EXHIBIT 10.5
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$725,000,000
REVOLVING MULTICURRENCY CREDIT AGREEMENT
DATED AS OF MAY 15, 1998
AMONG
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CORPORATION
AND
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.,
AS BORROWERS,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AND
THE BANK OF NEW YORK,
AS SYNDICATION AGENTS,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
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TABLE OF CONTENTS
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Section Page
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ARTICLE I DEFINITIONS...................................... 1
1.1 Certain Defined Terms............................ 1
1.2 Other Interpretive Provisions.................... 18
1.3 Accounting Principles............................ 19
1.4 Currency Equivalents Generally................... 19
1.5 Certain Financial Covenant Matters............... 19
ARTICLE II THE CREDITS...................................... 20
2.1 Amounts and Terms of Commitments................. 20
(a) The Revolving Loans.............................. 20
(b) Additional Borrowers............................. 20
2.2 Loan Accounts.................................... 21
2.3 Procedure for Borrowing.......................... 21
2.4 Conversion and Continuation Elections............ 22
2.5 Utilization of Commitments in Offshore Currencies 24
2.6 Swingline Loans.................................. 25
2.7 Currency Exchange Fluctuations................... 28
2.8 European Economic and Monetary Union............. 28
(a) Definitions...................................... 28
(b) Effectiveness of Provisions...................... 29
(c) Redenomination and Alternative Currencies........ 29
(d) Offshore Currency Loans.......................... 29
(e) Banking Days..................................... 29
(f) Payments to the Agent............................ 29
(g) Payments by the Agent to the Banks............... 29
(h) Payments by the Agent Generally.................. 29
(i) Basis of Accrual................................. 30
(j) Rounding and Other Consequential Changes......... 30
(k) Increased Costs.................................. 30
2.9 Voluntary Termination or Reduction of Commitments 30
2.10 Optional Prepayments............................. 31
2.11 Mandatory Prepayments; Cash Collateralization.... 31
2.12 Repayment of the Revolving Loans................. 32
2.13 Interest......................................... 32
2.14 Fees............................................. 33
(a) Arrangement and Agency Fees...................... 33
(b) Facility Fees.................................... 33
(c) Participation Fees............................... 33
2.15 Computation of Fees and Interest................. 34
2.16 Payments by the Company.......................... 34
2.17 Payments by the Banks to the Agent............... 35
2.18 Sharing of Payments, Etc......................... 35
2.19 The Borrowers' Designee.......................... 36
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Section Page
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ARTICLE III THE LETTERS OF CREDIT......................................... 36
3.1 The Letter of Credit Subfacility................................ 36
3.2 Issuance, Amendment and Renewal of Letters of Credit............ 38
3.3 Existing BofA Letters of Credit; Risk Participations, Drawings
and Reimbursements.............................................. 39
3.4 Repayment of Participations..................................... 42
3.5 Role of the Issuing Bank........................................ 42
3.6 Obligations Absolute............................................ 43
3.7 Cash Collateral Pledge.......................................... 44
3.8 Letter of Credit Fees........................................... 44
3.9 Uniform Customs and Practice.................................... 45
ARTICLE IV TAXES, YIELD PROTECTION AND ILLEGALITY........................ 45
4.1 Taxes........................................................... 45
4.2 Illegality...................................................... 47
4.3 Increased Costs and Reduction of Return......................... 47
4.4 Funding Losses.................................................. 48
4.5 Inability to Determine Rates.................................... 49
4.6 Reserves on Offshore Rate Loans................................. 49
4.7 Certificates of Banks........................................... 50
4.8 Substitution of Banks........................................... 50
4.9 Change of Lending Office........................................ 50
4.10 Survival........................................................ 50
ARTICLE V CONDITIONS PRECEDENT.......................................... 50
5.1 Conditions of Initial Credit Extensions......................... 50
(a) Credit Agreement and Notes................................... 51
(b) Resolutions; Incumbency...................................... 51
(c) Organization Documents....................................... 51
(d) Legal Opinions............................................... 51
(e) Payment of Fees.............................................. 51
(f) Proposed Amendment to 10 7/8% Notes.......................... 51
5.2 Additional Condition of Initial Credit Extension................ 51
5.3 Conditions to All Credit Extensions............................. 52
(a) Notice, Application.......................................... 52
(b) Continuation of Representations and Warranties............... 52
(c) No Existing Default.......................................... 52
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................ 52
6.1 Corporate Existence and Power................................... 52
6.2 Authorization; No Contravention................................. 53
6.3 Governmental Authorization...................................... 53
6.4 Binding Effect.................................................. 53
6.5 Litigation...................................................... 53
6.6 No Defaults..................................................... 53
6.7 ERISA Compliance................................................ 54
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Section Page
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6.8 Use of Proceeds; Margin Regulations................... 54
6.9 Title to Properties; Liens............................ 54
6.10 Taxes................................................. 54
6.11 Financial Condition................................... 55
6.12 Environmental Matters................................. 55
6.13 Regulated Entities.................................... 55
6.14 Copyrights, Patents, Trademarks and Licenses, Etc..... 55
6.15 Insurance............................................. 55
6.16 Full Disclosure....................................... 56
6.17 Year 2000............................................. 56
ARTICLE VII AFFIRMATIVE COVENANTS................................. 56
7.1 Financial Statements.................................. 56
7.2 Certificates; Other Information....................... 57
7.3 Notices............................................... 57
7.4 Preservation of Corporate Existence, Etc.............. 58
7.5 Maintenance of Property............................... 58
7.6 Insurance............................................. 58
7.7 Payment of Obligations................................ 59
7.8 Compliance with Laws.................................. 59
7.9 Inspection of Property and Books and Records.......... 59
7.10 Use of Proceeds....................................... 59
7.11 Additional Guarantors................................. 59
7.12 Additional Borrowers.................................. 60
7.13 Notification of Disposition of Subsidiary Guarantors.. 61
ARTICLE VIII NEGATIVE COVENANTS.................................... 61
8.1 Limitation on Liens................................... 61
8.2 Disposition of Assets................................. 63
8.3 Consolidations and Mergers............................ 64
8.4 Loans and Investments................................. 64
8.5 Limitation on Indebtedness............................ 65
8.6 Use of Proceeds....................................... 66
8.7 Restricted Payments................................... 66
8.8 ERISA................................................. 66
8.9 Change in Business.................................... 66
8.10 Minimum Fixed Charge Coverage Ratio................... 66
8.11 Maximum Leverage Ratio................................ 67
8.12 Minimum Consolidated Net Worth........................ 67
8.13 Non-Material Subsidiaries............................. 67
8.14 Unrestricted Subsidiaries............................. 67
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Section Page
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ARTICLE IX EVENTS OF DEFAULT..................................... 68
9.1 Event of Default...................................... 68
(a) Non-Payment....................................... 68
(b) Representation or Warranty........................ 68
(c) Specific Defaults................................. 68
(d) Other Defaults.................................... 68
(e) Cross-Default..................................... 68
(f) Insolvency; Voluntary Proceedings................. 69
(g) Involuntary Proceedings........................... 69
(h) ERISA............................................. 69
(i) Monetary Judgments................................ 69
(j) Change of Control................................. 69
(k) Guarantor Defaults................................ 69
9.2 Remedies.............................................. 69
ARTICLE X THE AGENT............................................. 70
10.1 Appointment and Authorization; "Agent"................ 70
10.2 Delegation of Duties.................................. 71
10.3 Liability of Agent.................................... 71
10.4 Reliance by Agent..................................... 71
10.5 Notice of Default..................................... 72
10.6 Credit Decision....................................... 72
10.7 Indemnification of Agent.............................. 72
10.8 Agent in Individual Capacity.......................... 73
10.9 Successor Agent....................................... 73
10.10 Withholding Tax....................................... 74
10.11 Co-Agents; Lead Managers.............................. 75
ARTICLE XI MISCELLANEOUS......................................... 75
11.1 Amendments and Waivers................................ 75
11.2 Notices............................................... 76
11.3 No Waiver; Cumulative Remedies........................ 77
11.4 Costs and Expenses.................................... 77
11.5 Indemnification....................................... 77
11.6 Payments Set Aside.................................... 78
11.7 Successors and Assigns................................ 78
11.8 Assignments, Participations, Etc...................... 78
11.9 Confidentiality....................................... 80
11.10 Set-off............................................... 81
11.11 Notification of Addresses, Lending Offices, Etc....... 81
11.12 Counterparts.......................................... 81
11.13 Severability.......................................... 81
11.14 No Third Parties Benefited............................ 81
11.15 Governing Law and Jurisdiction........................ 81
11.16 Waiver of Jury Trial.................................. 82
11.17 Judgment.............................................. 82
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Section Page
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11.18 Guaranty.................................................... 83
(a) Guaranty................................................. 83
(b) Separate Obligation...................................... 83
(c) Limitation of Guaranty................................... 83
(d) Liability of Guarantor................................... 84
(e) Consents of Guarantor.................................... 85
(f) Guarantor's Waivers...................................... 85
(g) Financial Condition of Borrowers......................... 86
(h) Subrogation.............................................. 86
(i) Continuing Guaranty...................................... 87
(j) Reinstatement............................................ 87
(k) Substantial Benefits..................................... 87
(l) Knowing and Explicit Waivers............................. 87
11.19 Release of Subsidiary Guarantors and Additional Borrowers... 87
11.20 Entire Agreement............................................ 88
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ANNEXES
Annex I Pricing Grid
SCHEDULES
Schedule 2.1 Commitments and Pro Rata Shares
Schedule 3.3 Existing BofA Letters of Credit
Schedule 8.1 Existing Liens
Schedule 11.2 Payment Offices; Addresses for Notices; Lending Offices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D Form of Legal Opinion of Counsel to the Company
Exhibit E Form of Legal Opinion of Counsel to Additional Guarantor
Exhibit F Form of Legal Opinion of Counsel to Additional Borrower
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Promissory Note
Exhibit I Form of Additional Guarantor Assumption Agreement
Exhibit J Form of Additional Borrower Request and Assumption Agreement
Exhibit K Form of Additional Borrower Notice
Exhibit L Form of Notice of Designation of Unrestricted Subsidiary
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REVOLVING MULTICURRENCY CREDIT AGREEMENT
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This REVOLVING MULTICURRENCY CREDIT AGREEMENT entered into as of May 15,
1998, is made among ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporation, a Delaware corporation (the
"Company"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International, Inc., a Delaware corporation ("JMII"),
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each Guarantor from time to time party to this Agreement, the several financial
institutions from time to time party to this Agreement (individually, a "Bank"
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and, collectively, the "Banks"), and Bank of America National Trust and Savings
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Association, as Issuing Bank, Swingline Bank and as administrative agent for
itself and the other Banks (in such capacity, the "Agent").
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WHEREAS, the Banks have agreed to make available to the Company and
JMII a revolving multicurrency credit facility with a letter of credit
subfacility and a swingline subfacility, upon the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE II
DEFINITIONS
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1.1 Certain Defined Terms. The following terms have the following
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meanings when used herein (including in the Recitals hereof):
"10-7/8% Notes" means the 10-7/8% Notes of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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International Group, Inc. (formerly named ▇▇▇▇▇▇▇▇ International Group,
Inc.) issued under the Indenture dated as of December 12, 1994 with The
Bank of New York, as Trustee.
"Acquisition" means any transaction or series of related transactions
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for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests, membership interests or
equity of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (other than a Person that is a Subsidiary), provided that
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the Company or the Subsidiary is the surviving entity.
"Additional Borrower" has the meaning specified in subsection 2.1(b).
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"Additional Borrower Notice" has the meaning specified in subsection
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2.1(b).
"Additional Borrower Request and Assumption Agreement" has the
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meaning specified in Section 7.12.
"Additional Guarantor" shall mean any Material U.S. Subsidiary that
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becomes a Guarantor hereunder pursuant to Section 7.11.
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"Additional Guarantor Assumption Agreement" has the meaning specified
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in Section 7.11.
"Affiliate" means, as to any Person, any other Person which, directly
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or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities,
membership interests, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks hereunder,
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and any successor agent arising under Section 10.9.
"Agent-Related Persons" means BofA and any successor agent arising
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under Section 10.9 and any successor letter of credit issuing bank
hereunder, together with their respective Affiliates (including, in the
case of BofA, the Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means (i) in respect of payments in Dollars,
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the address for payments set forth on Schedule 11.2 or such other address
as the Agent may from time to time specify, and (ii) in the case of
payments in any Offshore Currency, such address located in the primary
country of such Offshore Currency or such other address as the Agent may
from time to time specify.
"Aggregate Commitment" means the combined Commitments of the Banks.
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"Agreed Alternative Currency" has the meaning specified in subsection
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2.5(e).
"Agreement" means this Multicurrency Revolving Credit Agreement.
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"Applicable Currency" means, as to any particular payment or Loan,
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Dollars or the Offshore Currency in which it is denominated or is payable.
"Applicable Fee Amount" means with respect to the facility fees and
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standby letter of credit fees payable hereunder, the amount set forth
opposite the indicated Level below the heading "Facility Fee" or "Letter of
Credit Fee", as applicable, in the pricing grid set forth on Annex I in
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accordance with the parameters for calculations of such amount also set
forth on Annex I.
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"Applicable Margin" means, with respect to the Offshore Rate Loans,
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the amount set forth opposite the indicated Level below the heading
"Offshore Rate Spread" in the pricing grid set forth on Annex I in
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accordance with the parameters for calculations of such amounts also set
forth on Annex I.
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"Arranger" means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
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"Assignee" has the meaning specified in subsection 11.8(a).
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"Assignment and Acceptance" has the meaning specified in subsection
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11.8(a).
2
"Attorney Costs" means and includes all fees and disbursements of any
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law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
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References to the "Banks" shall include each of the Issuing Bank and the
Swingline Bank in its capacity as such unless the context otherwise clearly
requires. For purposes of clarification only, to the extent that the
Issuing Bank or the Swingline Bank may have any rights or obligations in
addition to those of the Banks due to its status as Issuing Bank or
Swingline Bank, its status as such will be specifically referenced.
"Banking Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City or San Francisco are
authorized or required by law to close and (i) with respect to interest
rate settings as to an Offshore Rate Loan denominated in Dollars, any
disbursements, settlements and payments in Dollars, and any other dealings
in Dollars to be carried out pursuant to this Agreement, a day on which
dealings in Dollars are carried on in the London or other applicable
offshore Dollar interbank market, (ii) with respect to any interest rate
settings as to an Offshore Currency Loan, any disbursements, settlements
and payments in and calculations pertaining to any Offshore Currency Loan,
and any other dealings in the relevant Offshore Currency of an Offshore
Currency Loan to be carried out pursuant to this Agreement, a day on which
commercial banks are open for foreign exchange business in London, England,
and in the principal financial center of the country of the relevant
Offshore Currency, and (iii) with respect to any Issuance of an Offshore
Currency Letter of Credit by a non-U.S. branch or office of the Issuing
Bank, any day other than a Saturday, Sunday or other day on which
commercial banks in the principal financial center of the country of such
branch or office are authorized or required by law to close.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
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U.S.C. '101, et seq.).
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"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
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above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to time by BofA in San
Francisco, California, as its "reference rate." (The "reference rate" is a
rate set by BofA based upon various factors including BofA's costs and
desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.) Any change in the reference rate announced
by BofA shall take effect at the opening of business on the day specified
in the public announcement of such change.
"Base Rate Loan" means a Revolving Loan, or an L/C Advance, that
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bears interest based on the Base Rate.
"BofA" means Bank of America National Trust and Savings Association,
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a national banking association.
"Borrower" means each of the Company, JMII and each Additional
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Borrower.
3
"Borrowers' Designee" means the Company, and any successor agent for
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the Borrowers pursuant to Section 2.19.
"Borrowing" means a borrowing hereunder consisting of (i) Revolving
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Loans of the same Type and in the same Applicable Currency made to any
Borrower on the same day by the Banks, (ii) a Swingline Loan (or Swingline
Loans) made to any Borrower on the same day by the Swingline Bank, or (iii)
an L/C Borrowing, in each case pursuant to Article II or Article III, and,
other than in the case of Base Rate Loans, having the same Interest Period.
"Borrowing Date" means any date on which a Borrowing occurs under
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Section 2.3 or Section 2.6.
"Business Day" means any day other than a Saturday, Sunday or other
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day on which commercial banks in New York City or San Francisco are
authorized or required by law to close and, if the applicable Business Day
relates to any Offshore Rate Loan, means a Banking Day.
"Capital Adequacy Regulation" means any guideline, request or
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directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding the capital adequacy of any bank or of any corporation
controlling a bank.
"Cash Collateralize" means to pledge and deposit with or deliver to
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the Agent, for the benefit of the Agent, the Issuing Bank and the Banks, as
collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance reasonably satisfactory to
the Agent and the Issuing Bank (which documents are hereby consented to by
the Banks). Derivatives of such term shall have corresponding meaning.
"Change of Control" means (i) any "person" (as such term is used in
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subsections 13(d) and 14(d) of the Exchange Act) or group of persons other
than the Trust on or after the Closing Date is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 35% or more of the
combined voting power of the Company's then-outstanding voting securities
(the "Voting Securities"), and (ii) the percentage of the Voting Securities
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of which such person or group of persons is the direct or indirect
"beneficial owner" exceeds the percentage of the Voting Securities of which
the Trust is the direct or indirect "beneficial owner."
"Closing Date" means the date on which all conditions precedent set
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forth in Section 5.1 are satisfied or waived by all Banks (or, in the case
of subsection 5.1(e), waived by the Person entitled to receive such
payment).
"Co-Agents" means each Bank designated as such on the signature pages
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hereof in its capacity as a co-agent hereunder.
"Code" means the Internal Revenue Code of 1986.
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4
"Commitment", as to each Bank, has the meaning specified in Section
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2.1(a).
"Compliance Certificate" means a certificate substantially in the
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form of Exhibit C.
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"Computation Date" has the meaning specified in subsection 2.5(a).
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"Consolidated Funded Debt" means Indebtedness of the Company and its
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Subsidiaries, eliminating intercompany items, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" and "Consolidated Net Loss" mean,
----------------------- ---------------------
respectively, for any period, net income or loss for such period, but
without giving effect to any extraordinary gains or losses, determined on a
consolidated basis for the Company and its Subsidiaries in accordance with
GAAP.
"Consolidated Net Worth" means, as of any date of determination,
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total assets minus total liabilities, without giving effect to any currency
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translation adjustments, determined on a consolidated basis for the Company
and its Subsidiaries in accordance with GAAP.
