title Company with respect
to such Additional Mortgaged Property, in an amount satisfactory to
Administrative Agent, insuring fee simple title to, or a valid
leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien
on such Additional Mortgaged Property, subject only to a standard
survey exception, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances under this
Agreement and for any other matters reasonably requested by
Administrative Agent and (2) shall provide for affirmative insurance
and such reinsurance as Administrative Agent may reasonably request,
all of the foregoing in form and substance reasonably satisfactory to
Administrative
112
Agent; and (b) evidence satisfactory to Administrative Agent that such
Loan Party has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the
issuance of the Additional Mortgage Policy and (ii) paid to the Title
Company or to the appropriate governmental authorities all expenses and
premiums of the Title Company in connection with the issuance of the
Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate
records;
(v) Title Report. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report
issued by the Title Company with respect thereto, dated not more than
30 days prior to the date such Additional Mortgage is to be recorded
and satisfactory in form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies
of all recorded documents listed as exceptions to title or otherwise
referred to in the Additional Mortgage Policy or title report delivered
pursuant to clause (v) or (vi) above;
(vii) Matters Relating to Flood Hazard Properties. (a)
Evidence, which may be in the form of a letter from an insurance broker
or a municipal engineer, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if such
Additional Mortgaged Property is a Flood Hazard Property, such Loan
Party's written acknowledgement of receipt of written notification from
Administrative Agent (1) that such Additional Mortgaged Property is a
Flood Hazard Property and (2) as to whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event such Additional Mortgaged
Property is a Flood Hazard Property that is located in a community that
participates in the National Flood Insurance Program, evidence that
Company has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations of the
Board of Governors of the Federal Reserve System; and
(viii) Environmental Audit. Reports and other information, in
form, scope and substance satisfactory to Administrative Agent and
prepared by environmental consultants satisfactory to Administrative
Agent, concerning any environmental hazards or liabilities to which
Company or any of its Subsidiaries may be subject with respect to such
Additional Mortgaged Property;
provided, that notwithstanding anything to the contrary contained in this
subsection 6.12, neither Company nor any of its Subsidiaries shall be required
to deliver any of the items set forth in this subsection 6.12C with respect to
any property unless Administrative Agent requests delivery of such items.
113
6.13 Year 2000 Problems.
Company shall (i) promptly advise Administrative Agent of any material
(A) disruption or delay in the implementation of the Plan of Correction, as the
same may be updated from time to time, including any determination by Company,
any senior manager of Company or any other Subsidiary of Company, or any
consultant known to Company or any other Subsidiary of Company with respect to
Year 2000 Problems ("Consultant") that there is or will be a failure to achieve
any of the objectives specifically identified in subdivision (ii) of subsection
5.19, or (B) change in the written Plan of Correction or related implementation
budget referred to in subdivision (v) of subsection 5.19, or any later version
thereof furnished to Administrative Agent; (ii) afford to Administrative Agent
and its representatives, upon three days' notice to Company, reasonable access
to Company's and its Subsidiaries' properties, personnel, service providers,
vendors and records for the purpose of enabling Administrative Agent to assess
the adequacy of, and the record of performance of Company and its Subsidiaries
with respect to, the Plan of Correction, related financial performance and
conformity of actual performance with related implementation budgets; and (iii)
periodically report to Administrative Agent, in such form as Administrative
Agent may reasonably request, on (a) the progress of Company and its
Subsidiaries in implementing the Plan of Correction, (b) the budget for, and
actual financial performance with respect to, implementation of the Plan of
Correction and (c) the assessment of Company, any senior manager of Company or
any other Subsidiary of Company, or any Consultant of the adequacy of the Plan
of Correction or the related implementation budget.
SECTION 7.
NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7. Holdings covenants and agrees that, so long as any
of the Commitments hereunder shall remain in effect and until payment in full of
all of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Holdings shall perform all covenants in subsections 7.13A, 7.13B and
7.15.
7.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Each of the Loan Parties may become and remain liable with
respect to its respective Obligations;
(ii) Company and its Subsidiaries, as applicable, may remain
liable with
114
respect to Indebtedness described in Schedule 7.1 annexed hereto;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent Obligations
so extinguished;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Indebtedness under Capital Leases capitalized on the
consolidated balance sheet of Company and its Subsidiaries and other
Indebtedness secured by Liens permitted under subsection 7.2A(iii);
provided, that the aggregate amount of all Indebtedness outstanding
under this clause (iv) at any time shall not exceed $20,000,000;
(v) Company may become and remain liable with respect to
Indebtedness to any of its Subsidiaries, any Subsidiary Guarantor may
become and remain liable with respect to Indebtedness to Company, and
any Subsidiary of Company which is not a Subsidiary Guarantor may
become and remain liable with respect to Indebtedness to any other
Subsidiary of Company which is not a Subsidiary Guarantor; provided
that, in each case, (a) all such intercompany Indebtedness shall be
evidenced by promissory notes, (b) all such intercompany Indebtedness
owed by Company to any of its respective Subsidiaries shall be
unsecured and subordinated in right of payment to the payment in full
of the Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, (c) any payment by
Company or by any Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by Company or by such Subsidiary to
Company or to any of its Subsidiaries for whose benefit such payment is
made and (d) each such Subsidiary Guarantor shall have executed and
delivered a counterpart of the Subsidiary Guaranty and the Pledge
Agreement and the Security Agreement;
(vi) Company may become and remain liable with respect to
Permitted Seller Paper in an aggregate principal amount not to exceed
$25,000,000 at any time outstanding;
(vii) Company and its Subsidiaries may remain liable with
respect to Permitted Earn Out Agreements in effect on the Closing Date,
and Company may become and remain liable with respect to Permitted Earn
Out Agreements after the Effective Date;
(viii) AmeriComm Holdings and its Subsidiaries may remain
liable with respect to Indebtedness under any Existing Senior Notes not
tendered pursuant to the Debt Tender Offer;
(ix) Company may become and remain liable with respect to the
Senior Subordinated Notes; and
(x) Company and its Subsidiaries may become and remain liable
with respect
115
to other Indebtedness in an aggregate principal amount not to exceed at
any time outstanding $15,000,000.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement, or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any state or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens described in Schedule 7.2A annexed hereto;
(iii) Purchase money security interests (including mortgages,
conditional sales, Capital Leases and any other title retention or
deferred purchase devices) in real or tangible personal property of
Company or any of its Subsidiaries existing or created at the time of
acquisition thereof or within 30 days thereafter, and the renewal,
extension and refunding of any such security interest in an amount not
exceeding the amount thereof remaining unpaid immediately prior to such
renewal, extension or refunding; provided, however, that such
Indebtedness is permitted by subsection 7.1(iv) or subsection 7.1(x)
hereof; and provided further, that Indebtedness which is not permitted
by subsection 7.1(iv) and is secured by Liens permitted under this
subsection 7.2A(iii) shall not (a) exceed $5,000,000 in aggregate
principal amount outstanding and (b) be owed to any Person other than a
Lender;
(iv) Liens on assets of Company and its Subsidiaries not
otherwise permitted under this subsection 7.2A, securing Indebtedness
in an aggregate amount not to exceed $2,500,000 at any time
outstanding;
(v) [Intentionally omitted]; and
(vi) Liens in favor of Administrative Agent granted pursuant
to the Collateral Documents.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any consensual Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than Liens
excepted by the provisions of subsection 7.2A, it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien equally
and ratably with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstanding the
foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any
116
such Lien not permitted by the provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired (other than in connection with the Senior
Subordinated Notes, the Holdings Notes and the Holdings PIK Notes).
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except (x) for encumbrances or restrictions under the Senior
Subordinated Note Indenture, and (y) as otherwise provided herein, Company will
not, and will not permit any of its Subsidiaries to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any such Subsidiary to (i) pay dividends or make
any other distributions on any of such Subsidiary's capital stock owned by
Company or any other Subsidiary of Company, (ii) repay or prepay any
Indebtedness owed by such Subsidiary to Company or any other Subsidiary of
Company, (iii) make loans or advances to Company or any other Subsidiary of
Company, or (iv) transfer any of its property or assets to Company or any other
Subsidiary of Company.
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may (a) continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company, (b) make and own additional Investments in any Subsidiary
which is a Subsidiary Guarantor at the time each such additional
Investment is made, and (c) own Investments in their respective
Subsidiaries to the extent that such Investments reflect an increase in
the value of such Subsidiaries;
(ii) Company and its Subsidiaries may make intercompany loans
to the extent permitted by subsection 7.1(v);
(iii) Company and its Subsidiaries may make and own
Investments in Cash Equivalents;
(iv) Company and its Subsidiaries may make Consolidated
Capital Expenditures permitted by subsection 7.6D;
(v) Company and its Subsidiaries may make and own Investments
in Subsidiaries acquired pursuant to acquisitions permitted pursuant to
subsection 7.7(vii);
(vi) Company and its Subsidiaries may make Investments
contemplated by the DIMAC Acquisition Agreement and the AmeriComm
Acquisition Agreement;
117
(vii) Company and its Subsidiaries may make loans to officers
of Holdings and its Subsidiaries in an aggregate amount not to exceed
$500,000 at any time; and
(viii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$5,000,000; provided that the aggregate amount of such Investments in
any Fiscal Year shall not exceed $2,500,000.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit, and the
Subsidiary Guarantors may become and remain liable with respect to
Contingent Obligations arising under the Subsidiary Guaranty;
(ii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under Interest Rate Agreements
required under subsection 6.10; provided, that such Interest Rate
Agreements are entered into to protect against fluctuations in interest
rates and not for the purposes of speculation;
(iii) Company and its Subsidiaries may become and remain
liable with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets;
(iv) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the ordinary
course of business of the obligations of suppliers, landlords,
customers, franchisees and licensees of Company and its Subsidiaries in
an aggregate amount not to exceed at any time $500,000;
(v) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of unsecured
guaranties of any obligations (other than obligations in respect of
Permitted Earn Out Agreements, Permitted Seller Paper or Indebtedness
of Company permitted under subsection 7.1(ix)) of Company or any of its
Subsidiaries permitted under this Agreement in an aggregate amount not
to exceed at any time $1,000,000;
(vi) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of unsecured guaranties of
any Indebtedness of Company permitted under subsection 7.1(ix);
provided, that in each case the obligations of any such Subsidiary
under any such guaranty shall be subordinated in right of payment to
the Obligations pursuant to documentation containing subordination
provisions and other material terms reasonably satisfactory to
Administrative Agent;
118
(vii) Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in Schedule 7.4
annexed hereto; and
(viii) Company and its Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and
its Subsidiaries in respect of all such Contingent Obligations shall at
no time exceed $2,000,000.
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; provided that, so long as no Event of Default has
occurred and is continuing or would result therefrom, (i) Company and its
Subsidiaries may make scheduled payments in respect of any Permitted Seller
Paper, (ii) Company and its Subsidiaries may make (x) regularly scheduled
payments of interest in respect of the Senior Subordinated Notes and any other
Subordinated Indebtedness and (y) Restricted Junior Payments to Holdings to
permit regularly scheduled payments of interest in respect of the Holdings Notes
and the Holdings PIK Notes, in each case in accordance with the terms of, and
only to the extent required by, and subject to the provisions contained in, the
indenture or other agreements pursuant to which such Subordinated Indebtedness,
Holdings Notes or Holdings PIK Notes were issued, in each case as such indenture
or other agreements may be amended from time to time to the extent permitted
under subsection 7.13, (iii) Company may make Restricted Junior Payments to
Holdings to permit the payment of the Management Fees under the Management
Services Agreement, (iv) Company may make Restricted Junior Payments to
Holdings, (a) in an aggregate amount not to exceed $500,000 in any Fiscal Year,
to the extent necessary to permit Holdings to pay general administrative costs
and expenses and (b) to the extent necessary to permit Holdings to discharge the
consolidated tax liabilities of Holdings and its Subsidiaries, (v) Company may
make Restricted Junior Payments to Holdings to the extent required for Holdings
to make, Restricted Junior Payments in an aggregate amount not to exceed
$2,500,000 in any Fiscal Year to the extent necessary to make repurchases of
capital stock (and options or warrants to purchase such capital stock) of
Holdings from employees upon termination (including by reason of death,
disability or retirement) of such employees, and (vi) so long as no Event of
Default or Potential Event of Default has occurred and is continuing or would be
caused thereby, Company may make Restricted Junior Payments of amounts to the
extent required for Holdings to repurchase, redeem, defease or otherwise prepay
or retire any Existing Senior Notes not tendered pursuant to the Debt Tender
Offer on terms (set forth in the Existing Senior Note Indenture or otherwise) no
less favorable in any material respect to Holdings, Company and Lenders than the
terms of the Debt Tender Offer; and, provided further, that any Restricted
Junior Payments by Company to Holdings permitted under this subsection shall be
applied by Holdings for the purposes specified in this subsection.
119
7.6 Financial Covenants.
A. Minimum Interest Coverage Ratio. The ratio (the "Interest Coverage
Ratio") of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Interest
Expense for any four-Fiscal Quarter period (or such shorter measurement period
contemplated by the definition) ending during any of the periods set forth below
(each applicable four-Fiscal Quarter period being a "Calculation Period") shall
not be less than the correlative ratio indicated; provided that, for any
measurement of the Interest Coverage Ratio made prior to the completion of four
Fiscal Quarters following the Closing Date, Consolidated Interest Expense for
the relevant Calculation Period shall equal the product of (i) Consolidated
Interest Expense for the period from the Closing Date to the date of measurement
multiplied by (ii) a fraction, the numerator of which is 365 and the denominator
of which is the number of days during the period from the Closing Date to the
date of measurement.
Period During Which Minimum Interest
Calculation Period Ends Coverage Ratio
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
Closing Date through March 31, 1999 1.65:1.00
---------------------------------------------------------------------------------------------------
April 1, 1999 through December 31, 1999 1.80:1.00
---------------------------------------------------------------------------------------------------
January 1, 2000 through December 31, 2000 2.15:1.00
---------------------------------------------------------------------------------------------------
January 1, 2001 through December 31, 2001 2.35:1.00
---------------------------------------------------------------------------------------------------
January 1, 2002 through December 31, 2002 2.50:1.00
---------------------------------------------------------------------------------------------------
January 1, 2003 and thereafter 2.75:1.00
B. Minimum Fixed Charge Coverage Ratio. The ratio (the "Fixed Charge
Coverage Ratio") of (i) Consolidated Adjusted EBITDA to (ii) Consolidated Fixed
Charges for any Calculation Period shall not be less than the correlative ratio
indicated; provided that, for any measurement of the Fixed Charge Coverage Ratio
made prior to the completion of four Fiscal Quarters following the Closing Date,
Consolidated Interest Expense for the relevant Calculation Period shall equal
the product of (i) Consolidated Interest Expense for the period from the Closing
Date to the date of measurement multiplied by (ii) a fraction, the numerator of
which is 365 and the denominator of which is the number of days during the
period from the Closing Date to the date of measurement, and each other
component of Consolidated Fixed Charges shall be measured from the Closing Date
to the date of measurement.
120
Minimum Fixed
Period During Which Charge
Calculation Period Ends Coverage Ratio
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Closing Date through December 31, 1999 1.00:1.00
------------------------------------------------------------------------------------------------
January 1, 2000 through December 31, 2000 1.05:1.00
------------------------------------------------------------------------------------------------
January 1, 2001 and thereafter 1.10:1.00
C. Maximum Leverage Ratio. The ratio (the "Leverage Ratio") of (i) the
sum of (x) Consolidated Total Debt as of the last day (any such day being a
"Calculation Date") of any Fiscal Quarter ending during any of the periods set
forth below plus (y) so long as the Permitted Earn Out Agreements described on
Schedule 1.1(ii) annexed hereto have not been cancelled or otherwise terminated,
(1) the amount with respect to each such Permitted Earn Out Agreement set forth
on Schedule 7.6C annexed hereto less (2) with respect to each such Permitted
Earn Out Agreement, the aggregate amount of all payments made by Company and
its Subsidiaries under such Permitted Earn Out Agreement after the Closing Date
(to the extent such aggregate amount does not exceed the amount described in the
immediately preceding clause (1)), to (ii) Consolidated Adjusted EBITDA for the
four-Fiscal Quarter period ending on such Calculation Date shall not exceed the
correlative ratio indicated:
Period During Which Maximum
Calculation Date Occurs Leverage Ratio
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
Closing Date through March 31, 1999 6.00:1.00
---------------------------------------------------------------------------------------------
April 1, 1999 through December 31, 1999 5.50:1.00
---------------------------------------------------------------------------------------------
January 1, 2000 through December 31, 2000 5.00:1.00
---------------------------------------------------------------------------------------------
January 1, 2001 through December 31, 2001 4.25:1.00
---------------------------------------------------------------------------------------------
January 1, 2002 through December 31, 2002 3.50:1.00
---------------------------------------------------------------------------------------------
January 1, 2003 and thereafter 3.00:1.00
D. Consolidated Capital Expenditures. Company shall not, and shall not
permit its Subsidiaries to, make or incur Consolidated Capital Expenditures, in
any Fiscal Year (or specified portion thereof) indicated below, in an aggregate
amount in excess of the corresponding amount (the "Maximum Consolidated Capital
Expenditures Amount") set forth below opposite such Fiscal Year (or such portion
thereof); provided that the Maximum Consolidated Capital Expenditures Amount for
any Fiscal Year indicated below shall (a) be increased by the sum of (i) an
amount equal to the excess, if any (but in no event more than 40% of the Maximum
Consolidated Capital Expenditures Amount for the previous Fiscal Year (or
specified portion thereof) indicated below), of the Maximum Consolidated Capital
Expenditures Amount for the previous Fiscal Year (or such portion thereof) over
the actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year (or such portion thereof) and (ii) an amount
121
equal to 2.5% of the incremental revenues of Company and its Subsidiaries
(calculated on a consolidated basis in accordance with GAAP) for the previous
Fiscal Year resulting from acquisitions permitted under subsection 7.7(vii)
consummated during the previous Fiscal Year, calculated on a Pro Forma Basis,
but decreased by an amount equal to 2.5% of the incremental reduction in
revenues of Company and its Subsidiaries (calculated on a consolidated basis in
accordance with GAAP) for the previous Fiscal Year (or such portion thereof)
resulting from sales of, or other dispositions of, operating entities during the
previous Fiscal Year (or such portion thereof).
Fiscal Year Maximum Consolidated
(or Portion Thereof) Capital Expenditures Amount
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
Closing Date to December 31, 1998 $14,000,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 1999 $16,000,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2000 $16,000,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2001 $16,500,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2002 $17,000,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2003 $17,500,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2004 $18,000,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2005 $18,500,000
-------------------------------------------------------------------------------------------------------
Fiscal Year 2006 and thereafter $19,000,000
-------------------------------------------------------------------------------------------------------
E. Certain Calculations.
(i) With respect to calculations of Consolidated Adjusted EBITDA for
any four-Fiscal Quarter period including the Closing Date, such calculations
shall be made assuming that Consolidated Adjusted EBITDA for each of the
applicable Fiscal Quarters ending prior to the Closing Date is as set forth on
Schedule 7.6E annexed hereto.
(ii) With respect to any period during which new Subsidiaries, assets
or businesses are acquired pursuant to subsection 7.7(vii), for purposes of
determining compliance with the financial covenants set forth in this subsection
7.6, Consolidated Adjusted EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Subsidiaries, assets or
businesses on a pro forma basis (including pro forma adjustments arising out of
events which are directly attributable to a specific transaction, are factually
supportable and are expected to have a continuing impact, in each case
determined on a basis consistent with Article 11 of Regulation S-X of the
Securities Act and as interpreted by the staff of the Securities and Exchange
Commission prior to December 1996 which would include cost savings resulting
from head count reductions, closure of facilities and similar restructuring
charges, which pro forma adjustments shall be certified by the chief financial
officer of Company) using the historical financial statements of all entities or
assets so acquired or to be acquired and the
122
consolidated financial statements of Company and its Subsidiaries which shall be
reformulated (a) as if such acquisition, and any acquisitions which have been
consummated during such period, and any Indebtedness or other liabilities
incurred in connection with any such acquisition had been consummated or
incurred at the beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans during such period), and (b) otherwise in
conformity with certain procedures to be agreed upon between Administrative
Agent and Company, all such calculations to be in form and substance
satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales.
Company shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, create any new Subsidiaries or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business, property or fixed assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise any part of the
business, property or fixed assets of, or stock or other evidence of beneficial
ownership of, any Person, except:
(i) any Subsidiary of Company may be merged with or into
Company or any wholly owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly owned Subsidiary Guarantor; provided that, in the case of such a
merger involving Company, Company shall be the continuing or surviving
corporation, and in the case of any other such merger, such wholly
owned Subsidiary Guarantor shall be the continuing or surviving
corporation;
(ii) [Intentionally Omitted];
(iii) Company and its Subsidiaries may acquire inventory,
equipment and other assets in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof (determined in
good faith by the board of directors of Company);
(v) Company and its Subsidiaries may sell the assets described
on Schedule 7.7 annexed hereto; provided that the consideration
received for such assets shall be in an amount at least equal to the
fair market value thereof (determined in good faith by the board of
directors of Company);
(vi) Company and its Subsidiaries may make Asset Sales in any
single Fiscal
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Year of assets that have, in the aggregate, a fair market value
(determined in good faith by the board of directors of Company) not in
excess of $7,500,000; provided that (x) the consideration received for
such assets shall be in an amount at least equal to the fair market
value thereof (determined in good faith by the board of directors of
Company); (y) not less than 80% of the consideration received therefor
shall be cash; and (z) the proceeds of such Asset Sales shall be
applied as required by subsection 2.4B(iii)(a);
(vii) Company and its Subsidiaries may acquire the stock or
other equity Securities of any Person that, as a result of such
acquisition, becomes a wholly-owned Subsidiary of Company or, through a
newly-created Subsidiary, may acquire the business, property or assets
of any Person; provided, that (q) Company shall give Administrative
Agent at least 10 days' notice of the proposed transaction, and copies
of the definitive documentation relating thereto, (r) any business
acquired shall be made in compliance with subsection 7.12 and all
applicable laws, (s) Company and its Subsidiaries shall own all of the
beneficial equity interests in the business acquired (t) any business
or property acquired shall be located in the United States, (u) any
business or property acquired shall have positive Consolidated Adjusted
EBITDA (provided that for purposes of this clause (u) the calculation
of Consolidated Adjusted EBITDA shall be made solely with respect to
such acquired business or property and not with respect to Company and
its Subsidiaries on a consolidated basis) on a Pro Forma Basis, (v)
upon the consummation of the acquisition in the case of a purchase of
equity Securities, such Person shall comply with the provisions of
subsection 6.9, (w) Company shall deliver an Officer's Certificate to
Administrative Agent and Lenders in form and substance reasonably
satisfactory to Administrative Agent, together with the related
financial statements, demonstrating in reasonable detail that, after
giving effect to the acquisition of such business (including any
Indebtedness incurred or assumed therein) (A) the Leverage Ratio,
determined on a Pro Forma Basis for the most recently completed four
Fiscal Quarters, shall be not be greater than the ratio set forth in
subsection 7.6C applicable at the time of such acquisition minus 0.25,
and (B) that Company and its Subsidiaries are otherwise in compliance
on a Pro Forma Basis, with the covenants set forth in subsection 7.6,
(x) on a Pro Forma Basis, the portion of Consolidated Adjusted EBITDA
attributable to such assets or Person being acquired, shall not exceed
25% of Consolidated Adjusted EBITDA (after giving effect to such
acquisition) for the four Fiscal Quarters most recently ended, (y)
after consummation of such acquisition, no Event of Default or
Potential Event of Default shall exist, and (z) after consummation of
such acquisition, the excess of Revolving Loan Commitments over the
Total Utilization of Revolving Loan Commitments shall be no less than
$7,500,000; and
(viii) Company may create new Subsidiaries; provided that,
concurrently with or prior to the formation of each such Subsidiary,
Company or such Subsidiary, as applicable, shall deliver each of the
items and execute each of the documents required pursuant to subsection
6.9.
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7.8 Sales and Lease-Backs.
Except for the transaction described in Schedule 7.8 annexed hereto,
Company shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (i) which Company or any of its Subsidiaries has sold or transferred
or is to sell or transfer to any other Person (other than Company or any of its
Subsidiaries) or (ii) which Company or any of its Subsidiaries intends to use
for substantially the same purpose as any other property which has been or is to
be sold or transferred by Company or any of its Subsidiaries to any Person
(other than Company or any of its Subsidiaries) in connection with such lease.
7.9 Sale or Discount of Receivables.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable other
than private self-pay receivables and receivables over 180 days old.
7.10 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of any
such holder, on terms that are less favorable to Company or that Subsidiary, as
the case may be, than those that might be obtained at the time from Persons who
are not such a holder or Affiliate; provided that the foregoing restriction
shall not apply to any transaction on or after the Effective Date between
Company and any of its Subsidiaries or between any of its Subsidiaries, (iii)
reasonable and customary fees paid to members of the boards of directors of
Company and its Subsidiaries, (iv) fees, expenses and other amounts payable to
the MDC Entities on the Closing Date, (v) the execution and delivery of the
DIMAC Acquisition Agreement and the AmeriComm Acquisition Agreement and the
documents delivered pursuant thereto and the consummation of the transactions
contemplated thereby, or (vi) fees, expenses and other amounts payable to the
MDC Entities or any of their respective Affiliates pursuant to the Management
Services Agreement.
7.11 Disposal of Subsidiary Stock.
Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except as permitted under this
Agreement or the Collateral Documents or to qualify directors if
required by applicable law; or
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(ii) permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Subsidiaries
(including such Subsidiary), except as permitted under this Agreement
or the Collateral Documents, to Company or another wholly owned
Subsidiary of Company or to qualify directors if required by applicable
law.
7.12 Conduct of Business of Company.
Company shall not, and shall not permit any of its Subsidiaries to,
engage in any business other than (i) the businesses engaged in by Company and
its Subsidiaries on the Closing Date and (ii) such other lines of business as
may be reasonably related thereto.
7.13 Amendments or Waivers of Related Agreements
A. Amendments or Waivers of Certain Related Agreements. Without the
prior written consent of Requisite Lenders, none of Holdings, Company nor any of
their respective Subsidiaries shall agree to any amendment, restatement,
supplement or other modification to, or waive any of its rights under, any
Related Agreement (other than amendments or other modifications to the Existing
Senior Note Indenture pursuant to the Consent Solicitation) if such amendment,
restatement, supplement, modification or waiver would be materially adverse to
the Lenders.
B. Amendments of Documents Relating to Subordinated Indebtedness.
Holdings and Company shall not, and shall not permit any of their respective
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Subordinated Indebtedness, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or trustee or other representative on their behalf)
which would be adverse to Holdings, Company or Lenders.
C. Preferred Stock. Without the prior written approval of Requisite
Lenders, neither Company nor any Subsidiary of Company shall amend, restate,
supplement or otherwise modify its Certificate of Incorporation if the effect of
such amendment, restatement, supplement or modification is to provide for the
issuance of any preferred stock of Company or of any of its Subsidiaries or the
filing or amendment of any certificate of designation with respect thereto.
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7.14 Fiscal Year
Neither Company nor any of its Subsidiaries shall change its Fiscal
Year-end from December 31.
7.15 Conduct of Business of Holdings.
Holdings shall engage in no business or activities and have no assets
other than (a) owning the stock of Company, (b) holding Cash or Cash
Equivalents, (c) issuing additional shares of common stock, (d) the payment of
taxes and other administrative activities in support of the operations of its
Subsidiaries, (e) the issuance of (i) up to $30,000,000 in aggregate principal
amount of Holdings Notes and (ii) any Holdings PIK Notes, (f) the issuance of
Permitted Seller Paper, (g) other activities for which Holdings receives
Restricted Junior Payments permitted under subsection 7.5, and (h) the
performance of its obligations hereunder and under the Holdings Guaranty and any
Collateral Documents.
SECTION 8.
EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of Default")
shall occur:
8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan when
due, whether at stated maturity, by acceleration, by notice of prepayment or
otherwise; failure by Company to pay when due any amount payable to an Issuing
Lender in reimbursement of any drawing honored or payment made under a Letter of
Credit; or failure by Company to pay any interest on any Loan or any fee or any
other amount due under this Agreement within five days after the date due; or
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8.2 Default in Other Agreements.
(i) Failure of Holdings or any of its Subsidiaries to pay when due (a)
any principal of or interest on any Indebtedness (other than Indebtedness
referred to in subsection 8.1) in an individual principal amount of $1,000,000
or more or any items of Indebtedness with an aggregate principal amount of
$2,500,000 or more or (b) any Contingent Obligation in an individual principal
amount of $1,000,000 or more or any Contingent Obligations with an aggregate
principal amount of $2,500,000 or more, in each case beyond the end of any grace
period provided therefor; or (ii) breach or default by Holdings or Company or
any of its Subsidiaries with respect to any other material term of the Holdings
Notes, the Holdings PIK Notes, the Senior Subordinated Note Indenture, the
Senior Subordinated Notes or any other material term of (a) any evidence of any
Indebtedness in an individual principal amount of $1,000,000 or more or any
items of Indebtedness with an aggregate principal amount of $2,500,000 or more
or any Contingent Obligation in an individual principal amount of $1,000,000 or
more or any Contingent Obligations with an aggregate principal amount of
$2,500,000 or more or (b) any loan agreement, mortgage, indenture or other
agreement relating to such Indebtedness or Contingent Obligation(s), if in any
case under this clause (ii) the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness or Contingent Obligation(s)
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due and payable prior to
its stated maturity or the stated maturity of any underlying obligation, as the
case may be (upon the giving or receiving of notice, lapse of time, both, or
otherwise); or
8.3 Breach of Certain Covenants.
Failure of any Loan Party to perform or comply with any term or
condition contained in subsection 2.4, 2.5, 6.2 or Section 7 of this Agreement;
or
8.4 Breach of Warranty.
Any material representation, warranty, certification or other statement
made by Holdings or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Holdings or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false in any material respect on the date as of which made;
or
8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan Documents, other
than any such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 30 days after the
earlier of (i) an officer of Company becoming aware of such default or (ii)
receipt by Company of notice from any Agent or any Lender of such default; or
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8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Holdings or Company or any of their respective
Subsidiaries in an involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
which decree or order is not stayed; or any other similar relief shall be
granted under any applicable federal or state law; or (ii) an involuntary case
shall be commenced against Holdings or Company or any of their respective
Subsidiaries under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over Holdings or Company or any of their respective Subsidiaries, or over
all or a substantial part of its property, shall have been entered; or there
shall have occurred the involuntary appointment of an interim receiver, trustee
or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or Company or any of their respective Subsidiaries, and any
such event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Holdings or Company or any of their respective Subsidiaries shall
have an order for relief entered with respect to it or commence a voluntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or Holdings or Company or any of
their respective Subsidiaries shall make any assignment for the benefit of
creditors; or (ii) Holdings or Company or any of their respective Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of Directors
of Holdings or Company or any of their respective Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise authorize any action to approve
any of the actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $2,000,000 or (ii)
in the aggregate at any time an amount in excess of $3,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Holdings or Company or any of their respective Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
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8.9 Dissolution.
Any order, judgment or decree shall be entered against Holdings or
Company or any of their respective Subsidiaries decreeing the dissolution or
split up of Holdings or Company or that Subsidiary and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in the
aggregate results in a Material Adverse Effect; or there shall exist an Unfunded
Current Liability, individually or in the aggregate for all Pension Plans
(excluding for purposes of such computation any Pension Plans with respect to
which there is no Unfunded Current Liability), which will have a Material
Adverse Effect; or
8.11 Change in Control.
(i) Prior to the consummation of any initial public offering of Company
common stock, (a) the MDC Entities shall at any time not own (directly or
indirectly), in the aggregate, at least 51% of the combined voting power of
Company's voting Securities (except as a result of the exercise of options
granted to management under the Stockholders Agreement, in which case the
percentage ownership of the MDC Entities of the combined voting power of
Company's voting Securities shall be at least 51%, as diluted thereby, but shall
in no event be less than 40%); (b) a majority of the members of the Board of
Directors of Company shall not be Continuing Directors; or (c) any Person (other
than the MDC Entities), including a "group" (within the meaning of Sections
13(d) and 14(d)(2) of the Exchange Act) which includes such Person, shall
purchase or otherwise acquire, directly or indirectly, beneficial ownership of
Securities of Company and, as a result of such purchase or acquisition, any
Person (together with its associates and Affiliates), shall directly or
indirectly beneficially own in the aggregate Securities representing more than
35% of the combined voting power of Company's voting Securities; or (ii) at any
time thereafter, (a) the MDC Entities together shall own, directly or
indirectly, in the aggregate, a lesser percentage of the combined voting power
of Company's voting Securities than any other holder, including a "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) which
includes such holder, of such voting Securities; (b) a majority of the members
of the Board of Directors of Company shall not be Continuing Directors; or (b)
any Person (other than the MDC Entities), including a "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) which includes such
Person, shall purchase or otherwise acquire, directly or indirectly, beneficial
ownership of Securities of Company and, as a result of such purchase or
acquisition, any Person (together with its associates and Affiliates), shall
directly or indirectly beneficially own in the aggregate Securities representing
more than 25% of the combined voting power of Company's voting Securities; or
(iii) at any time, the occurrence of a "Change of Control" (or any comparable
concept) as defined in the documentation for the Senior Subordinated Notes, the
Holdings Notes or the Holdings PIK Notes; or
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8.12 Invalidity of Guaranties.
At any time after the execution and delivery thereof, any Guaranty of
the Obligations of Company for any reason, other than the satisfaction in full
of all Obligations, ceases to be in full force and effect or is declared to be
null and void, or any Loan Party denies in writing that it has any further
liability, including without limitation with respect to future advances by
Lenders, under any Loan Document to which it is a party; or
8.13 Failure of Security.
Any Collateral Document shall, at any time, cease to be in full force
and effect (other than by reason of a release of Collateral thereunder in
accordance with the terms hereof or thereof, the satisfaction in full of the
Obligations or any other termination of such Collateral Document in accordance
with the terms hereof or thereof) or shall be declared null and void, or the
validity or enforceability thereof shall be contested in writing by any Loan
Party, or Administrative Agent shall not have or shall cease to have a valid
security interest in any Collateral purported to be covered thereby, perfected
and with the priority required by the relevant Collateral Document, for any
reason other than the failure of Administrative Agent or any Lender to take any
action within its control, subject only to Liens permitted under the applicable
Collateral Documents.
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit) and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request of Requisite
Lenders, by written notice to Company, declare all or any portion of the amounts
described in clauses (a) through (c) above to be, and the same shall forthwith
become, immediately due and payable, and the obligation of each Lender to make
any Loan, the obligation of Administrative Agent to issue any Letter of Credit
and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i) or the obligations of Lenders to
purchase participations in any unpaid Swing Line Loans as provided in subsection
2.1A(iv).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
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Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this paragraph
are intended merely to bind Lenders to a decision which may be made at the
election of Requisite Lenders and are not intended to benefit Company and do not
grant Company the right to require Lenders to rescind or annul any acceleration
hereunder or preclude Agents or Lenders from exercising any of the rights or
remedies available to them under any of the Loan Documents, even if the
conditions set forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 Appointment.
A. CSFB is hereby appointed Administrative Agent and Arranger hereunder
and under the other Loan Documents. WDR is hereby appointed Syndication Agent
hereunder and under the other Loan Documents. First Union is hereby appointed
Documentation Agent hereunder and under the other Loan Documents. Each Lender
hereby authorizes each Agent to act as its agent in accordance with the terms of
this Agreement and the other Loan Documents. Each Agent agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries.
On the Effective Date, all obligations of Arranger and Syndication Agent
hereunder, in each case solely in its capacity as Arranger or Syndication Agent,
shall terminate.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction Administrative Agent may
not exercise any of the rights, powers or remedies granted herein or in any of
the other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that
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Administrative Agent appoint an additional individual or institution as a
separate trustee, co-trustee, collateral agent or collateral co-agent (any such
additional individual or institution being referred to herein individually as a
"Supplemental Collateral Agent" and collectively as "Supplemental Collateral
Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor thereto, shall die, become incapable of acting, resign or be
removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers hereunder
and under the other Loan Documents as are specifically delegated to such Agent
by the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Each Agent shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents and
it may perform such duties by or through its agents or employees. No Agent shall
have, by reason of this Agreement or any of the other Loan Documents, a
fiduciary relationship in respect of any Lender; and nothing in this Agreement
or any of the other Loan Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any of the other Loan Documents except as expressly set forth
herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or
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sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports or certificates or any other documents furnished by any
Agent to Lenders or by or on behalf of Company and/or its Subsidiaries to any
Agent or any Lender in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the proceeds of the
Loans or the use of the Letters of Credit or as to the existence or possible
existence of any Event of Default or Potential Event of Default. Anything
contained in this Agreement to the contrary notwithstanding, Administrative
Agent shall not have any liability arising from confirmations of the amount of
outstanding Loans or the Total Utilization of Revolving Loan Commitments or the
component amounts thereof.
C. Exculpatory Provisions. Neither any Agent nor any of such Agent's
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by such Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. If any Agent shall request instructions from Lenders with
respect to any act or action (including the failure to take an action) in
connection with this Agreement or any of the other Loan Documents, such Agent
shall be entitled to refrain from such act or taking such action unless and
until such Agent shall have received instructions from Requisite Lenders (or
such other Lenders as may be required to give such instructions under subsection
10.6). Without prejudice to the generality of the foregoing, (i) such Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against such Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Such Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under this Agreement or any of
the other Loan Documents unless and until it has obtained the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6).
D. Agents Entitled to Act as Lender. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Each Agent and its Affiliates may accept deposits
from, lend money to and generally engage in
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any kind of banking, trust, financial advisory or other business with Company or
any of its Affiliates as if it were not performing the duties specified herein,
and may accept fees and other consideration from Company and/or its Subsidiaries
for services in connection with this Agreement and otherwise without having to
account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or, except as expressly provided elsewhere in this Agreement to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, counsel fees and disbursements) or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Agent in performing its duties hereunder or under the
other Loan Documents or otherwise in its capacity as such Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
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9.5 Successor Administrative Agent and Swing Line Lender.