"Consolidated Total Assets" means, as of any date of determination,
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total assets of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of
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any security issued by such Person or of any agreement, undertaking,
contract, indenture, mortgage, deed of trust or other instrument, document
or agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
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2.4, the Company (a) converts Loans of one Type to another Type, or (b)
continues as Loans of the same Type, but with a new Interest Period, Loans
having Interest Periods expiring on such date.
"Credit Extension" means and includes (a) the making of any Swingline
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Loans and Revolving Loans hereunder, (b) the Issuance of any Letters of
Credit hereunder and (c) the inclusion of the Existing BofA Letters of
Credit as Letters of Credit hereunder. The conversion or continuation of a
Loan as provided for herein shall not be considered a Credit Extension.
"Default" means any event or circumstance which, with the giving of
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notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
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"Dollar Equivalent Amount" means, at any time, (a) as to any amount
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denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in an Offshore Currency, the equivalent amount in
Dollars as determined by the Agent at such time on the basis of the Spot
Rate for the purchase of Dollars with such Offshore Currency on the most
recent Computation Date provided for in subsection 2.5(a).
"Dollars", "dollars" and "$" each mean lawful money of the United
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States.
"EBIT" means, for any period, Consolidated Net Income or Consolidated
----
Net Loss, as the case may be, for such period, plus the sum of (a) interest
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expense (net of interest income), and (b) income tax expense, in each case,
which were deductible in determining Consolidated Net Income or
Consolidated Net Loss for such period, determined on a consolidated basis
for the Company and its Subsidiaries in accordance with GAAP.
"EBITDA" means, for any period, EBIT for such period, plus the sum of
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(a) depletion and depreciation expense and (b) amortization expense, in
each case, which were deductible in determining Consolidated Net Income or
Consolidated Net Loss for such period, determined on a consolidated basis
for the Company and its Subsidiaries in accordance with GAAP.
"Effective Amount" means (i) with respect to any Revolving Loans or
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Swingline Loans on any date the aggregate outstanding principal amount
thereof after giving effect to any Borrowings and prepayments or repayments
of Revolving Loans or Swingline Loans occurring on such date; and (ii) with
respect to any outstanding L/C Obligations on any date the amount of such
L/C Obligations on such date after giving effect to any Issuances of
Letters of Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including changes
as a result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date. For purposes
of determining the Effective Amount in respect of any Offshore Currency
Loans to be made as part of a Borrowing or of any outstanding Offshore
Currency Loans, the amount of any such Offshore Currency Loans shall be the
Dollar Equivalent Amount thereof, and for purposes of determining the
Effective Amount in respect of any Offshore Currency Letters of Credit or
any Offshore Currency L/C Obligations outstanding, the amount of any such
Offshore Currency Letters of Credit and other Offshore Currency L/C
Obligations shall be the Dollar Equivalent Amount thereof, in each case
based upon the calculation thereof as of the most recent Computation Date
therefor pursuant to subsection 2.5(a).
"Eligible Assignee" means (a) a commercial bank organized under the
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laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $250,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $250,000,000, provided that such bank is acting
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through a branch or agency located in the United States; and (c) a Person
that is primarily engaged in the
6
business of commercial banking and that is (i) a Subsidiary of a Bank, (ii)
a Subsidiary of a person of which a Bank is a Subsidiary, or (iii) a Person
of which a Bank is a Subsidiary, provided that such Person is acting
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through a branch or agency located in the United States.
"Environmental Claims" means all claims, however asserted, by any
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Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws,
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statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental, health,
safety and land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"ERISA Affiliate" means any trade or business (whether or not
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incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
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Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or
any ERISA Affiliate from a Multiemployer Plan or notification that a
Multiemployer Plan is in reorganization; (d) the filing of a notice of
intent to terminate under Section 4041(c) of ERISA, the treatment of a
Pension Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.
"Event of Default" means any of the events or circumstances specified
----------------
in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, and the
------------
applicable rules and regulations promulgated thereunder.
"Existing BofA Letters of Credit" means the letters of credit
-------------------------------
described in Schedule 3.3.
------------
"FDIC" means the Federal Deposit Insurance Corporation, and any
----
Governmental Authority succeeding to any of its principal functions.
7
"Federal Funds Rate" means, for any day, the rate set forth in the
------------------
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York with respect
to the preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so published
with respect to any such preceding Business Day, the rate for such day will
be the arithmetic mean as determined by the Agent of the rates for the last
transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal
funds transactions in New York City selected by the Agent.
"Fee Letter" means the letter agreement referred to in subsection
----------
2.14(a).
"FRB" means the Board of Governors of the Federal Reserve System, and
---
any Governmental Authority succeeding to any of its principal functions.
"Further Taxes" means any and all present or future taxes, levies,
-------------
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any jurisdiction on account of
amounts payable or paid pursuant to Section 4.1.
"FX Trading Office" means the Foreign Exchange Trading Center, Unit
-----------------
#5752, Los Angeles, California of BofA, or such other of BofA's offices as
BofA may designate from time to time.
"GAAP" means generally accepted accounting principles in the United
----
States as in effect from time to time.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guarantor" means the Company, JMII and each Additional Guarantor.
---------
"Guaranty" means the guaranty of each Guarantor made pursuant to
--------
Section 11.18 and any other guaranty under any separate agreement executed
by any Guarantor pursuant to which it guarantees the Obligations.
"Honor Date" has the meaning specified in subsection 3.3(c).
----------
"Indebtedness" of any Person means, without duplication, (a) all
------------
indebtedness of such Person (including with respect to any Loans hereunder)
for borrowed money; (b) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (other than trade
accounts payables and accrued expenses arising in the ordinary course of
business) to the extent such amounts would in accordance with GAAP be
recorded as debt on a balance sheet of such Person; (c) all noncontingent
reimbursement
8
or payment obligations of such Person with respect to Surety Instruments
that have remained unpaid for more than three Business Days; (d) all
obligations evidenced by notes, bonds, debentures or similar instruments;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with
respect to property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default
are limited to repossession or sale of such property); (f) all obligations
of such Person with respect to leases which are or should be capitalized on
the balance sheet of such Person in accordance with GAAP; (g) the current
portion of all obligations of such Person arising with respect to preferred
stock that is mandatorily redeemable by such Person; (h) all indebtedness
referred to in clauses (a) through (g) above secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in property (including accounts and
contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such indebtedness; (i) all
guaranties and other direct and indirect liabilities of such Person in
respect of indebtedness or obligations of others of the kinds referred to
in clauses (a) through (h) above; and (j) the aggregate financing amount
payable from accounts receivable in connection with Permitted Receivables
Purchase Facilities. For all purposes of this Agreement, the Indebtedness
of any Person shall include all recourse Indebtedness of any partnership or
joint venture in which such Person is a general partner or a joint venturer
or a member.
"Indemnified Liabilities" has the meaning specified in Section 11.5.
-----------------------
"Indemnified Person" has the meaning specified in Section 11.5.
------------------
"Independent Auditor" has the meaning specified in subsection 7.1(a).
-------------------
"Insolvency Proceeding" means, with respect to any Person, (a) any
---------------------
case, action or proceeding with respect to such Person before any court or
other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshalling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial
portion of its creditors; in either case undertaken under U.S. Federal,
state or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means (i) as to any Revolving Loan other than
---------------------
a Base Rate Loan, the last day of each Interest Period applicable to such
Revolving Loan and each date such Loan is converted into another Type of
Loan, (ii) as to any Base Rate Loan which is not a Swingline Loan, the last
day of each calendar quarter, and (iii) with respect to any Base Rate Loan
that is a Swingline Loan, the Business Day on which principal of such
Swingline Loan is repaid or as otherwise provided in Section 2.6(e);
provided, however, that if any Interest Period for an Offshore Rate Loan
-------- -------
exceeds three months, the date that falls three months after the beginning
of such Interest Period is also an Interest Payment Date.
9
"Interest Period" means, as to any Offshore Rate Loan, the period
---------------
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the Borrowers' Designee on behalf
of the applicable Borrower in its Notice of Borrowing or Notice of
Conversion/Continuation;
provided that:
--------
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(ii) 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 end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend beyond the date
set forth in clause (a) of the definition of "Revolving Termination
Date."
"IRS" means the Internal Revenue Service, and any Governmental
---
Authority succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.1(a).
-------------
"Issue" means, with respect to any Letter of Credit, to incorporate
-----
the Existing BofA Letters of Credit into this Agreement, or to issue or to
extend the expiry of, or to renew or increase the amount of or otherwise
amend, such Letter of Credit; and the terms "Issued", "Issuing" and
------ -------
"Issuance" have corresponding meanings.
---------
"Issuing Bank" means BofA in its capacity as issuer of one or more
------------
Letters of Credit hereunder, together with any replacement letter of credit
issuer arising under subsection 10.1(b) or Section 10.9. Specific
reference to the Issuing Bank shall exclude the Issuing Bank in its
capacity as a Bank hereunder.
"Joint Venture" means a corporation, partnership, limited liability
-------------
company, joint venture or other similar legal arrangement (whether created
by contract or conducted through a separate legal entity) now or hereafter
formed by the Company or any of its Subsidiaries with another Person in
order to conduct a common venture or enterprise with such Person.
"L/C Advance" means each Bank's participation in any L/C Borrowing in
-----------
accordance with its Pro Rata Share.
10
"L/C Amendment Application" means an application form for amendment
-------------------------
of outstanding standby or commercial documentary letters of credit as shall
at any time be in use at the Issuing Bank, as the Issuing Bank shall
request.
"L/C Application" means an application form for issuances of standby
---------------
or commercial documentary letters of credit as shall at any time be in use
at the Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from a drawing
-------------
under any Letter of Credit which shall not have been reimbursed nor
converted into a Borrowing of Revolving Loans under subsection 3.3(c).
"L/C Commitment" means the commitment of the Issuing Bank to Issue,
--------------
and the commitment of the Banks severally to participate in, Letters of
Credit (including the Existing BofA Letters of Credit) from time to time
Issued or outstanding under Article III, in an aggregate amount on any date
not to exceed $50,000,000, as the same shall be reduced as a result of a
reduction in the L/C Commitment pursuant to Section 2.9; provided that the
--------
L/C Commitment is a part of the Aggregate Commitment, rather than a
separate, independent commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
---------------
undrawn amount of all Letters of Credit then outstanding, plus (b) the
----
amount of all unreimbursed drawings under all Letters of Credit, including
all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
---------------------
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of such
--------------
Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office," as the case may be, on Schedule 11.2, or such
-------------
other office or offices as such Bank may from time to time notify to the
Company and the Agent.
"Letters of Credit" means the Existing BofA Letters of Credit and any
-----------------
letters of credit (whether standby letters of credit or commercial
documentary letters of credit) Issued by the Issuing Bank pursuant to
Article III.
"Leverage Ratio" means, as of the last day of any fiscal quarter, the
--------------
ratio of (a) Consolidated Funded Debt on such day to (b) EBITDA for the
period of four consecutive fiscal quarters ended on such day.
"Lien" means any security interest, mortgage, deed of trust, pledge,
----
hypothecation, assignment, charge, encumbrance or lien (statutory or other)
of any kind or nature whatsoever in respect of any property (including
those created by, arising under or evidenced by any conditional sale or
other title retention agreement, or the interest of a lessor under a
capital lease, but not including the interest of a lessor under an
operating lease.
11
"Loan" means an extension of credit, in the form of a Revolving Loan
----
or a Swingline Loan under Article II, which may be a Base Rate Loan or an
Offshore Rate Loan (each a "Type" of Loan), or an extension of credit under
----
Article III in the form of an L/C Advance.
"Loan Availability Date" means the date occurring simultaneously with
----------------------
or after the Closing Date upon which all conditions precedent to the
initial Credit Extension hereunder specified in Section 5.2 and 5.3 are
satisfied or waived by all Banks.
"Loan Documents" means this Agreement, any Notes, the Fee Letter, the
--------------
L/C-Related Documents and each Guaranty and all other contracts and
agreements delivered to the Agent or any Bank in connection herewith.
"Loan Party" means each of the Company, JMII, each Guarantor and each
----------
Additional Borrower.
"Majority Banks" means at any time Banks then holding 51% or more of
--------------
the Dollar Equivalent Amount of the then aggregate Credit Exposure of all
the Banks, or, if no Credit Exposure then exists, Banks then having 51% or
more of the Commitments. For purposes of determining whether the Majority
Banks have approved any amendment, waiver or consent or taken any other
action hereunder, the Dollar Equivalent Amount of all unpaid Offshore
Currency Loans and all Offshore Currency L/C Obligations shall be
calculated on the date such amendment, waiver or consent is to become
effective or such action is to be taken. As used in this definition, the
"Credit Exposure" of any Bank means (i) with respect to any
---------------
outstanding Revolving Loans, the aggregate outstanding principal amount of
the Revolving Loans made by such Bank, and (ii) with respect to any
outstanding Swingline Loans and L/C Obligations, the participating interest
therein equal to such Bank's Pro Rata Share thereof.
"Margin Stock" means "margin stock" as such term is defined in
------------
Regulation T, U or X of the FRB.
"Material Adverse Effect" means a material adverse change in, or a
-----------------------
material adverse effect upon, the results of operations, business, or
financial condition of the Company or the Company and its Subsidiaries
taken as a whole.
"Material Subsidiary" means, at any time, any direct or indirect
-------------------
Subsidiary of the Company which meets either of the following conditions
(i) the Company's and its other Subsidiaries' proportionate share of the
total assets (after intercompany eliminations) of such Subsidiary exceeds
5% of the total assets of the Company and all of its Subsidiaries on a
consolidated basis; or (ii) the income from continuing operations of such
Subsidiary before income taxes, extraordinary items and cumulative effect
of any change in accounting principles exceeds 5% of such income of the
Company and all of its Subsidiaries on a consolidated basis, as of the end
of or for, as the case may be, the then most recently completed fiscal year
of the Company, based upon the annual financial statements for such fiscal
year delivered to the Agent under Section 7.1 or, if such financial
statements have not yet been delivered to the Agent, then based upon
financial
12
statements as of the end of or for, as the case may be, the most recently
ended fiscal quarter of the Company for which financial statements have
been made available to the Agent pursuant to Section 7.1.
"Material U.S. Subsidiary" means a Material Subsidiary organized in
------------------------
the United States.
"Minimum Amount" means (i) in the case of Base Rate Loans an
--------------
aggregate minimum amount of at least $5,000,000, (ii) in the case of
Swingline Loans, an aggregate minimum amount of $500,000 or any integral
multiple of $100,000 in excess thereof, and (iii) in the case of Offshore
Rate Loans, an aggregate minimum amount of at least $5,000,000. In
determining the Minimum Amount of any Offshore Currency Loans, the Dollar
Equivalent Amount thereof will be determined by the Agent as provided
herein.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
------------------
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
"Note" means a promissory note executed by a Borrower in favor of a
----
Bank pursuant to subsection 2.2(b), in substantially the form of Exhibit H.
---------
"Notice of Borrowing" means a notice in substantially the form of
-------------------
Exhibit A.
---------
"Notice of Conversion/Continuation" means a notice in substantially
---------------------------------
the form of Exhibit B.
---------
"Obligations" means all Revolving Loans, Swingline Loans, L/C
-----------
Obligations and other Indebtedness arising under any Loan Document and any
Swap Contract, in each case owing by the Company or any other Borrower to
any Bank (and, in the case of any Swap Contract, to any Affiliate of any
Bank), the Swingline Bank, the Issuing Bank, the Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising.
"Offshore Currency" means at any time English pounds sterling,
-----------------
Canadian dollars, French francs, Deutsche ▇▇▇▇, Swiss francs and any Agreed
Alternative Currency.
"Offshore Currency L/C Obligations" means any L/C Obligations
---------------------------------
denominated in an Offshore Currency or Offshore Currencies.
"Offshore Currency Letter of Credit" means any Letter of Credit
----------------------------------
denominated in an Offshore Currency.
"Offshore Currency Loan" means any Loan denominated in an Offshore
----------------------
Currency.
"Offshore Rate" means for any Interest Period:
-------------
13
(i) with respect to Offshore Rate Loans comprising part of the same
Borrowing, the rate of interest per annum determined by the Agent to
be the rate of interest per annum (rounded upward to the nearest
1/100th of 1%) appearing on Telerate display page 3740 or 3750 (or any
replacement page thereof or other applicable display page) for
deposits in the Applicable Currency in the approximate amount of the
Offshore Rate Loan to be made, continued or converted by BofA and
having a maturity comparable to such Interest Period, at approximately
11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period, subject to clause (ii) below; or
(ii) if for any reason the rate is not available as provided in the
preceding clause (i) of this definition, the "Offshore Rate" instead
-------------
means the rate of interest per annum determined by the Agent to be the
arithmetic mean (rounded upward to the nearest 1/100th of 1%) of the
rates of interest per annum notified to the Agent by BofA as the rate
of interest at which deposits in the Applicable Currency in the
approximate amount of the Offshore Rate Loan to be made, continued or
converted by BofA, and having a maturity comparable to such Interest
Period, would be offered to major banks in the London interbank market
or other applicable interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period.
"Offshore Rate Loan" means a Revolving Loan that bears interest based
------------------
on the Offshore Rate, and may be an Offshore Currency Loan or a Loan
denominated in Dollars.
"Organization Documents" means for any Person the certificate or
----------------------
articles of incorporation, the bylaws, any certificate of determination or
instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, any other applicable
organizational or constitutional documents and all applicable resolutions
of the board of directors (or any committee thereof) of such Person.
"Other Taxes" means any present or future stamp, court or documentary
-----------
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery, performance, enforcement or registration of, or otherwise with
respect to, this Agreement or any other Loan Documents.
"Overnight Rate" means, for any day, in the case of any Offshore
--------------
Currency Loans, the rate of interest per annum at which overnight deposits
in the Applicable Currency, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for
such day by BofA's London Branch to major banks in the London or other
applicable interbank market.
"Participant" has the meaning specified in subsection 11.8(d).
-----------
"PBGC" means the Pension Benefit Guaranty Corporation, or any
----
Governmental Authority succeeding to any of its principal functions under
ERISA.
14
"Pension Plan" means a pension plan (as defined in Section 3(2) of
------------
ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or
in the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding
five (5) plan years.
"Permitted Liens" has the meaning specified in Section 8.1.
---------------
"Permitted Receivables" shall mean all obligations of any obligor
---------------------
(whether now existing or hereafter arising) under a contract for sale of
goods or services by the Company or any of its Subsidiaries, which shall
include any obligation of such obligor (whether now existing or hereafter
arising) to pay interest, finance charges or amounts with respect thereto,
and, with respect to any of the foregoing receivables or obligations, (a)
all of the interest of the Company or any of its Subsidiaries in the goods
(including returned goods) the sale of which gave rise to such receivable
or obligation after the passage of title thereto to any obligor, (b) all
other Liens and property subject thereto from time to time purporting to
secure payment of such receivables or obligations, and (c) all guarantees,
insurance, letters of credit and other agreements or arrangements of
whatever character from time to time supporting or securing payment of any
such receivables or obligations.
"Permitted Receivables Purchase Facility" shall mean any agreement of
---------------------------------------
the Company or any of its Subsidiaries providing for sales, transfers or
conveyances of Permitted Receivables purporting to be sales (and considered
sales under GAAP) that do not provide, directly or indirectly, for recourse
against the seller of such Permitted Receivables (or against any of such
seller's Affiliates) by way of a guaranty or any other support arrangement,
with respect to the amount of such Permitted Receivables (based on the
financial condition or circumstances of the obligor thereunder), other than
such limited recourse as is reasonable given market standards for
transactions of a similar type, taking into account such factors as
historical bad debt loss experience and obligor concentration levels.
"Person" means an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or any
other entity of whatever nature.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
----
ERISA) which the Company sponsors or maintains or to which the Company
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
--------------
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the Aggregate Commitment
(or, if all Commitments have been terminated, the aggregate principal
amount of such Bank's Loans divided by the aggregate principal amount of
the Loans then held by all Banks). The initial Pro Rata Share of each Bank
is set forth opposite such Bank's name in Schedule 2.1 under the heading
------------
"Pro Rata Share."
"Reimbursement Date" has the meaning specified in subsection 3.3(c).
------------------
15
"Replacement Bank" has the meaning specified in Section 4.8.
----------------
"Reportable Event" means, any of the events set forth in Section
----------------
4043(c) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
------------------
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Responsible Officer" means, as to any Loan Party, its chief
-------------------
executive officer, president, chief financial officer or treasurer, or any
other officer having substantially the same authority.
"Revolving Loan" has the meaning specified in Section 2.1.
--------------
"Revolving Termination Date" means the earlier to occur of: (a) May
--------------------------
15, 2003; and (b) the date on which the Commitments terminate in accordance
with the provisions of this Agreement; subject to extension as provided in
Section 2.12(b).
"Same Day Funds" means (i) with respect to disbursements and payments
--------------
in Dollars, immediately available funds, and (ii) with respect to
disbursements and payments in an Offshore Currency, same day or other funds
as may be determined by the Agent to be customary in the place of
disbursement or payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any
---
Governmental Authority succeeding to any of its principal functions.
"Spot Rate" for a currency means the rate determined by the Agent to
---------
be the rate quoted by BofA as the spot rate for the purchase by BofA of
such currency with another currency through its FX Trading Office at
approximately 8:00 a.m. (San Francisco time) on the date as of which the
foreign exchange computation is made; provided that if at the time of any
--------
such determination, no such spot rate can reasonably be quoted, the Agent
may use any reasonable method as it deems applicable to determine such rate
hereunder, and such determination shall be conclusive absent manifest error
(without prejudice to the determination of the reasonableness of such
method).
"Subsidiary" of a Person means any corporation, association,
----------
partnership, limited liability company, joint venture or other business
entity of which more than 50% of the outstanding voting stock, membership
interests or other equity interests (in the case of Persons other than
corporations) having ordinary voting power to elect a majority of the board
of directors or other Persons performing similar functions, is owned or
controlled directly or indirectly by such Person, or one or more of the
Subsidiaries of such Person, or a combination thereof, but in any event
shall not include any Unrestricted Subsidiary other than for purposes of
Section 7.1. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Company.
16
"Subsidiary Guarantors" shall mean all Material Subsidiaries of the
---------------------
Company which pursuant to Section 11.18 have become and remain Guarantors
hereunder.
"Surety Instruments" means all letters of credit (including standby
------------------
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement, whether or not in writing,
-------------
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap
or option, bond, note or ▇▇▇▇ option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swaption, currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or
any combination of the foregoing, and, unless the context otherwise clearly
requires, any master agreement relating to or governing any or all of the
foregoing.
"Swingline Bank" means BofA, in its capacity as maker of Swingline
--------------
Loans hereunder. Specific reference to the Swingline Bank shall exclude
the Swingline Bank in its capacity as a Bank hereunder.
"Swingline Commitment" has the meaning specified in subsection
--------------------
2.6(a).
"Swingline Loan" has the meaning specified in subsection 2.6(a).
--------------
"Syndication Agent" means Bancamerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and The Bank
-----------------
of New York, each in its capacity as a syndication agent hereunder.
"Taxes" means any and all present or future taxes, levies,
-----
assessments, imposts, duties, deductions, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding (i) in the
case of each Bank and the Agent, respectively, taxes imposed on or measured
by its net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the case may
be, is organized or maintains a Lending Office or, has a principal
executive office, and (ii) in the case of each Bank and the Agent, taxes
imposed solely by reason of the Bank or the Agent (as the case may be)
doing business in the jurisdiction imposing such tax, other than solely as
a result of this Agreement or any other Loan Document or any transaction
contemplated hereby.
"Tender Offer" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Group, Inc.'s cash
------------
tender offer for and consent solicitation with respect to the 10-7/8%
Notes, pursuant to its Offer to Purchase and Consent Solicitation Statement
dated April 20, 1998, as amended.
"Trust" means The Manville Personal Injury Settlement Trust.
-----
"Type" has the meaning specified in the definition of "Loan."
----
17
"Unfunded Pension Liability" means the excess of a Plan's benefit
--------------------------
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
------------- ----
"Unrestricted Subsidiary" means any Subsidiary designated by the
-----------------------
Company as an Unrestricted Subsidiary in accordance with the provisions of
Section 8.14.
"Wholly Owned Subsidiary" means any corporation in which (other than
-----------------------
directors' qualifying shares) 100% of the capital stock of each class
having ordinary voting power, and 100% of the capital stock of every other
class, in each case, at the time as of which any determination is being
made, is owned, beneficially and of record, by the Company, or by one or
more of the other Wholly Owned Subsidiaries, or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
-----------------------------
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
18
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms. Unless otherwise expressly provided,
any reference to any action of the Agent or the Banks by way of consent,
approval or waiver shall be deemed modified by the phrase "in its/their sole
discretion."
(g) This Agreement and the other Loan Documents are the result of
negotiations among the Agent, the Company and the other parties, have been
reviewed by counsel to the Agent, the Company and such other parties, and are
the products of all parties. Accordingly, they shall not be construed against
the Banks or the Agent merely because of the Agent's or Banks' involvement in
their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
---------------------
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
1.4 Currency Equivalents Generally. Except to the extent expressly
------------------------------
provided otherwise herein (including for purposes of any redenomination of any
Offshore Currency Loan into a Loan in Dollars but not for purposes of the
preparation of any financial statements delivered pursuant hereto or any
exchange rate determinations expressly required to be done using a different
method), the equivalent in any Offshore Currency (or any other currency) of an
amount in Dollars, and the equivalent in Dollars of an amount in any Offshore
Currency (or any other currency), shall be determined at the Spot Rate.
1.5 Certain Financial Covenant Matters. (a) For purposes of determining
----------------------------------
any Applicable Fee Amount or any Applicable Margin and calculating the Company's
compliance with Section 8.11, EBITDA shall be adjusted for Acquisitions of
consolidated Subsidiaries (each an "Acquired Subsidiary") made by the Company or
-------------------
any Subsidiary during the 4-quarter period (the "Compliance Period") with
-----------------
reference to which the Leverage Ratio is being determined. Such adjustment shall
be made as follows:
(i) actual financial results of each such Acquired Subsidiary from
the date of its Acquisition through the end of the Compliance Period shall
be included in the above-referenced consolidated measure of EBITDA in
accordance with GAAP;
(ii) historical financial results of each such Acquired Subsidiary
may be included in the above-referenced consolidated measures of EBITDA if
any one of the following conditions is satisfied: (A) audited financial
statements of such Acquired Subsidiary are available for its most recent
fiscal year-end; (B) such Acquired Subsidiary is a Subsidiary or division
of a company for which audited financial statements are available for such
company's most recent fiscal year-end; or (C) reviewed financial statements
of such Acquired Subsidiary prepared in accordance with GAAP are available
for its most recent fiscal year-end;
19
(iii) if one or more of the conditions set forth in the preceding
clause (ii) are satisfied, then the historical financial results of such
Acquired Subsidiary shall be included in the consolidated financial results
of the Company as follows: (A) the Company shall determine in accordance
with GAAP the relevant financial results of such Acquired Subsidiary for
the period of four fiscal quarters of such Acquired Subsidiary ending on
the last day of its fiscal quarter most recently ended prior to the date of
its Acquisition, (B) the Company may make adjustments to such financial
results for specified expense items of such Acquired Subsidiary eliminated
as a result of its Acquisition, and (C) the Company shall include in the
above-referenced measure of EBITDA only such portion of such relevant
historical financial results that is obtained by multiplying such financial
results by the quotient obtained by dividing (x) the number of days elapsed
from the first day of the Compliance Period to the date of the Acquisition
of such Acquired Subsidiary, by (y) 365; provided, however, that any
--------
increase in EBITDA as a result of the adjustments described in this Section
1.5 made on the basis of reviewed financial statements pursuant to
subclause (ii)(C) shall not exceed $10,000,000 for any Compliance Period.
(b) For purposes of determining any Applicable Fee Amount or any
Applicable Margin or calculating the Company's compliance with Sections 8.10,
8.11 and 8.12, such determination and calculation shall exclude the financial
results and condition of each Unrestricted Subsidiary.
ARTICLE II
THE CREDITS
-----------
2.1 Amounts and Terms of Commitments. (a) The Revolving Loans. Each
-------------------------------- -------------------
Bank severally agrees, on the terms and conditions set forth herein, to make
loans to each Borrower in Dollars or any Offshore Currency (each such loan, a
"Revolving Loan") from time to time on any Business Day during the period from
---------------
the Loan Availability Date to the Revolving Termination Date, in an aggregate
Dollar Equivalent Amount not to exceed at any time the Dollar amount set forth
opposite such Bank's name on Schedule 2.1 under the heading "Commitment" (such
------------
amount, as the same may be reduced under Section 2.9 or reduced or increased as
a result of one or more assignments under Section 11.8, such Bank's
"Commitment"); provided, however, that, after giving effect to any Borrowing of
---------- -------- -------
Revolving Loans, (i) the Effective Amount of all outstanding Revolving Loans
plus the Effective Amount of all Swingline Loans plus the Effective Amount of
---- ----
all L/C Obligations, shall not at any time exceed the Aggregate Commitment; and
(ii) the Effective Amount of the Revolving Loans of any Bank plus the
----
participation of such Bank in the Effective Amount of all Swingline Loans plus
----
the participation of such Bank in the Effective Amount of all L/C Obligations,
shall not at any time exceed such Bank's Commitment. Within the limits of each
Bank's Commitment, and subject to the other terms and conditions hereof, each
Borrower may borrow Revolving Loans under this Section 2.1(a), prepay such Loans
under Section 2.10 and reborrow under this Section 2.1(a).
(b) Additional Borrowers. The Banks and the Agent agree that a
--------------------
Subsidiary may become a party hereto pursuant to the provisions of this
subsection 2.1(b) and Section 7.12 (an "Additional Borrower"). Any such
-------------------
Additional Borrower shall be entitled to request Revolving Loans, Swingline
Loans and Letters of Credit hereunder. The parties hereto acknowledge and agree
that prior to any Additional Borrower so becoming entitled to utilize
20
fully the credit facilities provided for herein the Agent and the Banks shall
have first received (i) an Additional Borrower Request and Assumption Agreement
as provided in Section 7.12 and (ii) the additional documents and certificates
specified in Section 7.12. If an Additional Borrower shall be entitled to
request Credit Extensions hereunder, the Agent shall send a notice in
substantially the form of Exhibit K (an "Additional Borrower Notice") to the
--------- --------------------------
Borrowers' Designee and the Banks designating the effective date thereof,
whereupon each of the Banks severally agrees to make Loans to such Additional
Borrower, on the terms and conditions set forth herein, and each of the parties
agrees that such Additional Borrower otherwise shall be a Borrower for all
purposes of Articles II and III of this Agreement.
2.2 Loan Accounts. (a) The Loans made by each Bank and the Letters
-------------
of Credit Issued by the Issuing Bank shall be evidenced by one or more accounts
or records maintained by such Bank or Issuing Bank, as the case may be, in the
ordinary course of business. The accounts or records maintained by the Agent,
the Issuing Bank and each Bank shall be conclusive absent manifest error of the
amount of the Loans made by the Banks to any Borrower, and the Letters of Credit
Issued for the account of such Borrower and the interest and payments thereon.
Any failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of any Borrower hereunder to pay any amount
owing with respect to the Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the Loans
made by such Bank may be evidenced by one or more Notes, instead of or in
addition to loan accounts. Each such Bank shall endorse on the schedules
annexed to its Note(s) the date, amount and maturity of each Loan made by it and
the amount and Applicable Currency of each payment of principal made by any
Borrower with respect thereto. Each such Bank is irrevocably authorized by each
Borrower to endorse its Note(s) and each Bank's record shall be conclusive
absent manifest error; provided, however, that the failure of a Bank to make, or
-------- -------
an error in making, a notation thereon with respect to any Loan shall not limit
or otherwise affect the obligations of such Borrower hereunder or under any such
Note to such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing of Revolving Loans
-----------------------
shall be made upon the Borrowers' Designee's irrevocable written notice
delivered to the Agent in the form of a Notice of Borrowing (which notice must
be received by the Agent (i) prior to 9:00 a.m. (San Francisco time) four
Business Days prior to the requested Borrowing Date, in the case of Offshore
Currency Loans; (ii) prior to 9:00 a.m. (San Francisco time) three Business Days
prior to the requested Borrowing Date, in the case of Offshore Rate Loans
denominated in Dollars; and (iii) prior to 8:00 a.m. (San Francisco time) on the
requested Borrowing Date, in the case of Base Rate Loans, specifying:
(A) the identity of the applicable Borrower;
(B) the amount of the Borrowing, which shall be in a Minimum Amount;
(C) the requested Borrowing Date, which shall be a Business Day;
(D) the Type of Loans comprising the Borrowing;
21
(E) in the case of a Borrowing comprised of Offshore Currency Loans,
the Applicable Currency; and
(F) if applicable, the duration of the Interest Period applicable to
such Loans included in such notice, subject to the provisions of the
definition of "Interest Period" herein. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing
comprised of Offshore Rate Loans, such Interest Period shall be one
month.
Upon receipt of any Notice of Borrowing of Revolving Loans, the Agent will
promptly notify each Bank thereof and of the amount of such Bank's Pro Rata
Share of the Borrowing (expressed in the Applicable Currency of the Borrowing).
(b) Each Bank will make the amount of its Pro Rata Share of each
Borrowing of Revolving Loans available to the Agent for the account of the
Company (or other Borrower, as the case may be) at the Agent's Payment Office on
the Borrowing Date requested by the Borrowers' Designee in Same Day Funds and in
the requested currency (i) in the case of a Borrowing comprised of Loans in
Dollars, by 11:00 a.m. (San Francisco time), and (ii) in the case of a Borrowing
comprised of Offshore Currency Loans, by such time as the Agent may reasonably
specify. The proceeds of all such Borrowings will then be made available to the
applicable Borrower by the Agent at such office by crediting the account of the
Company (or such other Borrower, as the case may be) on the books of BofA with
the aggregate of the amounts made available to the Agent by the Banks and in
like funds as received by the Agent, or if requested by Borrowers' Designee, by
wire transfer in accordance with written instructions provided to the Agent by
the Borrowers' Designee of such funds as received by the Agent, less customary
fees for such wire transfer, unless on the date of the Borrowing all or any
portion of the proceeds thereof shall then be required to be applied to the
repayment of any outstanding Loans or the reimbursement of any outstanding
drawings under Letters of Credit, in which case such proceeds or portion thereof
shall be applied to the payment of such Loans or the reimbursement of such
Letter of Credit drawings, as the case may be.
(c) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than 15 different Interest Periods in
effect with respect to any Revolving Loans.
2.4 Conversion and Continuation Elections. (a) The Borrowers'
-------------------------------------
Designee may, upon irrevocable written notice in accordance with subsection
2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate Loans of
a Borrower (other than Swingline Loans), or as of the last day of the
applicable Interest Period, in the case of any Offshore Rate Loans of
a Borrower denominated in Dollars, to convert any such Loans (or any
part thereof in an amount not less than a Minimum Amount) into Loans
in Dollars of any other Type; or
(ii) elect, as of the last day of the applicable Interest Period, to
continue any Offshore Rate Loans of a Borrower having Interest Periods
expiring on such day (or any part thereof in an amount not less than a
Minimum Amount) as Offshore Rate Loans of the same currency;
22
provided, that if at any time the aggregate amount of Offshore Rate Loans of a
--------
Borrower denominated in Dollars in respect of any Borrowing is reduced, by
payment, prepayment, or conversion of part thereof to be less than $5,000,000,
such Offshore Rate Loans in Dollars shall automatically convert into Base Rate
Loans, and on and after such date the right of such Borrower to continue such
Loans as, and convert such Loans into, Offshore Rate Loans shall terminate.
(b) Each such conversion and continuation of Revolving Loans shall be
made upon delivery by the Borrowers' Designee of a Notice of
Conversion/Continuation to the Agent. Each such Notice of
Conversion/Continuation must be received by the Agent (i) not later than 8:00
a.m. (San Francisco time) three Business Days in advance of the
Conversion/Continuation Date, if any Offshore Rate Loans in Dollars are to be
converted into or continued as Offshore Rate Loans denominated in Dollars; (ii)
not later than 9:00 a.m. (San Francisco time) four Business Days in advance of
the Conversion/Continuation Date, if any Offshore Currency Loans are to be
continued as Offshore Currency Loans; and (iii) not later than 9:00 a.m. (San
Francisco time) on the Conversion/ Continuation Date, if the Loans are to be
converted into Base Rate Loans, specifying:
(A) the identity of the applicable Borrower;
(B) the proposed Conversion/Continuation Date;
(C) the aggregate amount of Loans to be converted or continued;
(D) the Type of Loans resulting from the proposed conversion or
continuation; and
(E) other than in the case of conversions into Base Rate Loans, the
duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans in Dollars, the Borrowers' Designee has failed to select
timely a new Interest Period to be applicable to such Offshore Rate Loans, or if
any Event of Default then exists, the Borrowers' Designee shall be deemed to
have elected to convert such Offshore Rate Loans into Base Rate Loans effective
as of the expiration date of such Interest Period. If the Borrowers' Designee
has failed to select a new Interest Period to be applicable to any Offshore
Currency Loans prior to the fourth Business Day in advance of the expiration
date of the current Interest Period applicable thereto as provided in subsection
2.4(b), or if any Event of Default shall then exist, subject to the provisions
of subsection 2.5(d), the Borrowers' Designee shall be deemed to have elected to
continue such Offshore Currency Loans on the basis of a one month Interest
Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation of Revolving Loans, or, if no timely notice is
provided by the Borrowers' Designee, the Agent will promptly notify each Bank of
the details of any automatic conversion. All conversions and continuations of
Revolving Loans shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Bank.