A. Successor Administrative Agent. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company.
Upon any such notice of resignation, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation of Administrative Agent
pursuant to subsection 9.5A shall also constitute the resignation of CSFB or its
successor as Swing Line Lender, and any successor Administrative Agent appointed
pursuant to subsection 9.5A shall, upon its acceptance of such appointment,
become the successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made by the retiring
Administrative Agent in its capacity as Swing Line Lender, (ii) upon such
prepayment, the retiring Administrative Agent and Swing Line Lender shall
surrender the Swing Line Note held by it to Company for cancellation, and (iii)
Company shall issue a new Swing Line Note to the successor Administrative Agent
and Swing Line Lender substantially in the form of Exhibit VIII annexed hereto,
in the principal amount of the Swing Line Loan Commitment then in effect and
with other appropriate insertions.
9.6 Collateral Documents.
Each Lender hereby further authorizes Administrative Agent to enter
into each Collateral Document as secured party on behalf of and for the benefit
of Lenders and agrees to be bound by the terms of each Collateral Document;
provided that Administrative Agent shall not enter into or consent to any
amendment, modification, termination or waiver of any provision contained in any
Collateral Document without the prior consent of Requisite Lenders (or, if
required pursuant to subsection 10.6, all Lenders); provided further, however,
that, without further written consent or authorization from Requisite Lenders,
Administrative Agent may execute any documents or instruments necessary to
effect the release of any asset constituting Collateral from the Lien of the
applicable Collateral Document in the event that such asset is sold or otherwise
disposed of in a transaction effected in accordance with subsection 7.7(iii) or
7.7(iv). Anything contained in any of the Loan Documents to the contrary
notwithstanding, each Lender agrees that no Lender shall have any right
individually to realize upon any of the Collateral under any Collateral Document
(including without limitation through the exercise of a right of set-off against
call deposits of such Lender in which any funds on deposit in the Collateral
Account may from time to time be invested), it being understood and agreed that
all rights and remedies under the Collateral Documents may be exercised solely
by Administrative Agent for the benefit of Lenders in accordance with the terms
thereof.
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SECTION 10.
MISCELLANEOUS
10.1 Assignments and Participations in Loans, Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign, transfer or negotiate to any Eligible
Assignee, or (ii) sell participations to any Person in, all or any part of its
Commitments (together with its Letters of Credit or participations therein made
or arising pursuant to its Revolving Loan Commitment) or any Loan or Loans made
by it or any other interest herein or in any other Obligations owed to it;
provided that no such sale, assignment, transfer or participation shall, without
the consent of Company, require Company to file a registration statement with
the Securities and Exchange Commission or apply to qualify such sale,
assignment, transfer or participation under the securities laws of any state;
provided further that no such sale, assignment or transfer described in clause
(i) above shall be effective unless and until an Assignment Agreement effecting
such sale, assignment or transfer shall have been accepted by Administrative
Agent and recorded in the Register as provided in subsection 10.1B(ii);
provided, further that no such sale, assignment, transfer or participation of
any Letter of Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding interest in the
Revolving Loan Commitment and the Revolving Loans of the Lender effecting such
sale, assignment, transfer or participation; and provided further, that anything
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or the
other Obligations owed to such Lender.
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B. Assignments.
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(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit, or participation therein or other Obligation may (a)
be assigned in any amount to (x) another Lender, (y) to an Affiliate of
the assigning Lender or another Lender or (z) with respect to any
Lender that is an investment fund that invests in commercial loans, any
other investment fund that invests in commercial loans and that is
managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, so long as, in the case of
clauses (x), (y) or (z), any such Lender, is a Non-Defaulting Lender,
with the giving of notice to Company and Administrative Agent or (b) be
assigned in an aggregate amount of not less than $5,000,000 (or such
lesser amount as shall constitute the aggregate amount of the
Commitments, Loans, Letters of Credit, and participations therein and
other Obligations of the assigning Lender) to any other Eligible
Assignee with the consent of Administrative Agent and, if no Default or
Event of Default has occurred and is continuing, of Company (which
consent shall not be unreasonably withheld). To the extent of any such
assignment in accordance with either clause (a) or (b) above, the
assigning Lender shall be relieved of its obligations with respect to
its Commitments, Loans, Letters of Credit, or participations therein or
other Obligations or the portion thereof so assigned. The parties to
each such assignment shall execute and deliver to Administrative Agent,
for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing fee of $3,500 payable by the
assigning Lender, such certificates, documents or other evidence, if
any, with respect to United States federal income tax withholding
matters as the assignee under such Assignment Agreement may be required
to deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a)
and, if requested by Administrative Agent, a completed administrative
questionnaire in Administrative Agent's customary form with respect to
the assignee under such Assignment Agreement. Upon such execution,
delivery, acceptance and recordation, from and after the effective date
specified in such Assignment Agreement, (y) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder
and (z) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall
cease to be a party hereto); provided that, anything contained in any
of the Loan Documents to the contrary notwithstanding, if such Lender
is the Issuing Lender with respect to any outstanding Letters of Credit
such Lender shall continue to have all rights and obligations of an
Issuing Lender with respect to such Letters of Credit until the
cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The Commitments
hereunder shall be modified to reflect the Commitments of such assignee
and any remaining Commitments of such assigning Lender and, if any such
assignment occurs after the issuance of the Notes hereunder, the
assigning Lender shall surrender its applicable Notes and, upon such
surrender, new Notes shall be issued to the assignee and, if
applicable, to the assigning Lender, substantially in the form of
Exhibit IV, Exhibit V, Exhibit VI or Exhibit VII annexed hereto, as the
case may be, with appropriate insertions, to reflect the new
Commitments and/or outstanding Term Loans
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of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed by an
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing fee referred to in subsection
10.1B(i) and any certificates, documents or other evidence with respect
to United States federal income tax withholding matters that such
assignee may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii), (a) Administrative Agent shall, if such
Assignment Agreement has been completed and is in substantially the
form of Exhibit XVII hereto and if Administrative Agent has consented
to the assignment evidenced thereby (to the extent such consent is
required pursuant to subsection 10.1B(i)), (a) accept such Assignment
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of Administrative Agent
to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection
10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
(i) effecting the extension of the final maturity of the Loan allocated to such
participation, (ii) effecting a reduction of the principal amount of or
affecting the rate of interest payable on any Loan allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all of the Guarantors from their obligations under the
Guaranties, and all amounts payable by Company hereunder (including, without
limitation, amounts payable to such Lender pursuant to subsections 2.6D, 2.7 and
3.6) shall be determined as if such Lender had not sold such participation.
Company and each Lender hereby acknowledge and agree that, solely for purposes
of subsections 10.4 and 10.5, (a) any participation will give rise to a direct
obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. Assignments to Federal Reserve Banks and Fund Trustees. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, (i) any Lender may assign and pledge all or any portion
of its Loans, the other Obligations owed to such Lender and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank and (ii) with the consent of Administrative
Agent and, if no Default or Event of Default has occurred and is continuing,
Company, any Lender which is an investment fund may pledge all or any portion of
its Notes, or Loans to its trustee in support of its obligation to its trustee;
provided that, in either case, (a) no Lender shall, as between Company and such
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (b) in no event shall such Federal Reserve Bank or
such trustee be considered to be a "Lender" or be entitled to require the
assigning Lender to take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Company
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and its Subsidiaries in the possession of that Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to subsection 10.20.
F. Limitation. No assignee, participant or other transferee or any
Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with respect
to the rights transferred, unless such transfer is made with Company's prior
written consent or at a time when the circumstances giving rise to such greater
payment did not exist.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and out of pocket expenses of Administrative Agent in connection with the
preparation of the Loan Documents; (ii) all the actual and reasonable costs of
furnishing all opinions by counsel for Company (including without limitation any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Company's and Holdings' performance of and compliance with all agreements and
conditions on its part to be performed or complied with under this Agreement and
the other Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance requirements; (iii) the
reasonable fees, expenses and disbursements of counsel to Administrative Agent
(including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
the Loans and any consents, amendments, waivers or other modifications hereto or
thereto and any other documents or matters requested by Company; (iv) all other
actual and reasonable costs and expenses incurred by Administrative Agent in
connection with the negotiation, preparation and execution of the Loan Documents
and the transactions contemplated hereby and thereby; and (v) after the
occurrence of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and costs of
settlement, incurred by Administrative Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from Company hereunder or under
the other Loan Documents by reason of such Event of Default or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
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10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend, indemnify, pay and hold harmless Agents and Lenders,
and the officers, directors, employees, agents, attorneys and affiliates of
Agents and Lenders (collectively called the "Indemnitees") from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses and disbursements of any kind or
nature whatsoever (including without limitation the reasonable fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby (including without limitation Lenders' agreement
to make the Loans hereunder or the use or intended use of the proceeds of any of
the Loans or the issuance of Letters of Credit hereunder or the use or intended
use of any of the Letters of Credit) (collectively called the "Indemnified
Liabilities"); provided that Company shall not have any obligation to any
Indemnitee hereunder with respect to any Indemnified Liabilities to the extent,
and only to the extent, of any particular liability, obligation, loss, damage,
penalty, claim, cost, expense or disbursement that arose from the gross
negligence or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that the
undertaking to defend, indemnify, pay and hold harmless set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
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10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable law
and not by way of limitation of any such rights, upon the occurrence and during
the continuance of any Event of Default each Lender is hereby authorized by
Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender (at any office of that
Lender wherever located) to or for the credit or the account of Company against
and on account of the obligations and liabilities of Company to that Lender
under this Agreement, the Notes, the Letters of Credit and participations
therein, including, but not limited to, all claims of any nature or description
arising out of or connected with this Agreement, the Notes, the Letters of
Credit and participations therein or any other Loan Document, irrespective of
whether or not (i) that Lender shall have made any demand hereunder or (ii) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Company hereby further grants to
Administrative Agent and each Lender a security interest in all deposits and
accounts maintained with Administrative Agent or such Lender as security for the
Obligations.
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10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy, reorganization or insolvency proceeding of
Company or otherwise, those purchases shall be rescinded and the purchase prices
paid for such participations shall be returned to such purchasing Lender ratably
to the extent of such recovery, but without interest. Company expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Company to that holder
with respect thereto as fully as if that holder were owed the amount of the
participation held by that holder.
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10.6 Amendments and Waivers.
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A. No amendment, modification, termination or waiver of any
provision of this Agreement, the Notes or of any other Loan Document, or
consent to any departure by Company or any other Loan Party therefrom, shall
in any event be effective without the written concurrence of Requisite
Lenders; provided that any such amendment, modification, termination, waiver
or consent which: reduces the principal amount of any of the Loans; reduces
the percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions
of credit pursuant to this Agreement may be included in the definition of
"Requisite Lenders" and, if applicable, the related definition of "Term Loan
Exposure" on substantially the same basis as the Term A Loans, Term B Loans,
Term B Loan Commitments, Term C Loans, Term C Loan Commitments, Revolving
Loans and Revolving Loan Commitments are included on the Effective Date);
changes in any manner any provision of this Agreement which, by its terms,
expressly requires the approval or concurrence of all Lenders; postpones the
scheduled final maturity date of any of the Loans; postpones the date or
waives or reduces the amount of any scheduled payment (but not prepayment) of
principal of any of the Loans or of any scheduled reduction of the Revolving
Credit Commitments; postpones the date on which any interest or any fees are
payable; decreases the interest rate borne by any of the Loans (other than
any waiver of any increase in the interest rate applicable to any of the
Loans pursuant to subsection 2.2E) or the amount of any fees payable
hereunder; increases the maximum duration of Interest Periods permitted
hereunder; releases all or a significant portion of the Collateral; releases
any of the Guarantors from their obligations under the Guaranties; reduces
the amount or postpones the due date of any amount payable in respect of, or
extends the required expiration date of, any Letter of Credit; changes the
obligations of Lenders relating to the purchase of participations in Letters
of Credit in any manner that could be adverse to any Issuing Lender; or
changes in any manner the provisions contained in subsection 8.1 or this
subsection 10.6; shall be effective only if evidenced by a writing signed by
or on behalf of all Lenders to whom are owed Obligations being directly
affected by such amendment, modification, termination, waiver or consent. In
addition, (i) any amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if evidenced by
a writing signed by or on behalf of Administrative Agent and Requisite
Lenders, (ii) no amendment, modification, termination or waiver of any
provision of any Note shall be effective without the written concurrence of
the Lender which is the holder of that Note, (iii) no increase in the
Commitments of any Lender over the amount thereof then in effect shall be
effective without the written concurrence of that Lender, it being understood
and agreed that in no event shall waivers or modifications of conditions
precedent, covenants, Events of Default, Potential Events of Default or of a
mandatory prepayment or a reduction of any or all of the Commitments be
deemed to constitute an increase of the Commitment of any Lender and that an
increase in the available portion of any Commitment of any Lender shall not
be deemed to constitute an increase in the Commitment of such Lender, (iv) no
amendment, modification, termination or waiver of any provision of subsection
2.1A(iv) or any other provision of this Agreement relating to the Swing Line
Loan Commitment or the Swing Line Loans shall be effective without the
written concurrence of Swing Line Lender, (v) no amendment, modification,
termination or waiver of any provision of Section 3 relating to the rights or
obligations of any or all Issuing Lenders shall be effective without the
written concurrence of Administrative Agent and each Lender who is an Issuing
Lender with respect to any Letter of Credit then outstanding, (vi) no
amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
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requires the approval or concurrence of Administrative Agent shall be
effective without the written concurrence of Administrative Agent.
Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender, (vii) no amendment or modification of the
definition of "Requisite Class Lenders" shall be effective without the
consent of Requisite Class Lenders of each Class, and no amendment or
modification that alters, the required application of any repayments or
prepayments as between Classes pursuant to subsection 2.4C shall be effective
without the consent of Requisite Class Lenders of each Class which is being
allocated a lesser repayment or prepayment as a result thereof (although
Requisite Lenders may waive, in whole or in part, any mandatory prepayment so
long as the application, as between Classes, of any portion of such
prepayment which is still required to be made is not altered) and (viii) no
amendment, modification, termination or waiver of any Collateral Document
having the effect of securing additional Indebtedness (other than
Indebtedness comprising Obligations or Interest Rate Agreements) by the
Collateral shall be effective without the written concurrence of Lenders
having or holding more than 66 2/3% of the sum of the aggregate Term A Loan
Exposure of all Lenders plus the aggregate Term B Loan Exposure of all
Lenders plus the aggregate Term C Loan Exposure of all Lenders plus the
aggregate Revolving Loan Exposure of all Lenders. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on Company in any case shall
entitle Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company,
on Company.
B. If, in connection with any proposed change, waiver, discharge or
termination to any of the provision of this Agreement as contemplated by the
proviso in the first sentence of this subsection 10.6, the consent of Requisite
Lenders is obtained but consent of one or more of such other Lenders whose
consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a party
to this Agreement; provided that, concurrently with such termination, (i)
Company shall pay that Lender all principal, interest and fees and other amounts
due to be paid to such Lender with respect to all periods through such date of
termination, (ii) another financial institution satisfactory to Company and
Administrative Agent (or if Administrative Agent is also a Lender to be
terminated, the successor Administrative Agent) shall agree, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Administrative Agent (or if Administrative Agent is also a Lender to
be terminated, the successor Administrative Agent) to evidence the substitution
of such Lender shall have been received and approved by Administrative Agent as
of such date.
147
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telecopy or telex, or four Business Days
after depositing it in the United States mail, registered or certified, with
postage prepaid and properly addressed; provided that notices to Administrative
Agent shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Holdings, Company and Administrative
Agent, such other address as shall be designated by such Person in a written
notice delivered to the other parties hereto and (ii) as to each other party,
such other address as shall be designated by such party in a written notice
delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the Loans, the
cancellation or expiration of the Letters of Credit and the reimbursement of any
amounts drawn or paid thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any Lender
in the exercise of any power, right or privilege hereunder or under any other
Loan Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
148
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the obligation
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
149
10.14 Maximum Amount.
A. It is the intention of Company and the Lenders to conform strictly
to the usury and similar laws relating to interest from time to time in force,
and all agreements between the Loan Parties and their respective Subsidiaries
and the Lenders, whether now existing or hereafter arising and whether oral or
written, are hereby expressly limited so that in no contingency or event
whatsoever, whether by acceleration of maturity hereof or otherwise, shall the
amount paid or agreed to be paid in the aggregate to the Lenders as interest
(whether or not designated as interest, and including any amount otherwise
designated but deemed to constitute interest by a court of competent
jurisdiction) hereunder or under the other Loan Documents or in any other
agreement given to secure the indebtedness of Company to the Lenders, or in any
other document evidencing, securing or pertaining to the indebtedness evidenced
hereby, exceed the maximum amount permissible under applicable usury or such
other laws (the "Maximum Amount"). If under any circumstances whatsoever
fulfillment of any provision hereof, or any of the other Loan Documents, at the
time performance of such provision shall be due, shall involve exceeding the
Maximum Amount, then, ipso facto, the obligation to be fulfilled shall be
reduced to the Maximum Amount. For the purposes of calculating the actual amount
of interest paid and/or payable hereunder in respect of laws pertaining to usury
or such other laws, all sums paid or agreed to be paid to the holder hereof for
the use, forbearance or detention of the indebtedness of Company evidenced
hereby, outstanding from time to time shall, to the extent permitted by
Applicable Law, be amortized, pro-rated, allocated and spread from the date of
disbursement of the proceeds of the Notes until payment in full of all of such
indebtedness, so that the actual rate of interest on account of such
indebtedness is uniform through the term hereof. The terms and provisions of
this subsection shall control and supersede every other provision of all
agreements between Company or any endorser of the Notes and the Lenders.
B. If under any circumstances any Lender shall ever receive an amount
which would exceed the Maximum Amount, such amount shall be deemed a payment in
reduction of the principal amount of the Loans and shall be treated as a
voluntary prepayment under subsection 2.4B(i) and shall be so applied in
accordance with subsection 2.4 hereof or if such excessive interest exceeds the
unpaid balance of the Loans and any other indebtedness of Company in favor of
such Lender, the excess shall be deemed to have been a payment made by mistake
and shall be refunded to Company.
10.15 Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.16 Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS
150
PRINCIPLES.
10.17 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Company's rights
or obligations hereunder nor any interest therein may not be assigned or
delegated by Company without the prior written consent of all Lenders.
10.18 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST HOLDINGS OR COMPANY ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH OF HOLDINGS AND COMPANY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEX- CLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO HOLDINGS OR COMPANY, AS APPLICABLE,
AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER HOLDINGS OR COMPANY, AS
APPLICABLE, IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
HOLDINGS OR COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.18
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
151
10.19 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP OR OTHER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter of
this transaction, including, without limitation, contract claims, tort claims,
breach of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in their
related future dealings. Each party hereto further warrants and represents that
it has reviewed this waiver with its legal counsel and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SUBSECTION 10.19 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event
of litigation, this Agreement may be filed as a written consent to a trial by
the court.
10.20 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
lending or investing practices, it being understood and agreed by Company that
in any event a Lender may make disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participation therein
or as required or requested by any governmental agency or representative thereof
or pursuant to legal process; provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
152
10.21 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
It is the intention of each of the parties hereto that the Existing
Credit Agreement be amended and restated so as to preserve the perfection and
priority of all security interests securing indebtedness and obligations under
the Existing Credit Agreement and the other Loan Documents and that all
indebtedness and obligations of Company and its Subsidiaries hereunder and
thereunder shall be secured by the Collateral Documents and that this Agreement
shall not constitute a novation of the obligations and liabilities existing
under the Existing Credit Agreement or be deemed to evidence or constitute
repayment of all or any portion of any such obligations or liabilities. The
parties hereto further acknowledge and agree that this Agreement constitutes an
amendment of the Existing Credit Agreement made under the terms of subsection
10.6 thereof.
This Agreement shall become effective upon the execution of (i) a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery hereof; provided that, unless and until all of the
conditions set forth in subsection 4.1 have been satisfied or waived in
accordance with subsection 10.6 of the Existing Credit Agreement, the Existing
Credit Agreement shall remain in full force and effect without giving effect to
the amendments set forth herein, all as if this Agreement had never been
executed and delivered.
[Remainder of page intentionally left blank]
153
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
HOLDINGS AND COMPANY: DIMAC CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
DIMAC HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
Notice Address for Company and Holdings:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
AGENTS AND LENDERS: CREDIT SUISSE FIRST BOSTON,
individually and as Administrative Agent and
Arranger
By: /s/ Illegible
--------------------------------
Name:
Title:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-2
WARBURG DILLON READ LLC,
as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Director
Notice Address:
Warburg Dillon Read LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3-A
WARBURG DILLON READ LLC,
as Syndication Agent
By: /s/ ▇. ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇, ▇▇.
Title: Managing Director
UBS AG, STAMFORD BRANCH,
individually and as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Director
Notice Address:
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-3-B
UBS AG, STAMFORD BRANCH
By: /s/ ▇. ▇. ▇▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇, ▇▇.
Title: Managing Director
FIRST UNION NATIONAL BANK,
individually and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
First Union National Bank
One First Union Center
10th Floor
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
One First Union Center
5th Floor
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director
Notice Address:
BankBoston, N.A.
Mailstop 01-08-08
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-5
FLEET BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
Fleet Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-6
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Associate
Notice Address:
Bank Austria Creditanstalt Corporate Finance,
Inc.
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-7
FRANKLIN FLOATING RATE TRUST
By: /s/ Illegible
--------------------------------
Name:
Title:
Notice Address:
Franklin Floating Rate Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-8
MARINE MIDLAND BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: AUTHORIZED SIGNATORY
Notice Address:
Marine Midland Bank
c/o HSBC Securities, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-9
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: VICE PRESIDENT
Notice Address:
The Toronto-Dominion Bank
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
First Dominion Capital
1330 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Credit Analyst
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-10
MERCANTILE BANK N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: VICE PRESIDENT
Notice Address:
Mercantile Bank N.A.
▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Notice Address:
National Bank of Canada
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-14
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ B. ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: B. ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Notice Address:
The Prudential Company of America
c/o Prudential Capital Group
Four ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-15
▇▇▇▇▇ ▇▇▇ & FARNHAM INCORPORATED,
AS AGENT FOR KEYPORT LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. Good
--------------------------------
Name: ▇▇▇▇▇ ▇. Good
Title: Vice President & Portfolio Manager
Notice Address:
▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇-▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-17
▇▇▇▇▇▇▇ NATIONAL LIFE INSURANCE
COMPANY
BY: PPM AMERICA, INC., AS
ATTORNEY IN FACT, ON BEHALF
OF ▇▇▇▇▇▇▇ NATIONAL LIFE
INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
Notice Address:
PPM America, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-18
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President & Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇ American Capital Prime Rate
Income Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-20
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
SENIOR FLOATING RATE FUND
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President & Director
Notice Address:
▇▇▇ ▇▇▇▇▇▇ American Capital Senior Floating
Rate Fund
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-21
EXHIBIT I
NOTICE OF BORROWING
Pursuant to that certain Amended and Restated Credit Agreement dated as
of October 22, 1998, as amended, restated, supplemented or otherwise modified to
the date hereof (said Amended and Restated Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among DIMAC Corporation, a Delaware corporation
("Company"), DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
administrative agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as arranger, Warburg Dillon Read LLC, as syndication agent and
First Union National Bank, as documentation agent, this represents Company's
request to borrow as follows:
1. Date of borrowing:_____________
2. Amount of borrowing: i) Revolving Loans: $__________
ii) Term B Loans: $__________
iii) Term C Loans: $__________
3. Lender(s): / / a. Lenders, in accordance with their
applicable Pro Rata Shares
/ / b. Swing Line Lender
4. Type of Loans: / / a. Term B Loans
/ / b. Term C Loans
/ / c. Revolving Loans
/ / d. Swing Line Loan
5. Interest rate option: (1) / / a. Base Rate Loan(s)
/ / b. Eurodollar Rate Loans with an initial
Interest Period of ____________ month(s)
The proceeds of such Loans are to be deposited in Company's account at
Administrative Agent.
The undersigned officer, to the best of his or her knowledge, and
Company certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the
--------
(1) Term Loans and Revolving Loans may be Base Rate Loans or Eurodollar Rate
Loans. Swing Line Loans shall be Base Rate Loans.
I-1
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true and correct in all material respects on and as of such earlier
date;
(ii) No event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) Each Loan Party has performed in all material respects
all agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof;
(iv) Each of the other conditions precedent set forth in
subsection 4.2 of the Credit Agreement will be satisfied as of the
proposed Funding Date; and
[Remainder of page intentionally left blank]
I-2
(v) FOR REVOLVING LOANS: The amount of the proposed borrowing
will not cause the Total Utilization of Revolving Loan Commitments to
exceed the Revolving Loan Commitments.
DATED: DIMAC CORPORATION
--------------------
By:
------------------------------
Name:
Title:
I-3
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Amended and Restated Credit Agreement dated as
of October 22, 1998, as amended, restated, supplemented or otherwise modified to
the date hereof (said Amended and Restated Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among DIMAC Corporation, a Delaware corporation
("Company"), DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
administrative agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as arranger, Warburg Dillon Read LLC, as syndication agent and
First Union National Bank, as documentation agent, this represents Company's
request to convert or continue loans as follows:
1. Date of conversion/continuation: __________________, [199_] [200_]
2. Amount of Loans being converted/continued: $___________________
3. Type of Loans being converted/continued:
/ / a. Term A Loans
/ / b. Term B Loans
/ / c. Term C Loans
/ / d. Revolving Loans
4. Nature of conversion/continuation:
/ / a. Conversion of Base Rate Loans to Eurodollar Rate Loans
/ / b. Conversion of Eurodollar Rate Loans to Base Rate Loans
/ / c. Continuation of Eurodollar Rate Loans as such
5. If Loans are being continued as or converted to Eurodollar
Rate Loans, the duration of the new Interest Period that
commences on the conversion/ continuation date:
_______________ month(s)
II-1
In the case of a conversion to or continuation of Eurodollar Rate
Loans, the undersigned officer, to the best of his or her knowledge, and Company
certify that no Event of Default or Potential Event of Default has occurred and
is continuing under the Credit Agreement.
DATED: DIMAC CORPORATION
--------------------
By:
-------------------------------
Name:
Title:
II-2
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Amended and Restated Credit Agreement dated as
of October 22, 1998, as amended, restated, supplemented or otherwise modified to
the date hereof (said Amended and Restated Credit Agreement, as so amended,
restated, supplemented or otherwise modified, being the "Credit Agreement"; the
terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among DIMAC Corporation, a Delaware corporation
("Company"), DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
administrative agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as arranger, Warburg Dillon Read LLC, as syndication agent and
First Union National Bank, as documentation agent, this represents Company's
request for the issuance of a Letter of Credit by Administrative Agent as
follows:
1. Date of issuance of Letter of Credit: ________________, [199_] [200_]
2. Type of Letter of Credit:
/ / a. Commercial Letter of Credit
/ / b. Standby Letter of Credit
3. Face amount of Letter of Credit: $________________________
4. Expiration date of Letter of Credit: ________________, [199_] [200_]
5. Name and address of beneficiary:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
III-1
6. Attached hereto is:
/ / a. the verbatim text of such proposed Letter of Credit
/ / b. a description of the proposed terms and conditions of such
Letter of Credit, including a precise description of any
documents to be presented by the beneficiary which,
if presented by the beneficiary prior to the expiration date
of such Letter of Credit, would require the Issuing Lender to
make payment under such Letter of Credit.
The undersigned officer, to the best of his or her knowledge, and
Company certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties were true and correct
in all material respects on and as of such earlier date;
(ii) No event has occurred and is continuing or would result
from the issuance of the Letter of Credit contemplated hereby that
would constitute an Event of Default or a Potential Event of Default;
(iii) Company has performed in all material respects all
agreements and satisfied all conditions which the Credit Agreement
provides shall be performed or satisfied by it on or before the date
hereof;
(iv) The issuance of the proposed Letter of Credit will not
cause (a) the Letter of Credit Usage to exceed $___________ or (b) the
Total Utilization of Revolving Loan Commitments to exceed the Revolving
Loan Commitments; and
(v) Each of the other conditions precedent set forth in
subsection 4.2 of the Credit Agreement will be satisfied as of the
proposed date of issuance.
DATED: -------------------- DIMAC CORPORATION
By:
--------------------------------
Name:
Title:
III-2
EXHIBIT IV
[FORM OF TERM A NOTE]
DIMAC CORPORATION
PROMISSORY NOTE DUE JUNE 30, 2004
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, DIMAC CORPORATION, a Delaware corporation
("Company"), promises to pay to [2] ("Payee") or its registered assigns, the
principal amount of [3] ($[1]), in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit Agreement dated as of October 22, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Amended
and Restated Credit Agreement, as so amended, restated, supplemented or
otherwise modified, being the "Credit Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined), by and among
Company, DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
Administrative Agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as Arranger, Warburg Dillon Read LLC, as Syndication Agent and
First Union National Bank, as Documentation Agent.
Company shall make principal payments on this Note in consecutive
quarterly installments as set forth in the Credit Agreement, commencing on March
31, 2000 and ending on June 30, 2004. Each such installment shall be due on the
date specified in the Credit Agreement and in an amount determined in accordance
with the provisions thereof; provided that the last such installment shall be in
an amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
----------------
[1] Insert amount of Lender's Term A Loan in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Term A Loan in words.
IV-1
This Note is one of Company's "Term A Notes" in the aggregate principal
amount of $55,000,000 and is issued, together with the other Term A Notes, to
amend and restate without interruption or novation, all indebtedness evidenced
by the Term A Notes (as defined in the Existing Credit Agreement) and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Term A Loans evidenced hereby were made and are to be
repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Subsidiary Guaranty and
the Holdings Guaranty and is secured pursuant to the Collateral Documents.
IV-2
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.17 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
DIMAC CORPORATION
By:
----------------------------------
Name:
Title:
IV-3
EXHIBIT V
[FORM OF TERM B NOTE]
DIMAC CORPORATION
PROMISSORY NOTE DUE JUNE 30, 2006
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, DIMAC CORPORATION, a Delaware corporation
("Company"), promises to pay to [2] ("Payee") or its registered assigns, the
principal amount of [3] ($[1]), in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit Agreement dated as of October 22, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Amended
and Restated Credit Agreement, as so amended, restated, supplemented or
otherwise modified, being the "Credit Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined), by and among
Company, DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
Administrative Agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as Arranger,Warburg Dillon Read LLC, as Syndication Agent and
First Union National Bank, as Documentation Agent.
Company shall make principal payments on this Note in consecutive
quarterly installments as set forth in the Credit Agreement, commencing on March
31, 2000 and ending on June 30, 2006. Each such installment shall be due on the
date specified in the Credit Agreement and in an amount determined in accordance
with the provisions thereof; provided that the last such installment shall be in
an amount sufficient to repay the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest thereon.
----------------
[1] Insert amount of Lender's Term B Loan in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Term B Loan in words.
V-1
This Note is one of Company's "Term B Notes" in the aggregate principal
amount of $80,000,000 and is issued, together with the other Term B Notes, to
amend and restate without interruption or novation, all indebtedness evidenced
by the Term B Notes (as defined in the Existing Credit Agreement) and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Term B Loans evidenced hereby were made and are to be
repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Subsidiary Guaranty and
the Holdings Guaranty and is secured pursuant to the Collateral Documents.
V-2
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.17 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
DIMAC CORPORATION
By:
------------------------------
Name:
Title:
V-3
EXHIBIT VI
[FORM OF TERM C NOTE]
DIMAC CORPORATION
PROMISSORY NOTE DUE DECEMBER 31, 2006
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, DIMAC CORPORATION, a Delaware corporation
("Company"), promises to pay to [2] ("Payee") or its registered assigns, the
principal amount of [3] ($[1]), in the installments referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit Agreement dated as of October 22, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Amended
and Restated Credit Agreement, as so amended, restated, supplemented or
otherwise modified, being the "Credit Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined), by and among
Company, DIMAC Holdings, Inc., a Delaware corporation, the financial
institutions listed therein as Lenders, Credit Suisse First Boston, as
Administrative Agent (in such capacity, "Administrative Agent"), Credit Suisse
First Boston, as Arranger, Warburg Dillon Read LLC, as Syndication Agent and
First Union National Bank, as Documentation Agent.
Company shall make principal payments on this Note in consecutive
quarterly installments as set forth in the Credit Agreement, commencing on March
31, 2000 and ending on December 31, 2006. Each such installment shall be due on
the date specified in the Credit Agreement and in an amount determined in
accordance with the provisions thereof; provided that the last such installment
shall be in an amount sufficient to repay the entire unpaid principal balance of
this Note, together with all accrued and unpaid interest thereon.
This Note is one of Company's "Term C Notes" in the aggregate principal
amount of
----------------
[1] Insert amount of Lender's Term C Loan in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Term C Loan in words.
VI-1
$60,000,000 and is issued, together with the other Term C Notes, to amend and
restate without interruption or novation, all indebtedness evidenced by the Term
C Notes (as defined in the Existing Credit Agreement) and is issued pursuant to
and entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Term C Loans evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loan evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Subsidiary Guaranty and
the Holdings Guaranty and is secured pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
VI-2
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.17 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
DIMAC CORPORATION
By:
------------------------------------
Name:
Title:
VI-3
EXHIBIT VII
[FORM OF REVOLVING NOTE]
DIMAC CORPORATION
PROMISSORY NOTE DUE JUNE 30, 2004
$[1] New York, New York
[Effective Date]
FOR VALUE RECEIVED, DIMAC CORPORATION, a Delaware corporation
("Company"), promises to pay to [2] ("Payee") or its registered assigns, on or
before June 30, 2004, the lesser of (x) [3] ($[1]) and (y) the unpaid principal
amount of all advances made by Payee to Company as Revolving Loans under the
Credit Agreement referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of that certain
Amended and Restated Credit Agreement dated as of October 22, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Amended
and Restated Credit Agreement, as so amended, restated, supplemented or
otherwise modified, being the "Credit Agreement"; the terms defined therein and
not otherwise defined herein being used herein as therein defined), by and among
Company, DMAC Holdings, Inc., a Delaware corporation, the financial institutions
listed therein as Lenders, Credit Suisse First Boston, as Administrative Agent
(in such capacity, "Administrative Agent"), Credit Suisse First Boston, as
Arranger, Warburg Dillon Read LLC, as Syndication Agent and First Union National
Bank, as Documentation Agent.
This Note is one of Company's "Revolving Notes" in the aggregate
principal amount of $75,000,000 and is issued, together with the other
Revolving Notes, to amend and restate without interruption or novation, all
indebtedness evidenced by the Revolving Notes (as defined in the Existing
Credit Agreement) and is issued pursuant to and entitled to the benefits of
the Credit Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Revolving Loans
evidenced hereby were made and are to be repaid.
----------------
[1] Insert amount of Lender's Revolving Loan Commitment in numbers.
[2] Insert Lender's name in capital letters.
[3] Insert amount of Lender's Revolving Loan Commitment in words.
VII-1
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Unless and until an Assignment Agreement effecting the assignment or transfer of
this Note shall have been accepted by Administrative Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement, Company
and Administrative Agent shall be entitled to deem and treat Payee as the owner
and holder of this Note and the Loans evidenced hereby. Payee hereby agrees, by
its acceptance hereof, that before disposing of this Note or any part hereof it
will make a notation hereon of all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however, that
the failure to make a notation of any payment made on this Note shall not limit
or otherwise affect the obligations of Company hereunder with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Subsidiary Guaranty and
the Holdings Guaranty and is secured pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.17 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit
VII-2
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
IN WITNESS WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at the
place first written above.
DIMAC CORPORATION
By:
------------------------------
Name:
Title:
VII-3
TRANSACTIONS
ON
REVOLVING NOTE
Outstanding
Type of Amount of Amount of Principal
Loan Made Loan Made Principal Paid Balance Notation
Date This Date This Date This Date This Date Made By
---- ----------- ----------- ----------- ----------- -------
VII-4
EXHIBIT VIII
[FORM OF SWING LINE NOTE]
DIMAC CORPORATION
PROMISSORY NOTE DUE JUNE 30, 2004
$5,000,000.00 New York, New York
[Effective Date]
FOR VALUE RECEIVED, DIMAC CORPORATION, a Delaware corporation
("Company"), promises to pay to CREDIT SUISSE FIRST BOSTON ("Payee") or its
registered assigns, on or before June 30, 2004, the lesser of (x) FIVE MILLION
AND NO/100 DOLLARS ($5,000,000.00) and (y) the unpaid principal amount of all
advances made by Payee to Company as Swing Line Loans under the Credit Agreement
referred to below.
Company also promises to pay interest on the unpaid principal amount
hereof, from the date hereof until paid in full, at the rates and at the times
which shall be determined in accordance with the provisions of Amended and
Restated Credit Agreement dated as of October 22, 1998, as amended, restated,
supplemented or otherwise modified to the date hereof (said Amended and Restated
Credit Agreement, as so amended, restated, supplemented or otherwise modified,
being the "Credit Agreement"; the terms defined therein and not otherwise
defined herein being used herein as therein defined), by and among Company,
DIMAC Holdings, Inc., a Delaware corporation, the financial institutions listed
therein as Lenders, Credit Suisse First Boston, as Administrative Agent (in such
capacity, "Administrative Agent"), Credit Suisse First Boston, as Arranger,
Warburg Dillon Read LLC, as Syndication Agent and First Union National Bank, as
Documentation Agent.
This Note is Company's "Swing Line Note" and is issued to amend and
restate without interruption or novation, all indebtedness evidenced by the
Swing Line Note (as defined in the Existing Credit Agreement) and is issued
pursuant to and entitled to the benefits of the Credit Agreement, to which
reference is hereby made for a more complete statement of the terms and
conditions under which the Swing Line Loans evidenced hereby were made and are
to be repaid.