23
(e) Unless the Majority Banks otherwise consent, during the existence
of an Event of Default, the Borrowers' Designee may not elect to have a Loan in
Dollars converted into or continued as an Offshore Rate Loan or to have any
Offshore Currency Loan continued on the basis of an Interest Period exceeding
one month.
(f) After giving effect to any conversion or continuation of Loans,
unless the Agent shall otherwise consent, there may not be more than 15
different Interest Periods in effect with respect to any Revolving Loans.
2.5 Utilization of Commitments in Offshore Currencies. (a) The Agent
-------------------------------------------------
will determine the Dollar Equivalent Amount with respect to any (i) Borrowing
comprised of Offshore Currency Loans as of the requested Borrowing Date, (ii)
outstanding Offshore Currency Loans as of the last Business Day of each calendar
quarter, (iii) Letters of Credit to be Issued in an Offshore Currency as of the
requested date of Issuance, (iv) outstanding Letters of Credit denominated in an
Offshore Currency as of the last Business Day of each calendar quarter, and (v)
outstanding Offshore Currency Loans as of any redenomination date pursuant to
this Section 2.5, Section 3.3(c) or Section 4.2 (each such date under clauses
(i) through (v) a "Computation Date"); provided that the Majority Banks may in
---------------- --------
writing instruct the Agent to determine such Dollar Equivalent Amount as of a
date in addition to the last Business Day of each calendar quarter, and the
Issuing Bank may in writing instruct the Agent to determine such Dollar
Equivalent Amount as of a conversion date (if not on the last Business Day of a
calendar quarter) in connection with a redenomination of any amounts payable in
an Offshore Currency pursuant to subsection 3.3(c), in which case such
alternative date or dates shall also be a Computation Date or Dates.
(b) In the case of a proposed Borrowing of Revolving Loans comprised
of Offshore Currency Loans, the Banks shall be under no obligation to make such
Offshore Currency Loans in the requested Offshore Currency as part of such
Borrowing, if the Agent or the Banks shall determine that for any reason the
Banks cannot provide Loans in the requested Offshore Currency. In such event
the Agent will promptly give notice to the Borrowers' Designee that the
Borrowing in the requested Offshore Currency is not then available, and notice
thereof also will be given promptly by the Agent to the Banks. If the Agent
shall have so notified the Borrowers' Designee that any such Borrowing in a
requested Offshore Currency is not then available, the Borrowers' Designee may,
by notice to the Agent not later than 12:00 noon (San Francisco time) one
Business Day prior to the requested date of such Borrowing, withdraw the Notice
of Borrowing relating to such requested Borrowing. If the Borrowers' Designee
does so withdraw such Notice of Borrowing, the Borrowing requested therein shall
not occur and the Agent will promptly so notify each Bank. If the Borrowers'
Designee does not so withdraw such Notice of Borrowing, the Agent will promptly
so notify each Bank and such Notice of Borrowing shall be deemed to be a Notice
of Borrowing that requests a Borrowing comprised of Base Rate Loans in an
aggregate amount equal to the amount of the originally requested Borrowing as
expressed in Dollars in the Notice of Borrowing; and in such notice by the Agent
to each Bank the Agent will state such aggregate amount of such Borrowing in
Dollars and such Bank's Pro Rata Share thereof.
(c) In the case of a proposed continuation of Revolving Loans
consisting of Offshore Currency Loans for an additional Interest Period pursuant
to Section 2.4, the Banks shall be under no obligation to continue such Offshore
Currency Loans if the Agent or the Banks
24
shall determine that for any reason the Banks cannot continue to provide Loans
in the relevant Offshore Currency. In such event, the Agent will promptly give
notice to the Borrowers' Designee not later than 9:00 a.m. (San Francisco time)
on the Business Day following receipt of any such determination that the
continuation of such Offshore Currency Loans in the relevant Offshore Currency
is not then available, and notice thereof also will be given promptly by the
Agent to the Banks. If the Agent shall have so notified the Borrowers' Designee
that any such continuation of Offshore Currency Loans is not then available, any
Notice of Continuation/Conversion with respect thereto shall be deemed withdrawn
and such Offshore Currency Loans shall be redenominated into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to any
such Offshore Currency Loans. The Agent will promptly notify the Borrowers'
Designee and the Banks of any such redenomination and the redenomination date
and in such notice by the Agent to each Bank the Agent will state the aggregate
Dollar Equivalent Amount of the redenominated Offshore Currency Loans as of the
Computation Date with respect thereto and such Bank's Pro Rata Share thereof.
(d) Notwithstanding anything herein to the contrary, during the
existence of an Event of Default, upon the request of the Majority Banks, all or
any part of any outstanding Offshore Currency Loans shall be redenominated and
converted into Base Rate Loans in Dollars with effect from the last day of the
Interest Period with respect to any such Offshore Currency Loans. The Agent
will promptly notify the Borrowers' Designee of any such redenomination and
conversion request.
(e) The Borrowers' Designee shall be entitled to request that Revolving
Loans hereunder also be permitted to be made, and Letters of Credit hereunder
also be permitted to be issued, in any other lawful currency constituting a
eurocurrency (other than Dollars), in addition to the eurocurrencies specified
in the definition of "Offshore Currency" herein, that in the opinion of the
Banks is at such time freely traded and freely available in the offshore
interbank foreign exchange markets and is freely transferable and freely
convertible into Dollars (an "Agreed Alternative Currency"). The Borrowers'
---------------------------
Designee shall deliver to the Agent any request for designation of an Agreed
Alternate Currency in accordance with Section 11.2, to be received by the Agent
not later than 10:00 a.m. (San Francisco time) at least fifteen Business Days in
advance of the date of any Borrowing hereunder proposed to be made in such
Agreed Alternate Currency or any Letter of Credit proposed to be Issued
hereunder in such Agreed Alternate Currency. Upon receipt of any such request
the Agent will promptly notify the Banks thereof, and each Bank will use its
best efforts to respond to such request within three Business Days of receipt
thereof. Each Bank may grant or accept such request in its sole discretion.
The Agent will promptly notify the Borrowers' Designee of the acceptance or
rejection of any such request. Acceptance of such request shall be subject to
unanimous Bank approval.
2.6 Swingline Loans.
---------------
(a) Subject to the terms and conditions hereof, the Swingline Bank
agrees to make a portion of the Aggregate Commitment available to each Borrower
by making swingline loans denominated in Dollars (individually, a "Swingline
---------
Loan", and, collectively, the "Swingline Loans") to such Borrower on any
---- ---------------
Business Day during the period from the Loan Availability Date to the Revolving
Termination Date in accordance with the procedures set forth in this Section 2.6
in an aggregate principal amount at any one time outstanding not to exceed
$25,000,000, notwithstanding the fact that such Swingline Loans, when aggregated
with any other Credit Extensions made by or participated in by the Swingline
Bank, may exceed the
25
Swingline Bank's Commitment (the amount of such commitment of the Swingline Bank
to make Swingline Loans to the Borrowers pursuant to this subsection 2.6(a), as
the same shall be reduced pursuant to subsection 2.9(b) or as a result of any
assignment pursuant to Section 11.8, the Swingline Bank's "Swingline
---------
Commitment"); provided, that at no time shall (i) the sum of the Effective
---------- --------
Amount of all Swingline Loans plus the Effective Amount of all Revolving Loans
----
plus the Effective Amount of all L/C Obligations exceed the Aggregate
----
Commitment, or (ii) the Effective Amount of all Swingline Loans exceed the
Swingline Commitment. Additionally, all Swingline Loans shall at all times be
Base Rate Loans or accrue interest at such other rate as may be agreed to by the
Swingline Bank and the Borrowers' Designee. Within the foregoing limits, and
subject to the other terms and conditions hereof, each Borrower may borrow under
this subsection 2.6(a), prepay pursuant to Section 2.10 and reborrow pursuant to
this subsection 2.6(a).
(b) The Borrowers' Designee shall provide the Agent irrevocable
written notice (including notice via facsimile confirmed immediately by a
telephone call) in the form of a Notice of Borrowing of any Swingline Loan
requested hereunder (which notice must be received by the Agent prior to 11:00
a.m. (San Francisco time) on the requested Borrowing Date) specifying (i) the
amount to be borrowed, which shall be in a Minimum Amount (unless otherwise
agreed by the Swingline Bank), and (ii) the requested Borrowing Date, which
shall be a Business Day. Unless the Swingline Bank has received notice prior to
12:00 noon (San Francisco time) on such Borrowing Date from the Agent (including
at the request of any Bank) (A) directing the Swingline Bank not to make the
requested Swingline Loan as a result of the limitations set forth in the proviso
-------
set forth in the first sentence of subsection 2.6(a); or (B) that one or more
conditions specified in Article V are not then satisfied; then, subject to the
----
terms and conditions hereof, the Swingline Bank will, not later than 2:00 p.m.
(San Francisco time) on the Borrowing Date specified in such Notice of
Borrowing, make the amount of its Swingline Loan available to the applicable
Borrower by crediting the account of the Company (or such Borrower, as the case
may be) on the books of BofA or if requested by the Borrowers' Designee, by wire
transfer in accordance with written instructions provided to the Agent by the
Borrowers' Designee, less customary fees for such wire transfer. The Agent will
notify the Banks on a quarterly basis if any Swingline Loan Borrowings occurred
during such quarter.
(c) Each Borrower shall repay to the Swingline Bank in full on the
Revolving Termination Date the aggregate principal amount of the Swingline Loans
made to such Borrower outstanding on the Revolving Termination Date.
(d) For one Business Day during each successive ten Business Day
period the aggregate principal amount of Swingline Loans shall be $0 (a "Clean-
-----
Up Day"). Each Borrower shall prepay the outstanding principal amount of the
------
Swingline Loans made to such Borrower in whole to the extent required so that a
Clean-Up Day may occur in each such ten Business Day period as provided in this
subsection 2.6(d) (which Swingline Loans may not be reborrowed until such Clean-
Up Day has ended).
(e) If:
(i) any Swingline Loans shall remain outstanding at 5:00 p.m. (San
Francisco time) on the Business Day immediately prior to a Clean-Up
Day and by such time on such Business Day the Agent shall have
received neither:
26
(A) a Notice of Borrowing delivered pursuant to Section 2.3
requesting that Revolving Loans be made pursuant to subsection 2.1(a)
on the Clean-Up Day in an amount at least equal to the aggregate
principal amount of such Swingline Loans; nor
(B) any other notice indicating the applicable Borrower's intent to
repay such Swingline Loans with funds obtained from other sources; or
(ii) any Swingline Loans shall remain outstanding during the
existence of a Default or Event of Default and the Swingline Bank
shall in its sole discretion notify the Agent that the Swingline Bank
desires that such Swingline Loans be converted into Revolving Loans;
then the Agent shall be deemed to have received a Notice of Borrowing from the
----
Borrowers' Designee pursuant to Section 2.3 requesting that Base Rate Loans be
made pursuant to subsection 2.1(a) on such Clean-Up Day (in the case of the
circumstances described in clause (i) above) or on the first Business Day
subsequent to the date of such notice from the Swingline Bank (in the case of
the circumstances described in clause (ii) above) in an amount equal to the
aggregate amount of such Swingline Loans, and the procedures set forth in
subsections 2.3(b) and 2.3(c) shall be followed in making such Base Rate Loans;
provided that such Base Rate Loans shall be made notwithstanding a Borrower's
--------
failure to comply with Section 5.3; and provided, further, that if a Borrowing
-------- -------
of Revolving Loans becomes legally impracticable and if so required by the
Swingline Bank at the time such Revolving Loans are required to be made by the
Banks in accordance with this subsection 2.6(e), each Bank agrees that in lieu
of making Revolving Loans as described in this subsection 2.6(e), such Bank
shall purchase a participation from the Swingline Bank in the applicable
Swingline Loans in an amount equal to such Bank's Pro Rata Share of such
Swingline Loans, and the procedures set forth in subsections 2.3(b) and 2.3(c)
shall be followed in connection with the purchases of such participations. Upon
such purchases of participations the prepayment requirements of subsection
2.6(d) shall be deemed waived with respect to such Swingline Loans. The
proceeds of such Base Rate Loans shall be applied to repay such Swingline Loans.
If any Swingline Loan shall remain outstanding in lieu of a Borrowing of
Revolving Loans as provided above, interest on such Swingline Loan shall be due
and payable on demand. A copy of each notice given by the Agent to the Banks
pursuant to this subsection 2.6(e) with respect to the making of Revolving
Loans, or the purchases of participations, shall be promptly delivered by the
Agent to the Borrowers' Designee. Each Bank's obligation in accordance with
this Agreement to make the Revolving Loans, or purchase the participations, as
contemplated by this subsection 2.6(e), shall be absolute and unconditional and
shall not be affected by any circumstance, including (1) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against the Swingline Bank, any Loan Party or any other Person for any reason
whatsoever; (2) the occurrence or continuance of a Default, an Event of Default
or a Material Adverse Effect; or (3) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.7 Currency Exchange Fluctuations. Subject to Section 4.4, if on
------------------------------
any Computation Date the Agent shall have determined that the Dollar Equivalent
Amount of the aggregate principal amount of all Revolving Loans, Swingline Loans
and L/C Obligations then outstanding exceeds the Aggregate Commitment by more
than $500,000, due to a change in applicable rates of exchange between Dollars
and Offshore Currencies, then the Agent shall give notice to the Borrowers'
----
Designee that a prepayment is required under this Section, and the Borrowers
agree
to make prepayments of Loans not later than the Business Day following the
Borrowers' Designee's receipt of such notice such that, after giving effect to
such prepayment the aggregate Dollar Equivalent Amount of all Revolving Loans,
Swingline Loans and L/C Obligations does not exceed the Aggregate Commitment.
2.8 European Economic and Monetary Union.
------------------------------------
(a) Definitions. In this Section 2.8 and in each other provision of
-----------
this Agreement to which reference is made in this Section 2.8 expressly or
impliedly, the following terms have the meanings given to them in this Section
2.8.
"commencement of the third stage of EMU" means the date of
--------------------------------------
commencement of the third stage of EMU (at the date of this Agreement
expected to be January 1, 1999) or the date on which circumstances arise
which (in the opinion of the Agent) have substantially the same effect and
result in substantially the same consequences as commencement of the third
stage of EMU as contemplated by the Treaty on European Union.
"EMU" means economic and monetary union as contemplated in the Treaty
---
on European Union.
"EMU legislation" means legislative measures of the European Council
---------------
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part
the implementation of the third stage of EMU;
"euro" means the single currency of participating member states of
----
the European Union;
"euro unit" means the currency unit of the euro;
---------
"national currency unit" means the unit of currency (other than a
----------------------
euro unit) of a participating member state;
"participating member state" means each state so described in any EMU
--------------------------
legislation; and
"Treaty on European Union" means the Treaty of Rome of March 25, 1957,
------------------------
as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (which was
signed at Maastricht on February 7, 1992, and came into force on November 1,
1993), as amended from time to time.
(b) Effectiveness of Provisions. The provisions of subsections (c)
---------------------------
through (j) below shall be effective at and from the commencement of the third
stage of EMU; provided, that if and to the extent that any such provision
--------
relates to any state (or the currency of such state) that is not a participating
member state on the commencement of the third stage of EMU, such provision shall
become effective in relation to such state (and the currency of such state) at
and from the date on which such state becomes a participating member state.
28
(c) Redenomination and Alternative Currencies. Each obligation under
-----------------------------------------
this Agreement of a party to this Agreement which has been denominated in the
national currency unit of a participating member state shall be redenominated
into the euro unit in accordance with EMU legislation; provided, that if and to
--------
the extent that any EMU legislation provides that following the commencement of
the third stage of EMU an amount denominated either in the euro or in the
national currency unit of a participating member state and payable within that
participating member state by crediting an account of the creditor can be paid
by the debtor either in the euro unit or in that national currency unit, each
party to this Agreement shall be entitled to pay or repay any such amount either
in euro unit or in such national currency unit.
(d) Offshore Currency Loans. Any Offshore Currency Loan in the
-----------------------
currency of a participating member state shall be made in the euro unit.
(e) Banking Days. With respect to any amount denominated or to be
------------
denominated in the euro or a national currency unit, any reference to a "Banking
Day" shall be construed as a reference to a day (other than a Saturday or
Sunday) on which banks are generally open for business in (i) London and New
York City, and (ii) Frankfurt am Main, Germany (or such principal financial
center or centers in such participating member state or states as the Agent may
from time to time nominate for this purpose).
(f) Payments to the Agent. Section 2.16 of this Agreement, and each
---------------------
other provision of this Agreement calling for payments in an Applicable
Currency, shall be construed so that, in relation to the payment of any amount
of euro units or national currency units, such amount shall be made available to
the Agent in immediately available, freely transferable, cleared funds to such
account with such bank in Frankfurt am Main, Germany (or such other principal
financial center in such participating member state as the Agent may from time
to time nominate for this purpose) as the Agent shall from time to time nominate
for this purpose.
(g) Payments by the Agent to the Banks. Any amount payable by the
----------------------------------
Agent to the Banks under this Agreement in the currency of a participating
member state shall be paid in the euro unit.
(h) Payments by the Agent Generally. With respect to the payment of
-------------------------------
any amount denominated in the euro or in a national currency unit, the Agent
shall not be liable to a Borrower or any of the Banks in any way whatsoever for
any delay, or the consequences of any delay, in the crediting to any account of
any amount required by this Agreement to be paid by the Agent if the Agent shall
have taken all relevant steps to achieve, on the date required by this
Agreement, the payment of such amount in immediately available, freely
transferable, cleared funds (in the euro unit or, as the case may be, in a
national currency unit) to the account with the bank in the principal financial
center in the participating member state which the Company or, as the case may
be, any Bank shall have specified for such purpose. In this subsection (h),
"all relevant steps" means all such steps as may be prescribed from time to time
by the regulations or operating procedures of such clearing or settlement system
as the Agent may from time to time determine for the purpose of clearing or
settling payments of the euro.
(i) Basis of Accrual. If the basis of accrual of interest or fees
----------------
expressed in this Agreement with respect to the currency of any state that
becomes a participating state shall be inconsistent with any convention or
practice in the London interbank market or, as the case may be, the other
applicable Paris interbank market for the basis of accrual of interest or fees
in
29
respect of the euro, such convention or practice shall replace such expressed
basis effective as of and from the date on which such state becomes a
participating member state; provided, that if any Offshore Currency Loan in the
--------
currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Loan, at the end of the then
current Interest Period.
(j) Rounding and Other Consequential Changes. Without prejudice and
----------------------------------------
in addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for Indebtedness
of the Borrowers to the Banks and the Banks to the Borrowers under or pursuant
to this Agreement: (i) each reference in this Agreement to a minimum amount (or
an integral multiple thereof) in a national currency unit to be paid to or by
the Agent shall be replaced by a reference to such reasonably comparable and
convenient amount (or an integral multiple thereof) in the euro unit as the
Agent may from time to time specify; and (ii) except as expressly provided in
this Section 2.8, each provision of this Agreement shall be subject to such
reasonable changes of construction as the Agent may from time to time specify to
be necessary or appropriate to reflect the introduction of or changeover to the
euro in participating member states.
(k) Increased Costs. Each Borrower shall from time to time, at the
---------------
request of the Agent, pay to the Agent for the account of each Bank the amount
of any cost or increased cost incurred by, or of any reduction in any amount
payable to or in the effective return on its capital to, or of interest or other
return foregone by, such Bank or any holding company of such Bank as a result of
the introduction of, changeover to or operation of the euro in any participating
member state, other than any such cost or reduction or amount foregone reflected
in any interest rate hereunder.
2.9 Voluntary Termination or Reduction of Commitments.
-------------------------------------------------
(a) Each Borrower may, upon not less than three Business Days' prior
notice from the Borrowers' Designee to the Agent, terminate the Commitments, or
permanently reduce the Commitments by an aggregate minimum Dollar Equivalent
Amount of at least $5,000,000; unless, after giving effect thereto and to any
------
prepayments of any Loans made on the effective date thereof, (a) the Effective
Amount of all Revolving Loans, Swingline Loans and L/C Obligations together
would exceed the Aggregate Commitment then in effect, or (b) the Effective
Amount of all L/C Obligations then outstanding would exceed the L/C Commitment.
Once reduced in accordance with this Section 2.9, the Commitments may not be
increased. Any reduction of the Commitments shall be applied to each Bank
according to its Pro Rata Share. If and to the extent specified by the
Borrowers' Designee in the notice to the Agent, some or all of the reduction in
the Aggregate Commitment shall be applied to reduce the L/C Commitment and the
Swingline Commitment. All accrued facility and letter of credit fees to, but
not including, the effective date of any termination of the Commitments shall be
paid on the effective date of such termination. The Agent shall promptly
forward a copy of any such notice received under this subsection 2.9(a) to each
of the Banks.
(b) At no time shall the Swingline Commitment exceed the Aggregate
Commitment, and any reduction of the Commitments (under this Section 2.9 or
under Section 2.12) which reduces the Aggregate Commitment below the then-
current amount of the Swingline Commitment shall result in an automatic
corresponding reduction of the Swingline Commitment to the amount of the
Aggregate Commitment, as so reduced, without any action on the part of the
30
Swingline Bank. At no time shall the Swingline Commitment exceed the Commitment
of the Swingline Bank, and any reduction of the Commitments which reduces the
Commitment of the Swingline Bank below the then-current amount of the Swingline
Commitment shall result in an automatic corresponding reduction of the Swingline
Commitment to the amount of the Commitment of the Swingline Bank, as so reduced,
without any action on the part of the Swingline Bank.
2.10 Optional Prepayments. Subject to Section 4.4, each Borrower may,
--------------------
at any time or from time to time, upon notice from the Borrowers' Designee to
the Agent, (i) ratably prepay Revolving Loans in whole or in part, in minimum
Dollar Equivalent Amounts of at least $5,000,000 and (ii) ratably prepay
Swingline Loans in whole or in part, in minimum amounts of $500,000 or any
multiple of $100,000 in excess thereof, or in other amounts with the consent of
the Swingline Bank. The Borrowers' Designee shall deliver a notice of prepayment
in accordance with Section 11.2 to be received by the Agent (i) not later than
9:00 a.m. (San Francisco time) at least four Business Days in advance of the
prepayment date if the Loans to be prepaid are Offshore Currency Loans, (ii) not
later than 9:00 a.m. (San Francisco time) at least three Business Days in
advance of the prepayment date if the Loans to be prepaid are Offshore Rate
Loans in Dollars, and (iii) not later than 8:00 a.m. (San Francisco time) on the
prepayment date if the Loans to be prepaid are Base Rate Loans. Such notice of
prepayment shall specify the date and amount of such prepayment and whether such
prepayment is of Base Rate Loans, Swingline Loans, Offshore Rate Loans, or any
combination thereof, and the Applicable Currency. Such notice shall not
thereafter be revocable by the Borrowers' Designee. The Agent will promptly
notify the Swingline Bank thereof (in the case of any prepayment of Swingline
Loans) and each Bank thereof and of such Bank's Pro Rata Share of such
prepayment (if any). If such notice is given by the Borrowers' Designee, the
applicable Borrower shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein, together
with (other than in the case of Base Rate Loans) accrued interest to each such
date on the amount prepaid and any amounts required pursuant to Section 4.4.
2.11 Mandatory Prepayments; Cash Collateralization. If on any date the
---------------------------------------------
Effective Amount of L/C Obligations exceeds the L/C Commitment, the Company
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the L/C Commitment. Subject to Section 4.4, if
on any date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount of all Revolving Loans
then outstanding plus the Effective Amount of all Swingline Loans then
----
outstanding plus the Effective Amount of all L/C Obligations exceeds the
----
Aggregate Commitment, the Borrowers shall immediately, and without notice or
demand, prepay the outstanding principal amount of the Loans by an amount equal
to the applicable excess.
2.12 Repayment of the Revolving Loans. (a) Each Borrower shall repay
--------------------------------
to the Agent for the account of the Banks on the Revolving Termination Date the
aggregate principal amount of Revolving Loans made to such Borrower and
outstanding on such date.
(b) At the option of the Borrowers, upon written notice by the
Borrowers' Designee to the Agent to be given not more than 120 days but not
later than 30 days prior to the then applicable Revolving Termination Date, the
Borrowers' Designee may request that the Revolving Termination Date be extended
by successive one-year periods; provided, however, that each such one-year
-------- -------
extension shall require the unanimous approval of all of the Banks (such
31
approval to be within the sole discretion of each Bank) and the written consent
of each Loan Party; and provided further that if any Bank shall decline to
-------- -------
approve of any such extension, the Borrowers' Designee may (i) on or prior to
the then applicable Revolving Termination Date, obtain a Replacement Bank to
acquire and assume all or part of the Loans and Commitment of such non-
consenting Bank in accordance with Section 4.8, or (ii) subject to repayment in
full on or prior to the then applicable Revolving Termination Date of all
Obligations then owing to each such non-consenting Bank, request that the
Revolving Termination Date be extended only with respect to such Banks as have
consented to such extension. The Borrowers each acknowledge and agree that (A)
no Bank shall have any obligation to increase its Commitment hereunder or
otherwise acquire or assume all or any part of any other Bank's Loans or
Commitment, whether in connection with an extension of the Revolving Termination
Date pursuant to this subsection (b) or otherwise, and (B) in the event that
some but not all of the Banks consent to an extension of the Revolving
Termination Date pursuant this subsection (b) and the Borrowers' Designee
requests that the Revolving Termination Date be extended with respect to such
consenting Banks only, the Aggregate Commitment shall be automatically reduced
to an amount equal to the combined Commitments of the remaining Banks, subject
to Section 2.11.
2.13 Interest. (a) (i) Each Revolving Loan shall bear interest on
--------
the outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the Offshore Rate or the Base Rate, as the case may be
(and subject to the Company's right to convert to another Type of Loans under
Section 2.4), plus the Applicable Margin (in the case of Offshore Rate Loans).
----
(ii) Each Swingline Loan shall bear interest on the outstanding principal amount
thereof from the applicable Borrowing Date at a rate per annum equal to the Base
Rate, or at such other rate as may be agreed to by the Swingline Bank.
(b) Interest on each Revolving Loan and Swingline Loan shall be paid
in arrears on each Interest Payment Date. Interest shall also be paid on the
date of any prepayment of Loans (other than Base Rate Loans) under Section 2.10
or 2.11 for the portion of the Loans so prepaid and upon payment (including
prepayment) of Loans (other than Base Rate Loans) in full thereof and, during
the existence of any Event of Default, interest shall be paid on demand of the
Agent at the request or with the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan payable by any Borrower, or any other
amount payable by such Borrower hereunder or under any other Loan Document is
not paid in full when due (whether at stated maturity, by acceleration, demand
or otherwise), such Borrower agrees to pay interest on such unpaid principal or
other amount, from the date such amount becomes due until the date such amount
is paid in full, and after as well as before any entry of judgment thereon to
the extent permitted by law, payable on demand, (i) in the case of any overdue
amounts denominated in Dollars, at a rate per annum equal to the Base Rate plus
----
2% per annum, and (ii) during such periods as any such overdue amount is
denominated in an Offshore Currency, at a rate per annum equal during each
Default Interest Period for such overdue amount to the Offshore Rate for such
Default Interest Period plus the Applicable Margin plus 2%. With respect to any
---- ----
overdue amount payable in an Offshore Currency, the Majority Banks in their sole
discretion may from time to time select interest periods of time of not more
than three months, as they shall deem appropriate (each such period a "Default
-------
Interest Period"). The initial Default Interest Period shall begin on the date
---------------
on which the amount in default becomes due, and each succeeding Default Interest
Period shall begin on the day on which the next preceding Default Interest
Period expires.
32
(d) Anything herein to the contrary notwithstanding, the obligations
of each Borrower to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, and in such event
such Borrower shall pay such Bank interest at the highest rate permitted by
applicable law.
2.14 Fees. In addition to certain fees described in Section 3.8:
----
(a) Arrangement and Agency Fees. The Company shall pay an arrangement
---------------------------
fee to the Arranger for the Arranger's own account, and shall pay an agency fee
to the Agent for the Agent's own account, as required by the letter agreement
between the Company and the Arranger and Agent dated March 31, 1998.
(b) Facility Fees. The Company shall pay to the Agent for the account
-------------
of each Bank, a facility fee on the Aggregate Commitment, computed on a
quarterly basis in arrears on the last Business Day of each calendar quarter, as
calculated by the Agent, at a rate per annum equal to the Applicable Fee Amount.
Such facility fee shall be payable regardless of utilization of the Commitments
and shall accrue from the Closing Date to the Revolving Termination Date and
shall be due and payable quarterly in arrears on the last Business Day of each
calendar quarter commencing on June 30, 1998, through the Revolving Termination
Date, with the final payment to be made on the Revolving Termination Date;
provided that, in connection with any termination of Commitments under Section
--------
2.9, the accrued facility fee calculated for the period ending on such date
shall also be paid on the date of termination. The facility fees provided in
this subsection shall accrue at all times after the above-mentioned commencement
date, including at any time during which one or more conditions in Article V are
not met.
(c) Participation Fees. The Company shall pay to the Agent for the
------------------
benefit of the Banks, the participation fees set forth in the Fee Letter. Such
participation fees shall be due and payable on the Closing Date and allocated
among the Banks in accordance with the Fee Letter.
2.15 Computation of Fees and Interest. (a) All computations of
--------------------------------
interest for Base Rate Loans when the Base Rate is determined by BofA's
"reference rate" shall be made on the basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year), except that interest shall accrue on the basis of the actual
number of days elapsed and a year of 365 days or 366 days, as the case may be,
in the case of Offshore Currency Loans denominated in any Offshore Currency in
respect of which interest is calculated on a 365/366-day in accordance with
customary practice in the applicable interbank market. Interest and fees shall
accrue during each period during which interest or such fees are computed from
the first day thereof to the last day thereof.
(b) Each determination of an interest rate or a Dollar Equivalent
Amount by the Agent or the Issuing Bank shall be conclusive and binding on the
Borrowers and the Banks in the absence of manifest error.
33
2.16 Payments by the Company. (a) All payments to be made by the
-----------------------
Borrowers shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by any Loan Party shall be
made to the Agent for the account of the Banks at the Agent's Payment Office,
and, with respect to principal of, interest on, and any other amounts relating
to, any Offshore Currency Loan, shall be made in the Offshore Currency in which
such Loan is denominated or payable, and, with respect to all other amounts
payable hereunder, shall be made in Dollars. Such payments shall be made in
Same Day Funds, and (i) in the case of any Offshore Currency payments, no later
than such time on the dates specified herein as may be determined by the Agent
to be necessary for such payment to be credited on such date in accordance with
normal banking procedures in the place of payment, and (ii) in the case of any
Dollar payments, no later than 11:00 a.m. (San Francisco time) on the date
specified herein. Any payment which is received by the Agent later than 11:00
a.m. (San Francisco time) (in the case of any Dollar payments), or later than
the time specified by the Agent as provided in clause (i) above (in the case of
Offshore Currency payments), shall be deemed to have been received on the
following Business Day and any applicable interest or fee shall continue to
accrue. The Agent will promptly distribute to each Bank its Pro Rata Share (or
other applicable share as expressly provided herein) of such payment in like
funds as received.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Agent receives notice from a Borrower or the Borrowers'
Designee prior to the date on which any payment in Dollars or any Applicable
Currency is due to the Banks that such Borrower will not make such payment in
full as and when required, the Agent may assume that such Borrower has made such
payment in full to the Agent on such date in Same Day Funds and the Agent may
(but shall not be so required), in reliance upon such assumption, distribute to
each Bank on such due date an amount equal to the amount then due such Bank. If
and to the extent such Borrower has not made such payment in full to the Agent,
each Bank shall repay to the Agent on demand such amount distributed to such
Bank, together with interest thereon at the Federal Funds Rate or, in the case
of a payment in an Offshore Currency, the Overnight Rate, for each day from the
date such amount is distributed to such Bank until the date repaid.
2.17 Payments by the Banks to the Agent. (a) Unless the Agent
----------------------------------
receives notice from a Bank on or prior to the Loan Availability Date or, with
respect to any Borrowing after the Loan Availability Date, at least one Business
Day prior to the date of such Borrowing, or, in the case of Base Rate Loans
only, not later than 10:00 a.m. (San Francisco time) on the date of such
Borrowing, that such Bank will not make available as and when required hereunder
to the Agent for the account of the applicable Borrower the amount of that
Bank's Pro Rata Share of the Borrowing, the Agent may assume that each Bank has
made such amount available to the Agent in Same Day Funds on the Borrowing Date
and the Agent may (but shall not be so required), in reliance upon such
assumption, make available to such Borrower on such date a corresponding amount.
If and to the extent any Bank shall not have made its full amount available to
the Agent in Same Day Funds and the Agent in such circumstances has made
available to such Borrower such amount, that Bank shall on the Business Day
following such Borrowing Date make such amount available to the Agent, together
with interest at the Federal Funds Rate or, in the case of
34
any Borrowing consisting of Offshore Currency Loans, the Overnight Rate, for
each day during such period. A notice of the Agent submitted to any Bank with
respect to amounts owing under this subsection 2.17(a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Bank's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent on
the Business Day following the Borrowing Date, the Agent will notify the
Borrowers' Designee of such failure to fund and, upon demand by the Agent, such
Borrower shall pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.18 Sharing of Payments, Etc. If, other than as expressly provided
------------------------
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Banks such participations in the
Loans made by them as shall be necessary to cause such purchasing Bank to share
the excess payment pro rata with each of them; provided, however, that if all or
-------- -------
any portion of such excess payment is thereafter recovered from the purchasing
Bank, such purchase shall to that extent be rescinded and each other Bank shall
repay to the purchasing Bank the purchase price paid therefor, together with an
amount equal to such paying Bank's ratable share (according to the proportion of
(i) the amount of such paying Bank's required repayment to (ii) the total amount
so recovered from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.
Each Loan Party agrees that any Bank so purchasing a participation from another
Bank may, to the fullest extent permitted by law, exercise all its rights of
payment (including the right of set-off, but subject to Section 11.10) with
respect to such participation as fully as if such Bank were the direct creditor
of such Loan Party in the amount of such participation. The Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Banks following any such purchases or repayments.
2.19 The Borrowers' Designee.
-----------------------
(a) Each of the Borrowers hereby irrevocably appoints, designates and
authorizes the Borrowers' Designee to take such action on its behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to it by the terms of
this Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. The Borrowers' Designee may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact.
(b) The Borrowers' Designee shall promptly forward to the Agent or the
Borrowers, as appropriate, all notices, certificates, financial statements and
reports received by it in the performance of its duties hereunder.
35
(c) The Borrowers may, upon 30 days' notice to and with the consent of
the Agent (which consent shall not be unreasonably withheld), appoint another
Borrower to act as Borrowers' Designee and upon such appointment such successor
Borrowers' Designee shall succeed to all the appointment, powers and duties of
the retiring Borrowers' Designee and the term "Borrowers' Designee" shall mean
such successor designee and the retiring Borrowers' Designee's rights, powers
and duties as Borrowers' Designee shall be terminated.
(d) The Borrowers' Designee shall perform its duties hereunder and
under the other Loan Documents on behalf of the Borrowers. The action of the
Borrowers' Designee shall in each case bind all the Borrowers, and any action
taken by the Borrowers' Designee in the name of the Borrowers or any of them
pursuant to this Agreement or any other Loan Document shall bind the Borrowers,
whether or not such action has been duly authorized by such Borrowers.
(e) Any agreement of the Agent and the Banks herein with respect to
the Borrowers' Designee is solely for the convenience and at the request of the
Borrowers. The Agent and the Banks shall be entitled to rely on the authority
of any Person purporting to be a Person authorized by the Borrowers to act on
behalf of the Borrowers' Designee and the Agent and the Banks shall not have any
liability to the Borrowers or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance thereon.