All payments of principal and interest in respect of this Note shall be
made in lawful money of the United States of America in same day funds at the
Funding and Payment Office or at such other place as shall be designated in
writing for such purpose in accordance with the terms of the Credit Agreement.
Whenever any payment on this Note shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next succeeding
Business Day and such
VIII-1
extension of time shall be included in the computation of the payment of
interest on this Note.
This Note is subject to mandatory prepayment as provided in subsection
2.4B(iii) of the Credit Agreement and to prepayment at the option of Company as
provided in subsection 2.4B(i) of the Credit Agreement.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided in the Credit Agreement.
This Note is entitled to the benefits of the Subsidiary Guaranty and
the Holdings Guaranty and is secured pursuant to the Collateral Documents.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.17 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligations of Company,
which are absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
Company promises to pay all costs and expenses, including reasonable
attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement,
incurred in the collection and enforcement of this Note. Company and any
endorsers of this Note hereby consent to renewals and extensions of time at or
after the maturity hereof, without notice, and hereby waive diligence,
presentment, protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a defense to
any demand hereunder.
[Remainder of page intentionally left blank]
VIII-2
IN WITNESS WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
DIMAC CORPORATION
By:
--------------------------------
Name:
Title:
VIII-3
TRANSACTIONS
ON
SWING LINE NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
---- --------- -------------- ----------- --------
VIII-4
EXHIBIT IX
[FORM OF SUBSIDIARY GUARANTY]
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY is entered into as of June 26, 1998, by THE
UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of DMAC Acquisition Corp., a
Delaware corporation ("Company") (each such undersigned Subsidiary a "Guarantor"
and collectively, "Guarantors"; provided that after the Closing Date, Guarantors
shall be deemed to include any Additional Guarantors (as hereinafter defined)),
in favor of and for the benefit of CREDIT SUISSE FIRST BOSTON ("CSFB"), as agent
for and representative of (in such capacity herein called "Guarantied Party")
the financial institutions ("Lenders") party to the Credit Agreement referred to
below and any Interest Rate Exchangers (as hereinafter defined).
RECITALS
A. Company has entered into that certain Credit Agreement dated as of
June 26, 1998 (said Credit Agreement, as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, being the "Credit
Agreement"; capitalized terms defined therein and not otherwise defined herein
being used herein as therein defined) with DMAC Holdings, Inc., Lenders, CSFB,
as Administrative Agent, and CSFB, as Syndication Agent and Arranger.
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreements (collectively, the "Lender
Interest Rate Agreements") with or one or more Lenders or their Affiliates (in
such capacity, collectively, "Interest Rate Exchangers") in accordance with the
terms of the Credit Agreement, and it is desired that the obligations of Company
under the Lender Interest Rate Agreements, including without limitation the
obligation of Company to make payments thereunder in the event of early
termination thereof (all such obligations being the "Interest Rate
Obligations"), together with all obligations of Company under the Credit
Agreement and the other Loan Documents, be guarantied hereunder.
C. A portion of the proceeds of the Loans may be advanced to Guarantors
and thus the Guarantied Obligations (as hereinafter defined) are being incurred
for and will inure to the benefit of Guarantors (which benefits are hereby
acknowledged).
D. It is a condition precedent to the making of the initial Loans under
the Credit Agreement that Company's obligations thereunder be guarantied by
Guarantors.
E. Guarantors are willing irrevocably and unconditionally to guaranty
such
IX-1
obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
in order to induce Lenders and Guarantied Party to enter into the Credit
Agreement and to make Loans and other extensions of credit thereunder and to
induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, Guarantors hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
As used in this Guaranty, the following terms shall have the following
meanings unless the context otherwise requires:
"Beneficiaries" means Guarantied Party, Lenders and any
Interest Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term
in subsection 2.1.
"Guaranty" means this Subsidiary Guaranty dated as of June 26,
1998, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"payment in full", "paid in full" or any similar term means
payment in full, in cash, of the Guarantied Obligations, including
without limitation all principal, interest, costs, fees and expenses
(including without limitation legal fees and expenses) of Beneficiaries
as required under the Loan Documents and the Lender Interest Rate
Agreements.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Guaranty unless otherwise specifically
provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions of this
Guaranty shall prevail.
IX-2
SECTION 2.
THE GUARANTY
2.1 Guaranty of the Guarantied Obligations.
Subject to the provisions of subsection 2.2(a), Guarantors jointly and
severally hereby irrevocably and unconditionally guaranty the due and punctual
payment in full of all Guarantied Obligations when the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. ss. 362(a)). The term "Guarantied Obligations" is used herein in its most
comprehensive sense and includes:
(a) any and all Obligations of Company and any and all
Interest Rate Obligations, in each case now or hereafter made, incurred
or created, whether absolute or contingent, liquidated or unliquidated,
whether due or not due, and however arising under or in connection with
the Credit Agreement and the other Loan Documents and the Lender
Interest Rate Agreements, including those arising under successive
borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Company or from time to time renew them
after they have been satisfied and including interest which, but for
the filing of a petition in bankruptcy with respect to Company, would
have accrued on any Guarantied Obligations, whether or not a claim is
allowed against Company for such interest in the related bankruptcy
proceeding; and
(b) those expenses set forth in subsection 2.8 hereof.
IX-3
2.2 Limitation on Amount Guarantied; Contribution by Guarantors.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor under this Guaranty, the obligations of such
Guarantor hereunder shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor (i) in respect of intercompany indebtedness to
Company or other affiliates of Company to the extent that such indebtedness
would be discharged in an amount equal to the amount paid by such Guarantor
hereunder and (ii) under any guaranty of Subordinated Indebtedness which
guaranty contains a limitation as to maximum amount similar to that set forth in
this subsection 2.2(a), pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
to subrogation, reimbursement, indemnification or contribution of such Guarantor
pursuant to applicable law or pursuant to the terms of any agreement (including
without limitation any such right of contribution under subsection 2.2(b) or
under the Holdings Guaranty as contemplated by subsection 2.2(b)).
(b) Guarantors under this Guaranty, and Holdings under the Holdings
Guaranty, together desire to allocate among themselves (collectively, the
"Contributing Guarantors"), in a fair and equitable manner, their obligations
arising under this Guaranty and the Holdings Guaranty. Accordingly, in the event
any payment or distribution is made on any date by any Guarantor under this
Guaranty or Holdings under the Holdings Guaranty (a "Funding Guarantor") that
exceeds its Fair Share (as defined below) as of such date, that Funding
Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below) as of such date, with the result that
all such contributions will cause each Contributing Guarantor's Aggregate
Payments (as defined below) to equal its Fair Share as of such date. "Fair
Share" means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Contributing Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Contributing
Guarantors multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Guarantors under this Guaranty and the Holdings
Guaranty in respect of the obligations guarantied. "Fair Share Shortfall" means,
with respect to a Contributing Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "Adjusted Maximum Amount"
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guaranty or Holdings under the Holdings Guaranty, as applicable,
IX-4
determined as of such date, in the case of any Guarantor, in accordance with
subsection 2.2(a); provided that, solely for purposes of calculating the
"Adjusted Maximum Amount" with respect to any Contributing Guarantor for
purposes of this subsection 2.2(b), any assets or liabilities of such
Contributing Guarantor arising by virtue of any rights to subrogation,
reimbursement or indemnification or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Contributing
Guarantor. "Aggregate Payments" means, with respect to a Contributing Guarantor
as of any date of determination, an amount equal to (i) the aggregate amount of
all payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or Holdings under the Holdings Guaranty
(including in respect of this subsection 2.2(b) or subsection 2.2 of the
Holdings Guaranty) minus (ii) the aggregate amount of all payments received on
or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this subsection 2.2(b) or subsection 2.2 of
the Holdings Guaranty. The amounts payable as contributions hereunder or under
subsection 2.2 of the Holdings Guaranty shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this subsection 2.2(b) and subsection 2.2 of the Holdings Guaranty
shall not be construed in any way to limit the liability of any Contributing
Guarantor hereunder. Holdings is a third party beneficiary to the contribution
agreement set forth in subsection 2.2(b).
2.3 Payment by Guarantors; Application of Payments.
Subject to the provisions of subsection 2.2(a), Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Company to pay
any of the Guarantied Obligations when and as the same shall become due, whether
at stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. Section
362(a)), Guarantors will upon demand pay, or cause to be paid, in cash, to
Guarantied Party for the ratable benefit of Beneficiaries, an amount equal to
the sum of the unpaid principal amount of all Guarantied Obligations then due as
aforesaid, accrued and unpaid interest on such Guarantied Obligations (including
without limitation interest which, but for the filing of a petition in
bankruptcy with respect to Company, would have accrued on such Guarantied
Obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding) and all other Guarantied Obligations then
owed to Beneficiaries as aforesaid. All such payments shall be applied promptly
from time to time by Guarantied Party as provided in subsection 2.4D of the
Credit Agreement.
IX-5
2.4 Liability of Guarantors Absolute.
Each Guarantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Guarantied Obligations. In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement or the
occurrence of an Early Termination Date (as defined in a Master
Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any
similar swap agreement) under any Lender Interest Rate Agreement
(either such occurrence being an "Event of Default" for purposes of
this Guaranty) notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event
of Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of Company under the Loan Documents or
the Lender Interest Rate Agreements and the obligations of any other
guarantor (including any other Guarantor) of the obligations of Company
under the Loan Documents or the Lender Interest Rate Agreements, and a
separate action or actions may be brought and prosecuted against such
Guarantor whether or not any action is brought against Company or any
of such other guarantors and whether or not Company is joined in any
such action or actions.
(d) Payment by any Guarantor of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
any Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Guarantied Party is awarded a judgment in any suit
brought to enforce any Guarantor's covenant to pay a portion of the
Guarantied Obligations, such judgment shall not be deemed to release
such Guarantor from its covenant to pay the portion of the Guarantied
Obligations that is not the subject of such suit, and such judgment
shall not, except to the extent satisfied by such Guarantor, limit,
affect, modify or abridge any other Guarantor's liability hereunder in
respect of the Guarantied Obligations.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the
IX-6
Guarantied Obligations, (ii) settle, compromise, release or discharge,
or accept or refuse any offer of performance with respect to, or
substitutions for, the Guarantied Obligations or any agreement relating
thereto and/or subordinate the payment of the same to the payment of
any other obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of
this Guaranty or the Guarantied Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guarantied Obligations, any other guaranties of the
Guarantied Obligations, or any other obligation of any Person
(including any other Guarantor) with respect to the Guarantied
Obligations; (v) enforce and apply any security now or hereafter held
by or for the benefit of such Beneficiary in respect of this Guaranty
or the Guarantied Obligations and direct the order or manner of sale
thereof, or exercise any other right or remedy that such Beneficiary
may have against any such security, in each case as such Beneficiary in
its discretion may determine consistent with the Credit Agreement or
the applicable Lender Interest Rate Agreement and any applicable
security agreement, including foreclosure on any such security pursuant
to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though
such action operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of any Guarantor against
Company or any security for the Guarantied Obligations; and (vi)
exercise any other rights available to it under the Loan Documents or
the Lender Interest Rate Agreements.
(f) This Guaranty and the obligations of Guarantors hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not any Guarantor shall have had notice or knowledge of any
of them: (i) any failure or omission to assert or enforce or agreement
or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents the Lender Interest Rate
Agreements, at law, in equity or otherwise) with respect to the
Guarantied Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of the
Guarantied Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including without limitation provisions relating to events
of default) of the Credit Agreement, any of the other Loan Documents,
any of the Lender Interest Rate Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or
security for the Guarantied Obligations, in each case whether or not in
accordance with the terms of the Credit Agreement or such Loan
Document, such Lender Interest Rate Agreement or any agreement relating
to such other guaranty or security; (iii) the Guarantied Obligations,
or any agreement relating thereto, at any time being found to be
illegal, invalid or unenforceable in any respect; (iv) the application
of payments received from any source (other than payments received
pursuant to the other Loan Documents or any of the Lender Interest Rate
Agreements or from the proceeds of any security for the Guarantied
Obligations, except to the extent
IX-7
such security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have elected
to apply such payment to any part or all of the Guarantied Obligations;
(v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Company or any
of its Subsidiaries and to any corresponding restructuring of the
Guarantied Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any
of the Guarantied Obligations; (vii) any defenses, set-offs or
counterclaims which Company may allege or assert against any
Beneficiary in respect of the Guarantied Obligations, including, but
not limited to, failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do
any other act or thing, which may or might in any manner or to any
extent vary the risk of any Guarantor as an obligor in respect of the
Guarantied Obligations.
2.5 Waivers by Guarantors.
Each Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against
Company, any other guarantor (including any other Guarantor) of the
Guarantied Obligations or any other Person, (ii) proceed against or
exhaust any security held from Company, any such other guarantor or any
other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of any Beneficiary in favor
of Company or any other Person, or (iv) pursue any other remedy in the
power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including
without limitation any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full
of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guarantied Obligations, except
behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii) the benefit of any statute of
IX-8
limitations affecting such Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that
any Beneficiary protect, secure, perfect or insure any security
interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Credit Agreement, the Lender Interest Rate Agreements or any agreement
or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of
any of the matters referred to in subsection 2.4 and any right to
consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.6 Guarantors' Rights of Subrogation, Contribution, Etc.
Until the Guarantied Obligations have been paid in full and the
Commitments terminated, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
Company or any of its assets in connection with this Guaranty or the performance
by such Guarantor of its obligations hereunder, in each case whether such claim,
right or remedy arises in equity, under contract, by statute, under common
law or otherwise and including, without limitation, (a) any right of
subrogation, reimbursement or indemnification that such Guarantor now has or may
hereafter have against Company, (b) any right to enforce, or to participate in,
any claim, right or remedy that any Beneficiary now has or may hereafter have
against Company, and (c) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by any Beneficiary. In addition,
until the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled, each Guarantor shall withhold exercise of any right of
contribution or such Guarantor may have against any other guarantor (including
any other Guarantor) of the Guarantied Obligations (including without limitation
any such right of contribution under subsection 2.2(b) or under the Holdings
Guaranty as contemplated by subsection 2.2(b)). Each Guarantor further agrees
that, to the extent the waiver or agreement to withhold the exercise of its
rights of subrogation, reimbursement, indemnification and contribution as set
forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Company or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guarantor, shall be junior and subordinate to any rights
any Beneficiary may have against Company, to all right, title and interest any
Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid
to any Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount
IX-9
shall be held in trust for Guarantied Party on behalf of Beneficiaries and shall
forthwith be paid over to Guarantied Party for the benefit of Beneficiaries to
be credited and applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof.
2.7 Subordination of Other Obligations.
Any indebtedness of Company or any Guarantor now or hereafter held by
any Guarantor (the "Obligee Guarantor") is hereby subordinated in right of
payment to the Guarantied Obligations, and any such indebtedness collected or
received by the Obligee Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of the Obligee Guarantor under any other provision of this Guaranty.
2.8 Expenses.
Guarantors jointly and severally agree to pay, or cause to be paid, on
demand, and to save Beneficiaries harmless against liability for, any and all
costs and expenses (including fees and disbursements of counsel and allocated
costs of internal counsel) incurred or expended by any Beneficiary in connection
with the enforcement of or preservation of any rights under this Guaranty.
2.9 Continuing Guaranty.
This Guaranty is a continuing guaranty and shall remain in effect until
all of the Guarantied Obligations shall have been paid in full and the
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled. Each Guarantor hereby irrevocably waives any right to revoke
this Guaranty as to future transactions giving rise to any Guarantied
Obligations.
2.10 Authority of Guarantors or Company.
It is not necessary for any Beneficiary to inquire into the capacity or
powers of any Guarantor or Company or the officers, directors or any agents
acting or purporting to act on behalf of any of them.
IX-10
2.11 Financial Condition of Company.
Any Loans may be granted to Company or continued from time to time, and
any Lender Interest Rate Agreement may be entered into from time to time, in
each case without notice to or authorization from any Guarantor regardless of
the financial or other condition of Company at the time of any such grant or
continuation or at the time such Lender Interest Rate Agreement is entered into,
as the case may be. No Beneficiary shall have any obligation to disclose or
discuss with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Company. Each Guarantor has adequate means to obtain
information from Company on a continuing basis concerning the financial
condition of Company and its ability to perform its obligations under the Loan
Documents and the Lender Interest Rate Agreements, and each Guarantor assumes
the responsibility for being and keeping informed of the financial condition of
Company and of all circumstances bearing upon the risk of nonpayment of the
Guarantied Obligations. Each Guarantor hereby waives and relinquishes any duty
on the part of any Beneficiary to disclose any matter, fact or thing relating to
the business, operations or conditions of Company now known or hereafter known
by any Beneficiary.
2.12 Rights Cumulative.
The rights, powers and remedies given to Beneficiaries by this Guaranty
are cumulative and shall be in addition to and independent of all rights, powers
and remedies given to Beneficiaries by virtue of any statute or rule of law or
in any of the other Loan Documents, any of the Lender Interest Rate Agreements
or any agreement between any Guarantor and any Beneficiary or Beneficiaries or
between Company and any Beneficiary or Beneficiaries. Any forbearance or failure
to exercise, and any delay by any Beneficiary in exercising, any right, power or
remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
2.13 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty.
(a) So long as any Guarantied Obligations remain outstanding, no
Guarantor shall, without the prior written consent of Guarantied Party acting
pursuant to the instructions of Requisite Obligees (as defined in subsection
3.14), commence or join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Company. The obligations
of Guarantors under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership, reorganization,
liquidation or arrangement of Company or by any defense which Company may have
by reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement of
any proceeding referred to in clause (a) above (or, if interest on any portion
of the Guarantied Obligations ceases to accrue by
IX-11
operation of law by reason of the commencement of said proceeding, such interest
as would have accrued on such portion of the Guarantied Obligations if said
proceedings had not been commenced) shall be included in the Guarantied
Obligations because it is the intention of Guarantors and Beneficiaries that the
Guarantied Obligations which are guarantied by Guarantors pursuant to this
Guaranty should be determined without regard to any rule of law or order which
may relieve Company of any portion of such Guarantied Obligations. Guarantors
will permit any trustee in bankruptcy, receiver, debtor in possession, assignee
for the benefit of creditors or similar person to pay Guarantied Party, or allow
the claim of Guarantied Party in respect of, any such interest accruing after
the date on which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied Obligations
are paid by Company, the obligations of Guarantors hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent transfer
or otherwise, and any such payments which are so rescinded or recovered shall
constitute Guarantied Obligations for all purposes under this Guaranty.
2.14 Notice of Events.
As soon as any Guarantor obtains knowledge thereof, such Guarantor
shall give Guarantied Party written notice of any condition or event which has
resulted in a breach of or noncompliance with any term, condition or covenant
contained herein.
2.15 Set Off.
In addition to any other rights any Beneficiary may have under law or
in equity, if any amount shall at any time be due and owing by any Guarantor to
any Beneficiary under this Guaranty, such Beneficiary is authorized at any time
or from time to time upon the occurrence and during the continuation of any
Event of Default, without notice (any such notice being hereby expressly
waived), to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to such Guarantor and any other property
of such Guarantor held by any Beneficiary to or for the credit or the account of
such Guarantor against and on account of the Guarantied Obligations and
liabilities of such Guarantor to any Beneficiary under this Guaranty.
IX-12
2.16 Discharge of Guaranty Upon Sale of Guarantor.
If all of the stock of any Guarantor or any of its successors in
interest under this Guaranty shall be sold or otherwise disposed of (including
by merger or consolidation) in an Asset Sale not prohibited by subsection 7.7 of
the Credit Agreement or otherwise consented to by Requisite Lenders, the
Guaranty of such Guarantor or such successor in interest, as the case may be,
hereunder shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale; provided that, as a condition precedent to such discharge and
release, Guarantied Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Guarantied Party
of the applicable Net Cash Proceeds.
SECTION 3.
MISCELLANEOUS
3.1 Survival of Warranties.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Guaranty and the other Loan Documents
and the Lender Interest Rate Agreements and any increase in the Commitments
under the Credit Agreement.
3.2 Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier and shall be deemed to have been
given when delivered in person or by courier service, or upon receipt of
telefacsimile or three Business Days after depositing it in the United States
mail with postage pre-paid and properly addressed; provided, notices to
Guarantied Party shall not be effective until received. For purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or, as to any party, such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
3.3 Severability.
In case any provision in or obligation under this Guaranty shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
IX-13
3.4 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision of
this Guaranty, and no consent to any departure by any Guarantor therefrom, shall
in any event be effective without the written concurrence of Guarantied Party
and, in the case of any such amendment or modification, each Guarantor against
whom enforcement of such amendment or modification is sought. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
3.5 Headings.
Section and subsection headings in this Guaranty are included herein
for convenience of reference only and shall not constitute a part of this
Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law; Rules of Construction.
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF GUARANTORS AND
BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
The rules of construction set forth in subsection 1.3 of the Credit Agreement
shall be applicable to this Guaranty mutatis mutandis.
3.7 Successors and Assigns.
This Guaranty is a continuing guaranty and shall be binding upon each
Guarantor and its respective successors and assigns. This Guaranty shall inure
to the benefit of Beneficiaries and their respective successors and assigns. No
Guarantor shall assign this Guaranty or any of the rights or obligations of such
Guarantor hereunder without the prior written consent of all Lenders. Any
Beneficiary may, without notice or consent, assign its interest in this Guaranty
in whole or in part. The terms and provisions of this Guaranty shall inure to
the benefit of any transferee or assignee of any Loan, and in the event of such
transfer or assignment the rights and privileges herein conferred upon such
Beneficiary shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
IX-14
3.8 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF
OR RELATING TO THIS GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS GUARANTY, EACH GUARANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GUARANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SUBSECTION 3.2; (IV) AGREES THAT SERVICE AS PROVIDED
IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GUARANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT BENEFICIARIES
RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GUARANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
IX-15
3.9 Waiver of Trial by Jury.
EACH GUARANTOR AND, BY ITS ACCEPTANCE OF THE BENEFITS HEREOF, EACH
BENEFICIARY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS GUARANTY. The scope
of this waiver is intended to be all encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each Guarantor
and, by its acceptance of the benefits hereof, each Beneficiary (i) acknowledges
that this waiver is a material inducement for such Guarantor and Beneficiaries
to enter into a business relationship, that such Guarantor and Beneficiaries
have already relied on this waiver in entering into this Guaranty or accepting
the benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED BY GUARANTIED
PARTY AND EACH GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY. In the
event of litigation, this Guaranty may be filed as a written consent to a trial
by the court.
3.10 No Other Writing.
This writing is intended by Guarantors and Beneficiaries as the final
expression of this Guaranty and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade usage, and no parol
evidence of any nature, shall be used to supplement or modify any terms of this
Guaranty. There are no conditions to the full effectiveness of this Guaranty.
3.11 Further Assurances.
At any time or from time to time, upon the request of Guarantied Party,
Guarantors shall execute and deliver such further documents and do such other
acts and things as Guarantied Party may reasonably request in order to effect
fully the purposes of this Guaranty.
IX-16
3.12 Additional Guarantors.
The initial Guarantors hereunder shall be such of the Subsidiaries of
Company as are signatories hereto on the date hereof. From time to time
subsequent to the date hereof, additional Subsidiaries of Company may become
parties hereto, as additional Guarantors (each an "Additional Guarantor"), by
executing a counterpart of this Guaranty. Upon delivery of any such counterpart
to Administrative Agent, notice of which is hereby waived by Guarantors, each
such Additional Guarantor shall be a Guarantor and shall be as fully a party
hereto as if such Additional Guarantor were an original signatory hereof. Each
Guarantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Guarantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Guarantor hereunder. This Guaranty
shall be fully effective as to any Guarantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Guarantor hereunder.
3.13 Counterparts; Effectiveness.
This Guaranty may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all purposes; but
all such counterparts together shall constitute but one and the same instrument.
This Guaranty shall become effective as to each Guarantor upon the execution of
a counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Guarantied Party
of written or telephonic notification of such execution and authorization of
delivery thereof.
IX-17
3.14 Guarantied Party as Agent.
(a) Guarantied Party has been appointed to act as Guarantied Party
hereunder by Lenders and, by their acceptance of the benefits hereof, Interest
Rate Exchangers. Guarantied Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action, solely in
accordance with this Guaranty and the Credit Agreement; provided that Guarantied
Party shall exercise, or refrain from exercising, any remedies hereunder in
accordance with the instructions of (i) Requisite Lenders or (ii) after payment
in full of all Obligations under the Credit Agreement and the other Loan
Documents, the cancellation or expiration of all the Letters of Credit and the
termination of the Commitments, the holders of a majority of the aggregate
notional amount (or, with respect to any Lender Interest Rate Agreement that has
been terminated in accordance with its terms, the amount then due and payable
(exclusive of expenses and similar payments but including any early termination
payments then due) under such Lender Interest Rate Agreement) under all Lender
Interest Rate Agreements (Requisite Lenders or, if applicable, such holders
being referred to herein as "Requisite Obligees"). In furtherance of the
foregoing provisions of this subsection 3.14, each Interest Rate Exchanger, by
its acceptance of the benefits hereof, agrees that it shall have no right
individually to enforce this Guaranty, it being understood and agreed by such
Interest Rate Exchanger that all rights and remedies hereunder may be exercised
solely by Guarantied Party for the benefit of Beneficiaries in accordance with
the terms of this subsection 3.14.
(b) Guarantied Party shall at all times be the same Person that is
Administrative under the Credit Agreement. Written notice of resignation by
Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Guarantied Party under this Guaranty;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Guarantied Party under this Guaranty;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor
Guarantied Party under this Guaranty. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Guarantied Party under this Guaranty, and the
retiring or removed Guarantied Party under this Guaranty shall promptly (i)
transfer to such successor Guarantied Party all sums held hereunder, together
with all records and other documents necessary or appropriate in connection with
the performance of the duties of the successor Guarantied Party under this
Guaranty, and (ii) take such other actions as may be necessary or appropriate in
connection with the assignment to such successor Guarantied Party of the rights
created hereunder, whereupon such retiring or removed Guarantied Party shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Guarantied Party's resignation or removal hereunder as
Guarantied Party, the provisions of this Guaranty shall inure to its benefit as
to any actions taken or omitted to be taken by it under this Guaranty while it
was Guarantied Party hereunder.
IX-18
[Remainder of page intentionally left blank]
IX-19
IN WITNESS WHEREOF, each of the undersigned Guarantors has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first written above.
Each of the entities listed on Schedule
A annexed hereto
By:
------------------------------------
on behalf of each of the entities listed on
Schedule A annexed hereto
Name:
Title:
Notice Address:
See Schedule A
IX-20
Schedule A
Name Notice Address for each Guarantor
---- ---------------------------------
DIMAC Marketing Corporation c/o AmeriComm Holdings, Inc.
Palm Coast Data Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
The ▇▇▇▇▇▇▇ Group Inc. Dunwoody, Suite C150
▇▇▇▇▇▇ & Associates Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MBS/Multimode Inc. Attn: ▇▇▇▇ ▇▇▇▇▇▇
DIMAC Direct Inc.
IX-21
IN WITNESS WHEREOF, the undersigned Additional Guarantor has caused
this Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of ______________, [199_] [200_].
[NAME OF ADDITIONAL GUARANTOR]
By:
----------------------------------
Name:
Title:
Notice Address:
------------------------------
------------------------------
------------------------------
------------------------------
IX-22
EXHIBIT X
[FORM OF HOLDINGS GUARANTY]
HOLDINGS GUARANTY
This HOLDINGS GUARANTY is entered into as of June 26, 1998 by
DMAC HOLDINGS, INC., a Delaware corporation ("Guarantor"), in favor of and for
the benefit of CREDIT SUISSE FIRST BOSTON, as agent for and representative of
(in such capacity herein called "Guarantied Party") the financial institutions
("Lenders") party to the Credit Agreement referred to below and any Interest
Rate Exchangers (as hereinafter defined), and, subject to subsection 3.12, for
the benefit of the other Beneficiaries (as hereinafter defined).
RECITALS
A. DMAC Acquisition Corp., a Delaware corporation and a
wholly-owned subsidiary of Guarantor ("Company"), has entered into that certain
Credit Agreement dated as of June 26, 1998 with Guarantied Party, as
Administrative Agent, Syndication Agent and Arranger, and Lenders (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement"; capitalized terms defined
therein and not otherwise defined herein being used herein as therein defined).
B. Company may from time to time enter, or may from time to
time have entered into, one or more Interest Rate Agreements (collectively, the
"Lender Interest Rate Agreements") with or one or more Lenders (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be guarantied hereunder.
C. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that Company's obligations thereunder be
guarantied by Guarantor.
D. Guarantor is willing irrevocably and unconditionally to
guaranty such obligations of Company.
NOW, THEREFORE, based upon the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce Lenders and Guarantied Party to enter into
the Credit Agreement and to make Loans and other extensions of credit thereunder
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, Guarantor hereby agrees as follows:
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SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the following
terms shall have the following meanings unless the context otherwise requires:
"Beneficiaries" means Guarantied Party, Lenders and any
Interest Rate Exchangers.
"Guarantied Obligations" has the meaning assigned to that term
in subsection 2.1.
"Guaranty" means this Holdings Guaranty dated as of June 26,
1998, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"payment in full", "paid in full" or any similar term means
payment in full, in cash, of the Guarantied Obligations, including
without limitation all principal, interest, costs, fees and expenses
(including, without limitation, legal fees and expenses) of
Beneficiaries as required under the Loan Documents and the Lender
Interest Rate Agreements.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between the
terms, conditions and provisions of this Guaranty and the terms,
conditions and provisions of the Credit Agreement, the terms,
conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Guarantor hereby
irrevocably and unconditionally guaranties, as primary obligor and not merely as
surety, the due and punctual payment in full of all Guarantied Obligations when
the same shall become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. ss. 362(a)). The term "Guarantied Obligations" is
used herein in its most comprehensive sense and includes:
(a) any and all Obligations of Company and any and all
Interest Rate Obligations, in each case now or hereafter made, incurred
or created, whether absolute or contingent, liquidated or unliquidated,
whether due or not due, and however arising under or in connection with
the Credit Agreement and the other Loan Documents and the Lender
Interest Rate Agreements, including those arising under successive
borrowing transactions under the Credit Agreement which shall either
continue the Obligations of Company or from time to time renew them
after they have been satisfied and including
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interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on any Guarantied Obligations,
whether or not a claim is allowed against Company for such interest in
the related bankruptcy proceeding; and
(b) those expenses set forth in subsection 2.9 hereof.
2.2 Contribution by Guarantor. Guarantor under this Guaranty, and each
Subsidiary Guarantor under the Subsidiary Guaranty, together desire to allocate
among themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty and the
Subsidiary Guaranty. Accordingly, in the event any payment or distribution is
made on any date by Guarantor under this Guaranty or a Subsidiary Guarantor
under the Subsidiary Guaranty (a "Funding Guarantor") that exceeds its Fair
Share (as defined below) as of such date, that Funding Guarantor shall be
entitled to a contribution from each of the other Contributing Guarantors in the
amount of such other Contributing Guarantor's Fair Share Shortfall (as defined
below) as of such date, with the result that all such contributions will cause
each Contributing Guarantor's Aggregate Payments (as defined below) to equal its
Fair Share as of such date. "Fair Share" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of
(x) the Fair Share Contribution Amount (as defined below) with respect to such
Contributing Guarantor to (y) the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (ii) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty and the Subsidiary Guaranty in respect of the
obligations guarantied. "Fair Share Shortfall" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Contributing Guarantor over the Aggregate Payments of
such Contributing Guarantor. "Fair Share Contribution Amount" means, with
respect to a Contributing Guarantor as of any date of determination, the maximum
aggregate amount of the obligations of such Contributing Guarantor under this
Guaranty or the Subsidiary Guaranty, as applicable, that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided that, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this subsection 2.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder or under subsection 2.2(b) of the Subsidiary Guaranty
shall not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty or the Subsidiary Guaranty, as applicable
(including, without limitation, in respect of this subsection 2.2 or subsection
2.2(b) of the Subsidiary Guaranty), minus (ii) the aggregate amount of all
payments received on or before such date by such Contributing Guarantor from the
other Contributing Guarantors as contributions under this subsection 2.2 or
subsection 2.2(b) of the Subsidiary Guaranty. The amounts payable as
contributions hereunder and under subsection 2.2(b) of the Subsidiary Guaranty
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this
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subsection 2.2 and subsection 2.2(b) of the Subsidiary Guaranty shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder or under the Subsidiary Guaranty. Each Subsidiary Guarantor is a third
party beneficiary to the contribution agreement set forth in this subsection
2.2.
2.3 Payment by Guarantor; Application of Payments. Guarantor hereby
agrees, in furtherance of the foregoing and not in limitation of any other right
which any Beneficiary may have at law or in equity against Guarantor by virtue
hereof, that upon the failure of Company to pay any of the Guarantied
Obligations when and as the same shall become due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)),
Guarantor will upon demand pay, or cause to be paid, in cash, to Guarantied
Party for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Guarantied Obligations then due as aforesaid,
accrued and unpaid interest on such Guarantied Obligations (including, without
limitation, interest which, but for the filing of a petition in bankruptcy with
respect to Company, would have accrued on such Guarantied Obligations, whether
or not a claim is allowed against Company for such interest in the related
bankruptcy proceeding) and all other Guarantied Obligations then owed to
Beneficiaries as aforesaid. All such payments shall be applied promptly from
time to time by Guarantied Party as provided in subsection 2.4D of the Credit
Agreement.
2.4 Liability of Guarantor Absolute. Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guarantied Obligations. In furtherance of the foregoing and without limiting the
generality thereof, Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due and not of
collectibility.
(b) Guarantied Party may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement or the
occurrence of an Early Termination Date (as defined in a Master
Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any
similar swap agreement) under any Lender Interest Rate Agreement
(either such occurrence being an "Event of Default" for purposes of
this Agreement) notwithstanding the existence of any dispute between
Company and any Beneficiary with respect to the existence of such Event
of Default.
(c) The obligations of Guarantor hereunder are independent of
the obligations of Company under the Loan Documents or the Lender
Interest Rate Agreements and the obligations of any other guarantor
(including any Subsidiary Guarantor) of the obligations of Company
under the Loan Documents or the Lender Interest Rate Agreements, and a
separate action or actions may be brought and prosecuted against
Guarantor whether or not any action is brought against Company or any
of such other guarantors and whether
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or not Company is joined in any such action or actions.
(d) Guarantor's payment of a portion, but not all, of the
Guarantied Obligations shall in no way limit, affect, modify or abridge
Guarantor's liability for any portion of the Guarantied Obligations
which has not been paid. Without limiting the generality of the
foregoing, if Guarantied Party is awarded a judgment in any suit
brought to enforce Guarantor's covenant to pay a portion of the
Guarantied Obligations, such judgment shall not be deemed to release
Guarantor from its covenant to pay the portion of the Guarantied
Obligations that is not the subject of such suit.
(e) Any Beneficiary, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the
time, place, manner or terms of payment of the Guarantied Obligations,
(ii) settle, compromise, release or discharge, or accept or refuse any
offer of performance with respect to, or substitutions for, the
Guarantied Obligations or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the
Guarantied Obligations and take and hold security for the payment of
this Guaranty or the Guarantied Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for
payment of the Guarantied Obligations, any other guaranties (including
the Subsidiary Guaranty) of the Guarantied Obligations, or any other
obligation of any Person with respect to the Guarantied Obligations;
(v) enforce and apply any security now or hereafter held by or for the
benefit of such Beneficiary in respect of this Guaranty or the
Guarantied Obligations and direct the order or manner of sale thereof,
or exercise any other right or remedy that such Beneficiary may have
against any such security, in each case as such Beneficiary in its
discretion may determine consistent with the Credit Agreement or the
applicable Lender Interest Rate Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of Guarantor against Company or
any security for the Guarantied Obligations; and (vi) exercise any
other rights available to it under the Loan Documents or the Lender
Interest Rate Agreements.
(f) This Guaranty and the obligations of Guarantor hereunder
shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following,
whether or not Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy
(whether arising under the Loan Documents or the Lender Interest Rate
Agreements, at law, in equity or
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otherwise) with respect to the Guarantied Obligations or any agreement
relating thereto, or with respect to the Subsidiary Guaranty or any
other guaranty of or security for the payment of the Guarantied
Obligations; (ii) any rescission, waiver, amendment or modification of,
or any consent to departure from, any of the terms or provisions
(including without limitation provisions relating to events of default)
of the Credit Agreement, any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement or instrument executed
pursuant thereto, or of the Subsidiary Guaranty or any other guaranty
or security for the Guarantied Obligations, in each case whether or not
in accordance with the terms of the Credit Agreement or such Loan
Document, such Lender Interest Rate Agreement or any agreement relating
to the Subsidiary Guaranty or such other guaranty or security; (iii)
the Guarantied Obligations, or any agreement relating thereto, at any
time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source
(other than payments received pursuant to the other Loan Documents or
any of the Lender Interest Rate Agreements or from the proceeds of any
security for the Guarantied Obligations, except to the extent such
security also serves as collateral for indebtedness other than the
Guarantied Obligations) to the payment of indebtedness other than the
Guarantied Obligations, even though any Beneficiary might have elected
to apply such payment to any part or all of the Guarantied Obligations;
(v) any Beneficiary's consent to the change, reorganization or
termination of the corporate structure or existence of Company or any
of its Subsidiaries and to any corresponding restructuring of the
Guarantied Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any
of the Guarantied Obligations; (vii) any defenses, set-offs or
counterclaims which Company may allege or assert against any
Beneficiary in respect of the Guarantied Obligations, including, but
not limited to, failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do
any other act or thing, which may or might in any manner or to any
extent vary the risk of Guarantor as an obligor in respect of the
Guarantied Obligations.
2.5 Waivers by Guarantor. Guarantor hereby waives, for the
benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of
payment or performance by Guarantor, to (i) proceed against Company,
any other guarantor (including any Subsidiary Guarantor) of the
Guarantied Obligations or any other Person, (ii) proceed against or
exhaust any security held from Company, any such other guarantor or any
other Person, (iii) proceed against or have resort to any balance of
any deposit account or credit on the books of any Beneficiary in favor
of Company or any other Person, or (iv) pursue any other remedy in the
power of any Beneficiary whatsoever;
(b) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Company including,
without limitation, any defense based on or arising out of the lack of
validity or the unenforceability of the Guarantied Obligations or any
agreement or instrument relating thereto or by reason of the cessation
of the liability of Company from any cause other than payment in full
of the Guarantied
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Obligations;
(c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon any Beneficiary's errors or
omissions in the administration of the Guarantied Obligations, except
behavior which amounts to bad faith;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting Guarantor's liability hereunder or the enforcement hereof,
(iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect,
secure, perfect or insure any security interest or lien or any property
subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the
Credit Agreement, the Lender Interest Rate Agreements or any agreement
or instrument related thereto, notices of any renewal, extension or
modification of the Guarantied Obligations or any agreement related
thereto, notices of any extension of credit to Company and notices of
any of the matters referred to in subsection 2.4 and any right to
consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty.
2.7 Guarantor's Rights of Subrogation, Contribution, Etc. Guarantor
hereby waives any claim, right or remedy, direct or indirect, that Guarantor now
has or may hereafter have against Company or any of its assets in connection
with this Guaranty or the performance by Guarantor of its obligations hereunder,
in each case whether such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise and including, without
limitation, (a) any right of subrogation, reimbursement or indemnification that
Guarantor now has or may hereafter have against Company, (b) any right to
enforce, or to participate in, any claim, right or remedy that any Beneficiary
now has or may hereafter have against Company, and (c) any benefit of, and any
right to participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guarantied Obligations shall have been
indefeasibly paid in full and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, Guarantor shall withhold
exercise of any right of contribution Guarantor may have against any other
guarantor of the Guarantied Obligations. Guarantor further agrees that, to the
extent the waiver or agreement to withhold the exercise of its rights of
subrogation, reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of
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subrogation, reimbursement or indemnification Guarantor may have against Company
or against any collateral or security, and any rights of contribution Guarantor
may have against any such other guarantor, shall be junior and subordinate to
any rights any Beneficiary may have against Company, to all right, title and
interest any Beneficiary may have in any such collateral or security, and to any
right any Beneficiary may have against such other guarantor. If any amount shall
be paid to Guarantor on account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all Guarantied
Obligations shall not have been paid in full, such amount shall be held in trust
for Guarantied Party on behalf of Beneficiaries and shall forthwith be paid over
to Guarantied Party for the benefit of Beneficiaries to be credited and applied
against the Guarantied Obligations, whether matured or unmatured, in accordance
with the terms hereof.
2.8 Subordination of Other Obligations. Any indebtedness of Company now
or hereafter held by Guarantor is hereby subordinated in right of payment to the
Guarantied Obligations, and any such indebtedness of Company to Guarantor
collected or received by Guarantor after an Event of Default has occurred and is
continuing shall be held in trust for Guarantied Party on behalf of
Beneficiaries and shall forthwith be paid over to Guarantied Party for the
benefit of Beneficiaries to be credited and applied against the Guarantied
Obligations but without affecting, impairing or limiting in any manner the
liability of Guarantor under any other provision of this Guaranty.
2.9 Expenses. Guarantor agrees to pay, or cause to be paid, on demand,
and to save Beneficiaries harmless against liability for, any and all costs and
expenses (including fees and disbursements of counsel and allocated costs of
internal counsel) incurred or expended by any Beneficiary in connection with the
enforcement of or preservation of any rights under this Guaranty.
2.10 Continuing Guaranty; Termination of Guaranty. This Guaranty is a
continuing guaranty and shall remain in effect until all of the Guarantied
Obligations shall have been paid in full and the Commitments shall have
terminated and all Letters of Credit shall have expired or been cancelled.
Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guarantied Obligations.
2.11 Authority of Guarantor or Company. It is not necessary for any
Beneficiary to inquire into the capacity or powers of Guarantor or Company or
the officers, directors or any agents acting or purporting to act on behalf of
any of them.
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2.12 Financial Condition of Company. Any Loans may be granted to
Company or continued from time to time, and any Lender Interest Rate Agreement
may be entered into from time to time, in each case without notice to or
authorization from Guarantor regardless of the financial or other condition of
Company at the time of any such grant or continuation or at the time such Lender
Interest Rate Agreement is entered into, as the case may be. No Beneficiary
shall have any obligation to disclose or discuss with Guarantor its assessment,
or Guarantor's assessment, of the financial condition of Company. Guarantor has
adequate means to obtain information from Company on a continuing basis
concerning the financial condition of Company and its ability to perform its
obligations under the Loan Documents and the Lender Interest Rate Agreements,
and Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations. Guarantor hereby waives and
relinquishes any duty on the part of any Beneficiary to disclose any matter,
fact or thing relating to the business, operations or conditions of Company now
known or hereafter known by any Beneficiary .
2.13 Rights Cumulative. The rights, powers and remedies given to
Beneficiaries by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Beneficiaries by virtue
of any statute or rule of law or in any of the other Loan Documents, any of the
Lender Interest Rate Agreements or any agreement between Guarantor and any
Beneficiary or Beneficiaries or between Company and any Beneficiary or
Beneficiaries. Any forbearance or failure to exercise, and any delay by any
Beneficiary in exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or remedy.
2.14 Bankruptcy; Post-Petition Interest; Reinstatement of Guaranty. (a)
So long as any Guarantied Obligations remain outstanding, Guarantor shall not,
without the prior written consent of Guarantied Party acting pursuant to the
instructions of Requisite Obligees (as defined in subsection 3.12), commence or
join with any other Person in commencing any bankruptcy, reorganization or
insolvency proceedings of or against Company. The obligations of Guarantor under
this Guaranty shall not be reduced, limited, impaired, discharged, deferred,
suspended or terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation or
arrangement of Company or by any defense which Company may have by reason of the
order, decree or decision of any court or administrative body resulting from any
such proceeding.
(b) Guarantor acknowledges and agrees that any interest on any
portion of the Guarantied Obligations which accrues after the commencement of
any proceeding referred to in clause (a) above (or, if interest on any portion
of the Guarantied Obligations ceases to accrue by operation of law by reason of
the commencement of said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not been
commenced) shall be included in the Guarantied Obligations because it is the
intention of Guarantor and Beneficiaries that the Guarantied Obligations which
are guarantied by Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order which may relieve Company of any
portion of such Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of
creditors or
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similar person to pay Guarantied Party, or allow the claim of Guarantied Party
in respect of, any such interest accruing after the date on which such
proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Company, the obligations of Guarantor hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer or otherwise, and any such payments which are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes under this
Guaranty.
2.15 Notice of Events. As soon as Guarantor obtains knowledge thereof,
Guarantor shall give Guarantied Party written notice of any condition or event
which has resulted in a breach of or noncompliance with any term, condition or
covenant contained herein.
2.16 Set Off. In addition to any other rights any Beneficiary may have
under law or in equity, if any amount shall at any time be due and owing by
Guarantor to any Beneficiary under this Guaranty, such Beneficiary is authorized
at any time or from time to time upon the occurrence and during the continuance
of an Event of Default without notice (any such notice being hereby expressly
waived), to set off and to appropriate and to apply any and all deposits
(general or special, including but not limited to indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of such Beneficiary owing to Guarantor and any other property of
Guarantor held by any Beneficiary to or for the credit or the account of
Guarantor against and on account of the Guarantied Obligations and liabilities
of Guarantor to any Beneficiary under this Guaranty.
SECTION 3. MISCELLANEOUS
3.1 Survival of Warranties. All agreements, representations and
warranties made herein shall survive the execution and delivery of this Guaranty
and the other Loan Documents and the Lender Interest Rate Agreements and any
increase in the Commitments under the Credit Agreement.
3.2 Notices. Any notice or other communication herein required or
permitted to be given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier and shall be deemed to
have been given when delivered in person or by courier service, or upon receipt
of telefacsimile or three Business Days after depositing it in the United States
mail with postage pre-paid and properly addressed; provided, notices to
Guarantied Party shall not be effective until received. For purposes hereof, the
address of each party hereto shall be as set forth under such party's name on
the signature pages hereof or, as to any party, such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
3.3 Severability. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
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3.4 Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Guaranty, and no consent to any departure by
Guarantor therefrom, shall in any event be effective without the written
concurrence of Guarantied Party and, in the case of any such amendment or
modification, Guarantor. Any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was given.
3.5 Headings. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
3.6 Applicable Law. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF
GUARANTOR AND BENEFICIARIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Guaranty mutatis mutandis.
3.7 Successors and Assigns. This Guaranty is a continuing guaranty and
shall be binding upon Guarantor and its successors and assigns. This Guaranty
shall inure to the benefit of Beneficiaries and their respective successors and
assigns. Guarantor shall not assign this Guaranty or any of the rights or
obligations of Guarantor hereunder without the prior written consent of all
Lenders. Any Beneficiary may, without notice or consent, assign its interest in
this Guaranty in whole or in part. The terms and provisions of this Guaranty
shall inure to the benefit of any transferee or assignee of any Loan, and in the
event of such transfer or assignment the rights and privileges herein conferred
upon such Beneficiary shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof.
3.8 Consent to Jurisdiction and Service of Process. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY
EXECUTING AND DELIVERING THIS AGREEMENT, GUARANTOR, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO GUARANTOR AT
X-11
ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION 3.2;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER GUARANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT BENEFICIARIES RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 3.8
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
3.9 Waiver of Trial by Jury. GUARANTOR AND, BY ITS ACCEPTANCE OF THE
BENEFITS HEREOF, EACH BENEFICIARY HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY. The scope of this waiver is intended to be all-encompassing of
any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Guarantor and, by its acceptance of the benefits hereof, each
Beneficiary (i) acknowledges that this waiver is a material inducement for
Guarantor and Beneficiaries to enter into a business relationship, that
Guarantor and Beneficiaries have already relied on this waiver in entering into
this Guaranty or accepting the benefits thereof, as the case may be, and that
each will continue to rely on this waiver in their related future dealings and
(ii) further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 3.9 AND EXECUTED
BY GUARANTIED PARTY AND GUARANTOR), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY.
In the event of litigation, this Guaranty may be filed as a written consent to a
trial by the court.
3.10 No Other Writing. This writing is intended by Guarantor and
Beneficiaries as the final expression of this Guaranty and is also intended as a
complete and exclusive statement of the terms of their agreement with respect to
the matters covered hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to supplement or
modify any terms of this Guaranty. There are no conditions to the full
effectiveness of this Guaranty.
X-12
3.11 Further Assurances. At any time or from time to time, upon the
request of Guarantied Party, Guarantor shall execute and deliver such further
documents and do such other acts and things as Guarantied Party may reasonably
request in order to effect fully the purposes of this Guaranty.
3.12 Guarantied Party as Agent.
(a) Guarantied Party has been appointed to act as Guarantied
Party hereunder by Lenders and, by their acceptance of the benefits hereof,
Interest Rate Exchangers. Guarantied Party shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action,
solely in accordance with this Guaranty and the Credit Agreement; provided that
Guarantied Party shall exercise, or refrain from exercising, any remedies
hereunder in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all the Letters of
Credit and the termination of the Commitments, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Interest Rate Agreement)
under all Lender Interest Rate Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as "Requisite Obligees"). In furtherance
of the foregoing provisions of this subsection 3.12, each Interest Rate
Exchanger, by its acceptance of the benefits hereof, agrees that it shall have
no right individually to enforce this Guaranty, it being understood and agreed
by such Interest Rate Exchanger that all rights and remedies hereunder may be
exercised solely by Guarantied Party for the benefit of Beneficiaries in
accordance with the terms of this subsection 3.12.
(b) Guarantied Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute notice
of resignation as Guarantied Party under this Guaranty; removal of Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute removal
as Guarantied Party under this Guaranty; and appointment of a successor Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Guarantied Party under this Guaranty. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Guarantied Party under this Guaranty, and the retiring or
removed Guarantied Party under this Guaranty shall promptly (i) transfer to such
successor Guarantied Party all sums held hereunder, together with all records
and other documents necessary or appropriate in connection with the performance
of the duties of the successor Guarantied Party under this Guaranty, and (ii)
take such other actions as may be necessary or appropriate in connection with
the assignment to such successor Guarantied Party of the rights created
hereunder, whereupon such retiring or removed Guarantied Party shall be
discharged from its duties and obligations under this Guaranty. After any
retiring or removed Guarantied Party's resignation or removal hereunder as
Guarantied Party, the provisions of this Guaranty shall inure
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to its benefit as to any actions taken or omitted to be taken by it under this
Guaranty while it was Guarantied Party hereunder.
3.13 Counterparts; Effectiveness.
This Guaranty may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original for all purposes; but
all such counterparts together shall constitute but one and the same instrument.
This Guaranty shall become effective as to Guarantor upon the execution of a
counterpart hereof by Guarantor and receipt by Guarantied Party of written or
telephonic notification of such execution and authorization of delivery thereof.
[Remainder of page intentionally left blank]
X-14
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first written above.
DMAC HOLDINGS, INC.
By:
-----------------------------------
Name:
Title:
S-1
EXHIBIT XI
[FORM OF PLEDGE AGREEMENT]
PLEDGE AGREEMENT
This PLEDGE AGREEMENT (this "Agreement") is dated as of June 26, 1998,
and entered into by and among DMAC ACQUISITION CORP., a Delaware corporation
("Company"), DMAC HOLDINGS, INC., a Delaware corporation ("Holdings"), each of
THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of Company (each of such
undersigned Subsidiaries being a "Subsidiary Pledgor" and collectively
"Subsidiary Pledgors", and each of Company, Holdings and Subsidiary Pledgors
being a "Pledgor" and collectively "Pledgors"; provided that after the Closing
Date, "Pledgors" shall be deemed to include any Additional Pledgors (as
hereinafter defined)) and CREDIT SUISSE FIRST BOSTON, as agent for and
representative of (in such capacity herein called "Secured Party") the financial
institutions ("Lenders") party to the Credit Agreement referred to below and any
Interest Rate Exchangers (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pledgors are the legal and beneficial owners of (i) the shares of
stock (the "Pledged Shares") described in Part A of Schedule I annexed hereto
and issued by the corporations named therein and (ii) the indebtedness (the
"Pledged Debt") described in Part B of said Schedule I and issued by the
obligors named therein.
B. Pursuant to Credit Agreement dated as of June 26, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, restated, supplemented or otherwise modified, being
the "Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among Company, Holdings,
and the financial institutions listed therein as Lenders, Credit Suisse First
Boston, as Administrative Agent (in such capacity, "Administrative Agent"), and
Credit Suisse First Boston, as Syndication Agent and Arranger, Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
C. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreement (collectively, the "Lender
Interest Rate Agreements") with one or more Lenders or their Affiliates (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with
all obligations of Company under the Credit Agreement and the other Loan
Documents, be
XI-1
secured hereunder.
D. Subsidiary Pledgors have executed and delivered that certain
Subsidiary Guaranty dated as of June 26, 1998 (said Subsidiary Guaranty, as it
may hereafter be amended, restated, supplemented or otherwise modified from time
to time, being the "Subsidiary Guaranty") and Holdings has executed and
delivered that certain Holdings Guaranty dated as of June 26, 1998 (said
Holdings Guaranty, as it may hereafter be amended, supplemented or otherwise
modified from time to time, being the "Holdings Guaranty") in favor of Secured
Party for the benefit of Lenders and any Interest Rate Exchangers, pursuant to
which each Subsidiary Pledgor and Holdings have guarantied the prompt payment
and performance when due of all obligations of Company under the Credit
Agreement and all obligations of Company under the Lender Interest Rate
Agreements, including without limitation the obligation of Company to make
payments thereunder in the event of early termination thereof.
E. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that each Pledgor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Pledgor hereby agrees with
Secured Party as follows:
SECTION 1. Pledge of Security.
Each Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right, title
and interest in and to the following (the "Pledged Collateral"):
(a) the Pledged Shares owned by such Pledgor and the
certificates representing such Pledged Shares and any interest of such
Pledgor in the entries on the books of any financial intermediary
pertaining to such Pledged Shares, and all dividends, cash, warrants,
rights, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such Pledged Shares;
(b) the Pledged Debt owned by such Pledgor and the instruments
evidencing such Pledged Debt, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such Pledged Debt;
(c) all additional shares of, and all securities convertible
into and warrants, options and other rights to purchase or otherwise
acquire, stock of any issuer of any Pledged Shares from time to time
acquired by such Pledgor in any manner (which shares
XI-2
shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such additional shares,
securities, warrants, options or other rights and any interest of such
Pledgor in the entries on the books of any financial intermediary
pertaining to such additional shares (all such shares, securities,
warrants, options, rights, certificates, instruments and interests
collectively being "Additional Pledged Shares"), and all dividends,
cash, warrants, rights, instruments and other property or proceeds from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of such Additional Pledged Shares;
(d) all additional indebtedness from time to time owed to such
Pledgor by any obligor on any Pledged Debt and the instruments
evidencing such indebtedness, and all interest, cash, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such indebtedness;
(e) all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire,
stock of any Person that, after the date of this Agreement, becomes, as
a result of any occurrence, a direct Subsidiary of such Pledgor (which
shares shall be deemed to be part of the Pledged Shares), the
certificates or other instruments representing such shares, securities,
warrants, options or other rights and any interest of such Pledgor in
the entries on the books of any financial intermediary pertaining to
such shares (all such shares, securities, warrants, options, rights,
certificates, instruments and interests collectively being "New Pledged
Shares"), and all dividends, cash, warrants, rights, instruments and
other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such shares, securities, warrants, options or other rights;
(f) all indebtedness from time to time owed to such Pledgor by
any Person that, after the date of this Agreement, becomes, as a result
of such any occurrence, a direct or indirect Subsidiary of such
Pledgor, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
indebtedness; and
(g) to the extent not covered by clauses (a) through (f)
above, all proceeds of any or all of the foregoing Pledged Collateral.
For purposes of this Agreement, the term "proceeds" includes whatever
is receivable or received when Pledged Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary, and includes, without limitation, proceeds
of any indemnity or guaranty payable to such Pledgor or Secured Party
from time to time with respect to any of the Pledged Collateral.
XI-3
SECTION 2. Security for Obligations.
This Agreement secures, and the Pledged Collateral pledged and assigned
by each Pledgor is collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including without limitation the payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured
Obligations with respect to such Pledgor. "Secured Obligations" means
(a) with respect to Company, all obligations and liabilities
of every nature of Company now or hereafter existing under or arising
out of or in connection with the Credit Agreement and the other Loan
Documents and any Lender Interest Rate Agreements,
(b) with respect to each Subsidiary Pledgor and Additional
Pledgor, all obligations and liabilities of every nature of Pledgors
now or hereafter existing under or arising out of or in connection with
the Subsidiary Guaranty, and
(c) with respect to Holdings, all obligations and liabilities
of every nature of Holdings now or hereafter existing under or arising
out or in connection with the Holdings Guaranty.
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Pledgors now or hereafter existing under this Agreement.
XI-4
SECTION 3. Delivery of Pledged Collateral.
All certificates or instruments representing or evidencing the Pledged
Collateral shall be delivered to and held by or on behalf of Secured Party
pursuant hereto and shall be in suitable form for transfer by delivery or, as
applicable, shall be accompanied by the appropriate Pledgor's endorsement, where
necessary, or duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to Secured Party. Upon the occurrence and
during the continuation of an Event of Default (as defined in the Credit
Agreement) or the occurrence of an Early Termination Date (as defined in a
Master Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International Swap and
Derivatives Association Inc. or a similar event under any similar swap
agreement) under any Lender Interest Rate Agreement (either such occurrence
being an "Event of Default" for purposes of this Agreement), Secured Party shall
have the right, without notice to any Pledgor, to transfer to or to register in
the name of Secured Party or any of its nominees any or all of the Pledged
Collateral, subject only to the revocable rights specified in Section 7(a). In
addition, Secured Party shall have the right at any time to exchange
certificates or instruments representing or evidencing Pledged Collateral for
certificates or instruments of smaller or larger denominations.
SECTION 4. Representations and Warranties.
Each Pledgor represents and warrants as follows:
(a) Due Authorization, etc. of Pledged Collateral. All of the
Pledged Shares owned by such Pledgor have been duly authorized and
validly issued and are fully paid and non-assessable. All of the
Pledged Debt owned by such Pledgor has been duly authorized,
authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default.
(b) Description of Pledged Collateral. The Pledged Shares
owned by such Pledgor constitute the percentage of the issued and
outstanding shares of stock of each issuer thereof set forth on
Schedule I annexed hereto, and there are no outstanding warrants,
options or other rights to purchase, or other agreements outstanding
with respect to, or property that is now or hereafter convertible into,
or that requires the issuance or sale of, any Pledged Shares. The
Pledged Debt owned by such Pledgor constitutes all of the issued and
outstanding intercompany indebtedness evidenced by a promissory note of
the respective issuers thereof owing to such Pledgor.
(c) Ownership of Pledged Collateral. Such Pledgor is the
legal, record and beneficial owner of the Pledged Collateral owned by
such Pledgor free and clear of any Lien except for the security
interest created by this Agreement.
(d) Perfection. The pledge of the Pledged Collateral pursuant
to this Agreement creates a valid and perfected first priority security
interest in the Pledged
XI-5
Collateral, securing the payment of the Secured Obligations.
SECTION 5. Transfers and Other Liens; Additional Pledged Collateral; etc.
Each Pledgor shall:
(a) not, except as expressly permitted by the Credit
Agreement, (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral, (ii) create or suffer to exist any Lien upon or
with respect to any of the Pledged Collateral, except for the security
interest under this Agreement, or (iii) permit any issuer of Pledged
Shares to merge or consolidate unless all the outstanding capital stock
of the surviving or resulting corporation is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other
property is distributed in respect of the outstanding shares of any
other constituent corporation; provided that in the event any Pledgor
makes an Asset Sale permitted by the Credit Agreement and the assets
subject to such Asset Sale are Pledged Shares, Secured Party shall
release the Pledged Shares that are the subject of such Asset Sale to
such Pledgor free and clear of the lien and security interest under
this Agreement concurrently with the consummation of such Asset Sale;
and provided further, that as a condition precedent to such release,
Secured Party shall have received evidence satisfactory to it that
arrangements satisfactory to it have been made for delivery to Secured
Party of the Net Cash Proceeds of such Asset Sale in the event and to
the extent that all or any portion of such Net Cash Proceeds are
required to be applied to prepay the Loans under the Credit Agreement.
(b) (i) cause each issuer of Pledged Shares not to issue any
stock or other securities in addition to or in substitution for the
Pledged Shares issued by such issuer, except to a Pledgor, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly)
thereof, any and all additional shares of stock or other securities of
each issuer of Pledged Shares, and (iii) pledge hereunder, immediately
upon its acquisition (directly or indirectly) thereof, any and all
shares of stock of any Person that, after the date of this Agreement,
becomes, as a result of any occurrence, a direct Subsidiary of any
Pledgor;
(c) (i) pledge hereunder, immediately upon their issuance, any
and all instruments or other evidences of additional indebtedness from
time to time owed to such Pledgor by any obligor on the Pledged Debt,
and (ii) pledge hereunder, immediately upon their issuance, any and all
instruments or other evidences of indebtedness from time to time owed
to such Pledgor by any Person that after the date of this Agreement
becomes, as a result of any occurrence, a direct or indirect Subsidiary
of any Pledgor;
(d) promptly deliver to Secured Party all written notices
received by it with respect to the Pledged Collateral; and
(e) pay promptly when due all taxes, assessments and
governmental charges or levies imposed upon, and all claims against,
the Pledged Collateral, except to the
XI-6
extent the validity thereof is being contested in good faith;
provided that such Pledgor shall in any event pay such taxes,
assessments, charges, levies or claims not later than five days prior
to the date of any proposed sale under any judgement, writ or warrant
of attachment entered or filed against Pledgor or any of the Pledged
Collateral as a result of the failure to make such payment.
SECTION 6. Further Assurances; Pledge Amendments.
(a) Each Pledgor agrees that from time to time, at the expense of
Pledgors, such Pledgor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral. Without limiting the generality of the foregoing, such
Pledgor will: (i) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby and (ii) at
Secured Party's request, appear in and defend any action or proceeding that may
affect such Pledgor's title to or Secured Party's security interest in all or
any part of the Pledged Collateral.
(b) Each Pledgor further agrees that it will, upon obtaining any
additional shares of stock or other securities required to be pledged hereunder
as provided in Section 5(b) or (c), promptly (and in any event within five
Business Days) deliver to Secured Party a Pledge Amendment, duly executed by
such Pledgor, in substantially the form of Schedule II annexed hereto (a "Pledge
Amendment"), in respect of the additional Pledged Shares or Pledged Debt to be
pledged pursuant to this Agreement. Each Pledgor hereby authorizes Secured Party
to attach each Pledge Amendment to this Agreement and agrees that all Pledged
Shares or Pledged Debt listed on any such Pledge Amendment delivered to Secured
Party shall for all purposes hereunder be considered Pledged Collateral;
provided that the failure of a Pledgor to execute a Pledge Amendment with
respect to any additional Pledged Shares or Pledged Debt pledged pursuant to
this Agreement shall not impair the security interest of Secured Party therein
or otherwise adversely affect the rights and remedies of Secured Party hereunder
with respect thereto.
SECTION 7. Voting Rights; Dividends; Etc.
(a) Pledgors' Rights. So long as no Event of Default shall have
occurred and be continuing:
(i) Pledgors shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this
Agreement or the Credit Agreement;
XI-7
(ii) Pledgors shall be entitled to receive and retain, and to
utilize free and clear of the lien of this Agreement, any and all
dividends and interest paid in respect of the Pledged Collateral;
provided, however, that any and all
(1) dividends and interest paid or payable other than
in cash in respect of, and instruments and other property
received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral,
(2) dividends and other distributions paid or payable
in cash in respect of any Pledged Collateral in connection
with a partial or total liquidation or dissolution or in
connection with a reduction of capital, capital surplus or
paid-in-surplus, and
(3) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for
any Pledged Collateral,
shall be, and shall forthwith be delivered to Secured Party to hold as,
Pledged Collateral and shall, if received by a Pledgor, be received in
trust for the benefit of Secured Party, be segregated from the other
property or funds of such Pledgor and be forthwith delivered to Secured
Party as Pledged Collateral in the same form as so received (with all
necessary endorsements); and
(iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to Pledgors all such proxies,
dividend payment orders and other instruments as Pledgors may from time
to time reasonably request for the purpose of enabling Pledgors to
exercise the voting and other consensual rights which they are entitled
to exercise pursuant to paragraph (i) above and to receive the
dividends, principal or interest payments which they are authorized to
receive and retain pursuant to paragraph (ii) above.
(b) Secured Party's Rights. Upon acceleration of the maturity of the
Loans in accordance with Section 8 of the Credit Agreement and upon the
occurrence and during the continuation of an Event of Default:
(i) upon written notice from Secured Party to a Pledgor, all
rights of such Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 7(a)(i) shall cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right to
exercise such voting and other consensual rights;
(ii) all rights of Pledgors to receive the dividends and
interest payments which they would otherwise be authorized to receive
and retain pursuant to Section 7(a)(ii) shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Pledged Collateral
such dividends and interest payments; and
XI-8
(iii) all dividends, principal and interest payments which are
received by a Pledgor contrary to the provisions of paragraph (ii) of
this Section 7(b) shall be received in trust for the benefit of Secured
Party, shall be segregated from other funds of such Pledgor and shall
forthwith be paid over to Secured Party as Pledged Collateral in the
same form as so received (with any necessary endorsements).
(c) Irrevocable Proxy. In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to exercise pursuant
to Section 7(b)(i) and to receive all dividends and other distributions which it
may be entitled to receive under Section 7(a)(ii) or Section 7(b)(ii), (i) each
Pledgor shall promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment orders and other
instruments as Secured Party may from time to time reasonably request and (ii)
without limiting the effect of the immediately preceding clause (i), each
Pledgor hereby grants to Secured Party an IRREVOCABLE PROXY to vote the Pledged
Shares owned by such Pledgor and to exercise all other rights, powers,
privileges and remedies to which a holder of the Pledged Shares would be
entitled (including without limitation giving or withholding written consents of
shareholders, calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without the
necessity of any action (including any transfer of any Pledged Shares on the
record books of the issuer thereof) by any other Person (including the issuer of
the Pledged Shares or any officer or agent thereof), upon the occurrence of an
Event of Default and which proxy shall only terminate upon the payment in full
of the Secured Obligations.
SECTION 8. Secured Party Appointed Attorney-in-Fact.
Each Pledgor hereby irrevocably appoints Secured Party as such
Pledgor's attorney-in-fact, with full authority in the place and stead of such
Pledgor and in the name of such Pledgor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) to file one or more financing or continuation statements,
or amendments thereto, relative to all or any part of the Pledged
Collateral without the signature of such Pledgor;
(b) to ask, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Pledged Collateral;
(c) to receive, endorse and collect any instruments made
payable to such Pledgor representing any dividend, principal or
interest payment or other distribution in respect of the Pledged
Collateral or any part thereof and to give full discharge for the same;
and
(d) to file any claims or take any action or institute any
proceedings that
XI-9
Secured Party may deem necessary or desirable for the collection of
any of the Pledged Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Pledged Collateral.
SECTION 9. Secured Party May Perform.
If any Pledgor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Pledgors under Section 13(b).
SECTION 10. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Pledged Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have no duty as to
any Pledged Collateral, it being understood that Secured Party shall have no
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any
Pledged Collateral, whether or not Secured Party has or is deemed to have
knowledge of such matters, (b) taking any necessary steps (other than steps
taken in accordance with the standard of care set forth above to maintain
possession of the Pledged Collateral) to preserve rights against any parties
with respect to any Pledged Collateral, (c) taking any necessary steps to
collect or realize upon the Secured Obligations or any guarantee therefor, or
any part thereof, or any of the Pledged Collateral, or (d) initiating any action
to protect the Pledged Collateral against the possibility of a decline in market
value. Secured Party shall be deemed to have exercised reasonable care in the
custody and preservation of Pledged Collateral in its possession if such Pledged
Collateral is accorded treatment substantially equal to that which Secured Party
accords its own property consisting of negotiable securities.
XI-10
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be continuing,
Secured Party may exercise in respect of the Pledged Collateral, in addition to
all other rights and remedies provided for herein or otherwise available to it,
all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (the "Code") (whether
or not the Code applies to the affected Pledged Collateral), and Secured Party
may also in its sole discretion, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public or
private sale, at any exchange or broker's board or at any of Secured Party's
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as Secured Party
may deem commercially reasonable, irrespective of the impact of any such sales
on the market price of the Pledged Collateral. Secured Party or any Lender or
Interest Rate Exchanger may be the purchaser of any or all of the Pledged
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 15(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold at any such public sale, to use and apply any of the
Secured Obligations as a credit on account of the purchase price for any Pledged
Collateral payable by Secured Party at such sale. Each purchaser at any such
sale shall hold the property sold absolutely free from any claim or right on the
part of any Pledgor, and each Pledgor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Pledgor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Pledgor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. Each Pledgor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Pledged Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if Secured Party accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree. If
the proceeds of any sale or other disposition of the Pledged Collateral are
insufficient to pay all the Secured Obligations, Pledgors shall be jointly and
severally liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(b) Each Pledgor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Pledged Collateral conducted without prior registration or qualification of such
Pledged Collateral under the Securities Act and/or such state securities laws,
to limit purchasers to those who will agree, among other things, to acquire the
Pledged Collateral for their own account, for investment and not with a view to
the distribution or resale
XI-11
thereof. Each Pledgor acknowledges that any such private sales may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions and, notwithstanding such circumstances, such Pledgor agrees
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that Secured Party shall have no obligation to engage in
public sales and no obligation to delay the sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof to register it for a
form of public sale requiring registration under the Securities Act or under
applicable state securities laws, even if such issuer would, or should, agree to
so register it.
(c) If Secured Party determines to exercise its right to sell any or
all of the Pledged Collateral, upon written request, each Pledgor shall and
shall cause each issuer of any Pledged Shares owned by such Pledgor to be sold
hereunder from time to time to furnish to Secured Party all such information as
Secured Party may request in order to determine the number of shares and other
instruments included in the Pledged Collateral which may be sold by Secured
Party in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.
SECTION 12. Application of Proceeds.
All proceeds received by Secured Party in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied as provided in subsection 2.4D of the Credit
Agreement.
SECTION 13. Indemnity and Expenses.
(a) Pledgors jointly and severally agree to indemnify Secured Party,
each Lender and each Interest Rate Exchanger from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Exchanger's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Pledgors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Pledgor to perform or observe any of the provisions hereof.
(c) The obligations of Pledgors in this Section 13 shall survive the
termination of this Agreement and the discharge of Pledgors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
XI-12
SECTION 14. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Pledged Collateral and shall (a) remain in full force and effect until the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged Collateral
shall revert to the applicable Pledgors. Upon any such termination Secured Party
will, at Pledgors' expense, execute and deliver to Pledgors such documents as
Pledgors shall reasonably request to evidence such termination and Pledgors
shall be entitled to the return, upon their request and at their expense,
against receipt and without recourse to Secured Party, of such of the Pledged
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.
SECTION 15. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Pledged Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 11 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Interest Rate Agreement)
under all Lender Interest Rate Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as "Requisite Obligees"). In furtherance
of the foregoing provisions of this Section 15(a), each Interest Rate Exchanger,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Pledged Collateral hereunder, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 15(a).
XI-13
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 16. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Pledgor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Pledgors; provided that any Pledge Amendment in the form of Schedule II annexed
hereto or any amendment hereto pursuant to Section 19 shall be effective upon
execution by any Pledgor and Pledgors hereby waive any requirement of notice of
or consent to any such Pledge Amendment or amendment. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
XI-14
SECTION 17. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex (with received answerback), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided that notices to Secured Party shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be as
provided in subsection 10.8 of the Credit Agreement or as set forth under such
party's name on the signature pages hereof or such other address as shall be
designated by such party in a written notice delivered to the other parties
hereto.
SECTION 18. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 19. Additional Pledgors.
The initial Subsidiary Pledgors hereunder shall be such of the
Subsidiaries of Company as are signatories hereto on the date hereof. From time
to time subsequent to the date hereof, additional Subsidiaries of Company may
become parties hereto, as additional Pledgors (each an "Additional Pledgor"), by
executing an acknowledgement to this Agreement substantially in the form of
Schedule III annexed hereto. Upon delivery of any such counterpart to
Administrative Agent and Secured Party, notice of which is hereby waived by
Pledgors, each such Additional Pledgor shall be a Pledgor and shall be as fully
a party hereto as if such Additional Pledgor were an original signatory hereto.
Each Pledgor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Pledgor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Pledgor hereunder. This Agreement
shall be fully effective as to any Pledgor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Pledgor hereunder.
XI-15
SECTION 20. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 21. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 22. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
XI-16
SECTION 23. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PLEDGOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH PLEDGOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 17; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
PLEDGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 23 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
XI-17
SECTION 24. Waiver of Jury Trial.
PLEDGORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Pledgor and Secured Party acknowledge that this waiver is
a material inducement for Pledgors and Secured Party to enter into a business
relationship, that Pledgors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Pledgor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 24 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 25. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
XI-18
IN WITNESS WHEREOF, Pledgors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DMAC ACQUISITION CORP.
By:
-----------------------------------------------
Name:
Title:
DMAC HOLDINGS, INC.
By:
-----------------------------------------------
Name:
Title:
Each of the entities listed on Schedule A annexed
hereto
By:
-----------------------------------------------
on behalf of each of the entities listed on
Schedule A annexed hereto
Name:
Title:
S-1
CREDIT SUISSE FIRST BOSTON,
as Secured Party
By:
-----------------------------------------------
Name:
Title:
By:
-----------------------------------------------
Name:
Title:
S-2
Schedule A
Name Notice Address for
each Subsidiary Pledgor
DIMAC Marketing Corporation c/o AmeriComm Holdings, Inc.
Palm Coast Data Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
The ▇▇▇▇▇▇▇ Group Inc. Dunwoody, Suite C150
▇▇▇▇▇▇ & Associates Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MBS/Multimode Inc. Attn: ▇▇▇▇ ▇▇▇▇▇▇
DIMAC Direct Inc.
Sch.A-1
SCHEDULE I
TO PLEDGE AGREEMENT
Attached to and forming a part of the Pledge Agreement dated as of June
26, 1998, by and among the Pledgors referred to therein and Credit Suisse First
Boston, as Secured Party.
Part A
Percent-
age of
Out-
Stock Number standing
Class of Certificate Par of Shares
Pledgor Stock Issuer Stock Nos. Value Shares Pledged
----------------------- -------------------- ------------------ ---------------- ----------- ------------ -------------
Part B
Pledgor Debt Issuer Amount of
Indebtedness
------------------------ --------------------- ---------------------
Sch.-I-1
SCHEDULE II
TO PLEDGE AGREEMENT
[FORM OF PLEDGE AMENDMENT]
This Pledge Amendment, dated _______________, [199_] [200_] is
delivered pursuant to Section 6(b) of the Pledge Agreement referred to below.
The undersigned hereby agrees that this Pledge Amendment may be attached to the
Pledge Agreement dated as of June 26, 1998, by and among the Pledgors referred
to therein and Credit Suisse First Boston, as Secured Party (the "Pledge
Agreement", capitalized terms defined therein being used herein as therein
defined), and that the [Pledged Shares] [Pledged Debt] listed on this Pledge
Amendment shall be deemed to be part of the [Pledged Shares] [Pledged Debt] and
shall become part of the Pledged Collateral and shall secure all Secured
Obligations.