ARTICLE III
THE LETTERS OF CREDIT
---------------------
3.1 The Letter of Credit Subfacility. (a) On the terms and
--------------------------------
conditions set forth herein (i) the Issuing Bank agrees, (A) from time to time
on any Business Day during the period from the Loan Availability Date to the
Revolving Termination Date to issue Letters of Credit for the account of each
Borrower, and to amend or renew Letters of Credit previously issued by it, in
accordance with subsections 3.2(c) and 3.2(d), in an aggregate Dollar Equivalent
Amount not to exceed at any time the L/C Commitment, and (B) to honor drafts
under the Letters of Credit; and (ii) the Banks severally agree to participate
in Letters of Credit Issued for the account of each Borrower; provided, that the
--------
Issuing Bank shall not be obligated to Issue, and no Bank shall be obligated to
participate in, any Letter of Credit if as of the date of Issuance of such
Letter of Credit and after giving affect thereto (the "Issuance Date") (1) the
-------------
Effective Amount of all outstanding Revolving Loans plus the Effective Amount of
----
all Swingline Loans plus the Effective Amount of all L/C Obligations, shall
----
exceed the Aggregate Commitment; (2) the Effective Amount of the Revolving Loans
of any Bank plus the participation of such Bank in the Effective Amount of all
----
Swingline Loans plus the participation of such Bank in the Effective Amount of
----
all L/C Obligations, shall exceed such Bank's Commitment; or (3) the Effective
Amount of all L/C Obligations shall exceed the L/C Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, each
Borrower's ability to obtain Letters of Credit shall be fully revolving, and,
accordingly, any Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit which have expired or which have been drawn
upon and reimbursed.
(b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:
36
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from Issuing such Letter of Credit, or any Requirement of Law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction
over the Issuing Bank shall prohibit, or request that the Issuing Bank
refrain from, the Issuance of letters of credit generally or such Letter of
Credit in particular;
(ii) the Issuing Bank has received written notice from any Bank, the
Agent or any Loan Party, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is (A) more
than one year after the date of Issuance, unless the Majority Banks have
approved such expiry date in writing, or (B) after the date five Business
Days prior to the Revolving Termination Date;
(iv) any requested Letter of Credit does not provide for drafts, or
is not otherwise in form and substance acceptable to the Issuing Bank, or
the Issuance of a Letter of Credit shall violate any applicable policies of
the Issuing Bank;
(v) any standby Letter of Credit is for the purpose of supporting the
issuance of any letter of credit by any other Person; or
(vi) such Letter of Credit is in a face amount less than $1,000,000
(or the Dollar Equivalent Amount thereof in an Offshore Currency, as
determined as of the Computation Date for an Offshore Currency Letter of
Credit) or to be denominated in a currency other than Dollars or an
Offshore Currency.
3.2 Issuance, Amendment and Renewal of Letters of Credit. (a) Each
----------------------------------------------------
Letter of Credit shall be issued upon the irrevocable written request of the
Borrowers' Designee received by the Issuing Bank (with a copy sent by the
Borrowers' Designee to the Agent) at least four Business Days in the case of
Letters of Credit to be denominated in Dollars, and six Business Days in the
case of any Offshore Currency Letters of Credit (or such shorter time as the
Issuing Bank may agree in a particular instance in its sole discretion) prior to
the proposed date of issuance. Each such request for issuance of a Letter of
Credit shall be by facsimile, confirmed immediately in an original writing, in
the form of an L/C Application, and shall specify in form and detail
satisfactory to the Issuing Bank: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of the
Letter of Credit (and applicable Offshore Currency in the case of a proposed
Offshore Currency Letter of Credit); (iii) the expiry date of the Letter of
Credit; (iv) the name and address of the beneficiary thereof; (v) the documents
to be presented by the beneficiary of the Letter of Credit in case of any
drawing thereunder; (vi) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (vii) such other matters as
the Issuing Bank may require. The Dollar Equivalent Amount of any Offshore
Currency Letter of Credit will be determined by the Agent for such Letter of
Credit on the Computation Date therefor in accordance with subsection 2.5(a).
37
(b) At least two Business Days prior to the Issuance of any Letter of
Credit, the Issuing Bank will confirm with the Agent (by telephone or in
writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the Borrowers' Designee and, if not, the Issuing Bank
will provide the Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit from the Agent (A)
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under subsection 3.1(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or subsection
3.1(b)(ii); or (B) that one or more conditions specified in Article V are not
then satisfied; then, subject to the terms and conditions hereof, the Issuing
Bank shall, on the requested date, issue a Letter of Credit for the account of
the applicable Borrower in accordance with the Issuing Bank's usual and
customary business practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Borrowers' Designee received by the Issuing Bank (with a copy
sent by the Borrowers' Designee to the Agent) at least four Business Days in the
case of Letters of Credit denominated in Dollars, and six Business Days in the
case of Offshore Currency Letters of Credit (or such shorter time as the Issuing
Bank may agree in a particular instance in its sole discretion) prior to the
proposed date of amendment (including a renewal or extension thereof), amend any
Letter of Credit issued by it. Each such request for amendment of a Letter of
Credit shall be made by facsimile, confirmed immediately in an original writing,
made in the form of an L/C Amendment Application and shall specify in form and
detail satisfactory to the Issuing Bank: (i) the Letter of Credit to be
amended; (ii) the proposed date of amendment of the Letter of Credit (which
shall be a Business Day); (iii) the nature of the proposed amendment; and (iv)
such other matters as the Issuing Bank may require. The Issuing Bank shall be
under no obligation to amend any Letter of Credit if: (A) the Issuing Bank
would have no obligation at such time to issue such Letter of Credit in its
amended form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed amendment to the Letter of
Credit. The Agent will promptly notify the Banks of the receipt by it of any
L/C Application or L/C Amendment Application and of the Issuance of any Letter
of Credit notified to it by the Issuing Bank.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, the Issuing
Bank shall be entitled to authorize the renewal of any Letter of Credit issued
by it which provides for such renewal. The Issuing Bank shall be under no
obligation so to renew any Letter of Credit if: (A) the Issuing Bank would have
no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed renewal of the Letter of
Credit. If any outstanding Letter of Credit shall provide that it shall be
automatically renewed unless the beneficiary thereof receives notice from the
Issuing Bank that such Letter of Credit shall not be renewed, and if at the time
of renewal the Issuing Bank would be entitled to authorize the automatic renewal
of such Letter of Credit in accordance with this subsection 3.2(d) upon the
request of the Borrowers' Designee but the Issuing Bank shall not have received
any written direction by the Borrowers' Designee with respect thereto, the
Issuing Bank shall nonetheless be permitted to allow such Letter of Credit to
renew, and the applicable Borrower (as account party) and the Banks hereby
authorize such renewal, and, accordingly, the Issuing Bank shall be deemed to
have received an L/C Amendment Application from the Borrowers' Designee
requesting such renewal.
38
(e) The Issuing Bank may, at its election (or as required by the Agent
at the direction of the Majority Banks), deliver any notices of termination or
other communications to any Letter of Credit beneficiary or transferee, and take
any other action as necessary or appropriate, at any time and from time to time,
in order to cause the expiry date of such Letter of Credit to be a date not
later than the Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit.
3.3 Existing BofA Letters of Credit; Risk Participations, Drawings
--------------------------------------------------------------
and Reimbursements. (a) On and after the Loan Availability Date, the Existing
------------------
BofA Letters of Credit shall be deemed for all purposes, including for purposes
of the fees to be collected pursuant to subsections 3.8(a) and 3.8(c), and
reimbursement of costs and expenses to the extent provided herein, Letters of
Credit outstanding under this Agreement and entitled to the benefits of this
Agreement and the other Loan Documents, and shall be governed by the
applications and agreements pertaining thereto and by this Agreement. Each Bank
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank on the Loan Availability Date a participation in
each such Letter of Credit and each drawing thereunder in an amount equal to the
product of (i) such Bank's Pro Rata Share times (ii) the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, respectively. The Existing BofA Letters of Credit shall be deemed to
utilize the L/C Commitment and to utilize pro rata the Commitment of each Bank.
(b) Immediately upon the Issuance of each Letter of Credit in addition
to those described in subsection 3.3(a), each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Issuing Bank
a participation in such Letter of Credit and each drawing thereunder in an
amount equal to the product of (i) the Pro Rata Share of such Bank, times (ii)
the maximum amount available to be drawn under such Letter of Credit and the
amount of such drawing, respectively. Each Issuance of a Letter of Credit shall
be deemed to utilize the Commitment of each Bank by an amount equal to the
amount of such participation.
(c) In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the Issuing Bank will promptly notify
the Borrowers' Designee and specify in such notice the date such drawing will be
honored by the Issuing Bank (the "Honor Date"). If the Issuing Bank so notifies
----------
the Borrowers' Designee prior to 10:00 a.m. (San Francisco time) on the Honor
Date, the applicable Borrower, as account party under such Letter of Credit,
shall reimburse the Issuing Bank on the Honor Date for the amount paid by the
Issuing Bank under such Letter of Credit or, if the Issuing Bank shall so notify
the Borrowers' Designee after 10:00 a.m. (San Francisco time) on the Honor Date,
the applicable Borrower, as account party under such Letter of Credit, shall
reimburse the Issuing Bank by no later than 11:00 a.m. (San Francisco time) on
the next succeeding Business Day for the amount paid by the Issuing Bank under
such Letter of Credit on the Honor Date (each such date, a "Reimbursement
-------------
Date"), in each case, in an amount equal to the amount so paid by the Issuing
Bank and in the currency in which such Letter of Credit is payable. Such
reimbursement shall be made by such Borrower no
39
later than 2:00 p.m. (San Francisco time) in the case of reimbursement to be
made on the Honor Date, or 11:00 a.m. (San Francisco time) in the case of
reimbursement to be made on the next Business Day following the Honor Date. In
the event such Borrower fails to reimburse the Issuing Bank for the full amount
of any drawing under any Letter of Credit by the required time as provided above
on the Reimbursement Date, the Issuing Bank will promptly notify the Agent, and
the Agent will promptly notify each Bank thereof (including the amount thereof,
expressed in Dollars as specified below, and such Bank's Pro Rata Share
thereof), and the Borrowers' Designee shall be deemed to have requested that
Base Rate Loans be made by the Banks to such Borrower to be disbursed on the
Reimbursement Date for such Letter of Credit, subject to the amount of the
unutilized portion of the Aggregate Commitment and subject to the conditions set
forth in Section 5.3. In the case of any drawing under an Offshore Currency
Letter of Credit, the Issuing Bank shall redenominate the unreimbursed drawing
into Dollars as of the Honor Date, and shall notify the Agent of the Dollar
Equivalent Amount thereof, and upon notice by the Agent to the Banks, such Loans
shall be funded by each Bank in Dollars, in an amount equal to such Bank's Pro
Rata Share of the Dollar Equivalent Amount of the unreimbursed drawing as of the
Honor Date. Each Borrower hereby directs that the proceeds of any such Loans
deemed to be made by it shall be used to pay its reimbursement obligations in
respect of any such drawing. Solely for the purposes of making such Loans, the
Minimum Amount limitations set forth in Section 2.3 shall not be applicable.
Any notice given by the Issuing Bank or the Agent pursuant to this subsection
3.3(c) may be oral if immediately confirmed in writing (including by facsimile);
provided that the lack of such an immediate confirmation shall not affect the
--------
conclusiveness or binding effect of such notice. In the event that any amount of
any drawing under any Letter of Credit is not reimbursed by the applicable
Borrower on the Honor Date, the Dollar Equivalent Amount (as of the Honor Date)
of such unreimbursed amount shall bear interest until it is either deemed to be
an L/C Borrowing as provided in subsection (e) or deemed to be converted to a
Base Rate Loan as provided in this subsection (c) at a rate per annum equal to
the Base Rate.
(d) Each Bank shall upon receipt of any notice pursuant to subsection
3.3(c) make available to the Agent for the account of the Issuing Bank an amount
in Dollars and in Same Day Funds equal to its Pro Rata Share of the amount of
the drawing (redenominated into Dollars as provided above, if applicable),
whereupon the Banks shall (subject to subsection 3.3(e)) each be deemed to have
made a Revolving Loan consisting of a Base Rate Loan to the applicable Borrower
in that amount. The Agent will promptly give notice of the occurrence of any
Reimbursement Date, but failure of the Agent to give any such notice on the
Reimbursement Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligations under this
Section 3.3.
(e) With respect to any unreimbursed drawing that is not converted
into Revolving Loans to a Borrower in whole or in part, because of such
Borrower's failure to satisfy the conditions set forth in Section 5.3 or for any
other reason, such Borrower shall be deemed to have incurred from the Issuing
Bank an L/C Borrowing, in Dollars, in the amount of such drawing (determined, in
the case of any Offshore Currency Letter of Credit, as specified below), which
L/C Borrowing shall be due and payable on demand (together with interest) and
shall bear interest at a rate per annum equal to the Base Rate plus 2% per
----
annum. In such event, each Bank shall upon receipt of any notice pursuant to
subsection 3.3(c) make available to the Agent for the account of the Issuing
Bank an amount in Dollars and in Same Day Funds equal to its Pro Rata Share of
the amount of the drawing. Each Bank's payment to the Issuing Bank pursuant to
this subsection 3.3(e) shall be deemed payment in respect of its participation
in such L/C Borrowing
40
and shall constitute an L/C Advance from such Bank in satisfaction of its
participation obligation under this Section 3.3. In the case of any Offshore
Currency Letter of Credit, the unreimbursed drawing shall be redenominated into
Dollars by the Issuing Bank as of the Honor Date, and any payment by each Bank
shall be made in Dollars in an amount equal to such Bank's Pro Rata Share of the
Dollar Equivalent Amount of the unreimbursed drawing as of the Honor Date.
(f) If any Bank fails to make available to the Agent for the account
of the Issuing Bank the amount of such Bank's Pro Rata Share of the amount of
any drawing by no later than 12:00 noon (San Francisco time) on the
Reimbursement Date, then interest shall accrue on such Bank's obligation to make
----
such payment, from the Reimbursement Date to the date such Bank makes such
payment, at (i) the Federal Funds Rate in effect from time to time during the
period commencing on the Reimbursement Date and ending on the date three
Business Days thereafter, and (ii) thereafter at the Base Rate as in effect from
time to time.
(g) Each Bank's obligation in accordance with this Agreement to make
(or participate in) the Revolving Loans, or L/C Advances, as contemplated by
this Section 3.3, as a result of a drawing under a Letter of Credit, shall be
absolute and unconditional and without recourse to the Issuing Bank and shall
not be affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against the Issuing
Bank, any Loan Party or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of a Default, an Event of Default or a Material
Adverse Effect; or (iii) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; provided, however, that each
-------- -------
Bank's obligation to make Revolving Loans under this Section 3.3 is subject to
the conditions set forth in Section 5.3.
3.4 Repayment of Participations. (a) Upon (and only upon) receipt by
---------------------------
the Agent for the account of the Issuing Bank of funds from a Borrower (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of Credit pursuant to Section
3.3 or (ii) in payment of interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the account of the Issuing
Bank, the amount of such Bank's Pro Rata Share of such funds, and the Issuing
Bank shall receive the amount of the Pro Rata Share of such funds of any Bank
that did not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to return
to any Borrower, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by such
Borrower to the Agent for the account of the Issuing Bank pursuant to subsection
3.4(a) in reimbursement of a payment made under the Letter of Credit or interest
or fee thereon, each Bank shall, on demand of the Agent, forthwith return to the
Agent or the Issuing Bank the amount of its Pro Rata Share of any amounts so
returned by the Agent or the Issuing Bank plus interest thereon from the date
----
such demand is made to the date such amounts are returned by such Bank to the
Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds Rate
in effect from time to time.
41
3.5 Role of the Issuing Bank. (a) Each Bank and each Borrower agree
------------------------
that, in paying any drawing under a Letter of Credit, the Issuing Bank shall not
have any responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Bank for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Banks (including the Majority Banks, as applicable); (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
(c) Each Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
-------- -------
preclude such Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.6; provided,
--------
however, anything in such clauses to the contrary notwithstanding, that such
-------
Borrower may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to such Borrower, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by such Borrower
which the Company proves were caused by the Issuing Bank's willful misconduct or
gross negligence or the Issuing Bank's willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing: (i) the Issuing
Bank may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a 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.
3.6 Obligations Absolute. The obligations of each Borrower under
--------------------
this Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Revolving Loans, and the obligations of
each Guarantor hereunder with respect thereto, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this Agreement or any
L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations of such Borrower in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
42
(iii) the existence of any claim, set-off, defense or other right
that such Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by the L/C-Related Documents or any unrelated
transaction;
(iv) 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; or any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit;
(v) any payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of any Letter of Credit; or any payment made by the
Issuing Bank under any Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any Insolvency Proceeding;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the obligations of such Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Borrower or Guarantor.
3.7 Cash Collateral Pledge. Upon (i) the request of the Agent, (A)
----------------------
if the Issuing Bank has honored any full or partial drawing request on any
Letter of Credit and such drawing has resulted in an L/C Borrowing hereunder, or
(B) if, as of the Revolving Termination Date, any Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, or (ii) the
occurrence of the circumstances described in Section 2.11 requiring the Company
to Cash Collateralize Letters of Credit, then, the Company shall immediately
Cash Collateralize the L/C Obligations in an amount equal to such L/C
Obligations. In connection with any such amounts to be paid over to the Agent as
cash collateral for Offshore Currency L/C Obligations then outstanding, the
amount of cash collateral to be paid over with respect thereto and held as part
of the cash collateral pursuant to this Section 3.7 shall be determined on the
basis of the Dollar Equivalent Amount thereof as of the most recent Computation
Date. The Company shall, to the extent necessary, make such additional pledges
from time to time as shall be necessary to ensure that all L/C Obligations
remain at all times fully cash collateralized (in the case of any Offshore
Currency L/C Obligations, the amounts thereof from time to time to be determined
on the basis of the Dollar Equivalent Amount thereof as of the most recent
Computation Date), provided that no such additional pledge shall be required at
--------
any time that the shortfall in the amount of the required cash collateral
results from a change in applicable rates of exchange between Dollars and
Offshore Currencies and such shortfall shall not exceed at such time $100,000.
The
43
Company hereby grants the Agent, for the benefit of the Agent, the Issuing Bank
and the Banks, a security interest in all such cash and deposit account balances
contemplated by this Section 3.7 or Section 9.2. Cash collateral held under
this Section 3.7 or Section 9.2 shall be maintained in blocked, non-interest
bearing deposit accounts at BofA.
3.8 Letter of Credit Fees. (a) The Company shall pay to the Agent
---------------------
for the account of each of the Banks a letter of credit fee with respect to the
Letters of Credit equal to the rate per annum equal to the Applicable Fee Amount
of the actual daily maximum amount available to be drawn of the outstanding
Letters of Credit, computed on a quarterly basis in arrears on the last Business
Day of each calendar quarter based upon Letters of Credit outstanding for that
quarter as calculated by the Agent.