[NAME OF PLEDGOR]
By:
---------------------------------------
Name:
Title:
Class of Percentage of
Stock Stock Par Number of Outstanding
Stock Issuer Certificate Nos. Value Shares Shares Pledged
--------------------------- ---------------- ------------------- --------- -------------- -------------------
Amount of
Debt Issuer Indebtedness
----------------------------- -----------------------
Sch.-II-1
SCHEDULE III
TO PLEDGE AGREEMENT
[FORM OF PLEDGE ACKNOWLEDGEMENT]
This Pledge Acknowledgement, dated _______________, [199_] [200_], is
delivered pursuant to Section 19 of the Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Acknowledgement may be attached to
the Pledge Agreement dated June 26, 1998, by and among the Pledgors referred to
therein and Credit Suisse First Boston, as Secured Party (as amended, restated,
supplemented or otherwise modified to the date hereof, the "Pledge Agreement",
capitalized terms defined therein being used herein as therein defined), that
the undersigned by executing and delivering this Acknowledgement hereby becomes
a Pledgor under the Pledge Agreement in accordance with Section 19 thereof and
agrees to be bound by all of the terms thereof, and that the [Pledged Shares]
[Pledged Debt] listed on this Pledge Acknowledgement shall be deemed to be part
of the [Pledged Shares] [Pledged Debt] and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.
[NAME OF ADDITIONAL PLEDGOR]
By:
----------------------------------------
Name:
Title:
Notice Address:
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Sch.-III-1
Class of Percentage of
Stock Stock Par Number of Outstanding
Stock Issuer Certificate Nos. Value Shares Shares Pledged
-------------------------- -------------- --------------------- ------------ ---------------- --------------------
Amount of
Debt Issuer Indebtedness
------------------------- ------------------------
Sch.-III-2
EXHIBIT XII
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is dated as of June 26, 1998
and entered into by and among DMAC ACQUISITION CORP., a Delaware corporation
("Company"), each of THE UNDERSIGNED DIRECT AND INDIRECT SUBSIDIARIES of Company
(each of such undersigned Subsidiaries being a "Subsidiary Grantor" and
collectively "Subsidiary Grantors", and each of Company and Subsidiary Grantors
being a "Grantor" and collectively "Grantors"; provided that after the Closing
Date, "Grantors" shall include any Additional Grantors (as hereinafter defined))
and CREDIT SUISSE FIRST BOSTON, as agent for and representative of (in such
capacity herein called "Secured Party") the financial institutions ("Lenders")
party to the Credit Agreement referred to below and any Interest Rate Exchangers
(as hereinafter defined).
PRELIMINARY STATEMENTS
A. Pursuant to Credit Agreement dated as of June 26, 1998, as amended,
restated, supplemented or otherwise modified to the date hereof (said Credit
Agreement, as so amended, restated, supplemented or otherwise modified, being
the "Credit Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among Company, DMAC
Holdings, Inc., the financial institutions listed therein as Lenders, Credit
Suisse First Boston, as Administrative Agent (in such capacity, "Administrative
Agent"), and Credit Suisse First Boston, as Syndication Agent and Arranger,
Lenders have made certain commitments, subject to the terms and conditions set
forth in the Credit Agreement, to extend certain credit facilities to Company.
B. Company may from time to time enter, or may from time to time have
entered, into one or more Interest Rate Agreement (collectively, the "Lender
Interest Rate Agreements") with one or more Lenders or their Affiliates (in such
capacity, collectively, "Interest Rate Exchangers") in accordance with the terms
of the Credit Agreement, and it is desired that the obligations of Company under
the Lender Interest Rate Agreements, including without limitation the obligation
of Company to make payments thereunder in the event of early termination thereof
(all such obligations being the "Interest Rate Obligations"), together with all
obligations of Company under the Credit Agreement and the other Loan Documents,
be secured hereunder.
C. Subsidiary Grantors have executed and delivered that certain
Subsidiary Guaranty dated as of June 26, 1998 (said Subsidiary Guaranty, as it
may hereafter be amended, restated, supplemented or otherwise modified from time
to time, being the "Subsidiary Guaranty") in favor of Secured Party for the
benefit of Lenders and any Interest Rate Exchangers, pursuant to
XII-1
which each Subsidiary Grantor has guarantied the prompt payment and performance
when due of all obligations of Company under the Credit Agreement and all
obligations of Company under the Lender Interest Rate Agreements, including
without limitation the obligation of Company to make payments thereunder in the
event of early termination thereof.
D. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Grantors shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and other extensions of credit under the Credit Agreement
and to induce Interest Rate Exchangers to enter into the Lender Interest Rate
Agreements, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, each Grantor hereby agrees with
Secured Party as follows:
SECTION 1. Grant of Security.
Each Grantor hereby assigns to Secured Party, and hereby grants to
Secured Party a security interest in, all of such Grantor's right, title and
interest in and to the following, in each case whether now or hereafter existing
or in which Grantor now has or hereafter acquires an interest and wherever the
same may be located (the "Collateral"):
(a) all equipment in all of its forms (including, but not
limited to, all machinery, all computers, all data processing, computer
or office equipment, all furniture and all trucks and other vehicles),
all parts thereof and all accessions thereto (any and all such
equipment, parts and accessions being the "Equipment");
(b) all inventory in all of its forms (including, but not
limited to, (i) all goods held by such Grantor for sale or lease or to
be furnished under contracts of service or so leased or furnished, (ii)
all raw materials, work in process, finished goods, and materials used
or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods
in which such Grantor has an interest in mass or a joint or other
interest or right of any kind, and (iv) all goods which are returned to
or repossessed by such Grantor) and all accessions thereto and products
thereof (all such inventory, accessions and products being the
"Inventory") and all negotiable and non-negotiable documents of title
(including without limitation warehouse receipts, dock receipts and
bills of lading) issued by any Person covering any Inventory (any such
negotiable document of title being a "Negotiable Document of Title");
(c) all accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other rights and obligations of
any kind owned by or owing to such Grantor and all rights in, to and
under all security agreements, leases and other contracts securing or
otherwise relating to any such accounts, contract rights, chattel
paper, documents, instruments, general intangibles or other obligations
(any and all such
XII-2
accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other obligations being the
"Accounts", and any and all such security agreements, leases and other
contracts being the "Related Contracts");
(d) all agreements to which such Grantor is a party, as each
such agreement may be amended, restated, supplemented or otherwise
modified from time to time (said agreements, as so amended, restated,
supplemented or otherwise modified, being referred to herein
individually as an "Assigned Agreement" and collectively as the
"Assigned Agreements"), including, without limitation, (i) all rights
of such Grantor to receive moneys due or to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty with
respect to the Assigned Agreements, (iii) all claims of such Grantor
for damages arising out of any breach of or default under the Assigned
Agreements, and (iv) all rights of such Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned
Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder;
(e) all cash, money, currency and deposit accounts, including
without limitation demand, time, savings, passbooks or similar accounts
maintained with Lenders or other banks, savings and loan associations
or other financial institutions (but excluding deposit accounts
maintained in trust by such Grantor or otherwise segregated from other
funds of such Grantor for the benefit of customers of such Grantor and
containing only funds owing to such customers);
(f) the "Intellectual Property Collateral", which term means:
(i) all rights, title and interest (including rights
acquired pursuant to a license or otherwise but only to the
extent permitted by agreements governing such license or other
use) in and to all trademarks, service marks, designs, logos,
indicia, tradenames, trade dress, corporate names, company
names, business names, fictitious business names, trade styles
and/or other source and/or business identifiers and
applications pertaining thereto, owned by such Grantor, or
hereafter adopted and used, in its business (including,
without limitation, the trademarks specifically identified in
Schedule 1(a), as the same may be amended pursuant hereto from
time to time) (collectively, the "Trademarks"), all
registrations that have been or may hereafter be issued or
applied for thereon in the United States and any state thereof
and in foreign countries (including, without limitation, the
registrations and applications specifically identified in
Schedule 1(a), as the same may be amended pursuant hereto from
time to time) (the "Trademark Registrations"), all common law
and other rights (but in no event any of the obligations) in
and to the Trademarks in the United States and any state
thereof and in foreign countries (the "Trademark Rights"), and
all goodwill of such Grantor's business symbolized by the
Trademarks and associated therewith (the "Associated
Goodwill"):
(ii) all rights, title and interest (including rights
acquired pursuant to a
XII-3
license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all
patents and patent applications and rights and interests in
patents and patent applications under any domestic or foreign
law that are presently, or in the future may be, owned or held
by such Grantor and all patents and patent applications and
rights, title and interests in patents and patent applications
under any domestic or foreign law that are presently, or in
the future may be, owned by such Grantor in whole or in part
(including, without limitation, the patents and patent
applications listed in Schedule 1(b), as the same may be
amended pursuant hereto from time to time), all rights (but
not obligations) corresponding thereto (including, without
limitation, the right (but not the obligation), exercisable
only upon the occurrence and during the continuation of an
Event of Default, to ▇▇▇ for past, present and future
infringements in the name of such Grantor or in the name of
Secured Party or Lenders), and all reissues, divisions,
continuations, renewals, extensions and continuations-in-part
thereof (all of the foregoing being collectively referred to
as the "Patents"); it being understood that the rights and
interests included in the Intellectual Property Collateral
hereby shall include, without limitation, all rights and
interests pursuant to licensing or other contracts in favor of
such Grantor pertaining to patent applications and patents
presently or in the future owned or used by third parties but,
in the case of third parties which are not Affiliates of such
Grantor, only to the extent permitted by such licensing or
other contracts and, if not so permitted, only with the
consent of such third parties; and
(iii) all rights, title and interest (including
rights acquired pursuant to a license or otherwise but only to
the extent permitted by agreements governing such license or
other use) under copyright in various published and
unpublished works of authorship including, without limitation,
computer programs, computer data bases, other computer
software, layouts, trade dress, drawings, designs, writings,
and formulas owned by Grantor (including, without limitation,
the works listed on Schedule 1(c), as the same may be amended
pursuant hereto from time to time) (collectively, the
"Copyrights"), all copyright registrations issued to such
Grantor and applications for copyright registration that have
been or may hereafter be issued or applied for thereon by
Grantor in the United States and any state thereof and in
foreign countries (including, without limitation, the
registrations listed on Schedule 1(c), as the same may be
amended pursuant hereto from time to time) (collectively, the
"Copyright Registrations"), all common law and other rights in
and to the Copyrights in the United States and any state
thereof and in foreign countries including all copyright
licenses (but with respect to such copyright licenses, only to
the extent permitted by such licensing arrangements) (the
"Copyright Rights"), including, without limitation, each of
the Copyrights, rights, titles and interests in and to the
Copyrights and works protectable by copyright, which are
presently, or in the future may be, owned, created (as a work
for hire for the benefit of such Grantor), authored (as a work
for hire for the benefit of such Grantor), or acquired by such
Grantor, in whole or in part, and all Copyright Rights with
respect thereto and all Copyright Registrations therefor,
heretofore or hereafter granted or applied for, and all
XII-4
renewals and extensions thereof, throughout the world,
including all proceeds thereof (such as, by way of example and
not by limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to
renew and extend such Copyright Registrations and Copyright
Rights and to register works protectable by copyright and the
right (but not the obligation) to ▇▇▇ for past, present and
future infringements of the Copyrights and Copyright Rights;
(g) all information used or useful or arising from the
business including all goodwill, trade secrets, trade secret rights,
know-how, customer lists, processes of production, ideas, confidential
business information, techniques, processes, formulas, and all other
proprietary information;
(h) to the extent not included in any other paragraph of this
Section 1, all other general intangibles (including without limitation
tax refunds, rights to payment or performance, choses in action and
judgments taken on any rights or claims included in the Collateral);
(i) all plant fixtures, business fixtures and other fixtures
and storage and office facilities, and all accessions thereto and
products thereof;
(j) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon; and
(k) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral. For purposes of this Agreement, the term
"proceeds" includes whatever is receivable or received when Collateral
or proceeds are sold, exchanged, collected or otherwise disposed of,
whether such disposition is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Collateral include, and no Grantor shall be deemed to have granted a security
interest in, any of such Grantor's rights or interests in any license, contract
or agreement to which such Grantor is a party or any of its rights or interests
thereunder to the extent, but only to the extent, that such a grant would, under
the terms of such license, contract or agreement or otherwise, result in a
breach of the terms of, or constitute a default under any license, contract or
agreement to which such Grantor is a party (other than to the extent that any
such term would be rendered ineffective pursuant to Section 9-318(4) of the
Uniform Commercial Code of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity); provided, that
immediately upon the ineffectiveness, lapse or termination of any such
provision, the Collateral shall include, and such Grantor shall be deemed to
have granted a security interest in, all such rights and interests as if such
provision had never been in effect.
XII-5
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral assigned by each Grantor is
collateral security for, the prompt payment or performance in full when due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including without limitation the payment of amounts that
would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all Secured Obligations
with respect to such Grantor. "Secured Obligations" means:
(a) with respect to Company, all obligations and liabilities
of every nature of Company now or hereafter existing under or arising
out of or in connection with the Credit Agreement and the other Loan
Documents and any Lender Interest Rate Agreement, and
(b) with respect to each Subsidiary Grantor and Additional
Grantor, all obligations and liabilities of every nature of Grantors
now or hereafter existing under or arising out of or in connection with
the Subsidiary Guaranty;
in each case together with all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Company, would accrue on such
obligations, whether or not a claim is allowed against Company for such interest
in the related bankruptcy proceeding), reimbursement of amounts drawn under
Letters of Credit, payments for early termination of Lender Interest Rate
Agreements, fees, expenses, indemnities or otherwise, whether voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender or Interest Rate Exchanger as a
preference, fraudulent transfer or otherwise, and all obligations of every
nature of Grantors now or hereafter existing under this Agreement.
XII-6
SECTION 3. Grantors Remain Liable.
Anything contained herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts and agreements included
in the Collateral by reason of this Agreement, nor shall Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder.
SECTION 4. Representations and Warranties.
Each Grantor represents and warrants as follows:
(a) Ownership of Collateral. Except as expressly permitted by
the Credit Agreement and for the security interest created by this
Agreement, such Grantor owns the Collateral owned by such Grantor free
and clear of any Lien.
(b) Locations of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at the places
specified in Schedule 4(b) annexed hereto.
(c) Negotiable Documents of Title. No Negotiable Documents of
Title are outstanding with respect to any of the Inventory.
(d) Office Locations. The chief place of business, the chief
executive office and the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that
evidence Accounts are, and, except as set forth on Schedule 4(d)
annexed hereto, have been for the four month period preceding the date
hereof, located at the locations set forth on Schedule 4(d) annexed
hereto.
(e) Names. No Grantor has in the past done, and no Grantor now
does, business under any other name (including any trade-name or
fictitious business name) except the names listed in Schedule 4(e)
annexed hereto.
(f) Delivery of Certain Collateral. All notes and other
instruments (excluding checks) comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and
accompanied by duly executed instruments of transfer or assignment in
blank.
XII-7
(g) Intellectual Property Collateral.
(i) a true and complete list of all Trademark Registrations
and Trademark applications owned, held (whether pursuant to a
license or otherwise) or used by such Grantor, in whole or in
part, is set forth in Schedule 1(a);
(ii) a true and complete list of all Patents owned, held
(whether pursuant to a license or otherwise) or used by such
Grantor, in whole or in part, is set forth in Schedule 1(b);
(iii) a true and complete list of all Copyright Registrations
and applications for Copyright Registrations held (whether
pursuant to a license or otherwise) by such Grantor, in whole
or in part, is set forth in Schedule 1(c);
(iv) after reasonable inquiry, such Grantor is not aware of
any pending or threatened claim by any third party that any of
the Intellectual Property Collateral owned, held or used by
such Grantor is invalid or unenforceable; and
(v) no effective security interest or other Lien covering all
or any part of the Intellectual Property Collateral is on file
in the United States Patent and Trademark Office or the United
States Copyright Office.
(h) Perfection. The security interests in the Collateral
granted to Secured Party for the ratable benefit of the Lenders and
Interest Rate Exchangers hereunder constitute valid security interests
in the Collateral. Upon the filing of UCC financing statements naming
each Grantor as "debtor", naming Secured Party as "secured party" and
describing the Collateral in the filing offices set forth on Schedule
4(h) annexed hereto, and in the case of the Intellectual Property
Collateral, in addition the filing of a Grant of Trademark Security
Interest, substantially in the form of Exhibit I and a Grant of Patent
Security Interest, substantially in the form of Exhibit II, with the
United States Patent and Trademark Office and the filing of a Grant of
Copyright Security Interest, substantially in the form of Exhibit III,
with the United States Copyright Office, the security interests in the
Collateral granted to Secured Party for the ratable benefit of the
Lenders and Interest Rate Exchangers will, to the extent a security
interest in the Collateral may be perfected by filing UCC financing
statements and, in the case of the Intellectual Property Collateral, in
addition to the filing of such UCC Financing Statements, by the filing
of a Grant of Trademark Security Interest and Grant of Patent Security
Interest with the United States Patent and Trademark Office and a Grant
of Copyright Security Interest with the United State Copyright Office,
constitute perfected security interests therein prior to all other
Liens.
XII-8
SECTION 5. Further Assurances.
(a) Each Grantor agrees that from time to time, at the expense of
Grantors, such Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that Secured Party may request, in order to perfect and protect any security
interest granted or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor will:
(i) at the request of Secured Party, ▇▇▇▇ conspicuously each item of chattel
paper included in the Accounts, each Related Contract and, at the request of
Secured Party, each of its records pertaining to the Collateral, with a legend,
in form and substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) at the
request of Secured Party, deliver and pledge to Secured Party hereunder all
promissory notes and other instruments (including checks) and all original
counterparts of chattel paper constituting Collateral, duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to Secured Party, (iii) use commercially reasonable
efforts to obtain any necessary consents of third parties to the assignment and
perfection of a security interest to Secured Party with respect to any
Collateral, (iv) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby, (v) promptly
after the acquisition by such Grantor of any item of Equipment which is covered
by a certificate of title under a statute of any jurisdiction under the law of
which indication of a security interest on such certificate is required as a
condition of perfection thereof, execute and file with the registrar of motor
vehicles or other appropriate authority in such jurisdiction an application or
other document requesting the notation or other indication of the security
interest created hereunder on such certificate of title, (vi) within 30 days
after the end of each calendar year and June 30 of each calendar year, deliver
to Secured Party copies of all such applications or other documents filed during
such semiannual period and copies of all such certificates of title issued
during such semiannual period indicating the security interest created hereunder
in the items of Equipment covered thereby, (vii) at any reasonable time, upon
request by Secured Party, exhibit the Collateral to and allow inspection of the
Collateral by Secured Party, or persons designated by Secured Party, and (viii)
at Secured Party's request, appear in and defend any action or proceeding that
may affect such Grantor's title to or Secured Party's security interest in all
or any part of the Collateral.
(b) Without limiting the generality of the foregoing clause (a), if any
Grantor shall hereafter obtain rights to any new Intellectual Property
Collateral or become entitled to the benefit of (i) any patent application or
patent or any reissue, division, continuation, renewal, extension or
continuation-in-part of any Patent or any improvement of any Patent; or (ii) any
Copyright Registration, application for Registration or renewals or extension of
any Copyright, then in any such case, the provisions of this Agreement shall
automatically apply thereto. Each Grantor shall promptly notify Secured Party in
writing of any of the foregoing rights acquired by such Grantor after the
XII-9
date hereof and of (i) any Trademark Registrations issued or application for a
Trademark Registration or application for a Patent made, and (ii) any Copyright
Registrations issued or applications for Copyright Registration made, in any
such case, after the date hereof. Promptly after the filing of an application
for any (1) Trademark Registration; (2) Patent; and (3) Copyright Registration,
each Grantor shall execute and deliver to Secured Party and record in all places
where this Agreement is recorded a Security Agreement Supplement, substantially
in the form of Exhibit IV, pursuant to which such Grantor shall grant to Secured
Party a security interest to the extent of its interest in such Intellectual
Property Collateral; provided, if, in the reasonable judgment of such Grantor,
after due inquiry, granting such interest would result in the grant of a
Trademark Registration or Copyright Registration in the name of Secured Party,
such Grantor shall give written notice to Secured Party as soon as reasonably
practicable and the filing shall instead be undertaken as soon as practicable
but in no case later than immediately following the grant of the applicable
Trademark Registration or Copyright Registration, as the case may be.
(c) Each Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of any Grantor. Each Grantor
agrees that a carbon, photographic or other reproduction of this Agreement or of
a financing statement signed by such Grantor shall be sufficient as a financing
statement and may be filed as a financing statement in any and all
jurisdictions.
(d) Each Grantor hereby authorizes Secured Party to modify this
Agreement without obtaining such Grantor's approval of or signature to such
modification by amending Schedules 1(a), 1(b), and 1(c), as applicable, to
include reference to any right, title or interest in any existing Intellectual
Property Collateral or any Intellectual Property Collateral acquired or
developed by any Grantor after the execution hereof or to delete any reference
to any right, title or interest in any Intellectual Property Collateral in which
any Grantor no longer has or claims any right, title or interest.
(e) Each Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. Certain Covenants of Grantors.
Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering
the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in such Grantor's chief place of business, chief executive
office or residence or the office where such Grantor keeps its records
regarding the Accounts and all originals of all chattel
XII-10
paper that evidence Accounts; and
(d) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against,
the Collateral, except to the extent the validity thereof is being
contested in good faith; provided that such Grantor shall in any event
pay such taxes, assessments, charges, levies or claims not later than
five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against such Grantor or
any of the Collateral as a result of the failure to make such payment.
SECTION 7. Special Covenants With Respect to Equipment and Inventory.
Each Grantor shall:
(a) keep the Equipment and Inventory owned by such Grantor at
the places therefor specified on Schedule 4(b) annexed hereto or, upon
30 days' prior written notice to Secured Party, at such other places in
jurisdictions where all action that may be necessary or desirable, or
that Secured Party may request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to
enable Secured Party to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory shall have been
taken;
(b) cause the Equipment owned by such Grantor to be maintained
and preserved in the same condition, repair and working order as when
new, ordinary wear and tear excepted, and in accordance with such
Grantor's past practices. Each Grantor shall promptly furnish to
Secured Party a statement respecting any material loss or damage to any
of the Equipment owned by such Grantor;
(c) keep correct and accurate records of Inventory owned by
such Grantor, itemizing and describing the kind, type and quantity of
such Inventory, such Grantor's cost therefor and (where applicable) the
current list prices for such Inventory;
(d) if any Inventory is in possession or control of any of
such Grantor's agents or processors, if the aggregate book value of all
such Inventory exceeds $500,000, and in any event upon the occurrence
of an Event of Default (as defined in the Credit Agreement) or the
occurrence of an Early Termination Date (as defined in a Master
Agreement or an Interest Rate Swap Agreement or Interest Rate and
Currency Exchange Agreement in the form prepared by the International
Swap and Derivatives Association Inc. or a similar event under any
similar swap agreement) under any Lender Interest Rate Agreement
(either such occurrence being an "Event of Default" for purposes of
this Agreement), instruct such agent or processor to hold all such
Inventory for the account of Secured Party and subject to the
instructions of Secured Party.
(e) promptly upon the issuance and delivery to such Grantor of
any
XII-11
Negotiable Document of Title, deliver such Negotiable Document of
Title to Secured Party.
SECTION 8. Insurance.
Each Grantor shall, at its own expense, maintain insurance with respect
to the Equipment and Inventory in accordance with the terms of the Credit
Agreement.
SECTION 9. Special Covenants with respect to Accounts and Related Contracts.
(a) Each Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related Contracts, and all originals of all chattel paper that
evidence Accounts, at the location therefor specified in Section 4 or, upon 30
days' prior written notice to Secured Party, at such other location in a
jurisdiction where all action that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured Party to
exercise and enforce its rights and remedies hereunder, with respect to such
Accounts and Related Contracts shall have been taken. Each Grantor will hold and
preserve such records and chattel paper and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records and chattel paper, and each Grantor agrees to render
to Secured Party, at Grantor's cost and expense, such clerical and other
assistance as may be reasonably requested with regard thereto. Promptly upon the
request of Secured Party, each Grantor shall deliver to Secured Party complete
and correct copies of each Related Contract.
(b) Each Grantor shall, for not less than 3 years from the date on
which such Account arose, maintain (i) complete records of each Account of such
Grantor, including records of all payments received, credits granted and
merchandise returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under the Accounts and Related Contracts. In connection with
such collections, each Grantor may take (and, at Secured Party's direction,
shall take) such action as such Grantor or Secured Party may deem necessary or
advisable to enforce collection of amounts due or to become due under the
Accounts; provided, however, that Secured Party shall have the right at any
time, upon the occurrence and during the continuation of an Event of Default or
a Potential Event of Default and upon written notice to such Grantor of its
intention to do so, to notify the account debtors or obligors under any Accounts
of the assignment of such Accounts to Secured Party and to direct such account
debtors or obligors to make payment of all amounts due or to become due
to such Grantor thereunder directly to
XII-12
Secured Party, to notify each Person maintaining a lockbox or similar
arrangement to which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing collections on checks
and other payment items from time to time sent to or deposited in such lockbox
or other arrangement directly to Secured Party and, upon such notification and
at the expense of Grantors, to enforce collection of any such Accounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done. After receipt by such
Grantor of the notice from Secured Party referred to in the proviso to the
preceding sentence, (i) all amounts and proceeds (including checks and other
instruments) received by such Grantor in respect of the Accounts and the Related
Contracts shall be received in trust for the benefit of Secured Party hereunder,
shall be segregated from other funds of such Grantor and shall be forthwith paid
over or delivered to Secured Party in the same form as so received (with any
necessary endorsement) to be held as cash Collateral and applied as provided by
Section 18, and (ii) such Grantor shall not adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.
SECTION 10. Special Provisions With Respect to the Assigned Agreements.
(a) Each Grantor shall at its expense:
(i) if consistent with sound business practices, perform and
observe all terms and provisions of the Assigned Agreements to be
performed or observed by it, maintain the Assigned Agreements in full
force and effect, enforce the Assigned Agreements in accordance with
their terms, and take all such action to such end as may be from time
to time requested by Secured Party; and
(ii) upon the reasonable request of Secured Party, furnish to
Secured Party, promptly upon receipt thereof, copies of all notices,
requests and other documents received by such Grantor under or pursuant
to the Assigned Agreements, and from time to time (A) furnish to
Secured Party such information and reports regarding the Assigned
Agreements as Secured Party may reasonably request and (B) upon request
of Secured Party make to the parties to such Assigned Agreements such
demands and requests for information and reports or for action as such
Grantor is entitled to make under the Assigned Agreements.
(b) Upon the occurrence and during the continuance of an Event of
Default, no Grantor shall:
(i) cancel or terminate any of the Assigned Agreements or
consent to or accept any cancellation or termination thereof;
(ii) amend or otherwise modify the Assigned Agreements or give
any consent, waiver or approval thereunder;
(iii) waive any default under or breach of the Assigned
Agreements;
(iv) consent to or permit or accept any prepayment of amounts
to become due under or in connection with the Assigned Agreements,
except as expressly provided
XII-13
therein; or
(v) take any other action in connection with the Assigned
Agreements that would materially impair the value of the interest or
rights of such Grantor thereunder or that would materially impair the
interest or rights of Secured Party.
SECTION 11. Deposit Accounts.
Upon the occurrence and during the continuation of an Event of Default,
Secured Party may exercise dominion and control over, and refuse to permit
further withdrawals (whether of money, securities, instruments or other
property) from any deposit accounts maintained with Secured Party constituting
part of the Collateral.
SECTION 12. Special Provisions With Respect to the Intellectual Property
Collateral.
(a) Each Grantor shall:
(i) diligently keep reasonable records respecting the
Intellectual Property Collateral and at all times keep at least one
complete set of its records concerning such Collateral at its chief
executive office or principal place of business;
(ii) hereafter use commercially reasonable efforts so as not
to permit the inclusion in any contract to which it hereafter becomes a
party of any provision that could or might in any way materially impair
or prevent the creation of a security interest in, or the assignment
of, such Grantor's rights and interests in any property included within
the definitions of any Intellectual Property Collateral acquired under
such contracts;
(iii) take all steps deemed appropriate in Grantor's
commercially reasonable judgement to protect the secrecy of all trade
secrets relating to the products and services sold or delivered under
or in connection with the Intellectual Property Collateral, including,
without limitation, where appropriate entering into confidentiality
agreements with employees and labeling and restricting access to secret
information and documents;
(iv) use proper statutory notice in connection with its use of
any of the Intellectual Property Collateral;
(v) use a commercially appropriate standard of quality (which
may be consistent with such Grantor's past practices) in the
manufacture, sale and delivery of products and services sold or
delivered under or in connection with the Trademarks; and
(vi) furnish to Secured Party from time to time at Secured
Party's reasonable request statements and schedules further identifying
and describing any Intellectual Property Collateral and such other
reports in connection with such Collateral, all in reasonable detail.
XII-14
(b) Except as otherwise provided in this Section 12, each Grantor shall
continue to collect, at its own expense, all amounts due or to become
due to such Grantor in respect of the Intellectual property Collateral
or any portion thereof. In connection with such collections, each
Grantor may take (and, at Secured Party's reasonable direction, shall
take) such action as such Grantor or Secured Party may deem reasonably
necessary or advisable to enforce collection of such amounts; provided,
Secured Party shall have the right at any time, upon the occurrence and
during the continuation of an Event of Default and upon written notice
to such Grantor of its intention to do so, to notify the obligors with
respect to any such amounts of the existence of the security interest
created hereby and to direct such obligors to make payment of all such
amounts directly to Secured Party, and, upon such notification and at
the expense of such Grantor, to enforce collection of any such amounts
and to adjust, settle or compromise the amount or payment thereof, in
the same manner and to the same extent as such Grantor might have done.
After receipt by any Grantor of the notice from Secured Party referred
to in the proviso to the preceding sentence and during the continuation
of any Event of Default, (i) all amounts and proceeds (including checks
and other instruments) received by each Grantor in respect of amounts
due to such Grantor in respect of the Intellectual Property Collateral
or any portion thereof shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over or delivered to Secured Party
in the same form as so received (with any necessary endorsement) to be
held as cash Collateral and applied as provided by Section 18, and (ii)
such Grantor shall not adjust, settle or compromise the amount or
payment of any such amount or release wholly or partly any obligor with
respect thereto or allow any credit or discount thereon.
(c) Each Grantor shall have the duty diligently, through counsel
reasonably acceptable to Secured Party, to prosecute, file and/or make,
unless and until such Grantor, in its commercially reasonable judgment,
decides otherwise, (i) any application relating to any of the
Intellectual Property Collateral owned, held or used by such Grantor
and identified on Schedules 1(a), 1(b) or 1(c), as applicable, that is
pending as of the date of this Agreement, (ii) any Copyright
Registration on any existing or future unregistered but copyrightable
works (except for works of nominal commercial value or with respect to
which such Grantor has determined in the exercise of its commercially
reasonable judgment that it shall not seek registration), (iii)
application on any future patentable but unpatented innovation or
invention comprising Intellectual Property Collateral, and (iv) any
Trademark opposition and cancellation proceedings, renew Trademark
Registrations and Copyright Registrations and do any and all acts which
are necessary or desirable, as determined in such Grantor's
commercially reasonable judgment, to preserve and maintain all rights
in all Intellectual Property Collateral. Any expenses incurred in
connection therewith shall be borne solely by Grantors. Subject to the
foregoing, each Grantor shall give Secured Party prior written notice
of any abandonment of any Intellectual Property Collateral or any
pending patent application or any Patent.
(d) Except as provided herein, each Grantor shall have the right to
commence and
XII-15
prosecute in its own name, as real party in interest, for its own
benefit and at its own expense, such suits, proceedings or other
actions for infringement, unfair competition, dilution,
misappropriation or other damage, or reexamination or reissue
proceedings as are in its commercially reasonable judgment necessary to
protect the Intellectual Property Collateral. Secured Party shall
provide, at such Grantor's expense, all reasonable and necessary
cooperation in connection with any such suit, proceeding or action
including, without limitation, joining as a necessary party. Each
Grantor shall promptly, following its becoming aware thereof, notify
Secured Party of the institution of, or of any adverse determination
in, any proceeding (whether in the United States Patent and Trademark
Office, the United States Copyright Office or any federal, state, local
or foreign court) or regarding such Grantor's ownership, right to use,
or interest in any Intellectual Property Collateral. Each Grantor shall
provide to Secured Party any information with respect thereto requested
by Secured Party.
(e) In addition to, and not by way of limitation of, the granting of a
security interest in the Collateral pursuant hereto, each Grantor,
effective upon the occurrence and during the continuation of an Event
of Default and upon written notice from Secured Party, shall grant,
sell, convey, transfer, assign and set over to Secured Party, for its
benefit and the ratable benefit of Lenders, all of such Grantor's
right, title and interest in and to the Intellectual Property
Collateral to the extent necessary to enable Secured Party to use,
possess and realize on the Intellectual Property Collateral and to
enable any successor or assign to enjoy the benefits of the
Intellectual Property Collateral. This right shall inure to the benefit
of all successors, assigns and transferees of Secured Party and its
successors, assigns and transferees, whether by voluntary conveyance,
operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or otherwise. Such right and license shall be granted free
of charge, without requirement that any monetary payment whatsoever be
made to such Grantor. In addition, each Grantor hereby grants to
Secured Party and its employees, representatives and agents the right
to visit such Grantor's and any of its Affiliate's or subcontractor's
plants, facilities and other places of business that are utilized in
connection with the manufacture, production, inspection, storage or
sale of products and services sold or delivered under any of the
Intellectual Property Collateral (or which were so utilized during the
prior six month period), and to inspect the quality control and all
other records relating thereto upon reasonable advance written notice
to such Grantor and at reasonable dates and times and as often as may
be reasonably requested. If and to the extent that any Grantor is
permitted to license the Intellectual Property Collateral, Secured
Party shall promptly enter into a non-disturbance agreement or other
similar arrangement, at such Grantor's request and expense, with such
Grantor and any licensee of any Intellectual Property Collateral
permitted hereunder in form and substance reasonably satisfactory to
Secured Party pursuant to which (i) Secured Party shall agree not to
disturb or interfere with such licensee's rights under its license
agreement with such Grantor so long as such licensee is not in default
thereunder, and (ii) such licensee shall acknowledge and agree that the
Intellectual Property Collateral licensed to it is subject to the
security interest created in favor of Secured Party and the other terms
of this Agreement.
XII-16
SECTION 13. Transfers and Other Liens.
No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by the
Credit Agreement; or
(b) except for the security interest created by this
Agreement, create or suffer to exist any Lien upon or with respect to
any of the Collateral to secure the indebtedness or other obligations
of any Person.
SECTION 14. Secured Party Appointed Attorney-in-Fact.
Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including without limitation:
(a) upon the occurrence and during the continuance of an Event
of Default, to obtain and adjust insurance required to be maintained by
such Grantor or paid to Secured Party pursuant to Section 8;
(b) upon the occurrence and during the continuance of an Event
of Default, to ask for, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(c) upon the occurrence and during the continuance of an Event
of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a)
and (b) above;
(d) upon the occurrence and during the continuance of an Event
of Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or
placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to be
determined by Secured Party in its sole discretion, any such payments
made by Secured Party to become obligations of such Grantor to Secured
Party, due and payable immediately without demand;
(f) upon the occurrence and during the continuance of an Event
of Default, to
XII-17
sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and
other documents relating to the Collateral; and
(g) upon the occurrence and during the continuance of an Event
of Default, generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as fully
and completely as though Secured Party were the absolute owner thereof
for all purposes, and to do, at Secured Party's option and Grantors'
expense, at any time or from time to time, all acts and things that
Secured Party deems necessary to protect, preserve or realize upon the
Collateral and Secured Party's security interest therein in order to
effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
SECTION 15. Secured Party May Perform.
If any Grantor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
such Grantor under Section 20(b).
SECTION 16. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which Secured Party accords its own property.
XII-18
SECTION 17. Remedies.
XII-19
If any Event of Default shall have occurred and be continuing, Secured
Party may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the Uniform Commercial Code as
in effect in any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Collateral), and also may (a) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (b) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (c) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (d) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (c) and collecting any
Secured Obligation, and (e) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable. Secured Party or
any Lender or Interest Rate Exchanger may be the purchaser of any or all of the
Collateral at any such sale and Secured Party, as agent for and representative
of Lenders and Interest Rate Exchangers (but not any Lender or Lenders or
Interest Rate Exchanger or Interest Rate Exchangers in its or their respective
individual capacities unless Requisite Obligees (as defined in Section 22(a))
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency.
SECTION 18. Additional Remedies for Intellectual Property Collateral.
XII-20
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default, (i) Secured Party
shall have the right (but not the obligation) to bring suit, in the name of any
Grantor, Secured Party or otherwise, to enforce any Intellectual Property
Collateral, in which event each Grantor shall, at the request of Secured Party,
do any and all lawful acts and execute any and all documents required by Secured
Party in aid of such enforcement and each Grantor shall promptly, upon demand,
reimburse and indemnify Secured Party as provided in Sections 10.2 and 10.3 of
the Credit Agreement and Section 20 hereof, as applicable, in connection with
the exercise of its rights under this Section, and, to the extent that Secured
Party shall elect not to bring suit to enforce any Intellectual Property
Collateral as provided in this Section, each Grantor agrees to use all
reasonable measures, whether by action, suit, proceeding or otherwise, to
prevent the infringement of any of the Intellectual Property Collateral by
others and for that purpose agrees to use its commercially reasonable judgement
in maintaining any action, suit or proceeding against any Person so infringing
reasonably necessary to prevent such infringement; (ii) upon written demand from
Secured Party, each Grantor shall execute and deliver to Secured Party an
assignment or assignments of the Intellectual Property Collateral and such other
documents as are necessary or appropriate to carry out the intent and purposes
of this Agreement; (iii) each Grantor agrees that such an assignment and/or
recording shall be applied to reduce the Secured Obligations outstanding only to
the extent that Secured Party (or any Lender) receives cash proceeds in respect
of the sale of, or other realization upon, the Intellectual Property Collateral;
and (iv) within five Business Days after written notice from Secured Party, each
Grantor shall make available to Secured Party, to the extent within such
Grantor's power and authority, such personnel in such Grantor's employ on the
date of such Event of Default as Secured Party may reasonably designate, by
name, title or job responsibility, to permit such Grantor to continue, directly
or indirectly, to produce, advertise and sell the products and services sold or
delivered by such Grantor under or in connection with the Trademarks, Trademark
Registrations and Trademark Rights, such persons to be available to perform
their prior functions on Secured Party's behalf and to be compensated by Secured
Party at such Grantor's expense on a per diem, pro-rata basis consistent with
the salary and benefit structure applicable to each as of the date of such Event
of Default.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have occurred and be continuing, (iii) an
assignment to Secured Party of any rights, title and interests in and to the
Intellectual Property Collateral shall have been previously made. and (iv) the
Secured Obligations shall not have become immediately due and payable, upon the
written request of any Grantor, Secured Party shall promptly execute and deliver
to such Grantor such assignments as may be necessary to reassign to such Grantor
any such rights, title and interests as may have been assigned to Secured Party
as aforesaid, subject to any disposition thereof that may have been made by
Secured Party; provided, after giving effect to such reassignment, Secured
Party's security interest granted pursuant hereto, as well as all other rights
and remedies of Secured Party granted hereunder, shall continue to be in full
force and effect; and provided further, the rights, title and interests so
reassigned shall be free and clear of all Liens other than Liens (if any)
encumbering such rights, title and interest at the time of their assignment to
Secured Party and Permitted Encumbrances.
XII-21
SECTION 19. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral shall be applied as provided
in subsection 2.4D of the Credit Agreement.
SECTION 20. Indemnity and Expenses.
(a) Grantors jointly and severally agree to indemnify Secured Party,
each Lender and each Interest Rate Exchanger from and against any and all
claims, losses and liabilities in any way relating to, growing out of or
resulting from this Agreement and the transactions contemplated hereby
(including without limitation enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Lender's or Interest Rate Exchanger's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantors jointly and severally agree to pay to Secured Party upon
demand the amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iv) the failure
by any Grantor to perform or observe any of the provisions hereof.
(c) The obligations of Grantors in this Section 20 shall survive the
termination of this Agreement and the discharge of Grantors' other obligations
under this Agreement, the Lender Interest Rate Agreements, the Credit Agreement
and the other Loan Documents.
XII-22
SECTION 21. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Grantors and their respective successors and
assigns, and (c) inure, together with the rights and remedies of Secured Party
hereunder, to the benefit of Secured Party and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit Agreement, any Lender
may assign or otherwise transfer any Loans held by it to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted to Lenders herein or otherwise. Upon the payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Grantors. Upon any such termination Secured Party will,
at Grantors' expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination.
SECTION 22. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders and, by their acceptance of the benefits hereof, Interest Rate
Exchangers. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement; provided that Secured
Party shall exercise, or refrain from exercising, any remedies provided for in
Section 17 in accordance with the instructions of (i) Requisite Lenders or (ii)
after payment in full of all Obligations under the Credit Agreement and the
other Loan Documents, the cancellation or expiration of all Letters of Credit
and the termination of the Commitments, the holders of a majority of the
aggregate notional amount (or, with respect to any Lender Interest Rate
Agreement that has been terminated in accordance with its terms, the amount then
due and payable (exclusive of expenses and similar payments but including any
early termination payments then due) under such Lender Interest Rate Agreement)
under all Lender Interest Rate Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as "Requisite Obligees"). In furtherance
of the foregoing provisions of this Section 21(a), each Interest Rate Exchanger,
by its acceptance of the benefits hereof, agrees that it shall have no right
individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Interest Rate Exchanger that all rights and
remedies hereunder may be exercised solely by Secured Party for the benefit of
Lenders and Interest Rate Exchangers in accordance with the terms of this
Section 22(a).
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured
XII-23
Party under this Agreement; removal of Administrative Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal as Secured
Party under this Agreement; and appointment of a successor Administrative Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Administrative Agent under subsection 9.5 of
the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Secured Party
under this Agreement, and the retiring or removed Secured Party under this
Agreement shall promptly (i) transfer to such successor Secured Party all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Secured Party under this Agreement,
and (ii) execute and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or removed
Secured Party shall be discharged from its duties and obligations under this
Agreement. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Secured Party, the provisions of this Agreement shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Agreement while it was Secured Party hereunder.
SECTION 23. Additional Grantors.
The initial Subsidiary Grantors hereunder shall be such of the
Subsidiaries of Company as are signatories hereto on the date hereof. From time
to time subsequent to the date hereof, additional Subsidiaries of Company may
become parties hereto as additional Grantors (each an "Additional Grantor"), by
executing an acknowledgement to this Agreement substantially in the form of
Exhibit V annexed hereto. Upon delivery of any such acknowledgement to
Administrative Agent and Secured Party, notice of which is hereby waived by
Grantors, each such Additional Grantor shall be a Grantor and shall be as fully
a party hereto as if such Additional Grantor were an original signatory hereto.
Each Grantor expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Administrative Agent not to cause any
Subsidiary of Company to become an Additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder.
XII-24
SECTION 24. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by any Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Secured Party and, in the case of any such amendment or modification, by
Grantors; provided that any amendment hereto pursuant to Section 23 shall be
effective upon execution by any Additional Grantor and Grantors hereby waive any
requirement of notice of or consent to any such amendment. Any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given.
SECTION 25. Notices.
Any notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices to
Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement or as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such party in a written
notice delivered to the other parties hereto.
SECTION 26. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 27. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
XII-25
SECTION 28. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 29. Governing Law; Terms; Rules of Construction.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined. The
rules of construction set forth in subsection 1.3 of the Credit Agreement shall
be applicable to this Agreement mutatis mutandis.
XII-26
SECTION 30. Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY
AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 25; (IV) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH
GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT SECURED PARTY
RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION;
AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 30 RELATING TO JURISDICTION
AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE
UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
XII-27
SECTION 31. Waiver of Jury Trial.
GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Each Grantor and Secured Party acknowledge that this waiver is
a material inducement for Grantors and Secured Party to enter into a business
relationship, that Grantors and Secured Party have already relied on this waiver
in entering into this Agreement and that each will continue to rely on this
waiver in their related future dealings. Each Grantor and Secured Party further
warrant and represent that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SECTION 30 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
SECTION 32. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
XII-28
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DMAC ACQUISITION CORP.
By:
-----------------------------------------------
Name:
Title:
Each of the entities listed on Schedule A annexed
hereto
By:
-----------------------------------------------
on behalf of each of the entities listed on
Schedule A annexed hereto
Name:
XII-29
Schedule A
Name Notice Address for each Subsidiary
Grantor
DIMAC Marketing Corporation c/o AmeriComm Holdings, Inc.
Palm Coast Data Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇.
The ▇▇▇▇▇▇▇ Group Inc. Dunwoody, Suite C150
▇▇▇▇▇▇ & Associates Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
MBS/Multimode Inc. Attn: ▇▇▇▇ ▇▇▇▇▇▇
DIMAC Direct Inc.
XII-30
CREDIT SUISSE FIRST BOSTON,
as Secured Party
By:
-----------------------------------------
Name:
Title:
By:
-----------------------------------------
Name:
Title:
XII-31
SCHEDULE 1(a) TO
SECURITY AGREEMENT
Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
------------------------- ------------------- ------------------ -----------------
XII-32
SCHEDULE 1(b) TO
SECURITY AGREEMENT
Patents Issued:
Patent No. Issue Date Invention Inventor
------------------- --------------- ----------------- --------------
Patents Pending:
Applicant's Date Application
Name Filed Number Invention Inventor
--------------- ----------- ------------------ --------------- ----------------
XII-33
SCHEDULE 1(c) TO
SECURITY AGREEMENT
U.S. Copyrights:
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
Pending U.S. Copyright Registrations & Applications:
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- --------- --------
Pending Foreign Copyright Registrations & Applications:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
XII-34
SCHEDULE 4(b)
TO
SECURITY AGREEMENT
Locations of Equipment and Inventory
Name of Company/Limited Partner- Locations of Equipment and Inventory
ship
--------------------------------- ------------------------------------
XII-35
SCHEDULE 4(d)
TO
SECURITY AGREEMENT
Office Locations
Name of Company/Limited Partnership Office Locations
----------------------------------- ----------------
XII-36
SCHEDULE 4(e)
TO
SECURITY AGREEMENT
Other Names
Name of Company/Limited Partnership Other Names
----------------------------------- -----------
XII-37
SCHEDULE 4(h)
TO
SECURITY AGREEMENT
Filing Offices
XII-38
EXHIBIT I TO
SECURITY AGREEMENT
[FORM OF GRANT OF TRADEMARK SECURITY INTEREST]
GRANT OF TRADEMARK SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Trademark Collateral (as defined below); and
WHEREAS, [Grantor] [and DMAC Acquisition Corp., a Delaware corporation
("Company"),] and DMAC Holdings, Inc., a Delaware corporation, have entered into
a Credit Agreement dated as of June 26, 1998 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement") with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders") and Credit Suisse First Boston, as administrative agent for
the Lenders (in such capacity, "Secured Party") and as syndication agent and
arranger, pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to [Company] [Grantor]; and
WHEREAS, [Company] [Grantor] may from time to time enter, or may from
time to time have entered, into one or more Interest Rate Agreements
(collectively, the "Lender Interest Rate Agreements") with one or more Lenders
(in such capacity, collectively, "Lender Counterparties"); and
[WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June 26, 1998 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Guaranty") in favor of Secured Party for the benefit of Lenders and
any Lender Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Interest Rate Agreements, including without limitation the obligation of
Company to make payments thereunder in the event of early termination thereof;
and]
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
26, 1998 (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Trademark Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy
XII-I-1
of which are hereby acknowledged, subject to the terms and conditions of the
Credit Agreement and the Security Agreement, Grantor hereby grants to Secured
Party a security interest in all of Grantor's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "Trademark Collateral"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all
trademarks, service marks, designs, logos, indicia, tradenames, trade
dress, corporate names, company names, business names, fictitious
business names, trade styles and/or other source and/or business
identifiers and applications pertaining thereto, owned by such Grantor,
or hereafter adopted and used, in its business (including, without
limitation, the trademarks specifically identified in Schedule A)
(collectively, the "Trademarks"), all registrations that have been or
may hereafter be issued or applied for thereon in the United States and
any state thereof and in foreign countries (including, without
limitation, the registrations and applications specifically identified
in Schedule A) (the "Trademark Registrations"), all common law and
other rights (but in no event any of the obligations) in and to the
Trademarks in the United States and any state thereof and in foreign
countries (the "Trademark Rights"), and all goodwill of such Grantor's
business symbolized by the Trademarks and associated therewith (the
"Associated Goodwill"); and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Trademark Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Trademark Collateral. For purposes of this Grant of
Trademark Security Interest, the term "proceeds" includes whatever is
receivable or received when Trademark Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Trademark Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the
Trademark Collateral shall include, and Grantor shall be deemed to have granted
a security interest in, all such rights and interests as if such provision had
never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Trademark
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
XII-I-2
IN WITNESS WHEREOF, Grantor has caused this Grant of Trademark Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the _____ day of _____, _____.
[NAME OF GRANTOR]
By:
-------------------------------------------
Name:
Title:
XII-I-3
SCHEDULE A
TO
GRANT OF TRADEMARK SECURITY INTEREST
United States
Trademark Registration Registration
Registered Owner Description Number Date
---------------- -------------- ------------ ------------
XI-I-A-1
EXHIBIT II TO
SECURITY AGREEMENT
[FORM OF GRANT OF PATENT SECURITY INTEREST]
GRANT OF PATENT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Patent Collateral (as defined below); and
WHEREAS, [Grantor] [and DMAC Acquisition Corp., a Delaware corporation
("Company"),] and DMAC Holdings, Inc., a Delaware corporation, have entered into
a Credit Agreement dated as of June 26, 1998 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement") with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders") and Credit Suisse First Boston, as administrative agent for
the Lenders (in such capacity, "Secured Party") and as syndication agent and
arranger, pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to [Company] [Grantor]; and
WHEREAS, [Company] [Grantor] may from time to time enter, or may from
time to time have entered, into one or more Interest Rate Agreements
(collectively, the "Lender Interest Rate Agreements") with one or more Lenders
(in such capacity, collectively, "Lender Counterparties"); and
[WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June 26, 1998 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Guaranty") in favor of Secured Party for the benefit of Lenders and
any Lender Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Interest Rate Agreements, including without limitation the obligation of
Company to make payments thereunder in the event of early termination thereof;
and]
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
26, 1998 (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Patent Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy
XII-II-1
of which are hereby acknowledged, subject to the terms and conditions of the
Credit Agreement and the Security Agreement, Grantor hereby grants to Secured
Party a security interest in all of Grantor's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "Patent Collateral"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) in and to all patents
and patent applications and rights and interests in patents and patent
applications under any domestic or foreign law that are presently, or
in the future may be, owned or held by such Grantor and all patents and
patent applications and rights, title and interests in patents and
patent applications under any domestic or foreign law that are
presently, or in the future may be, owned by such Grantor in whole or
in part (including, without limitation, the patents and patent
applications listed in Schedule A), all rights (but not obligations)
corresponding thereto to ▇▇▇ for past, present and future infringements
and all re-issues, divisions, continuations, renewals, extensions and
continuations-in-part thereof (all of the foregoing being collectively
referred to as the "Patents"); and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Patent Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Patent Collateral. For purposes of this Grant of
Patent Security Interest, the term "proceeds" includes whatever is
receivable or received when Patent Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Patent Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any of Grantor's rights or interests in any license,
contract or agreement to which Grantor is a party or any of its rights or
interests thereunder to the extent, but only to the extent, that such a grant
would, under the terms of such license, contract or agreement or otherwise,
result in a breach of the terms of, or constitute a default under any license,
contract or agreement to which Grantor is a party; provided, that immediately
upon the ineffectiveness, lapse or termination of any such provision, the Patent
Collateral shall include, and Grantor shall be deemed to have granted a security
interest in, all such rights and interests as if such provision had never been
in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Patent
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Grant of Patent Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ____ day of
XII-II-2
_______, ____.
[NAME OF GRANTOR]
By:
--------------------------------------------
Name:
Title:
XII-II-3
SCHEDULE A
TO
GRANT OF PATENT SECURITY INTEREST
Patents Issued:
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
Patents Pending:
Applicant's Date Application
Name Filed Number Invention Inventor
----------- ----- ----------- --------- --------
XII-II-A-1
EXHIBIT III TO
SECURITY AGREEMENT
[FORM OF GRANT OF COPYRIGHT SECURITY INTEREST]
GRANT OF COPYRIGHT SECURITY INTEREST
WHEREAS, [NAME OF GRANTOR], a ___________ corporation ("Grantor"), owns
and uses in its business, and will in the future adopt and so use, various
intangible assets, including the Copyright Collateral (as defined below); and
WHEREAS, [Grantor] [and DMAC Acquisition Corp., a Delaware corporation
("Company"),] and DMAC Holdings, Inc., a Delaware corporation, have entered into
a Credit Agreement dated as of June 26, 1998 (said Credit Agreement, as it may
heretofore have been and as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement") with the
financial institutions named therein (collectively, together with their
respective successors and assigns party to the Credit Agreement from time to
time, the "Lenders") and Credit Suisse First Boston, as administrative agent for
the Lenders (in such capacity, "Secured Party") and as syndication agent and
arranger, pursuant to which Lenders have made certain commitments, subject to
the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities to [Company] [Grantor]; and
WHEREAS, [Company] [Grantor] may from time to time enter, or may from
time to time have entered, into one or more Interest Rate Agreements
(collectively, the "Lender Interest Rate Agreements") with one or more Lenders
(in such capacity, collectively, "Lender Counterparties"); and
[WHEREAS, Grantor has executed and delivered that certain Subsidiary
Guaranty dated as of June 26, 1998 (said Subsidiary Guaranty, as it may
hereafter be amended, supplemented or otherwise modified from time to time,
being the "Guaranty") in favor of Secured Party for the benefit of Lenders and
any Lender Counterparties, pursuant to which Grantor has guarantied the prompt
payment and performance when due of all obligations of Company under the Credit
Agreement and the other Loan Documents and all obligations of Company under the
Lender Interest Rate Agreements, including without limitation the obligation of
Company to make payments thereunder in the event of early termination thereof;
and]
WHEREAS, pursuant to the terms of a Security Agreement dated as of June
26, 1998 (as amended, supplemented or otherwise modified from time to time, the
"Security Agreement"), among Grantor, Secured Party and the other grantors named
therein, Grantor has agreed to create in favor of Secured Party a secured and
protected interest in, and Secured Party has agreed to become a secured creditor
with respect to, the Copyright Collateral;
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy
XII-III-1
of which are hereby acknowledged, subject to the terms and conditions of the
Credit Agreement and the Security Agreement, Grantor hereby grants to Secured
Party a security interest in all of Grantor's right, title and interest in and
to the following, in each case whether now or hereafter existing or in which
Grantor now has or hereafter acquires an interest and wherever the same may be
located (the "Copyright Collateral"):
(i) all rights, title and interest (including rights acquired pursuant
to a license or otherwise but only to the extent permitted by
agreements governing such license or other use) under copyright in
various published and unpublished works of authorship including,
without limitation, computer programs, computer data bases, other
computer software layouts, trade dress, drawings, designs, writings,
and formulas (including, without limitation, the works listed on
Schedule A, as the same may be amended pursuant hereto from time to
time) (collectively, the "Copyrights"), all copyright registrations
issued to Grantor and applications for copyright registration that have
been or may hereafter be issued or applied for thereon in the United
States and any state thereof and in foreign countries (including,
without limitation, the registrations listed on Schedule A, as the same
may be amended pursuant hereto from time to time) (collectively, the
"Copyright Registrations"), all common law and other rights in and to
the Copyrights in the United States and any state thereof and in
foreign countries including all copyright licenses (but with respect to
such copyright licenses, only to the extent permitted by such licensing
arrangements) (the "Copyright Rights"), including, without limitation,
each of the Copyrights, rights, titles and interests in and to the
Copyrights and works protectable by copyright, which are presently, or
in the future may be, owned, created (as a work for hire for the
benefit of Grantor), authored (as a work for hire for the benefit of
Grantor), or acquired by Grantor, in whole or in part, and all
Copyright Rights with respect thereto and all Copyright Registrations
therefor, heretofore or hereafter granted or applied for, and all
renewals and extensions thereof, throughout the world, including all
proceeds thereof (such as, by way of example and not by limitation,
license royalties and proceeds of infringement suits), the right (but
not the obligation) to renew and extend such Copyright Registrations
and Copyright Rights and to register works protectable by copyright and
the right (but not the obligation) to ▇▇▇ in the name of such Grantor
or in the name of Secured Party or Lenders for past, present and future
infringements of the Copyrights and Copyright Rights; and
(ii) all proceeds, products, rents and profits of or from any and all
of the foregoing Copyright Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is
the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Copyright Collateral. For purposes of this Grant of
Copyright Security Interest, the term "proceeds" includes whatever is
receivable or received when Copyright Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.
Notwithstanding anything herein to the contrary, in no event shall the
Copyright Collateral include, and Grantor shall be not deemed to have granted a
security interest in, any
XII-III-2
of Grantor's rights or interests in any license, contract or agreement to which
Grantor is a party or any of its rights or interests thereunder to the extent,
but only to the extent, that such a grant would, under the terms of such
license, contract or agreement or otherwise, result in a breach of the terms of,
or constitute a default under any license, contract or agreement to which
Grantor is a party; provided, that immediately upon the ineffectiveness, lapse
or termination of any such provision, the Copyright Collateral shall include,
and Grantor shall be deemed to have granted a security interest in, all such
rights and interests as if such provision had never been in effect.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Secured Party with respect to the security interest in the Copyright
Collateral granted hereby are more fully set forth in the Security Agreement,
the terms and provisions of which are incorporated by reference herein as if
fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Grant of Copyright Security
Interest to be duly executed and delivered by its officer thereunto duly
authorized as of the ____ day of ______, ____.
[NAME OF GRANTOR]
By:
--------------------------------------------
Name:
Title:
XII-III-3
SCHEDULE A
TO
GRANT OF COPYRIGHT SECURITY INTEREST
U.S. Copyrights:
Title Registration No. Date of Issue Registered Owner
----- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
Pending U.S. Copyright Registrations & Applications:
Title Reference No. Date of Application Copyright Claimant
----- ------------- ------------------- ------------------
Pending Foreign Copyright Registrations & Applications:
Country Title Registration No. Date of Issue
------- ----- ---------------- -------------
XII-III-A-1
EXHIBIT IV TO
SECURITY AGREEMENT
SECURITY AGREEMENT SUPPLEMENT
This SECURITY AGREEMENT SUPPLEMENT, dated _______, is delivered
pursuant to the Security Agreement, dated as of June 26, 1998 (as it may be from
time to time amended, modified or supplemented, the "Security Agreement"), among
DMAC Acquisition Corp., the other Grantors named therein, and Credit Suisse
First Boston, as Secured Party. Capitalized terms used herein not otherwise
defined herein shall have the meanings ascribed thereto in the Security
Agreement.
Subject to the terms and conditions of the Security Agreement, Grantor
hereby grants to Secured Party a security interest in all of Grantor's right,
title and interest in and to the Intellectual Property Collateral listed on
Supplemental Schedule [1(a)] [1(b)] [1.(c)] attached hereto the following, in
each case whether now or hereafter existing or in which Grantor now has or
hereafter acquires an interest and wherever the same may be located. All such
[Intellectual Property Collateral] shall be deemed to be part of the Collateral
and hereafter subject to each of the terms and conditions of the Security
Agreement.
IN WITNESS WHEREOF, Grantor has caused this Supplement to be duly
executed and delivered by its duly authorized officer as of ______________.
[GRANTOR]
By:
---------------------------------------
Name:
Title:
XII-IV-1
EXHIBIT V TO
SECURITY AGREEMENT
[FORM OF ACKNOWLEDGEMENT]
This ACKNOWLEDGEMENT, dated _______, is delivered pursuant to Section
23 of the Security Agreement referred to below. The undersigned hereby agrees
that this Acknowledgement may be attached to the Security Agreement, dated as of
June 26, 1998 (as it may be from time to time amended, modified or supplemented,
the "Security Agreement"; capitalized terms used herein not otherwise defined
herein shall have the meanings ascribed therein), among DMAC Acquisition Corp.,
the other Grantors named therein, and Credit Suisse First Boston, as Secured
Party, that the undersigned by executing and delivering this Acknowledgement
hereby becomes a Grantor under the Security Agreement in accordance with Section
23 thereof and agrees to be bound by all of the terms thereof, and that the
Patents, Trademarks, Trademark Registrations, Copyrights and Copyright
Registrations described on this Acknowledgement shall be deemed to be part of
the and shall become part of the Collateral and shall secure all Secured
Obligations.
[NAME OF ADDITIONAL GRANTOR]
By:
---------------------------------
Name:
Title:
Trademarks:
Trademark Registration Registration
Registered Owner Description Number Date
---------------- ----------- ------------ -------------
Patents Issued:
Patent No. Issue Date Invention Inventor
---------- ---------- --------- --------
XII-V-1
Patents Pending:
Applicant's Date Application
Name Filed Number Invention Inventor
-------------- ------- ----------- --------- --------
U.S. Copyrights:
Copyright Registration No. Date of Issue Registered Owner
--------- ---------------- ------------- ----------------
Foreign Copyright Registrations:
Country Copyright Registration No. Date of Issue
------- --------- ---------------- -------------
Pending U.S. Copyrights:
Copyright Reference No. Date of Application Copyright Claimant
--------- ------------- ------------------- --------- --------
XII-V-2
Pending Foreign Copyrights:
Country Copyright Registration No. Date of Issue
------- --------- ---------------- -------------
XII-V-3
EXHIBIT XIII
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(1) I am the duly elected [Title] of DIMAC Corporation,
a Delaware corporation ("Company");
(2) I have reviewed the terms of that certain Amended and
Restated Credit Agreement dated as of October 22, 1998, by and among
Company, DIMAC Holdings, Inc., the financial institutions listed
therein as Lenders, Credit Suisse First Boston, as Administrative
Agent, Credit Suisse First Boston, as Arranger, Warburg Dillon Read
LLC, as Syndication Agent and First Union National Bank, as
Documentation Agent, as amended, restated, supplemented or otherwise
modified to the date hereof (said Amended and Restated Credit
Agreement, as so amended, restated, supplemented or otherwise modified,
being the "Credit Agreement"; the terms defined therein and not
otherwise defined in this Certificate (including Attachment No. 1
annexed hereto and made a part hereof) being used in this Certificate
as therein defined), and the terms of the other Loan Documents, and I
have made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and condition of Holdings and its
Subsidiaries during the accounting period covered by the attached
financial statements; and
(3) The examination described in paragraph (2) above did not
disclose, and I have no knowledge of, the existence of any condition or
event which constitutes an Event of Default or Potential Event of
Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate[,
except as set forth below].
[Set forth [below] [in a separate attachment to this Certificate] are
all exceptions to paragraph (3) above listing, in detail, the nature of the
condition or event, the period during which it has existed and the action which
Company has taken, is taking, or proposes to take with respect to each such
condition or event:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
------------------------------------------------------------------------------]
XIII-1
The foregoing certifications, together with the computations set forth
in Attachment No. 1 annexed hereto and made a part hereof and the financial
statements delivered with this Certificate in support hereof, are made and
delivered this __________ day of _____________, [199_] [200_] pursuant to
subsection 6.1(iv) of the Credit Agreement.
DIMAC CORPORATION
By:
--------------------------------------------
Name:
Title:
▇▇▇▇-▇
▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a Compliance
Certificate dated as of ____________, [199_][200_] and pertains to the period
from ____________, [199_][200_] to ____________, [199_][200_]. Subsection
references herein relate to subsections of the Credit Agreement.
A. Indebtedness
1. Indebtedness under Capital Leases of the type described in
subsection 7.1(iv):
$
-------------
2. Maximum Indebtedness Permitted under subsection 7.1(iv) (after
Phase II Completion Date):
$20,000,000
3. Indebtedness under Permitted Seller paper described in
subsection 7.1(vi);
$
-------------
4. Maximum Indebtedness permitted under subsection
7.1(vi);
$25,000,000
5. Indebtedness of the type described under subsection 7.1(x):
$
-------------
6. Maximum indebtedness of the type described under subsection
(x):
$15,000,000
B. Liens
1. Indebtedness secured by Liens described in 7.2A(iii):
$
-------------
2. Maximum Indebtedness permitted to be secured under subsection
7.2A(iii):
$5,000,000
3. Indebtedness secured by Liens described in subsection
7.2A(iv):
$
-------------
4. Maximum Indebtedness permitted to be secured by Liens under
subsection 7.2A(iv):
$2,500,000
C. Investments
XIII-3
1. Investments of the type described in subsection 7.3(vii):
$
-------------
2. Maximum permitted under subsection 7.3(vii) per Fiscal Year:
$500,000
3. Investments of the type described in subsection 7.3(viii)
(limited to $2,500,000 in any fiscal year)
$
-------------
4. Aggregate Maximum permitted under subsection 7.3(viii)
$5,000,000
D. Contingent Obligations
1. Contingent Obligations of the type described in subsec-
tion 7.4(iv):
$
-------------
2. Maximum permitted under subsection 7.4(iv):
$500,000
3. Contingent Obligations of the type described in subsection
7.4(v):
$
-------------
4. Maximum permitted under subsection 7.4(v): $1,000,000
5. Contingent Obligations of the type described in
subsection 7.4(ix)
$
-------------
6. Maximum permitted under subsection 7.4(ix)
$2,000,000
E. Minimum Interest Coverage Ratio (for the Calculation Period
ending _____________, [199_] [200_])
1. Consolidated Net Income:
$
-------------
2. Consolidated Interest Expense:
$
-------------
3. Provisions for taxes based on income:
$
-------------
4. Total depreciation expense:
$
-------------
5. Total amortization expense:
$
-------------
XIII-4
6. Other non-cash items reducing Consolidated Net Income:
$
-------------
7. All one time cash compensation payments made in connection
with the Acquisition:
$
-------------
8. Items described on Schedule 1.1(i):
$
-------------
9. Other non-cash items increasing Consolidated Net Income:
$
-------------
10. Any payments made under Permitted Earn-Out Agreements and
Management Fees to the extent otherwise deducted in
determining Consolidated Net Income:
$
-------------
11. Any payments (net of indemnification) by Company and its
Subsidiaries of demands, obligations, interest, penalties,
suits, judgements, orders, liabilities, debts, claims,
actions, causes of action, costs and expenses in connection
with the postal investigation disclosed on Schedule 5.14 of
the DIMAC Acquisition Agreement:
$
-------------
12. Consolidated Adjusted EBITDA (taking into account any
adjustments required pursuant to 7.6E) ((E.1 + E.2 + E.3 + E.4
+ E.5 + E.6 + E.7 + E.8) (E.9 + E.10 + E.11)):
$
-------------
13. Consolidated Interest Expense:
$
-------------
14. Interest Coverage Ratio ((E.13):(E.14)):
_____:1.00
15. Minimum Interest Coverage Ratio required under subsection
7.6A:
_____:1.00
F. Minimum Fixed Charge Coverage Ratio (for Calculation
Period ending _____________, [199_] [200_])
1. Consolidated Adjusted EBITDA (E.12 above):
$
-------------
2. Scheduled repayments of principal of all Indebtedness (as
reduced by prepayments thereon previously made):
$
-------------
3. Consolidated Interest Expense (E.13 above):
$
-------------
4. Consolidated Capital Expenditures (other than Designated
Capital Expenditures):
$
-------------
XIII-5
5. Taxes based on income actually paid in cash: $
-------------
6. Consolidated Fixed Charges (H.2 + H.3 + H.4 + H.5):
$
-------------
7. Fixed Charge Coverage Ratio ((H.1):(H.6)):
_____:1.00
8. Minimum Fixed Charge Coverage Ratio required under subsection
7.6C:
_____:1.00
G. Maximum Leverage Ratio (as of _____________, [199_] [200_])
1. Consolidated Total Debt plus (y) so long as the Permitted
----
Earn Out Agreements described on Schedule 1.1(ii) of
the Credit Agreement have not been cancelled or
otherwise terminated, (1) the amount with respect to each
such Permitted Earn Out Agreement set forth on
Schedule 7.6C of the Credit Agreement less (2) with
respect to each such Permitted Earn Out Agreement, the
aggregate amount of all payments made by Company and
its Subsidiaries under such Permitted Earn Out
Agreement after the Closing Date (to the extent such
aggregate amount does not exceed the amount described
in the immediately preceding clause (1)):
$
-------------
2. Consolidated Adjusted EBITDA for the Calculation Period ended
on the above date (E.12 above):
$
-------------
3. Leverage Ratio (G.1 - G.2): _____:1.00
4. Maximum Leverage Ratio permitted under subsection 7.6B:
_____:1.00
H. Consolidated Capital Expenditures (for the Fiscal Year ending December
31, [199_] [200_] [to date])
1. Consolidated Capital Expenditures:
$
-------------
2. Maximum Consolidated Capital Expenditures Amount permitted
under subsection 7.6D (as adjusted (calculations and
supporting information therefor attached hereto) in accordance
with the provisos to such subsection):
$
-------------
I. Fundamental Changes
1. Aggregate fair market value of assets sold in Asset Sales
described in subsection 7.7(vi) during the period commencing
_________________, [199_] [200_]:
XIII-6
$
-------------
2. Total consideration received in respect of such Asset Sales:
$
-------------
3. Maximum permitted under subsection 7.7(vi)
$7,500,000
4. Cash portion of consideration for Asset Sales described in
subsection 7.7(vi):
$
-------------
5. Percentage of consideration received in cash ((J.4):(J.2)):
-----%
6. Minimum percentage required under subsection 7.7(vi): 80%
XIII-7
EXHIBIT XIV
[INTENTIONALLY DELETED]
EXHIBIT XV
[INTENTIONALLY DELETED]
EXHIBIT XVI
[FORM OF ASSIGNMENT AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this "Agreement") is entered into by and
between the parties designated as Assignor ("Assignor") and Assignee
("Assignee") above the signatures of such parties on the Schedule of Terms
attached hereto and hereby made an integral part hereof (the "Schedule of
Terms") and relates to that certain Amended and Restated Credit Agreement
described in the Schedule of Terms (said Amended and Restated Credit Agreement,
as amended, restated, supplemented or otherwise modified to the date hereof and
as it may hereafter be amended, restated, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Effective upon the Settlement Date specified in Item 4 of the
Schedule of Terms (the "Settlement Date"), Assignor hereby sells and assigns to
Assignee, without recourse, representation or warranty (except as expressly set
forth herein), and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents with respect to
Assignor's Commitments and outstanding Loans, if any, which represents, as of
the Settlement Date, the percentage interest specified in Item 3 of the Schedule
of Terms of all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the Commitments and any
outstanding Loans (the "Assigned Share"). Without limiting the generality of the
foregoing, the parties hereto hereby expressly acknowledge and agree that any
assignment of all or any portion of Assignor's rights and obligations relating
to Assignor's Revolving Loan Commitment shall include (i) in the event Assignor
is an Issuing Lender with respect to any outstanding Letters of Credit (any such
Letters of Credit being "Assignor Letters of Credit"), the sale to Assignee of a
participation in the Assignor Letters of Credit and any drawings thereunder as
contemplated by subsection 3.1C of the Credit Agreement and (ii) the sale to
Assignee of a ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any Letters of Credit
other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above, Assignee hereby
agrees to pay to Assignor, on the Settlement Date, the principal amount of any
outstanding Loans included within the Assigned Share, such payment to be made by
wire transfer of immediately
XVI-1
available funds in accordance with the applicable payment instructions set forth
in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3 of the Schedule
of Terms correctly sets forth the amount of the Commitments, the outstanding
Term A Loans, the outstanding Term B Loans, the outstanding Term C Loans and the
Pro Rata Share corresponding to the Assigned Share.
(d) Assignor and Assignee hereby agree that, upon giving effect to the
assignment and assumption described above, (i) Assignee shall be a party to the
Credit Agreement and shall have all of the rights and obligations under the Loan
Documents, and shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise related to the
Assigned Share, and (ii) Assignor shall be absolutely released from any of such
obligations, covenants and agreements assumed or made by Assignee in respect of
the Assigned Share. Assignee hereby acknowledges and agrees that the agreement
set forth in this Section 1(d) is expressly made for the benefit of Company,
Agents, Assignor and the other Lenders and their respective successors and
permitted assigns.
(e) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect the assignment by
Assignor and the assumption by Assignee of Assignor's rights and obligations
with respect to the Assigned Share, (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitments, the outstanding Term
A Loans, the outstanding Term B Loans, the outstanding Term C Loans and the Pro
Rata Share corresponding to the Assigned Share as set forth in Item 3 of the
Schedule of Terms or on the interest of Assignee in any outstanding Revolving
Loans corresponding thereto, and (iii) from and after the Settlement Date,
Administrative Agent shall make all payments under the Credit Agreement in
respect of the Assigned Share (including without limitation all payments of
principal and accrued but unpaid interest, commitment fees and letter of credit
fees with respect thereto) (1) in the case of any such interest and fees that
shall have accrued prior to the Settlement Date, to Assignor, and (2) in all
other cases, to Assignee; provided that Assignor and Assignee shall make
payments directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor and/or Assignee
by Administrative Agent under the Loan Documents in respect of the Assigned
Share in the event that, for any reason whatsoever, the payment of consideration
contemplated by Section 1(b) occurs on a date other than the Settlement Date.
SECTION 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Assigned Share, free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of any of the Loan Documents or for any representations, warranties,
recitals or statements made therein or made in
XVI-2
any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
Assignor to Assignee or by or on behalf of Company or of any other Loan Party to
Assignor or Assignee in connection with the Loan Documents and the transactions
contemplated thereby or for the financial condition or business affairs of
Company or any other Person liable for the payment of any Obligations, nor shall
Assignor 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 Loan Documents or as to the use of the proceeds of the Loans or
the use of the Letters of Credit or as to the existence or possible existence of
any Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an Eligible Assignee;
that it has experience and expertise in the making or purchasing of loans such
as the Loans; that it has acquired the Assigned Share for its own account in the
ordinary course of its business and without a view to distribution of the Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of
subsection 10.1 of the Credit Agreement, the disposition of the Assigned Share
or any interests therein shall at all times remain within its exclusive
control); and that it has received, reviewed and approved a copy of the Credit
Agreement (including all Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received from Assignor
such financial information regarding Company and its Subsidiaries as is
available to Assignor and as Assignee has requested, that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the assignment evidenced by this Agreement,
and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. 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 Assignee or to provide Assignee
with any other credit or other information with respect thereto, whether coming
into its possession before the making of the initial Loans or at any time or
times thereafter, and Assignor shall not have any responsibility with respect to
the accuracy of or the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, 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, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
XVI-3
SECTION 3. Miscellaneous.
(a) Each of Assignor and Assignee hereby agrees from time to time, upon
request of the other such party hereto, to take such additional actions and to
execute and deliver such additional documents and instruments as such other
party may reasonably request to effect the transactions contemplated by, and to
carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought.
(c) Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed. For the purposes hereof, the notice address of each of
Assignor and Assignee shall be as set forth on the Schedule of Terms or, as to
either such party, such other address as shall be designated by such party in a
written notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve as the
initial notice address of Assignee for purposes of subsection 10.8 of the Credit
Agreement.