(b) The Company shall pay to the Issuing Bank a letter of credit
fronting fee for each Letter of Credit Issued by the Issuing Bank equal to 0.10%
per annum of the difference between the average daily maximum amount available
to be drawn on the outstanding Letters of Credit and the Pro Rata Share of the
Issuing Bank therein in its capacity as a Bank, computed on a quarterly basis in
arrears on the last Business Day of each calendar quarter based upon Letters of
Credit outstanding for such quarter as calculated by the Agent.
(c) The letter of credit fees described in subsections 3.8(a) and
3.8(b) shall be due and payable quarterly in arrears on the last Business Day of
each calendar quarter during which Letters of Credit are outstanding, commencing
on the first such quarterly date to occur after the Loan Availability Date,
through the Revolving Termination Date (or such later date upon which the
outstanding Letters of Credit shall expire), with the final payment to be made
on the Revolving Termination Date (or such later expiration date).
(d) For purposes of determining the average daily maximum amount
available to be drawn on the outstanding Letters of Credit in order to calculate
the fees due under subsection 3.8(a) or subsection (b), the amount of any Letter
of Credit in an Offshore Currency on any date shall be determined based upon the
Dollar Equivalent Amount thereof as of the most recent Computation Date pursuant
to subsection 2.5(a) with respect to such Letter of Credit.
(e) The Company shall pay to the Issuing Bank from time to time on
demand the normal issuance, presentation, amendment and other processing fees,
and other standard costs and charges, of the Issuing Bank relating to letters of
credit as from time to time in effect, in Dollars or in such Offshore Currency
as the Issuing Bank shall specify.
3.9 Uniform Customs and Practice. The Uniform Customs and Practice
----------------------------
for Documentary Credits as published by the International Chamber of Commerce
most recently at the time of issuance of any Letter of Credit shall (unless
otherwise expressly provided in the Letters of Credit) apply to the Letters of
Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.1 Taxes. (a) Any and all payments by each Loan Party to each Bank
-----
or the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for, any Taxes. In addition,
the Loan Parties shall pay all Other Taxes.
44
(b) If any Loan Party shall be required by law to deduct or withhold
any Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that, after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section), such
Bank or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;
(ii) such Loan Party shall make such deductions and withholdings;
(iii) such Loan Party shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) such Loan Party shall also pay to each Bank or the Agent for the
account of such Bank, at the time interest is paid, Further Taxes in the
amount that the respective Bank specifies as necessary to preserve the
after-tax yield such Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
(c) Each Loan Party agrees to indemnify and hold harmless each Bank
and the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii)
Further Taxes in the amount that the respective Bank specifies as necessary to
preserve the after-tax yield such Bank would have received if such Taxes, Other
Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date such Bank or the Agent makes written demand
therefor; provided, however, that such Loan Party shall not be obligated to make
-------- -------
a payment to the Bank or the Agent (as the case may be) pursuant to this Section
in respect of penalties, interest and other liabilities attributable to any
Taxes, Other Taxes, or Further Taxes, if (A) such penalties, interest and other
liabilities have accrued after such Loan Party has indemnified or paid any
additional amount pursuant to this Section, or (B) such penalties, interest and
other liabilities are attributable to the gross negligence or wilful misconduct
of the Bank. After the Bank or the Agent (as the case may be) learns of the
imposition of Taxes, Other Taxes or Further Taxes, such Bank and the Agent will
act in good faith to promptly notify the relevant Loan Party of its obligations
hereunder.
(d) Within 30 days after the date of any payment by any Loan Party of
Taxes, Other Taxes or Further Taxes, the Borrowers' Designee shall furnish to
each Bank or the Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment satisfactory to such Bank or the
Agent.
(e) If any Loan Party is required to pay any amount to any Bank or the
Agent pursuant to subsection (b) or (c) of this Section, then such Bank shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
change the jurisdiction of its Lending Office so as to eliminate any such
additional payment by such Loan Party which may thereafter accrue,
45
if such change in the judgment of such Bank is not otherwise materially
disadvantageous to such Bank; provided that the mere existence of fees, charges,
--------
costs or expenses that the relevant Loan Party has offered and agreed to pay on
behalf of a Bank shall not be deemed to be disadvantageous to the Bank.
(f) If a Bank receives a refund in respect of any Taxes, Other Taxes
or Further Taxes as to which it has been indemnified by any Loan Party pursuant
to this Section, or with respect to which any Loan Party has paid additional
amounts pursuant to this Section, it shall within 30 days from the date of
receipt of such refund pay over the amount of such refund (including any
interest paid or credited by the relevant taxing authority with respect to such
refund) to such Loan Party (but only to the extent of indemnity payments made,
or additional amounts paid, by the Loan Party under the Section with respect to
the Taxes, Other Taxes or Further Taxes giving rise to such refund); provided,
--------
however, that the Loan Party, upon the request of such Bank agrees to repay the
-------
amount paid over to the Loan Party to such Bank in the event such Bank is
required to repay such refund to such relevant authority.
(g) For any period with respect to which a Bank has failed to provide
the Company, JMII, the applicable Borrower or the Agent with the appropriate
form as required by Section 10.10(a) (whether or not such Bank is lawfully able
to do so, unless such failure is due to a change in treaty, law or regulation
occurring subsequent to the date on which such form originally was required to
be provided), such Bank shall not be entitled to indemnification under this
Section 4.1 with respect to Taxes imposed by the United States (or any political
division thereof); provided that if a Bank, which is otherwise exempt from
--------
withholding tax, becomes subject to Taxes because of its failure to deliver a
form required hereunder, the Loan Parties shall take such steps as such Bank
shall reasonably request, at the Bank's expense, to assist such Bank to recover
such Taxes.
(h) Each Bank and the Agent agrees that it will (i) take all
reasonable actions reasonably requested by the Loan Parties that are without
risk or material cost to such Bank or the Agent (as the case may be) to maintain
all exemptions, available to it from withholding taxes (whether available by
treaty or existing administrative waiver), including the filing of any
certificate or document if such filing would avoid the need for or reduce the
amount of any such additional amounts payable to or for the account of such Bank
or the Agent (as the case may be) pursuant to this Section 4.1, and (ii) to the
extent reasonable and without material cost to it, otherwise cooperate with the
relevant Loan Party to minimize any amount payable by such Loan Party under this
Section.
4.2 Illegality. If any Bank determines that the introduction of any
----------
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans, then, in such event, the affected Bank shall give notice
thereof to the Borrowers' Designee (through the Agent). Thereafter, (i) any
obligation of that Bank to make Offshore Rate Loans (or convert Loans into
Offshore Rate Loans) shall be suspended until such Bank notifies the Agent and
the Borrowers' Designee that the circumstances giving rise to such determination
no longer exist, (ii) to the extent that such determination relates to an
Offshore Rate Loan then being requested by a Borrower pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, such Bank shall make such Loan
as (or convert such Loan to) a Base Rate Loan, and (iii) any outstanding
Offshore Rate Loans of such affected Bank shall convert
46
into Base Rate Loans either on the last day of the Interest Period thereof, if
such Bank may lawfully continue to maintain such Offshore Rate Loans to such
day, or (subject to Section 4.4) immediately, if such Bank may not lawfully
continue to maintain such Offshore Rate Loan. If such notice relates to an
Offshore Currency Loan, such Loan to be made as (or converted into) a Base Rate
Loan by the affected Bank shall be in the Dollar Equivalent Amount of the
Offshore Currency Loan maintained by such Bank, or to be made, converted or
continued by such Bank.
4.3 Increased Costs and Reduction of Return. (a) If any Bank
---------------------------------------
determines that, due to either (i) the introduction after the date hereof of or
any change after the date hereof in or in the interpretation of any law or
regulation or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Bank of agreeing
to make or making, funding or maintaining any Offshore Rate Loans or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then such Bank shall
promptly give notice to the Borrowers' Designee and the affected Borrower shall
pay to such Bank, within 15 days of receipt of the notice referred to above,
such additional amounts (in the form of an increased rate of, or a different
method of calculating, interest or otherwise as such Bank in its sole discretion
shall determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder. To the extent
the notice required by the preceding sentence and relating to the costs arising
under this Section 4.3 is given by any Bank more than 90 days after the
occurrence of the event giving rise to the additional costs of the type
described in this Section 4.3, such Bank shall not be entitled to compensation
under this Section 4.3 for any amounts incurred or accrued prior to the giving
of such notice to the Borrowers' Designee.
(b) If any Bank shall have determined that (i) the introduction after
the date hereof of any Capital Adequacy Regulation, (ii) any change after the
date hereof in any Capital Adequacy Regulation, or (iii) any change after the
date hereof in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, affects or would affect the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank and (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy and such Bank's desired
return on capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, the Company agrees to pay such Bank, within 15 days of the receipt of
the notice referred to below, such additional amounts as shall be required to
compensate such Bank for the increased cost to such Bank as a result of such
increase of capital. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's determination of compensation
--------
under this subsection 4.3(b) shall, absent manifest error, be final and
conclusive and binding on all parties hereto. Each Bank, upon determining that
additional amounts will be payable pursuant to this subsection 4.3(b), will give
prompt written notice thereof to the Borrowers' Designee, although the failure
to give any such notice shall not release or diminish the Company's obligations
to pay additional amounts pursuant to this subsection 4.3(b). To the extent the
notice required by the immediately preceding sentence is given by any
47
Bank more than 90 days after the occurrence of the event giving rise to the
additional costs of the type described in this subsection 4.3(b), such Bank
shall not be entitled to compensation under this subsection 4.3(b) for any
amounts incurred or accrued prior to the giving of such notice to the Borrowers'
Designee.
4.4 Funding Losses. Each Borrower shall reimburse each Bank and hold
--------------
each Bank harmless, within 15 days of written request by such Bank to the
Borrowers' Designee (which request shall set forth in reasonable detail the
basis for requesting and the calculation of the amount of such compensation),
from any loss or expense which the Bank may sustain or incur as a consequence
of:
(a) the failure of such Borrower to make on a timely basis any
payment of principal of any Offshore Rate Loan;
(b) the failure of such Borrower to borrow, continue or convert a Loan
after the Borrowers' Designee has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the failure of such Borrower to make any prepayment in accordance
with any notice delivered under Section 2.9 or 2.10;
(d) the prepayment (including pursuant to Section 2.10, 2.11, or 4.8)
or other payment (including after acceleration thereof) of an Offshore Rate Loan
on a day that is not the last day of the relevant Interest Period; or
(e) the conversion under Section 2.4 of any Offshore Rate Loan to a
Base Rate Loan on a day that is not the last day of the relevant Interest
Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees payable
to terminate the deposits from which such funds were obtained or from charges
relating to any Offshore Currency Loans (but excluding any loss of anticipated
profits).
4.5 Inability to Determine Rates. If the Agent or the Banks shall
----------------------------
determine that for any reason adequate and reasonable means do not exist for
determining the Offshore Rate for any requested Interest Period with respect to
a proposed borrowing of Offshore Rate Loans or conversion or continuation of
Offshore Rate Loans, or that the Offshore Rate applicable pursuant hereto for
any requested Interest Period with respect to a proposed borrowing of Offshore
Rate Loans, or a conversion into or continuation of Offshore Rate Loans does not
adequately and fairly reflect the cost to the Banks of funding such Loans, the
Agent will promptly so notify the Borrowers' Designee and each Bank.
Thereafter, the obligation of the Banks to make or maintain Offshore Rate Loans
hereunder shall be suspended until the Agent upon the instructions of the Banks
revokes such notice in writing. Upon receipt of such notice, the Borrowers'
Designee may revoke any Notice of Borrowing or Notice of Conversion/Continuation
then submitted by it. In the case of any Offshore Rate Loans in Dollars, if the
Borrowers' Designee does not revoke such Notice, the Banks shall make, convert
or continue the Loans, as proposed by the Borrowers' Designee, in the amount
specified in the applicable notice submitted by the Borrowers' Designee, but
such Loans shall be made, converted or continued as Base Rate Loans instead of
Offshore Rate Loans. In the case of any Offshore Currency Loans, the Borrowing
or continuation shall be
48
in an aggregate amount equal to the Dollar Equivalent Amount of the originally
requested Borrowing or continuation in the Offshore Currency, and to that end
any outstanding Offshore Currency Loans which are the subject of any
continuation shall be redenominated and converted into Base Rate Loans in
Dollars with effect from the last day of the Interest Period with respect to any
such Offshore Currency Loans.
4.6 Reserves on Offshore Rate Loans. The Company shall pay to each
-------------------------------
Bank, as long as such Bank shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), and, in respect of any Offshore Currency Loans, under any
applicable regulations of the central bank or other relevant Governmental
Authority in the country in which the Offshore Currency of such Offshore Rate
Loan circulates, additional costs on the unpaid principal amount of each
Offshore Rate Loan equal to the actual costs of such reserves allocated to such
Loan by the Bank (as determined by such Bank in good faith, which determination
shall be conclusive), payable on each date on which interest is payable on such
Loan, provided such Bank shall promptly give notice to the Borrowers' Designee
--------
and to the Agent of such additional cost. Thereafter the affected Borrower
shall pay such Bank, within 15 days of receipt of such notice, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs. To the extent the notice required by the preceding sentence and relating
to the costs arising under this Section 4.6 is given by any Bank more than 90
days after the occurrence of the event giving rise to the additional costs of
the type described in this Section 4.6, such Bank shall not be entitled to
compensation under this Section 4.6 for any amounts incurred or accrued prior to
the giving of such notice to the Borrowers' Designee.
4.7 Certificates of Banks. Any Bank claiming reimbursement or
---------------------
compensation under this Article IV shall deliver to the Borrowers' Designee
(with a copy to the Agent) a certificate setting forth in reasonable detail the
amount payable to the Bank hereunder and such certificate shall be conclusive
and binding on the Loan Parties in the absence of manifest error.
4.8 Substitution of Banks. Upon the occurrence of any event giving
---------------------
rise to the operation of Section 4.1, 4.2, 4.3 or 4.6 with respect to any Bank
which results in such Bank (an "Affected Bank") charging to any Borrower
-------------
increased costs in excess of those generally charged to such Borrower by the
other Banks, or upon notice to the Agent from any Bank that it shall not consent
to a request by the Borrowers' Designee for an extension of the Revolving
Termination Date pursuant to subsection 2.12(b), the Borrowers' Designee may:
(i) request one or more of the other Banks to acquire and assume all or part of
such Affected Bank's Loans and Commitment; or (ii) designate a replacement
commercial bank, which shall be an Eligible Assignee, satisfactory to the
Borrowers' Designee to acquire and assume all or a ratable part of such Affected
Bank's Loans and Commitment (a "Replacement Bank"); provided, however, that the
---------------- -------- -------
Borrowers shall be liable for the payment upon demand of all costs and other
amounts arising under Section 4.4 hereof that result from the acquisition of any
Affected Bank's Loan and/or Commitment (or any portion thereof) by a Bank or
Replacement Bank, as the case may be, on a date other than the last day of the
applicable Interest Period with respect to any Offshore Rate Loan then
outstanding. Any such designation of a Replacement Bank under clause (ii) shall
be
49
effected in accordance with, and subject to the terms and conditions of, the
assignment provisions contained in Section 11.8 hereof, and shall in any event
be subject to the prior written consent of the Agent, the Issuing Bank and the
Swingline Bank (which consents shall not be unreasonably withheld).
4.9 Change of Lending Office. Each Bank agrees that on the
------------------------
occurrence of any event giving rise to the operations of Section 4.1, 4.2, 4.3
or 4.6 with respect to such Bank it will, if requested by the Borrowers'
Designee, use reasonable efforts (subject to overall policy considerations of
such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event, provided that such designation is made on such
--------
terms that such Bank and its Lending Office suffer no material economic, legal
or regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section.
4.10 Survival. The agreements and obligations of the Company and the
--------
other Loan Parties in this Article IV shall survive the termination of the
Commitments, the termination or expiration of all Letters of Credit and the
payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.1 Conditions of Initial Credit Extensions. Subject to Sections 5.2
---------------------------------------
and 5.3, the obligation of each Bank and the Swingline Bank to make its initial
Loan hereunder, and the obligation of the Issuing Bank to Issue its initial
Letter of Credit and to include the Existing BofA Letters of Credit herein, are
subject to the condition that the Agent shall have received on or before the
Closing Date all of the following, in form and substance satisfactory to the
Agent and each Bank (except where the form and content of a document is
specified herein), and in sufficient copies for each Bank:
(a) Credit Agreement and Notes. This Agreement executed by each party
--------------------------
hereto and Notes executed by each Borrower for any Banks requesting Notes;
(b) Resolutions; Incumbency.
-----------------------
(i) Copies of the resolutions of the board of directors of each Loan
Party authorizing the transactions contemplated hereby, certified as of the
Closing Date by the Secretary or an Assistant Secretary of such Loan Party;
and
(ii) A certificate of the Secretary or Assistant Secretary of each
Loan Party, dated as of the Closing Date, certifying the names and true
signatures of the officers of such Loan Party authorized to execute and
deliver this Agreement and all other Loan Documents to be delivered by it
hereunder;
(c) Organization Documents. The articles or certificate of
----------------------
incorporation and the bylaws (or other applicable organizational or
constitutional documents) of each Loan Party as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of such Loan Party as of the
Closing Date.
(d) Legal Opinions.
--------------
50
(i) an opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇, General Counsel of the Company,
and addressed to the Agent and the Banks, substantially in the form of Exhibit
-------
D, dated the Closing Date; and
(ii) a favorable opinion of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, special
counsel to the Agent, dated the Closing Date;
(e) Payment of Fees. Evidence of payment by the Company of all
---------------
accrued and unpaid fees and, to the extent invoiced at least two Business Days
prior to the Closing Date, costs and expenses to the extent then due and payable
on the Closing Date; and
(f) Proposed Amendment to 10 7/8% Notes. A certificate of a
-----------------------------------
Responsible Officer of the Company attaching the form of Supplemental Indenture
to the Indenture under which the 10-7/8% Notes are issued the form and substance
of which shall be deemed satisfactory to the Agent and the Banks if
substantially the same in form and substance as the draft Supplemental Indenture
provided to the Agent on April 22, 1998.
5.2 Additional Condition of Initial Credit Extension. The obligation
------------------------------------------------
of each Bank and the Swingline Bank to make its initial Loan hereunder, and the
obligation of the Issuing Bank to Issue its initial Letter of Credit and to
include the Existing BofA Letters of Credit herein, are subject to the
additional condition precedent that the Agent shall have received on or before
the Loan Availability Date, in sufficient copies for each Bank, a certificate of
a Responsible Officer of the Company certifying that, prior to or concurrently
with the initial Credit Extension, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Group, Inc. has
accepted for payment pursuant to the Tender Offer at least 51% of the
outstanding principal amount of the 10-7/8% Notes and given notice of such
acceptance to the Trustee under the governing Indenture and the terms of the
Indenture were, upon the giving of such notice, amended automatically as set
forth in the form of the Supplemental Indenture delivered to the Agent and the
Banks pursuant to subsection 5.1(f).