(d) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
(e) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5- 1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(f) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(g) This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
XVI-4
(h) This Agreement shall become effective upon the date (the "Effective
Date") upon which all of the following conditions are satisfied: (i) the
execution of a counterpart hereof by each of Assignor and Assignee, (ii) the
giving of notice to Company, (iii) the receipt by Administrative Agent of the
processing and recordation fee referred to in subsection 10.1B(i) of the Credit
Agreement, (iv) in the event Assignee is a Non-US Lender (as defined in
subsection 2.7B(iii)(a) of the Credit Agreement), the delivery by Assignee to
Administrative Agent of such forms, certificates or other evidence with respect
to United States federal income tax withholding matters as Assignee may be
required to deliver to Administrative Agent pursuant to said subsection
2.7B(iii)(a), (v) the execution of a counterpart hereof by Administrative Agent
as evidence of its consent hereto to the extent required under subsection
10.1B(i) of the Credit Agreement and as evidence of its acceptance hereof in
accordance with subsection 10.1B(ii) of the Credit Agreement, (vi) the receipt
by Administrative Agent of originals or telefacsimiles of the counterparts
described above and authorization of delivery thereof, and (vii) the recordation
by Administrative Agent in the Register of the pertinent information regarding
the assignment effected hereby in accordance with subsection 10.1B(ii) of the
Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized, such execution being made as of the Effective Date in the applicable
spaces provided on the Schedule of Terms.
XVI-5
SCHEDULE OF TERMS
1. Company: DIMAC CORPORATION
2. Name and Date of Credit Agreement: Amended and Restated Credit
Agreement dated as of October 22, 1998, by and among Company, DIMAC
Holdings, Inc., the financial institutions listed therein as Lenders,
Credit Suisse First Boston, as Administrative Agent, Credit Suisse
First Boston, as Arranger, Warburg Dillon Read LLC, as Syndication
Agent and First Union National Bank, as Documentation Agent.
3. Amounts:
Re: Term A Re: Term B Re: Term C Re: Revolving
Loans Loans Loans Loans
----- ----- ----- -----
(a) Aggregate Com- $__________ $__________ $__________ $__________
mitments of all
Lenders:
(b) Assigned _________% _________% _________% _________%
Share/Pro Rata
Share:
(c) Amount of As- $__________ $__________ $__________ $__________
signed Share of
Commitments:
(d) Amount of As- $__________ $__________ $__________
signed Share of
Term Loans:
4. Settlement Date: ____________, [199_][200_]
5. Assignor's Payment Instructions:
ASSIGNOR:
______________________________
______________________________
______________________________
Attention:____________________
Reference:____________________
6. Assignor's Notice Address:
XVI-6
ASSIGNOR:
______________________________
______________________________
______________________________
______________________________
Attention:____________________
Reference:____________________
7. Assignee Information:
Lending Institution:________________________________________________
Address: ________________________________________________
________________________________________________
________________________________________________
Telephone: __________ Telex No.: __________
Telefax: __________ Answerback: __________
CONTACT - Credit Name:____________________________________________
Address:______________________________________
Telephone:____________________________________
Telefax:______________________________________
8. Assignee's Payment Instructions:
Bank Name: _________________________________________________
ABA/Routing No. _________________________________________________
Account Name _________________________________________________
Account No. _________________________________________________
For further credit: _________________________________________________
Account No. _________________________________________________
Attention: _________________________________________________
Reference: _________________________________________________
XVI-7
9. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignee as Assignor
By:_____________________ By:
Name: Name:
Title: Title:
[Consented to and accepted in [Consented to and accepted in
accordance with subsec- accordance with subsec-
tions 10.1B(i) of the Credit tions 10.1B(i) and (ii) of the Credit
Agreement Agreement
DIMAC CORPORATION CREDIT SUISSE FIRST
BOSTON,
as Administrative Agent
By:_______________________ By:__________________________
Name: Name:
Title:] Title:
By:__________________________
Name:
Title:]
XVI-8
EXHIBIT XVII
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this "Agreement") is dated as of
June 26, 1998 and entered into by and between DMAC ACQUISITION CORP., a Delaware
corporation ("Pledgor"), and CREDIT SUISSE FIRST BOSTON ("CSFB"), as agent for
and representative of (in such capacity herein called "Secured Party") the
financial institutions ("Lenders") party to the Credit Agreement referred to
below.
PRELIMINARY STATEMENTS
A. Pursuant to that certain Credit Agreement dated as of June 26, 1998
(said Credit Agreement, as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, being the "Credit Agreement"; the terms
defined therein and not otherwise defined herein being used herein as therein
defined), by and among Pledgor, DMAC Holdings, Inc., CSFB, as Administrative
Agent, and CSFB, as Syndication Agent and Arranger, Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Pledgor.
B. It is a condition precedent to the initial extensions of credit by
Lenders under the Credit Agreement that Pledgor shall have granted the security
interests and undertaken the obligations contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lenders to make Loans and issue Letters of Credit under the Credit Agreement and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Pledgor hereby agrees with Secured Party as follows:
SECTION 1. Certain Definitions.
The following terms used in this Agreement shall have the following
meanings:
"Collateral" means (i) the Collateral Account, (ii) all
amounts on deposit from time to time in the Collateral Account, (iii)
all interest, cash, instruments, securities and other property from
time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Collateral, and (iv) to the
extent not covered by clauses (i) through (iii) above, all proceeds of
any or all of the foregoing Collateral.
XVII-1
"Collateral Account" means the restricted deposit account
established and maintained by Secured Party pursuant to subsection
2(a).
"Secured Obligations" means all obligations and liabilities of
every nature of Pledgor now or hereafter existing under or arising out
of or in connection with the Credit Agreement and the other Loan
Documents and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but
for the filing of a petition in bankruptcy with respect to Pledgor,
would accrue on such obligations), reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnities or otherwise, whether
voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others,
and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part
of such payment is avoided or recovered directly or indirectly from
Secured Party or any Lender as a preference, fraudulent transfer or
otherwise, and all obligations of every nature of Pledgor now or
hereafter existing under this Agreement.
SECTION 2. Establishment and Operation of Collateral Account.
(a) Secured Party is hereby authorized to establish and maintain at its
office at _____________________________________________, as a blocked account in
the name of Secured Party and under the sole dominion and control of Secured
Party, a restricted deposit account designated as "DMAC Acquisition Corp.
Collateral Account".
(b) The Collateral Account shall be operated in accordance with the
terms of this Agreement.
(c) All amounts at any time held in the Collateral Account shall be
beneficially owned by Pledgor but shall be held in the name of Secured Party
hereunder, for the benefit of Lenders, as collateral security for the Secured
Obligations upon the terms and conditions set forth herein. Pledgor shall have
no right to withdraw, transfer or, except as expressly set forth herein,
otherwise receive any funds deposited into the Collateral Account.
(d) Anything contained herein to the contrary notwithstanding, the
Collateral Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.
XVII-2
SECTION 3. Deposits of Cash Collateral.
(a) All deposits of funds in the Collateral Account shall be made by
wire transfer (or, if applicable, by intra-bank transfer from another account of
Pledgor) of immediately available funds in accordance with written wire transfer
instructions provided to Pledgor by Secured Party. Pledgor shall, promptly after
initiating a transfer of funds to the Collateral Account, give notice to Secured
Party by telefacsimile of the date, amount and method of delivery of such
deposit.
(b) If an Event of Default has occurred and is continuing and, in
accordance with Section 8 of the Credit Agreement, Pledgor is required to pay to
Secured Party an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding under the Credit Agreement or
if Pledgor is required to cash collateralize Letters of Credit pursuant to
subsection 2.4C(i) of the Credit Agreement, Pledgor shall deliver funds in such
an amount for deposit in the Collateral Account in accordance with Section 3(a).
Upon any drawing under any outstanding Letter of Credit in respect of which
Pledgor has deposited in the Collateral Account any amounts described above,
Secured Party shall apply such amounts to reimburse the Issuing Lender for the
amount of such drawing. In the event the amount deposited in the Collateral
Account pursuant to this Section 3(b) exceeds the maximum amount available to be
drawn under all Letters of Credit, Secured Party shall apply such excess amount
then on deposit in the Collateral Account in accordance with subsection 2.4D of
the Credit Agreement.
(c) Pledgor shall, promptly after initiating a transfer of funds to the
Collateral Account, give notice to Secured Party by telefacsimile of the date,
amount and method of delivery of such deposit.
SECTION 4. Pledge of Security for Secured Obligations.
Pledgor hereby pledges and assigns to Secured Party, and hereby grants
to Secured Party a security interest in, all of Pledgor's right, title and
interest in and to the Collateral as collateral security for the prompt payment
or performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all
Secured Obligations.
SECTION 5. No Investment of Amounts in the Collateral Account; Interest on
Amounts in the Collateral Account.
(a) Cash held by Secured Party in the Collateral Account shall not be
invested by Secured Party but instead shall be maintained as a cash deposit in
the Collateral Account pending application thereof as elsewhere provided in this
Agreement.
XVII-3
(b) To the extent permitted under Regulation Q of the Board of
Governors of the Federal Reserve System, any cash held in the Collateral Account
shall bear interest at the standard rate paid by Secured Party to its customers
for deposits of like amounts and terms.
(c) Subject to Secured Party's rights under Section 12, any interest
earned on deposits of cash in the Collateral Account in accordance with
subsection 5(b) shall be deposited directly in, and held in the Collateral
Account.
SECTION 6. Representations and Warranties.
Pledgor represents and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time of
transfer thereof to Secured Party will be) the legal and beneficial
owner of the Collateral from time to time transferred by Pledgor to
Secured Party, free and clear of any Lien except for the security
interest created by this Agreement.
(b) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the grant by
Pledgor of the security interest granted hereby, (ii) the execution,
delivery or performance of this Agreement by Pledgor, or (iii) the
perfection of or the exercise by Secured Party of its rights and
remedies hereunder (except as may have been taken by or at the
direction of Pledgor).
(c) Perfection. The pledge and assignment of the Collateral
pursuant to this Agreement creates a valid and perfected first priority
security interest in the Collateral, securing the payment of the
Secured Obligations.
(d) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Pledgor with
respect to the Collateral is accurate and complete in all respects.
XVII-4
SECTION 7. Further Assurances.
Pledgor agrees that from time to time, at the expense of Pledgor,
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that Secured
Party may request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, Pledgor will: (a) execute and
file such financing or continuation statements, or amendments thereto, and such
other instruments or notices, as may be necessary or desirable, or as Secured
Party may request, in order to perfect and preserve the security interests
granted or purported to be granted hereby and (b) at Secured Party's request,
appear in and defend any action or proceeding that may affect Pledgor's
beneficial title to or Secured Party's security interest in all or any part of
the Collateral.
SECTION 8. Transfers and other Liens.
Pledgor agrees that it will not (a) sell, assign (by operation of law
or otherwise) or otherwise dispose of any of the Collateral or (b) create or
suffer to exist any Lien upon or with respect to any of the Collateral, except
for the security interest under this Agreement.
SECTION 9. Secured Party Appointed Attorney-in-Fact.
Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Party or otherwise, from time to time in Secured
Party's discretion to take any action and to execute any instrument that Secured
Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation to file one or more financing or
continuation statements, or amendments thereto, relative to all or any part of
the Collateral without the signature of Pledgor.
SECTION 10. Secured Party May Perform.
If Pledgor fails to perform any agreement contained herein, Secured
Party may itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be payable by
Pledgor under subsection 10.2 of the Credit Agreement.
XVII-5
SECTION 11. Standard of Care.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral, it being
understood that Secured Party shall have no responsibility for (a) taking any
necessary steps (other than steps taken in accordance with the standard of care
set forth above to maintain possession of the Collateral) to preserve rights
against any parties with respect to any Collateral or (b) taking any necessary
steps to collect or realize upon the Secured Obligations or any guarantee
therefor, or any part thereof, or any of the Collateral. Secured Party shall be
deemed to have exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Secured Party accords its own property of like
kind.
SECTION 12. Remedies.
(a) If any Event of Default or Potential Event of Default shall have
occurred and be continuing, Secured Party may (i) transfer any or all of the
Collateral to an account established in Secured Party's name (whether at Secured
Party or otherwise) or (ii) otherwise register title to any Collateral in the
name of Secured Party or one of its nominees or agents, without reference to any
interest of Pledgor.
(b) If any Event of Default shall have occurred and be continuing,
subject to the provisions of subsection 3(b), Secured Party may exercise in
respect of the Collateral, in addition to all other rights and remedies
otherwise available to it, all the rights and remedies of a secured party on
default under the Uniform Commercial Code as in effect in any relevant
jurisdiction (the "Code") (whether or not the Code applies to the affected
Collateral).
(c) If the proceeds of any disposition of the Collateral are
insufficient to pay all the Secured Obligations, Pledgor shall be liable for the
deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.
(d) Anything contained herein to the contrary notwithstanding, any of
the Collateral consisting of cash held by Secured Party in the Collateral
Account shall be subject to Secured Party's rights of set-off under subsection
10.4 of the Credit Agreement.
XVII-6
SECTION 13. Continuing Security Interest; Transfer of Loans.
This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the payment in
full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit, (b) be binding upon Pledgor, its successors and assigns, and (c) inure,
together with the rights and remedies of Secured Party hereunder, to the benefit
of Secured Party and its successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the payment in full of all Secured
Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Pledgor. Upon any such termination Secured Party shall, at Pledgor's
expense, execute and deliver to Pledgor such documents as Pledgor shall
reasonably request to evidence such termination and Pledgor shall be entitled to
the return, upon its request and at its expense, against receipt and without
recourse to Secured Party, of such of the Collateral as shall not have been
otherwise applied pursuant to the terms hereof.
SECTION 14. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured Party hereunder
by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including
without limitation the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums held by Secured Party hereunder (which
shall be deposited in a new Collateral Account established and maintained by
such successor Secured Party), together with all records and other documents
necessary or appropriate in connection
XVII-7
with the performance of the duties of the successor Secured Party under this
Agreement, and (ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor
Secured Party of the security interests created hereunder, whereupon such
retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.
SECTION 15. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by Pledgor therefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party and, in the case of any such amendment or modification, by Pledgor. Any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given.
SECTION 16. Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex (with
received answerback), or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; provided that notices
to Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as provided in subsection 10.8 of the
Credit Agreement.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Secured Party in the exercise of any
power, right or privilege hereunder shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or privilege.
All rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
XVII-8
SECTION 18. Severability.
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 19. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
SECTION 20. Governing Law; Terms.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. Unless otherwise defined herein
or in the Credit Agreement, terms used in Articles 8 and 9 of the Uniform
Commercial Code in the State of New York are used herein as therein defined.
SECTION 21. Counterparts.
This Agreement may be executed in one or more counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank]
XVII-9
IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
DMAC ACQUISITION CORP.
By:
---------------------------------
Name:
Title:
XVII-10
CREDIT SUISSE FIRST BOSTON,
as Secured Party
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
XVII-11
EXHIBIT XVIII
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of October 22, 1998 (said Amended and Restated Credit
Agreement, as amended, restated, supplemented or otherwise modified to the date
hereof, being the "Credit Agreement"), by and among DIMAC Corporation, a
Delaware corporation, DIMAC Holdings, Inc., a Delaware corporation, the
financial institutions listed therein as Lenders ("Lenders"), Credit Suisse
First Boston, as Administrative Agent for Lenders, Credit Suisse First Boston,
as Arranger, Warburg Dillon Read LLC, as Syndication Agent and First Union
National Bank, as Documentation Agent. Pursuant to subsection 2.7B(iii) of the
Credit Agreement, the undersigned hereby certifies that it is not a "bank" or
other Person described in Section 881(c)(3) of the Internal Revenue Code of
1986, as amended.
[NAME OF LENDER]
By:
---------------------------------
Name:
Title:
XVIII-1
EXHIBIT XIX
[FORM OF PERMITTED SELLER PAPER]
___% NON-NEGOTIABLE SUBORDINATED NOTE
[Insert Date] $ _________
[DIMAC CORPORATION] [DIMAC HOLDINGS, INC.], a Delaware
corporation (the "Borrower"), hereby promises upon the terms and subject to the
provisions hereof to pay to [NAME OF SELLER] (the "Holder"), the principal
amount of [_______] Dollars ($_______).
This % Non-Negotiable Junior Subordinated Note (the "Note") was issued
pursuant to the Purchase Agreement (the "Purchase Agreement") dated as of
[__________, [199_] [200_], between the Borrower and the Holder.
1. Definitions. As used herein, the following terms shall
have the following meanings:
"Indebtedness" means (i) all obligations for borrowed money or
for the deferred purchase price of property or services (including, without
limitation, all obligations contingent or otherwise in connection with
acceptance, letter of credit or similar facilities), (ii) all obligations
evidenced by bonds, notes, debentures or other similar instruments or
securities, (iii) all indebtedness created or arising under any sale and
leaseback arrangement, conditional sale or other title retention agreement with
respect to property owned or acquired (whether or not the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all rental obligations under
capital leases to the extent not included in clause (iii) above, (v) all
guarantees (direct or indirect), all contingent reimbursement obligations under
undrawn letters of credit and all other contingent obligations in respect of, or
obligations to purchase or otherwise acquire or to assure payment of,
indebtedness of others and (vi) indebtedness of others secured by any lien upon
property, whether or not assumed, but only to the extent of such property's fair
market value.
"Person" means an individual, a partnership, a corporation, an
association, a limited liability company, a joint stock company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
"Senior Agent" shall mean Credit Suisse First Boston, as
Administrative Agent for the Lenders under the Senior Credit Agreement, and its
successors in such capacity, or if there is then no acting Administrative Agent
under the Senior Credit Agreement, financial institutions holding a majority in
principal amount of the Senior Debt outstanding thereunder.
"Senior Credit Agreement" shall mean the Amended and Restated
Credit
XIX-1
Agreement, dated as of October 22, 1998, by and among the Borrower, [DIMAC
Corporation] [DIMAC Holdings, Inc.], a Delaware corporation, Credit Suisse First
Boston, as Administrative Agent and Arranger, Warburg Dillon Read LLC, as
Syndication Agent and First Union National Bank, as Documentation Agent and the
financial institutions listed therein as Lenders, as amended, restated, modified
or supplemented from time to time hereafter, together with any credit agreement
or similar document from time to time executed by the Borrower to evidence any
Refinancing (as defined in the definition of Senior Indebtedness) or successive
Refinancings.
"Senior Indebtedness" shall mean (i) all Obligations (as
defined in the Senior Credit Agreement) (including Contingent Obligations, as
defined in the Senior Credit Agreement) now or hereafter incurred pursuant to
and in accordance with the terms of the Senior Debt Documents, (ii) any
additional Indebtedness incurred under or pursuant to the Senior Credit
Agreement and the other Senior Debt Documents whether such Obligations or
additional Indebtedness involve principal prepayment charges, interest
(including, without limitation, interest accruing after the filing of a petition
initiating any proceeding under the Bankruptcy Code, whether or not allowed as a
claim in such proceeding) indemnities or reimbursement of fees, expenses or
other amounts, and (iii) any indebtedness incurred for the purpose of
refinancing, restructuring, extending or renewing (collectively, "Refinancing")
the obligations of the Borrower under the Senior Credit Agreement as set forth
in clauses (i) and (ii) above.
"Senior Debt Documents" shall mean the Senior Credit Agreement
and all other documents and instruments delivered or filed in connection with
the creation or incurrence of any Senior Indebtedness (including, without
limitation, the guaranty agreements executed and delivered by the subsidiaries
of the Borrower in respect of the Obligations under the Senior Credit
Agreement).
"Senior Lenders" shall mean the financial institutions party
to the Senior Credit Agreement as "Lenders" from time to time.
2. Payment of Interest. Interest shall accrue on the unpaid
principal amount of this Note from the date hereof at the rate of [ ]% per annum
[NOT TO EXCEED ___%] (the "Interest Rate"), calculated on the basis of a 365 day
year. The Borrower shall pay interest semi-annually in arrears on the fifteenth
day of January and July in each year (each, an "Interest Payment Date")
commencing on ____________, [199_][200_].
3. Payment of Principal.
(a) Scheduled Payment. Subject to the provisions of Section 4
hereof, on [_____________], [199_][200_] (the "Maturity Date"), the Borrower
shall pay to the holder of this Note the entire principal amount of this Note,
plus all accrued and unpaid interest hereon which is then unpaid.
(b) Optional Prepayments. Subject to the provisions of Section
4 hereof, the Borrower may, at any time and from time to time, without premium
or penalty, prepay all or a portion of the unpaid principal amount of this Note,
together with unpaid interest accrued since the preceding Interest Payment Date
to which interest has been paid on such portion of the
XIX-2
principal amount which it is prepaying; provided, that no such prepayment shall
be made if such prepayment is then prohibited by the terms of any Senior
Indebtedness. A prepayment of less than all of the unpaid principal amount of
this Note shall not relieve the Borrower of its obligation to make the scheduled
payment on this Note on the Maturity Date. Each partial payment under this Note
shall first be credited to accrued and unpaid interest on the principal being
prepaid, and the remainder shall be credited to principal. Whenever any payment
to be made hereunder shall be due on a date which is not a business day, the
payment shall be made on the next succeeding business day and such extension of
time shall be included in the computation of interest with respect to such
payment
4. Subordination.
(a) Agreement to Subordinate. The Borrower and, by its
acceptance hereof, each Holder agree that the indebtedness of the Borrower
evidenced by this Note, whether for principal, interest or any other amount
payable under or in respect hereof and all rights or claims arising out of or
associated with such Indebtedness (the "Subordinated Obligations"), shall be
junior and subordinate in right of payment to the prior payment in full in cash
of all Senior Indebtedness, in accordance with the provisions of this Section 4.
Each holder of Senior Indebtedness shall be deemed to have acquired Senior
Indebtedness in reliance upon the agreements of the Borrower and the holder of
this Note contained in this Section 4. The provisions of this Section 4 shall be
reinstated if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any holder of Senior Indebtedness or
any representative of such holder upon the insolvency, bankruptcy or
reorganization of the Borrower. Any provision of this Note to the contrary
notwithstanding (other than the provision contained in Section 6), the Borrower
shall not make, and no Holder shall accept, any payment or prepayment of
principal, or prepayment of other amounts due thereunder, of any kind whatsoever
(including without limitation by distribution of assets, set off, exchange or
any other manner) with respect to the Subordinated Obligations at any time when
any of the Senior Indebtedness remains outstanding. Holder may receive interest
payments in respect of the Subordinated Obligations in accordance with the terms
of this Note except to the extent and at the times prohibited or restricted by
the provisions of this Section 4. In no event shall the Holder commence any
action or proceeding to contest the provisions of this Section 4 or the priority
of the Liens (as defined in the Senior Credit Agreement) granted to the holders
of the Senior Indebtedness by the Borrower. No Holder shall take, accept or
receive any collateral security from the Borrower for the payment of the
Subordinated Obligations.
(b) Liquidation, Dissolution, Bankruptcy. In the event of any
insolvency, bankruptcy, dissolution, winding up, liquidation, arrangement,
reorganization, marshalling of assets or liabilities, composition, assignment
for the benefit of creditors or other similar proceedings relating to the
Borrower, its debts, its property or its operations, whether voluntary or
involuntary, including, without limitation the filing of any petition or the
taking of any action to commence any of the foregoing (which, in the case of
action by a third party, is not dismissed within 60 days) (a "Bankruptcy
Event"), all Senior Indebtedness shall first be paid in full in cash or other
immediately available funds before Holder shall be entitled to receive or retain
any payment or distribution of assets of the Borrower with respect to any
Subordinated Obligations. In the event of any such Bankruptcy Event, any payment
or distribution of assets to which
XIX-3
Holder would be entitled if the Subordinated Obligations were not subordinated
to the Senior Indebtedness in accordance with this Section 4, whether in cash,
property, securities or otherwise, shall be paid or delivered by the debtor,
custodian, trustee or agent or other Person making such payment or distribution,
or by the Holder if received by it, directly to the Senior Agent on behalf of
the holders of the Senior Indebtedness for application to the payment of the
Senior Indebtedness remaining unpaid, to the extent necessary to make payment in
full in cash or other immediately available funds of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to or for the holders of the Senior Indebtedness.
(c) No Payments with Respect to Subordinated Obligations in
Certain Circumstances.
(i) In circumstances in which Section 4(b) is not
applicable, no payment of any nature (including, without limitation, any
distribution of assets) in respect of the Subordinated Obligations (including,
without limitation, pursuant to any judgment with respect thereto or on account
of the purchase or redemption or other acquisition of Subordinated Obligations,
by set off, prepayment exchange or other manner) shall be made by or on behalf
of the Borrower if, at the time of such payment:
(A) a default in the payment when due
(whether at the maturity thereof, or upon acceleration of
maturity or otherwise and without giving effect to any
applicable grace periods) of all or any portion of the Senior
Indebtedness (whether of principal, interest or any other
amount with respect thereto) shall have occurred, and such
default shall not have been cured or waived in accordance with
the terms of the Senior Debt Documents; or
(B) subject to the last sentence of this
Section 4(c), (x) the Borrower shall have received notice from
the Senior Agent of the occurrence of one or more Events of
Default (as defined in the Senior Credit Agreement) in respect
of the Senior Indebtedness (other than payment defaults
described in Section 4(c)(i)(A) above), (y) any such Event of
Default shall not have been cured or waived in accordance with
the terms of the Senior Debt Documents, and (z) 180 days shall
not have elapsed since the date such notice was received.
The Borrower may resume payments (and may make any payments
missed due to the application of Section 4(c)(i)) in respect of the Subordinated
Obligations or any judgment with respect thereto:
(A) in the case of a default referred to in
clause (A) of this Section 4(c)(i), upon a cure or waiver
thereof in accordance with the terms of the Senior Debt
Documents; or
(B) in the case of an Event of Default or
Events of Default referred to in clause (B) of this Section
4(c)(i), upon the earlier to occur of (1) the cure or waiver
of all such Events of Default in accordance with the terms of
the Senior Debt Documents, or (2) the expiration of such
period of 180 days.
XIX-4
(ii) Following any acceleration of the maturity of any Senior
Indebtedness and as long as such acceleration shall continue
unrescinded and unannulled, such Senior Indebtedness shall first be
paid in full in cash before any payment is made on account of or
applied on the Subordinated Obligations.
(iii) The Borrower shall give prompt written notice to the
Holder of (x) any default in respect of Senior Obligations referred to
in Section 4(c)(i)(A) and (y) any notice of the type described in
Section 4(c)(i)(B) from the Senior Agent.
(d) When Distribution Must Be Paid Over. In the event that
Holder shall receive any payment or distribution of assets that Holder is not
entitled to receive or retain under the provisions of this Note, Holder shall
hold any amount so received in trust for the holders of Senior Indebtedness,
shall segregate such assets from other assets held by Holder and shall forthwith
turn over such payment or distribution (without liability for interest thereon)
to the Senior Agent on behalf of the holders of Senior Indebtedness in the form
received (with any necessary endorsement) to be applied to Senior Indebtedness.
(e) Exercise of Remedies. So long as any Senior Indebtedness
is outstanding (including any loans, any letters of credit, any commitments to
lend or any lender guarantees), Holder (solely in its capacity as a holder of
this Note) shall not exercise any rights or remedies with respect to an Event of
Default under this Note, including, without limitation, any action (l) to demand
or ▇▇▇ for collection of amounts payable hereunder, (2) to accelerate the
principal of this Note, or (3) to commence or join with any other creditor
(other than the holder of a majority in principal amount of the Senior
Indebtedness) in commencing any proceeding in connection with or premised on the
occurrence of a Bankruptcy Event prior to the earlier of:
(A) the payment in full in cash or other
immediately available funds of all Senior Indebtedness;
(B) the initiation of a proceeding (other
than a proceeding prohibited by clause (3) of this Section
4(e)) in connection with or premised upon the occurrence of a
Bankruptcy Event;
(C) the expiration of 180 days immediately
following the receipt by the Senior Agent of notice of the
occurrence of such Event of Default from the Holder; and
(D) the acceleration of the maturity of the
Senior Indebtedness; provided, however, that if, with respect
to (B) and (D) above, such proceeding or acceleration,
respectively, is rescinded, or with respect to (C) above,
during such 180-day period such Event of Default has been
cured or waived, the prohibition against taking the actions
described in this section 4(e) shall automatically be
reinstated as of the date of the rescission, cure or waiver,
as applicable. In all events, unless an event described in
clause (A), (B) or (D) above has occurred and not been
rescinded, the Holder shall give thirty (30) days prior
written notice to the Senior
XIX-5
Agent before taking any action described in this Section 4(e), which notice
shall describe with specificity the action that the Holder in good faith intends
to take.
(f) Acceleration of Payment of Note. If this Note is declared
due and payable prior to the Maturity Date, no direct or indirect payment that
is due solely by reason of such declaration shall be made, nor shall application
be made of any distribution of assets of the Borrower (whether by set off or in
any other manner, including, without limitation, from or by way of collateral)
to the payment, purchase or other acquisition or retirement of this Note,
unless, in either case, (i) all amounts due or to become due on or in respect of
the Senior Indebtedness shall have been previously paid in full in cash, (ii)
all commitments to lend under Senior Indebtedness shall have been terminated,
(iii) all letters of credit shall have been cancelled or otherwise terminated,
(iv) all guarantees constituting Senior Indebtedness shall have been terminated
and (v) all lender guarantees constituting Senior Indebtedness shall have been
permanently reduced to zero.
(g) Proceedings Against Borrower. So long as any Senior
Indebtedness is outstanding (including any loans, any commitments to lend, any
letters of credit or any lender guarantees, Holder (solely in its capacity as a
holder of this Note) shall not commence any bankruptcy, insolvency,
reorganization or other similar proceeding against Borrower.
(h) Amending Senior Indebtedness. Any holder of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to Holder (i) modify or amend the terms of the Senior Indebtedness
provided that such Senior Indebtedness cannot be extended or renewed past [**
December 31, 2007 **], (ii) sell, exchange, release, fail to perfect a lien on
or a security interest in or otherwise in any manner deal with or apply any
property pledged or mortgaged to secure, or otherwise securing, Senior
Indebtedness, (iii) release any guarantor or any other person liable in any
manner for the Senior Indebtedness, (iv) exercise or refrain from exercising any
rights against Borrower or any other person, (v) apply any sums by whomever paid
or however realized to Senior Indebtedness or (vi) take any other action that
might be deemed to impair in any way the rights of the holder of this Note. Any
and all of such actions may be taken by the holders of Senior Indebtedness
without incurring responsibility to Holder and without impairing or releasing
the obligations of Holder to the holders of Senior Indebtedness.
(i) Certain Rights in Bankruptcy. Holder hereby
irrevocably authorizes and empowers each holder of Senior Indebtedness (and its
representative or representatives) to demand, ▇▇▇ for, collect and receive all
payments and distributions under the terms of this Note, to file and prove all
claims (including claims in bankruptcy) relating to this Note, to exercise any
right to vote arising with respect to this Note and any claims hereunder in any
bankruptcy, insolvency or similar proceeding and take any and all other
actions in the name of Holder (solely in its capacity as a holder of this Note),
as such holder of Senior Indebtedness determines to be necessary or appropriate.
(j) Subrogation. No payment or distribution to any holder of
Senior Indebtedness pursuant to the provisions of this Note shall entitle Holder
to exercise any right of subrogation in respect thereof until (i)(1) all Senior
Indebtedness shall have been paid in full in
XIX-6
cash, (2) all commitments to lend under Senior Indebtedness shall have been
terminated, (3) all letters of credit shall have been cancelled or otherwise
terminated, (4) all guarantees constituting Senior Indebtedness shall have been
terminated and (5) all lender guarantees constituting Senior Indebtedness shall
have been permanently reduced to zero or (ii) all holders of Senior Indebtedness
have consented in writing to the taking of such action.
(k) Relative Rights. The provisions of this Section 4 are for
the benefit of the holders of Senior Indebtedness (and their successors and
assigns) and shall be enforceable by them directly against Holder. Holder
acknowledges and agrees that any breach of the provisions of this Section 4 will
cause irreparable harm for which the payment of monetary damages may be
inadequate. For this reason, Holder agrees that, in addition to any remedies at
law or equity to which a holder of the Senior Indebtedness may be entitled, a
holder of the Senior Indebtedness will be entitled to an injunction or other
equitable relief to prevent breaches of the provisions of this Section 4 and/or
to compel specific performance of such provisions. The provisions of this
Section 4 shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of Senior Indebtedness is rescinded or must otherwise
be returned by any holder of Senior Indebtedness upon the occurrence of a
Bankruptcy Event or otherwise, all as though such payment had not been made. The
provisions of this Section 4 are not intended to impair and shall not impair as
between Borrower and Holder, the obligation of Borrower, which is absolute and
unconditional, to pay Holder all amounts owing under this Note.
(l) Reliance on Orders and Decrees. Subject to the provisions
of Section 4(d) hereof, upon any payment or distribution of assets of Borrower,
whether in cash, property, securities or otherwise, Holder shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which any insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to Holder for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Section 4.
5. Events of Default.
(a) Definition. The following shall be an "Event of Default"
under this Note;
(i) the Borrower shall fail to make any payment of
interest on this Note when the same shall become due and payable and
such failure shall continue for a period of 5 days;
(ii) the Borrower shall fail to make any payment of
the principal of this Note when the same shall become due and payable,
whether on the Maturity Date or otherwise;
(iii) (A) the Borrower shall commence any case,
proceeding or action
XIX-7
(x) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to its debts, or
(y) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its
assets, (B) the Borrower shall make a general assignment for the
benefit of its creditors, (C) there shall be commenced against the
Borrower any case, proceeding or other action of a nature referred to
in clause (A) above which shall not have been vacated or discharged
within 60 days from the commencement thereof, or (iv) a court shall
enter a decree or order for relief in any involuntary case under Title
11 of the United States Code, as amended from time to time, or any
applicable bankruptcy or similar law now or hereafter in effect, which
decree or order is not stayed, vacated, discharged, or bonded pending
appeal within 60 days from the entry thereof; or
(iv) the acceleration of the maturity of the Senior
Indebtedness.
(b) Remedies. If an Event of Default shall occur and be
continuing, then, subject to the provisions of Section 4, the Holder may, upon
written notice to the Borrower, declare all amounts owing under this Note to be
immediately due and payable.
Subject to the immediately preceding paragraph and to Section
4 above, the Holder shall also have all other rights in respect of this Note
following the occurrence and during the continuance of an Event of Default which
are available pursuant to applicable law or in equity.
[6. Right of Set-Off. Anything in this Note to the contrary
notwithstanding, nothing in this Note shall preclude the Borrower from timely
exercising such Borrower's right pursuant to Section ______ of the Purchase
Agreement to set-off indemnification claims against this Note and/or interest
payments under this Note.]
7. No Presentment. The Borrower, for itself and any guarantors
hereof, and their successors and assigns, waives presentment, demand, protest
and notice thereof or of dishonor, and waives any right to be released by reason
of any extension of time or change in the terms of payment.
8. Amendment. So long as any Senior Indebtedness (including
any letter of credit or lender guarantee) is outstanding or there is a
commitment to lend any Senior Indebtedness (including any commitment under the
Senior Debt Documents) the terms of this Note may be amended only with the
consent of the Senior Agent. Subject to the foregoing, without the consent of
the Senior Agent hereof, this Note may be amended by the Borrower and the Holder
to cure any ambiguity, defect or inconsistency that does not affect the
subordination provisions hereof or the rights of the Senior Lenders.
9. Cancellation. After all unpaid principal and interest owed
on this Note has been paid in full, this Note shall be surrendered to the
Borrower for cancellation and shall
XIX-8
not be reissued.
10. Transfer Restrictions: Acknowledgment of Security
Interest. This Note shall not be transferrable by the Holder hereof without the
prior written consent of the Borrower (which consent shall not be unreasonably
withheld). The Holder hereby acknowledges, and agrees to, the Borrower's grant
of its interest herein to the Lenders under the Credit Agreement, dated as of
the date hereof, to collaterally secure the Borrower's obligations under such
Credit Agreement.
11. Payment of Expenses. The Borrower agrees to pay all costs
and expenses (including reasonable attorneys' fees) reasonably incurred by the
Holder after the occurrence and during the continuance of an Event of Default in
enforcing any obligations under this Note or in collecting any payments due from
Borrower under this Note (including in connection with a bankruptcy or
insolvency proceeding with respect to the Borrower).
12. Governing Law. The construction, validity and
interpretation of this Note shall be governed by and construed in accordance
with the domestic laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
13. Descriptive Headings. The descriptive headings of this
Note are inserted for convenience only, and do not constitute a part of this
Note.
[Remainder of page intentionally left blank.]
XIX-9
IN WITNESS WHEREOF, the Borrower has executed and delivered this Note
on the date first written above.
[DIMAC CORPORATION]
[DIMAC HOLDINGS, INC.]
By:
------------------------------------
Name:
Title:
Agreed:
[NAME OF SELLER]
By:
-------------------------------
Name:
Title:
XIX-10
EXHIBIT XX
[FORM OF MORTGAGE]
MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS
AND LEASES AND FIXTURE FILING ([*STATE*])
THIS MORTGAGE, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES AND FIXTURE FILING ([*STATE*]) (this "Mortgage") is dated as of October
22, 1998 by and from AMERICOMM DIRECT MARKETING, INC., a Delaware corporation
("Mortgagor"), whose address is c/o DIMAC Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ to CREDIT SUISSE FIRST BOSTON ("CSFB"),
as Administrative Agent (in such capacity "Agent") for the Lenders listed in the
Credit Agreement (defined below) and all successor Administrative Agents and
assigns (Agent and all successor Agents and assigns, "Mortgagee"), having an
address at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
ARTICLE I.
DEFINITIONS
Section A. Definitions. All capitalized terms used herein
without definition shall have the respective meanings ascribed to them in that
certain Amended and Restated Credit Agreement dated as of even date herewith (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") by and among DIMAC CORPORATION, a Delaware corporation, as borrower
("Borrower"), DIMAC HOLDINGS, INC., as a guarantor, the lenders listed on the
signature pages thereof ("Lenders"),CSFB, as administrative agent and arranger,
WARBURG DILLON READ LLC, as syndication agent, and FIRST UNION NATIONAL BANK, as
documentation agent. As used herein, the following terms shall have the
following meanings:
1. "Indebtedness": (1) All (a) principal indebtedness of
Borrower to Mortgagee and the Lenders, together with interest thereon, under the
Term A Loans, the Term B Loans, the Term C Loans, the Revolving Loans and the
Swing Line Loans, as evidenced by the Term A Notes, the Term B Notes, the Term C
Notes, the Revolving Notes and the Swing Line Note (such Notes and any and all
modifications, substitutions, extensions, renewals and replacements thereof are
collectively referred to herein as the "Mortgage Notes") of even date herewith,
and (b) other amounts evidenced or secured by the Loan Documents, including
without limitation, reimbursement obligations in respect of Letters of Credit,
together with interest thereon and other amounts payable with respect thereto,
and (c) principal, interest and other amounts including without limitation
future or additional advances, which may hereafter be loaned by Mortgagee or the
Lenders or any of them under or in connection with the Credit Agreement or any
of the other Loan Documents, whether evidenced by a promissory note or other
instrument which, by its terms, is secured hereby, the full and prompt payment
of which has been guaranteed by Mortgagor pursuant to the terms of a Subsidiary
Guaranty dated as of June 26, 1998, a counterpart of which was executed by
Mortgagor as of even date hereof and (2)
XX-1
all other indebtedness, obligations and liabilities now or hereafter existing of
any kind of Mortgagor or Borrower to Mortgagee or the Lenders under documents
which recite that they are intended to be secured by this Mortgage. Pursuant to
the Credit Agreement, the Lenders have agreed to provide Borrower with a
revolving credit facility, which permits Borrower to borrow certain principal
amounts, repay all or a portion of such principal amounts, and reborrow the
amounts previously paid to the Lenders, all upon satisfaction of certain
conditions stated in the Credit Agreement. The amount of such revolving credit
facility may increase and decrease from time to time as the Lenders advance,
Borrower repays, and the Lenders re-advance sums on account of the revolving
credit, all as more fully described in the Credit Agreement. Additionally,
pursuant to the Credit Agreement, Borrower will enter into Lender Interest Rate
Agreements. The term "Indebtedness" shall include any and all advances and
re-advances under the revolving credit feature of the Credit Agreement and any
and all amounts under the Lender Interest Rate Agreements entered into with one
or more of the Lenders or any Affiliates thereof.
2. "Mortgaged Property": All of Mortgagor's interest in (1)
the fee interest in the real property described in Exhibit A attached hereto and
incorporated herein by this reference, together with any greater estate therein
as hereafter may be acquired by Mortgagor (the "Land"), (2) all improvements now
owned or hereafter acquired by Mortgagor, now or at any time situated, placed or
constructed upon the Land (the "Improvements"; the Land and Improvements are
collectively referred to as the "Premises"), (3) all materials, supplies,
equipment, apparatus and other items of personal property now owned or hereafter
acquired by Mortgagor and now or hereafter attached to, installed in or used in
connection with any of the Improvements or the Land, and water, gas, electrical,
telephone, storm and sanitary sewer facilities and all other utilities now owned
or hereafter acquired by Mortgagor, whether or not situated in easements (the
"Fixtures"), (4) all reserves, escrows or impounds required under the Credit
Agreement and all deposit accounts maintained by Mortgagor with respect to the
Mortgaged Property (the "Deposit Accounts"), (5) all leases, licenses,
concessions, occupancy agreements or other agreements (written or oral, now or
at any time in effect) which grant to any Person a possessory interest in, or
the right to use, all or any part of the Mortgaged Property, together with all
related security and other deposits (the "Leases"), (6) all of the rents,
revenues, royalties, income, proceeds, profits, security and other types of
deposits, and other benefits paid or payable by parties to the Leases for using,
leasing, licensing possessing, operating from, residing in, selling or otherwise
enjoying the Mortgaged Property (the "Rents"), (7) all other agreements, such as
construction contracts, architects' agreements, engineers' contracts, utility
contracts, maintenance agreements, management agreements, service contracts,
listing agreements, guaranties, warranties, permits, licenses, certificates and
entitlements in any way relating to the construction, use, occupancy, operation,
maintenance, enjoyment or ownership of the Mortgaged Property (the "Property
Agreements"), (8) all rights, privileges, tenements, hereditaments,
rights-of-way, easements, appendages and appurtenances appertaining to the
foregoing, (9) all property tax refunds (the "Tax Refunds"), (10) all
accessions, replacements and substitutions for any of the foregoing and all
proceeds thereof (the "Proceeds"), (11) all insurance policies, unearned
premiums therefor and proceeds from such policies covering any of the above
property now or hereafter acquired by Mortgagor (the "Insurance"), and (12) all
of Mortgagor's right, title and interest in and to any awards, damages,
remunerations, reimbursements, settlements or compensation
XX-2
hereafter to be made by any governmental authority pertaining to the Land,
Improvements, Fixtures or tangible personal property affixed to, placed upon,
used in connection with, arising from or otherwise related to, the Premises (the
"Condemnation Awards"). As used in this Mortgage, the term "Mortgaged Property"
shall mean all or, where the context permit or requires, any portion of the
above or any interest therein.
3. "Obligations": All of the agreements, covenants,
conditions, warranties, representations and other obligations of Mortgagor
(including, without limitation, the obligation to repay the Indebtedness) under
the Subsidiary Guaranty, the Credit Agreement and the other Loan Documents.
4. "UCC": The Uniform Commercial Code of [**State**] or, if
the creation, perfection and enforcement of any security interest herein granted
is governed by the laws of a state other than [**State**], then, as to the
matter in question, the Uniform Commercial Code in effect in that state.
ARTICLE II.
GRANT
Section ▇. ▇▇▇▇▇. [** For Ten Dollars and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged and **] to secure the full and timely payment of the Indebtedness
and the full and timely performance of the Obligations, Mortgagor MORTGAGES,
GRANTS, BARGAINS, ASSIGNS, SELLS and CONVEYS, to Mortgagee, for the benefit of
the Lenders, the Mortgaged Property, subject, however, to the Permitted
Encumbrances and other Liens permitted pursuant to the Credit Agreement, TO HAVE
AND TO HOLD the Mortgaged Property to Mortgagee, for the benefit of the Lenders,
and Mortgagor does hereby bind itself, its successors and assigns to WARRANT AND
FOREVER DEFEND the title to the Mortgaged Property unto Mortgagee, for the
benefit of the Lenders.
ARTICLE III.
WARRANTIES, REPRESENTATIONS AND COVENANTS
Mortgagor warrants, represents and covenants to Mortgagee, for
the benefit of the Lenders, as follows:
Section A. Title to Mortgaged Property and Lien of this
Instrument. Mortgagor owns the Mortgaged Property free and clear of any liens,
claims or interests, except the Permitted Encumbrances and other Liens permitted
pursuant to the Credit Agreement. This Mortgage creates a valid, enforceable
First Priority Lien and security interest against the Mortgaged Property.
Section B. First Lien Status. Mortgagor shall preserve and
protect the First Priority Lien and security interest status of this Mortgage
and the other Loan Documents. If any lien or security interest (other than the
Permitted Encumbrances, other Liens permitted pursuant to the Credit Agreement
or this Mortgage) is asserted against the Mortgaged Property,
XX-3
Mortgagor shall promptly, and at its expense, (a) give Mortgagee a detailed
written notice of such lien or security interest (including origin, amount and
other terms) promptly after Mortgagor has notice thereof, and (b) pay the
underlying claim in full or take such other action so as to cause it to be
released or contest the same in compliance with the requirements of the Credit
Agreement (including the requirement of providing a bond or other security
satisfactory to Mortgagee).
Section C. Payment and Performance. Mortgagor shall perform
the Obligations in full when they are required to be performed.
Section D. Replacement of Fixtures. Mortgagor shall not,
without the prior written consent of Mortgagee, permit any of the Fixtures to be
removed at any time from the Land or Improvements, unless the removed item is
removed temporarily for maintenance and repair or, if removed permanently, is
permitted under the Credit Agreement or first approved in writing by Mortgagee.
Section E. Other Covenants. All of the covenants of Borrower
in the Credit Agreement are incorporated herein by reference and, together with
covenants in this Article 3, shall be covenants running with the land.
Section F. Condemnation Awards and Insurance Proceeds.
1. Condemnation Awards. Mortgagor assigns all awards
and compensation to which it is entitled for any condemnation or other taking,
or any purchase in lieu thereof, to Mortgagee, for the benefit of the Lenders,
and authorizes Mortgagee to collect and receive such awards and compensation and
to give proper receipts and acquittances therefor, subject to the terms of the
Credit Agreement.
2. Insurance Proceeds. Mortgagor assigns to
Mortgagee, for the benefit of the Lenders, all of Mortgagor's right, title and
interest in all proceeds of any insurance policies insuring against loss or
damage to the Mortgaged Property. Mortgagor authorizes Mortgagee to collect and
receive such proceeds and authorizes and directs the issuer of each of such
insurance policies to make payment for all such losses directly to Mortgagee,
instead of to Mortgagor and Mortgagee jointly, except to the extent provided
otherwise in the Credit Agreement. Such proceeds shall be applied as required by
the Credit Agreement.
ARTICLE IV.
[Intentionally Omitted]
ARTICLE V.
DEFAULT AND FORECLOSURE
Section A. Remedies. If an Event of Default exists, Mortgagee
may, at Mortgagee's election, exercise any or all of the following rights,
remedies and recourses:
XX-4
1. Acceleration. The Indebtedness shall automatically become
immediately due and payable, if required by the Credit Agreement and in
accordance with the Credit Agreement, or if the Credit Agreement does not
require automatic acceleration, Mortgagee may declare the Indebtedness to be
immediately due and payable, pursuant to and in accordance with the Credit
Agreement, without further notice, presentment, protest, notice of intent to
accelerate, notice of acceleration, demand or action of any nature whatsoever
(each of which hereby is expressly waived by Mortgagor), whereupon the same
shall become immediately due and payable.
2. Entry on Mortgaged Property. Enter the Mortgaged Property
and take exclusive possession thereof and of all books, records and accounts
relating thereto or located thereon. If Mortgagor remains in possession of the
Mortgaged Property after an Event of Default and without Mortgagee's prior
written consent, Mortgagee may invoke any legal remedies to dispossess
Mortgagor.
3. Operation of Mortgaged Property. Hold, lease, develop,
manage, operate or otherwise use the Mortgaged Property upon such terms and
conditions as Mortgagee may deem reasonable under the circumstances (making such
repairs, alternations, additions and improvements and taking other actions, from
time to time, as Mortgagee deems necessary or desirable), and apply all Rents
and other amounts collected by Mortgagee in connection therewith in accordance
with the provisions of Section 5.7.
4. Foreclosure and Sale. Institute proceedings for the
complete foreclosure of this Mortgage, either by judicial action or by power of
sale, in which case the Mortgaged Property may be sold for cash or credit in one
or more parcels. With respect to any notices required or permitted under the
UCC, Mortgagor agrees that ten (10) days' prior written notice shall be deemed
commercially reasonable. At any such sale by virtue of any judicial proceedings,
power of sale, or any other legal right, remedy or recourse, the title to and
right of possession of any such property shall pass to the purchaser thereof,
and to the fullest extent permitted by law, Mortgagor shall be completely and
irrevocably divested of all of its right, title, interest, claim, equity, equity
of redemption, and demand whatsoever, either at law or in equity, in and to the
property sold and such sale shall be a perpetual bar both at law and in equity
against Mortgagor, and against all other Persons claiming or to claim the
property sold or any part thereof, by, through or under Mortgagor. Mortgagee or
any of the Lenders may be a purchaser at such sale and if Mortgagee is the
highest bidder, Mortgagee may credit the portion of the purchase price that
would be distributed to Mortgagee against the Indebtedness in lieu of paying
cash. In the event this Mortgage is foreclosed by judicial action, appraisement
of the Mortgaged Property is waived.
5. Receiver. Make application to a court of competent
jurisdiction for, and obtain from such court as a matter of strict right and
without notice to Mortgagor or regard to the adequacy of the Mortgaged Property
for the repayment of the Indebtedness, the appointment of a receiver of the
Mortgaged Property, and Mortgagor irrevocably consents to such appointment. Any
such receiver shall have all the usual powers and duties of receivers in similar
cases, including the full power to rent, maintain and otherwise operate the
Mortgaged Property upon such terms as may be approved by the court, and shall
apply such Rents in accordance with
XX-5
the provisions of Section 5.7.
6. Other. Exercise all other rights, remedies and recourses
granted under the Loan Documents or otherwise available at law or in equity.
Section B. Separate Sales. The Mortgaged Property may be sold
in one or more parcels and in such manner and order as Mortgagee in its sole
discretion may elect; the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
Section C. Remedies Cumulative, Concurrent and Nonexclusive.
Mortgagee and the Lenders shall have all rights, remedies and recourses granted
in the Loan Documents and available at law or equity (including the UCC), which
rights (a) shall be cumulated and concurrent, (b) may be pursued separately,
successively or concurrently against Mortgagor or others obligated under the
Loan Documents, or against the Mortgaged Property, or against any one or more of
them, at the sole discretion of Mortgagee or the Lenders, (c) may be exercised
as often as occasion therefor shall arise, and the exercise or failure to
exercise any of them shall not be construed as a waiver or release thereof or of
any other right, remedy or recourse, and (d) are intended to be, and shall be,
nonexclusive. No action by Mortgagee or the Lenders in the enforcement of any
rights, remedies or recourses under the Loan Documents or otherwise at law or
equity shall be deemed to cure any Event of Default.
Section D. Release of and Resort to Collateral. Mortgagee may
release, regardless of consideration and without the necessity for any notice to
or consent by the holder of any subordinate lien on the Mortgaged Property, any
part of the Mortgaged Property without, as to the remainder, in any way
impairing, affecting, subordinating or releasing the lien or security interest
created in or evidenced by the Loan Documents or their status as a First
Priority Lien and security interest in and to the Mortgaged Property. For
payment of the Indebtedness, Mortgagee may resort to any other security in such
order and manner as Mortgagee may elect.
Section E. Waiver of Redemption, Notice and Marshalling of
Assets. To the fullest extent permitted by law, Mortgagor hereby irrevocably and
unconditionally waives and releases (a) all benefit that might accrue to
Mortgagor by virtue of any present or future statute of limitations or law or
judicial decision exempting the Mortgaged Property from attachment, levy or sale
on execution or providing for any stay of execution, exemption from civil
process, redemption or extension of time for payment, (b) except as provided in
the Credit Agreement, all notices of any Event of Default or of Mortgagee's
election to exercise or the actual exercise of any right, remedy or recourse
provided for under the Loan Documents, and (c) any right to a marshalling of
assets or a sale in inverse order of alienation.
Section F. Discontinuance of Proceedings. If Mortgagee or the
Lenders shall have proceeded to invoke any right, remedy or recourse permitted
under the Loan Documents and shall thereafter elect to discontinue or abandon it
for any reason, Mortgagee or the Lenders shall have the unqualified right to do
so and, in such an event, Mortgagor and Mortgagee or the Lenders shall be
restored to their former positions with respect to the Indebtedness, the
Obligations, the Loan Documents, the Mortgaged Property and otherwise, and the
rights, remedies, recourses and powers of Mortgagee or the Lenders shall
continue as if the
XX-6
right, remedy or recourse had never been invoked, but no such discontinuance or
abandonment shall waive any Event of Default which may then exist or the right
of Mortgagee or the Lenders thereafter to exercise any right, remedy or recourse
under the Loan Documents for such Event of Default.
Section G. Application of Proceeds. The proceeds of any sale
of, and the Rents and other amounts generated by the holding, leasing,
management, operation or other use of the Mortgaged Property, shall be applied
by Mortgagee (or the receiver, if one is appointed) in the following order
unless otherwise required by applicable law:
1. to the payment of the costs and expenses of taking
possession of the Mortgaged Property and of holding, using, leasing, repairing,
improving and selling the same, including, without limitation (1) receiver's
fees and expenses, including the repayment of the amounts evidenced by any
receiver's certificates, (2) court costs, (3) reasonable attorneys' and
accountants' fees and expenses, and (4) reasonable costs of advertisement;
2. to the payment of the Indebtedness and performance of the
Obligations in such manner and order of preference as Mortgagee in its sole
discretion may determine; and
3. the balance, if any, to the payment of the Persons legally
entitled thereto.
Section H. Occupancy After Foreclosure. Any sale of the
Mortgaged Property or any part thereof in accordance with Section 5.1(d) will
divest all right, title and interest of Mortgagor in and to the property sold.
Subject to applicable law, any purchaser at a foreclosure sale will receive
immediate possession of the property purchased. If Mortgagor retains possession
of such property or any part thereof subsequent to such sale, Mortgagor will be
considered a tenant at sufferance of the purchaser, and will, if Mortgagor
remains in possession after demand to remove, be subject to eviction and
removal, forcible or otherwise, with or without process of law.
Section I. Additional Advances and Disbursements; Costs of
Enforcement.
1. If any Event of Default exists, Mortgagee and each of the
Lenders shall have the right, but not the obligation, to cure such Event of
Default in the name and on behalf of Mortgagor. All reasonable sums advanced and
reasonable expenses incurred at any time by Mortgagee or any Lender under this
Section 5.9, or otherwise under this Mortgage or any of the other Loan Documents
or applicable law, shall bear interest from the date that such sum is advanced
or expense incurred, to and including the date of reimbursement, computed at the
rate or rates at which interest is then computed on the Indebtedness, and all
such sums, together with interest thereon, shall be secured by this Mortgage.
2. Mortgagor shall pay all reasonable expenses (including
reasonable attorneys' fees and expenses) of or incidental to the perfection and
enforcement of this Mortgage and the other Loan Documents, or the enforcement,
compromise or settlement of the Indebtedness or any claim under this Mortgage
and the other Loan Documents, and for the
XX-7
curing thereof, or for defending or asserting the rights and claims of Mortgagee
or the Lenders in respect thereof, by litigation or otherwise.
Section J. No Mortgagee in Possession. Neither the enforcement
of any of the remedies under this Article 5, the assignment of the Rents and
Leases under Article 6, the security interests under Article 7, nor any other
remedies afforded to Mortgagee or the Lenders under the Loan Documents, at law
or in equity shall cause Mortgagee or any Lender to be deemed or construed to be
a mortgagee in possession of the Mortgaged Property, to obligate Mortgagee or
any Lender to lease the Mortgaged Property or attempt to do so, or to take any
action, incur any expense, or perform or discharge any obligation, duty or
liability whatsoever under any of the Leases or otherwise.
ARTICLE VI.
ASSIGNMENT OF RENTS AND LEASES
Section A. Assignment. In furtherance of and in addition to
the assignment made by Mortgagor in Section 2.1 of this Mortgage, Mortgagor
hereby absolutely and unconditionally assigns, sells, transfers and conveys to
Mortgagee, for the benefit of the Lenders, all of its right, title and interest
in and to all Leases, whether now existing or hereafter entered into, and all of
its right, title and interest in and to all Rents. This assignment is an
absolute assignment and not an assignment for additional security only. So long
as no Event of Default shall have occurred and be continuing, Mortgagor shall
have a revocable license from Mortgagee to exercise all rights extended to the
landlord under the Leases, including the right to receive and collect all Rents
and to hold the Rents in trust for use in the payment and performance of the
Obligations and to otherwise use the same. The foregoing license is granted
subject to the conditional limitation that no Event of Default shall have
occurred and be continuing. Upon the occurrence and during the continuance of an
Event of Default, whether or not legal proceedings have commenced, and without
regard to waste, adequacy of security for the Obligations or solvency of
Mortgagor, the license herein granted shall automatically expire and terminate,
without notice by Mortgagee (any such notice being hereby expressly waived by
Mortgagor).
Section B. Perfection Upon Recordation. Mortgagor acknowledges
that Mortgagee has taken all actions necessary to obtain, and that upon
recordation of this Mortgage Mortgagee shall have, to the extent permitted under
applicable law, a valid and fully perfected, first priority, present assignment
of the Rents arising out of the Leases and all security for such Leases.
Mortgagor acknowledges and agrees that upon recordation of this Mortgage
Mortgagee's interest in the Rents shall be deemed to be fully perfected,
"▇▇▇▇▇▇" and enforced as to Mortgagor and all third parties, including, without
limitation, any subsequently appointed trustee in any case under Title 11 of the
United States Code (the "Bankruptcy Code"), without the necessity of commencing
a foreclosure action with respect to this Mortgage, making formal demand for the
Rents, obtaining the appointment of a receiver or taking any other affirmative
action.
Section C. Bankruptcy Provisions. Without limitation of the
absolute nature of the assignment of the Rents hereunder, Mortgagor and
Mortgagee agree that (a) this Mortgage
XX-8
shall constitute a "security agreement" for purposes of Section 552(b) of the
Bankruptcy Code, (b) the security interest created by this Mortgage extends to
property of Mortgagor acquired before the commencement of a case in bankruptcy
and to all amounts paid as Rents and (c) such security interest shall extend to
all Rents acquired by the estate after the commencement of any case in
bankruptcy.
Section D. No Merger of Estates. So long as part of the
Indebtedness and the Obligations secured hereby remain unpaid and undischarged,
the fee and leasehold estates to the Mortgaged Property shall not merge, but
shall remain separate and distinct, notwithstanding the union of such estates
either in Mortgagor, Mortgagee, any tenant or any third party by purchase or
otherwise.
ARTICLE VII.
SECURITY AGREEMENT
Section A. Security Interest. This Mortgage constitutes a
"security agreement" on personal property within the meaning of the UCC and
other applicable law and with respect to the Fixtures, Deposit Accounts, Leases,
Rents, Property Agreements, Tax Refunds, Proceeds, Insurance and Condemnation
Awards. To this end, Mortgagor grants to Mortgagee, for the benefit of the
Lenders, a First Priority security interest in the Fixtures, Deposit Accounts,
Leases, Rents, Property Agreements, Tax Refunds, Proceeds, Insurance,
Condemnation Awards and all other Mortgaged Property which is personal property
to secure the payment of the Indebtedness and performance of the Obligations,
and agrees that Mortgagee shall have all the rights and remedies of a secured
party under the UCC with respect to such property. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the Fixtures,
Deposit Accounts, Leases, Rents, Property Agreements, Tax Refunds, Proceeds,
Insurance and Condemnation Awards sent to Mortgagor at least ten (10) days prior
to any action under the UCC shall constitute reasonable notice to Mortgagor.
Section B. Financing Statements; Chief Executive Office.
Mortgagor shall execute and deliver to Mortgagee, in form and substance
satisfactory to Mortgagee, such financing statements and such further assurances
as Mortgagee may, from time to time, reasonably consider necessary to create,
perfect and preserve Mortgagee's security interest hereunder and Mortgagee may
cause such statements and assurances to be recorded and filed, at such times and
places as may be required or permitted by law to so create, perfect and preserve
such security interest. All such financing statements required to be executed
and delivered shall disclose all such UCC information to be provided on Exhibit
B, attached hereto and incorporated herein by this reference.
Section C. Fixture Filing. This Mortgage shall also constitute
a "fixture filing" for the purposes of the UCC against all of the Mortgaged
Property which is or is to become fixtures. Information concerning the security
interest herein granted may be obtained at the addresses of Debtor (Mortgagor)
and Secured Party (Mortgagee) as set forth in the first paragraph of this
Mortgage.
ARTICLE VIII.
XX-9
[Intentionally Omitted]
ARTICLE IX.
MISCELLANEOUS
Section A. Notices. Any notice required or permitted to be
given under this Mortgage shall be given in accordance with Section 10.8 of the
Credit Agreement.
Section B. Covenants Running with the Land. All Obligations
contained in this Mortgage are intended by Mortgagor and Mortgagee to be, and
shall be construed as, covenants running with the Mortgaged Property. As used
herein, "Mortgagor" shall refer to the party named in the first paragraph of
this Mortgage and to any subsequent owner of all or any portion of the Mortgaged
Property. All Persons who may have or acquire an interest in the Mortgaged
Property shall be deemed to have notice of, and be bound by, the terms of the
Credit Agreement and the other Loan Documents; however, no such party shall be
entitled to any rights thereunder without the prior written consent of
Mortgagee.
Section C. Change in Tax Law. Upon the enactment of or change
in (including, without limitation, a change in interpretation of) any applicable
law (i) deducting or allowing Mortgagor to deduct from the value of the
Mortgaged Property for the purpose of taxation any lien or security interest
thereon or (ii) subjecting Mortgagee or any of the Lenders to any tax or
changing the basis of taxation of mortgages, deeds of trust, or other liens or
debts secured thereby, or the manner of collection of such taxes, in each such
case, so as to affect this Mortgage, the Indebtedness or Mortgagee, and the
result is to increase the taxes imposed upon or the cost to Mortgagee of
maintaining the Indebtedness, or to reduce the amount of any payments receivable
hereunder, then, and in any such event, Mortgagor shall, on demand, pay to
Mortgagee and the Lenders additional amounts to compensate for such increased
costs or reduced amounts, provided that if any such payment or reimbursement
shall be unlawful, or taxable to Mortgagee, or would constitute usury or render
the Indebtedness wholly or partially usurious under applicable law, then
Mortgagee or the Requisite Lenders may, at their option, declare the
Indebtedness immediately due and payable or require Mortgagor to pay or
reimburse Mortgagee or the Lenders for payment of the lawful and non-usurious
portion thereof.
Section D. Mortgage Tax. Mortgagor shall (i) pay when due any
tax imposed upon it or upon Mortgagee or any Lender pursuant to the tax law of
the state in which the Mortgaged Property is located in connection with the
execution, delivery and recordation of this Mortgage, and (ii) prepare, execute
and file any form required to be prepared, executed and filed in connection
therewith.
Section E. Attorney-in-Fact. Mortgagor hereby irrevocably
appoints Mortgagee and its successors and assigns, as its attorney-in-fact with
full power of substitution, which agency is coupled with an interest, (a) to
execute and/or record any notices of completion, cessation of labor or any other
notices that Mortgagee deems appropriate to protect Mortgagee's interest, if
Mortgagor shall fail to do so within ten (10) days after written request by
Mortgagee, (b) upon the issuance of a deed pursuant to the foreclosure of this
Mortgage or the delivery of a
XX-10
deed in lieu of foreclosure, to execute all instruments of assignment,
conveyance or further assurance with respect to the Fixtures, Deposit Accounts,
Leases, Rents, Property Agreements, Tax Refunds, Proceeds, Insurance and
Condemnation Awards in favor of the grantee of any such deed and as may be
necessary or desirable for such purpose, (c) to prepare, execute and file or
record financing statements, continuation statements, applications for
registration and like papers necessary to create, perfect or preserve
Mortgagee's security interests and rights in or to any of the Mortgaged
Property, and (d) while any Event of Default exists, to perform any obligation
of Mortgagor hereunder, however: (1) Mortgagee shall not under any circumstances
be obligated to perform any obligation of Mortgagor; (2) any reasonable sums
advanced by Mortgagee in such performance shall be added to and included in the
Indebtedness and shall bear interest at the rate or rates at which interest is
then computed on the Indebtedness; (3) Mortgagee as such attorney-in-fact shall
only be accountable for such funds as are actually received by Mortgagee; and
(4) Mortgagee shall not be liable to Mortgagor or any other person or entity for
any failure to take any action which it is empowered to take under this Section
9.5.
Section F. Successors and Assigns. This Mortgage shall be
binding upon and inure to the benefit of Mortgagee and Mortgagor and their
respective successors and assigns. Except as otherwise permitted by the Credit
Agreement, Mortgagor shall not, without the prior written consent of Mortgagee,
assign any rights, duties or obligations hereunder.
Section G. No Waiver. Any failure by Mortgagee or the Lenders
to insist upon strict performance of any of the terms, provisions or conditions
of the Loan Documents shall not be deemed to be a waiver of same, and Mortgagee
and the Lenders shall have the right at any time to insist upon strict
performance of all of such terms, provisions and conditions.
Section H. Credit Agreement. If any conflict or inconsistency
exists between this Mortgage and the Credit Agreement, the Credit Agreement
shall govern.
Section I. Release or Reconveyance. Upon payment in full of
the Loans and all other then accrued Indebtedness or upon a sale of the
Mortgaged Property in accordance with the provisions of the Credit Agreement,
Mortgagee, at Mortgagor's reasonable expense, shall release the liens and
security interests created by this Mortgage or reconvey the Mortgaged Property
to Mortgagor.
Section J. Waiver of Stay, Moratorium and Similar Rights.
Mortgagor agrees, to the full extent that it may lawfully do so, that it will
not at any time insist upon or plead or in any way take advantage of any stay,
marshalling of assets, extension, redemption or moratorium law now or hereafter
in force and effect so as to prevent or hinder the enforcement of the provisions
of this Mortgage or the Indebtedness secured hereby, or any agreement between
Mortgagor and Mortgagee or any rights or remedies of Mortgagee.
Section K. Applicable Law. The provisions of this Mortgage
regarding the creation, perfection and enforcement of the liens and security
interests herein granted shall be governed by and construed under the laws of
the state in which the Mortgaged Property is located. All other provisions of
this Mortgage shall be governed by the laws of the State of New York (including,
without limitation, Section 5-1401 of the General Obligations Law of the State
XX-11
of New York), without regard to conflicts of laws principles.
Section L. Headings. The Article, Section and Subsection
titles hereof are inserted for convenience of reference only and shall in no way
alter, modify or define, or be used in construing, the text of such Articles,
Sections or Subsections.
Section M. Entire Agreement. This Mortgage and the other Loan
Documents embody the entire agreement and understanding between Mortgagee and
Mortgagor and supersede all prior agreements and understandings between such
parties relating to the subject matter hereof and thereof. Accordingly, the Loan
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
Section N. Reduction Of Secured Amount. In the event that the
amount secured by the Mortgage is less than the aggregate Indebtedness evidenced
by the Mortgage Notes, then the amount secured shall be reduced only by the last
and final sums that Mortgagor or Borrower repays with respect to the
Indebtedness and shall not be reduced by any intervening repayments of the
Indebtedness. So long as the balance of the Indebtedness exceeds the amount
secured, any payments of the Indebtedness shall not be deemed to be applied
against, or to reduce, the portion of the Indebtedness secured by this
Mortgagor. Such payments shall instead be deemed to reduce only such portions of
the Indebtedness as are secured by other collateral located outside of the state
in which the Mortgaged Property is located or are unsecured.
ARTICLE X.
[Intentionally Omitted]
XX-12
IN WITNESS WHEREOF, Mortgagor has on the date set forth in the
acknowledgement hereto, effective as of the date first above written, caused
this instrument to be duly EXECUTED AND DELIVERED by authority duly given.
MORTGAGOR: AMERICOMM DIRECT MARKETING, INC.,
a Delaware corporation
By:
--------------------------------
Name:
Title:
▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) SS.:
COUNTY OF NEW YORK )
On the ____ day of October in the year 1998 before me, the undersigned, a notary
public in and for said state, personally appeared _______________, personally
known to me or proved to me on the basis of satisfactory evidence (New York
Driver License No. _______________) to be the individual(s) whose name(s) is
(are) subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person
upon behalf of which the individual(s) acted, executed the instrument.
-----------------------------------------------------------
(Signature and office of individual taking acknowledgement)
------------------------------------------
(Print Name:)
S-2
EXHIBIT A
Legal Description of premises located at: [** TO BE COMPLETED **]
A-1-1
EXHIBIT B
UCC INFORMATION
Debtor:
Name: AmeriComm Direct Marketing, Inc.
Corporate Structure: a Delaware corporation
Notice Address: c/o DIMAC Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
State in which Mortgagor's
Chief Executive Office is
located: [** **]
Secured Party:
Credit Suisse First Boston,
as Administrative Agent
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Secured Party acts as Administrative Agent for the Lenders party from time to
time to the Credit Agreement. Information regarding the security interest held
by the Lenders, for which Secured Party acts as Administrative Agent, may be
obtained by contacting Secured Party at the address set forth above.
Exh. B-1
EXHIBIT XXI
[FORM OF ACKNOWLEDGEMENT AND CONSENT
TO AMENDED AND RESTATED CREDIT AGREEMENT]
This ACKNOWLEDGEMENT AND CONSENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this "Acknowledgement and Consent" ) is dated as of October 22, 1998
and entered into by the undersigned, and is made with reference to that certain
Amended and Restated Credit Agreement dated as of the date hereof (the "Restated
Credit Agreement" ), by and among DIMAC Corporation, a Delaware corporation
("Company" ), DIMAC Holdings, Inc., a Delaware corporation ("Holdings" ), the
financial institutions listed on the signature pages attached thereto each
individually referred to herein as a "Lender" and collectively as "Lenders" ),
Credit Suisse First Boston ("CSFB" ), as Administrative Agent, CSFB, as
Arranger, Warburg Dillon Read LLC ("WDR" ), as Syndication Agent and First Union
National Bank ("First Union" ), as Documentation Agent, which amends and
restates that certain Credit Agreement dated as of June 26, 1998, as amended on
July 29, 1998 (as so amended and as it may be heretofore have been further
amended, restated supplemented or otherwise modified prior to the date hereof,
the "Existing Credit Agreement") by and among Company, the lenders party
thereto, CSFB, as administrative agent, WDR, as syndication agent and First
Union, as documentation agent. Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Restated Credit
Agreement.
XXI-1
Company is a party to the Pledge Agreement, Security Agreement and
Collateral Account Agreement, in each case as amended through the Effective
Date, pursuant to which Company has secured the Obligations of the Company by
granting to the Administrative Agent (for the benefit of the Agents and Lenders,
(i) a first priority lien on substantially all of its property and (ii) a first
priority pledge of all the capital stock of its direct Subsidiaries. Holdings is
a party to the Holdings Guaranty and Pledge Agreement, in each case as amended
through the Effective Date, pursuant to which such Holdings has granted to the
Administrative Agent, for the benefit of Agents and Lenders, (i) a first
priority lien on substantially all of its respective property and (ii) a first
priority pledge of all the capital stock of its direct Subsidiaries to secure
the obligations of Holdings under the Holdings Guaranty. Each of the Persons
indicated as Subsidiary Guarantors on the signature pages hereof (each, a
"Subsidiary Guarantor" ) is a party to the Subsidiary Guaranty, Pledge Agreement
and Security Agreement, in each case as amended through the Effective Date,
pursuant to which such Subsidiary Guarantor has granted to the Administrative
Agent, for the benefit of the Agents and Lenders, (i) a first priority lien on
substantially all of its respective property and (ii) a first priority pledge of
all the capital stock of its direct Subsidiaries to secure the obligations of
such Subsidiary Guarantor under the Subsidiary Guaranty. Certain of the
Subsidiary Guarantors are parties to the Closing Date Mortgages, pursuant to
which each such Subsidiary Guarantor has granted to Administrative Agent, for
the benefit of the Agents and Lenders a first priority lien on the Closing Date
Properties to secure the obligations of such Subsidiary Guarantor under the
Subsidiary Guaranty. Company, Holdings and the Subsidiary Guarantors are
collectively referred to herein as the "Credit Support Parties", and the
Subsidiary Guaranty, Holdings Guaranty, Pledge Agreement, Security Agreement,
Closing Date Mortgages and Collateral Account Agreement are collectively
referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has reviewed
the terms and provisions of the Restated Credit Agreement and consents to the
amendment and restatement of the Existing Credit Agreement effected pursuant to
the Restated Credit Agreement. Each Credit Support Party hereby confirms that
each Credit Support Document to which it is a party or otherwise bound and all
Collateral encumbered thereby will continue to guaranty or secure, as the case
may be, to the fullest extent possible the payment and performance of all
"Obligations", "Guarantied Obligations" and "Secured Obligations," as the case
may be (in each case as such terms are defined in the applicable Credit Support
Document), including without limitation the payment and performance of all such
"Obligations, Guarantied Obligations or Secured Obligations," as the case may
be, in respect of the Obligations of Company now or hereafter existing under or
in respect of the Restated Credit Agreement and the Notes defined therein.
Without limiting the generality of the foregoing, each Credit Support Party
hereby acknowledges and confirms the understanding and intent of such party
that, upon the Effective Date, the definition of "Obligations" contained in the
Restated Credit Agreement includes the obligations of Company under the Term A
Notes, Term B Notes, Term C Notes, Revolving Notes and Swing Line Note which
amend and restate the Notes (as such term is defined in the Existing Credit
Agreement).
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and
XXI-2
that all of its obligations thereunder (which obligations on the date hereof
remain absolute and unconditional and are not subject to any defense, set-off or
counterclaim) shall be valid and enforceable and shall not be impaired or
limited by the execution or effectiveness of this Acknowledgment and Consent.
Each Credit Support Party represents and warrants that all representations and
warranties contained in the Restated Credit Agreement and the Credit Support
Documents to which it is a party or otherwise bound are true and correct in all
material respects on and as of the Effective Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were true
and correct in all material respects on and as of such earlier date.
Each Subsidiary Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Acknowledgment
and Consent, such Credit Support Party is not required by the terms of the
Existing Credit Agreement or any other Loan Document (as such term is defined in
the Existing Credit Agreement) to consent to the amendments to the Existing
Credit Agreement effected pursuant to the Restated Credit Agreement and (ii)
nothing in the Restated Credit Agreement, this Acknowledgement and Consent or
any other Loan Document shall be deemed to require the consent of such Credit
Support Party to any future amendments to the Restated Credit Agreement.
THIS ACKNOWLEDGEMENT AND CONSENT AND THE RIGHTS AND OBLIGATIONS OF
THE UNDERSIGNED SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5- 1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
XXI-3
IN WITNESS WHEREOF, the undersigned have caused this
Acknowledgement and Consent to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first written
above.
COMPANY: DIMAC CORPORATION
By:
---------------------------------
Name:
Title:
HOLDINGS: DIMAC HOLDINGS, INC.
By:
--------------------------------
Name:
Title:
Notice Address for Company and Holdings:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
and a copy to:
White & Case
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
XXI-4
SUBSIDIARY
GUARANTORS: DIMAC MARKETING CORP.
PALM COAST DATA INC.
THE ▇▇▇▇▇▇▇ GROUP INC.
▇▇▇▇▇▇ & ASSOCIATES INC.
MBS/MULTIMODE INC.
DIMAC DIRECT INC.
BY:
----------------------------
Name:
Title:
Notice Address for all Subsidiary
Guarantors:
c/o AmeriComm Holdings, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
XXI-5