5.3 Conditions to All Credit Extensions. The obligation of each Bank
-----------------------------------
and the Swingline Bank to make any Loan to be made by it (including its initial
Loan) and the obligation of the Issuing Bank to Issue any Letter of Credit
(including the initial Letter of Credit) and to include the Existing BofA
Letters of Credit herein are subject to the satisfaction of the following
conditions precedent on the relevant Borrowing Date or Issuance Date:
(a) Notice, Application. The Agent shall have received a Notice of
-------------------
Borrowing or, in the case of any Issuance of any Letter of Credit, the Issuing
Bank and the Agent shall have received an L/C Application or L/C Amendment
Application, as required under Section 3.2;
(b) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties in Article VI shall be true and correct on and as
of such Borrowing Date or Issuance Date with the same effect as if made on and
as of such Borrowing Date or Issuance Date (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date and except that this
subsection (b) shall be deemed instead to refer to the last day of the most
recent year for which financial statements have then been delivered in respect
of the representation and warranty made in subsection 6.11(a)); and
51
(c) No Existing Default. No Default or Event of Default shall exist
-------------------
or shall result from such Borrowing or Issuance.
Each Notice of Borrowing and L/C Application or L/C Amendment Application
submitted by the Borrowers' Designee hereunder shall constitute a representation
and warranty by the Borrowers' Designee and the applicable Borrower hereunder,
as of the date of each such notice and as of each Borrowing Date or Issuance
Date, as applicable, that the conditions in this Section 5.3 are satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
6.1 Corporate Existence and Power. The Company and each of its
-----------------------------
Material Subsidiaries: (a) is a corporation, partnership or limited liability
company duly organized or formed, as the case may be, validly existing and (if
applicable) in good standing under the laws of the jurisdiction of its
incorporation or formation; (b) has the power and authority (i) to own its
assets and carry on its business and (ii) in the case of any Loan Party, to
execute, deliver, and perform its obligations under the Loan Documents to which
it is a party; (c) is duly qualified, licensed and (if applicable) in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, license or good standing except, in each case referred to in
clause (b)(i) or clause (c) of this Section, to the extent that the failure to
do so would not reasonably be expected to have a Material Adverse Effect.
6.2 Authorization; No Contravention. The execution, delivery and
-------------------------------
performance by each of the Loan Parties of this Agreement and each other Loan
Document to which it is a party have been duly authorized by all necessary
corporate or comparable action, and do not and will not: (a) contravene the
terms of any of that Person's Organization Documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien (other
than a Permitted Lien) under, any document evidencing any material Contractual
Obligation to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is
subject, except where such conflict, breach or contravention would not
reasonably be expected to have a Material Adverse Effect; or (c) violate any
Requirement of Law, except where such violation would not reasonably be expected
to have a Material Adverse Effect.
6.3 Governmental Authorization. No approval, consent, exemption,
--------------------------
authorization, or other action by, or notice to, or filing with (except as have
been obtained or made on or prior to any Credit Extension or are limited to the
routine public disclosure concerning the Company), any Governmental Authority is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, any Loan Party of the Agreement or any other Loan
Document.
52
6.4 Binding Effect. This Agreement and each other Loan Document to
--------------
which any Loan Party is a party constitute the legal, valid and binding
obligations of such Loan Party, enforceable against such Loan Party in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally or by equitable principles relating to enforceability.
6.5 Litigation. Except as disclosed in the Company's Form 10-K with
----------
respect to its fiscal year ended December 31, 1997, there are no actions, suits,
proceedings (regardless of whether enforcement is sought in equity or at law),
claims or disputes pending, or to the best knowledge of the Company, threatened
or contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or any of its Material Subsidiaries or any of
their respective properties, (a) which in any manner draws into question the
validity or enforceability of any Loan Document; or (b) in which there is a
reasonable possibility of any adverse decision that would have a Material
Adverse Effect. No injunction, writ, temporary restraining order or any order
of any nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution or delivery of this Agreement or
any other Loan Document by the Loan Parties, or directing that such execution or
delivery, or payment thereunder, not be consummated (or made) as herein or
therein provided.
6.6 No Defaults. No Default or Event of Default exists or would
-----------
result from the incurring of any Obligations by any Loan Party.
6.7 ERISA Compliance. Except as in each case has not resulted or
----------------
would not reasonably be expected to result in a Material Adverse Effect:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Pension Plan which is intended to qualify under Section 401(a) of the Code has
received a favorable determination letter from the IRS and, to the best
knowledge of the Company, nothing has occurred which would cause the loss of
such qualification. The Company and each ERISA Affiliate has made all required
contributions to any Pension Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Pension
Plan.
(b) There are no pending or, to the best knowledge of the Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or would reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
53
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
6.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans
-----------------------------------
are to be used solely for the purposes set forth in and permitted by Section
7.10 and Section 8.6. Neither the Company nor any of its Subsidiaries is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock.
6.9 Title to Properties; Liens. The Company and each of its Material
--------------------------
Subsidiaries has good record and marketable title in fee simple to, or valid
leasehold interests in (or the equivalent in the applicable jurisdiction), all
real property necessary or used in the ordinary conduct of their respective
businesses, except for any Permitted Liens and such defects in or other
differences from such required title or interest as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
6.10 Taxes. The Company and its Subsidiaries have filed all Federal
-----
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, (i) except those which are being contested in good
faith by appropriate proceedings or (ii) where the failure to so file or pay
would not reasonably be expected to have a Material Adverse Effect.
6.11 Financial Condition. (a) The audited consolidated balance sheet
-------------------
of the Company and its Subsidiaries dated December 31, 1997, and the related
consolidated statements of income or operations, stockholders' equity and cash
flows for the fiscal period ended on that date: (i) were prepared in accordance
with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein and (ii) are complete and accurate in all
material respects and fairly present the financial condition of the Company and
its Subsidiaries as of the date thereof and results of operations and cash flows
for the period covered thereby.
(b) Since December 31, 1997, there has been no Material Adverse
Effect.
6.12 Environmental Matters. Except as disclosed in the Company's
---------------------
Form 10-K with respect to its fiscal year ended December 31, 1997, the Company
conducts in the ordinary course of business a review of the effect of existing
Environmental Laws and existing Environmental Claims on the business, operations
and properties of the Company and its Subsidiaries, and as a result thereof the
Company has reasonably concluded that such Environmental Laws and Environmental
Claims would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
6.13 Regulated Entities. None of the Company or any Subsidiary of
------------------
the Company is an "Investment Company" within the meaning of the Investment
Company Act of 1940. No Borrower is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code, or any other Federal or state
statute or regulation limiting its ability to incur Indebtedness.
54
6.14 Copyrights, Patents, Trademarks and Licenses, Etc. The Company
-------------------------------------------------
and its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without any known conflict with
the rights of any other Person, except where the failure to so own, license or
otherwise have the right to use any of the foregoing would not, alone or in the
aggregate, be reasonably expected to have a Material Adverse Effect. To the
best knowledge of the Company, (i) no product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Company or any Subsidiary infringes upon any rights held by any other Person,
(ii) except as specifically disclosed in the Company's Form 10-K for the fiscal
year ended December 31, 1997, no claim or litigation regarding any of the
foregoing is pending or, to the best knowledge of the Company, threatened, and
(iii) no patent, invention, device, application, principle or any statute, law,
rule, regulation, standard or code is pending or, to the best knowledge of the
Company, proposed, which, in any such case, would reasonably be expected to have
a Material Adverse Effect described in clauses (i), (ii) or (iii).
6.15 Insurance. The properties of the Company and its Material
---------
Subsidiaries are insured, with financially sound and reputable insurance
companies or through the Company's own program of self-insurance, in such
amounts, with such deductibles and covering such risks as are customary for
companies engaged in similar businesses and owning similar properties in
localities where the Company or such Subsidiary operates.
6.16 Full Disclosure. The factual information (other than any
---------------
projections or pro forma financial information) included in any exhibits,
reports, statements or certificates furnished by or on behalf of the Company or
any of its Subsidiaries in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Company to
the Banks prior to the Closing Date) concerning the operations, business,
financial conditions, properties and prospects of the Company and its
Subsidiaries is, taken as a whole, true and correct in all material respects as
of the date such information was supplied to the Agent and the Banks and, taken
as a whole, does not omit any material fact required to be stated or necessary
to make any statements made, in light of the circumstances under which they are
made, not misleading. All projections and pro forma financial information are
based on good faith assumptions and estimates that the Company believed
reasonable at the time made. However, because financial projections are based
on estimates and assumptions about circumstances and events that have not yet
taken place, actual results during the period covered by such projections may
differ materially from the projected results.
6.17 Year 2000. The Company has reviewed the areas within its
---------
consolidated business and operations that could be adversely affected by, and
has developed or is developing a plan to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by the Company
and its Subsidiaries may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any date after December
31, 1999). Based on such review and plan, the Company reasonably believes that
the "Year 2000 Problem" will not have a Material Adverse Effect.
55
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance:
7.1 Financial Statements. The Borrowers' Designee shall deliver to
--------------------
the Agent in sufficient quantities for each Bank:
(a) as soon as available, but not later than 110 days after the end of
each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income or operations, stockholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Coopers &
▇▇▇▇▇▇▇ or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
---------------------
financial statements present fairly in all material respects the consolidated
financial position, results of operations and cash flows for the dates and for
the periods indicated in conformity with GAAP. Such opinion shall not be
qualified or limited because of a restricted or limited examination by the
Independent Auditor of any material portion of the Company's or any Subsidiary's
records; and
(b) as soon as available, but not later than 60 days after the end of
each of the first three fiscal quarters of each fiscal year (commencing with the
fiscal quarter ended March 31, 1998), a copy of the unaudited consolidated
balance sheet of the Company and its Subsidiaries as of the end of such quarter
and the related consolidated statement of income for the period commencing on
the first day and ending on the last day of such quarter and statement of cash
flow for the elapsed portion of the fiscal year ending on the last day of such
quarter, and certified by a Responsible Officer as being complete and accurate
in all material respects and fairly presenting, in accordance with GAAP (subject
to ordinary year-end audit adjustments and the absence of footnotes), the
financial position and the results of operations and cash flows of the Company
and the Subsidiaries. As to any information contained in materials furnished
pursuant to subsection 7.2(b), the Company shall not be separately required to
furnish such information under subsection (a) or (b) above, but the foregoing
shall not be in derogation of the obligation of the Company to furnish the
information and materials described in subsection (a) and (b) above at the times
specified therein.
7.2 Certificates; Other Information. The Borrowers' Designee shall
-------------------------------
furnish to the Agent in sufficient quantities for each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a Compliance Certificate executed by
a Responsible Officer of the Company;
(b) promptly, copies of all reports on Forms 10-K, 10-Q and 8-K and
any amendments thereto, or successor forms, which the Company may file with the
SEC;
56
(c) as soon as available, but not later than 60 days after the end of
each fiscal year, the annual operating budget for the next succeeding fiscal
year adopted by the Company; and
(d) promptly, such additional information regarding the business,
financial or corporate affairs of any Loan Party or any Subsidiary as the Agent,
at the request of any Bank, may from time to time reasonably request.
7.3 Notices. The Borrowers' Designee shall promptly notify the
-------
Agent (who shall notify each Bank):
(a) of the occurrence of any Default or Event of Default;
(b) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent and each Bank a copy of any notice with respect
to such event that is filed with a Governmental Authority and any notice
delivered by a Governmental Authority to any Borrower or any ERISA Affiliate
with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to, any
Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Section 412
of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability; and
(c) promptly after the incorporation, creation or acquisition of any
Material U.S. Subsidiary or upon any Subsidiary becoming a Material U.S.
Subsidiary.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth details of the
occurrence referred to therein, and stating what action the Company or any
affected Subsidiary proposes to take with respect thereto and at what time.
7.4 Preservation of Corporate Existence, Etc. The Company shall, and
----------------------------------------
shall cause each of its Material Subsidiaries to:
(a) preserve and maintain in full force and effect its (i) legal
existence and (ii) good standing, if applicable, under the laws of its state or
jurisdiction of incorporation or formation;
57
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except where the failure to
do so would not reasonably be expected to have a Material Adverse Effect;
provided that nothing in this Section 7.4 shall prohibit (to the extent
--------
permitted under Section 8.3) (i) the merger of a Subsidiary into the Company or
the merger or consolidation of a Subsidiary with another Person, if the Person
surviving such consolidation or merger is a Subsidiary, or (ii) the termination
of the corporate existence of any Subsidiary if the Company in good faith
determines that such termination is in the best interests of the Company,
provided that the corporate existence of an Additional Borrower may not be
--------
terminated unless prior thereto all principal of, interest on, reimbursement
obligations in respect of and fees related to any outstanding Credit Extensions
in favor of such Additional Borrower have been paid in full and any Letter of
Credit issued for the account of such Additional Borrower has been terminated
(or arrangement to the satisfaction of the Issuing Bank has been made for such
termination).
7.5 Maintenance of Property. The Company shall, and shall cause each
-----------------------
of its Material Subsidiaries to, maintain, and preserve all its property which
is used or useful in its business in good working order and condition, ordinary
wear and tear excepted.
7.6 Insurance. The Company shall maintain, and shall cause each of
---------
its Material Subsidiaries to maintain, with financially sound and reputable
insurers or through the Company's own program of self-insurance, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts and with such deductibles as are customarily
carried under similar circumstances by such other Persons.
7.7 Payment of Obligations. The Company shall, and shall cause each
----------------------
of its Material Subsidiaries to, pay and discharge as the same shall become due
and payable, all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property not constituting a Permitted Lien; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness;
except, in each case referred to in clause (a) where the failure to do so would
not reasonably be expected to result in a Material Adverse Effect, or in each
case referred to in clause (c), where failure to do so would not otherwise
constitute a Default or Event of Default hereunder.
7.8 Compliance with Laws. The Company shall comply, and shall cause
--------------------
each of its Material Subsidiaries to comply, in all material respects with all
Requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including ERISA and all
58
Environmental Laws), except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect and except such as may be contested
in good faith or as to which a bona fide dispute may exist.
7.9 Inspection of Property and Books and Records. The Company shall
--------------------------------------------
permit, and shall cause each of its Subsidiaries to permit, representatives and
independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial,
operating and other records, and make copies thereof or abstracts therefrom, and
to discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants, all at such reasonable times during
normal business hours and as often as may be reasonably desired, upon reasonable
advance notice to the Company, and subject to the provisions of Section 11.9,
provided that the Agent or such Bank shall have given the Company's Chief
--------
Financial Officer or Treasurer a reasonable opportunity to participate therein
in person or through a designated representative.
7.10 Use of Proceeds. Each Borrower shall use the proceeds of the
---------------
Loans for working capital and other general corporate purposes, including
repurchase of the 107/8% Notes.
7.11 Additional Guarantors. If the Company, or any Subsidiary of the
---------------------
Company, shall incorporate, create or acquire any Material U.S. Subsidiary, or
if any Subsidiary of the Company shall become a Material U.S. Subsidiary, the
Company shall cause such Subsidiary constituting such a Material U.S. Subsidiary
to furnish promptly, but in no event more than 30 days after sending the notice
required under subsection 7.3(c), each of the following to the Agent, in
sufficient quantities for each Bank:
(i) a duly executed notice and agreement in substantially the form of
Exhibit I (an "Additional Guarantor Assumption Agreement"); and
--------- -----------------------------------------
(ii) (A) (1) copies of the resolutions of the board of directors of
such Subsidiary approving and authorizing the execution, delivery and
performance by such Subsidiary of its Additional Guarantor Assumption
Agreement and this Agreement, certified as of the date of such Additional
Guarantor Assumption Agreement (the "Additional Guarantor Accession Date")
-----------------------------------
by the Secretary or an Assistant Secretary of such Subsidiary; and (2) a
certificate of the Secretary or Assistant Secretary of such Subsidiary
certifying the names and true signatures of the officers of such Subsidiary
authorized to execute and deliver and perform, as applicable, its
Additional Guarantor Assumption Agreement, this Agreement and all other
Loan Documents to be delivered hereunder; (B) the articles or certificate
of incorporation of such Subsidiary as in effect on the Additional
Guarantor Accession Date, certified by the Secretary or Assistant Secretary
of such Subsidiary as of the Additional Guarantor Accession Date, and the
bylaws of such Subsidiary as in effect on the Additional Guarantor
Accession Date, certified by the Secretary or Assistant Secretary of such
Subsidiary as of the Additional Guarantor Accession Date; and (C) an
opinion of counsel to such Subsidiary and addressed to the Agent and the
Banks, substantially in the form of Exhibit E;
---------
provided that ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ International Group, Inc. shall not be required to
--------
become an Additional Guarantor prior to July 31, 1998 and no special-purpose
Subsidiary the business and activities of which are restricted to being the
entity through which a Permitted Receivables Purchase Facility is effected shall
be required to be an Additional Guarantor.
59
7.12 Additional Borrowers. Any Subsidiary of the Company may at any
--------------------
time become an Additional Borrower hereunder subject to subsection 2.1(b) and to
the Agent's receipt of each of the following, in sufficient quantities for each
Bank:
(i) a duly executed notice and agreement in substantially the form of
Exhibit J (an "Additional Borrower Request and Assumption Agreement"); and
(ii) not more than 30 days after furnishing to the Agent the
Additional Borrower Request and Assumption Agreement, (A)(1) copies of the
resolutions of the board of directors of such Subsidiary approving and
authorizing the execution, delivery and performance by such Subsidiary of
its Additional Borrower Request and Assumption Agreement and this Agreement
and authorizing the borrowing of Revolving Loans and other Credit
Extensions hereunder, certified as of the date of such Additional Borrower
Request and Assumption Agreement (the "Additional Borrower Accession Date")
by the Secretary or an Assistant Secretary of such Subsidiary; and (2) a
certificate of the Secretary or Assistant Secretary of such Subsidiary
certifying the names and true signatures of the officers of such Subsidiary
authorized to execute and deliver its Additional Borrower Request and
Assumption Agreement, this Agreement and all other Loan Documents to be
delivered hereunder; (B) the articles or certificate of incorporation (or,
in the case of a non-U.S. Subsidiary its applicable organizational
documents) of such Subsidiary as in effect on the Additional Borrower
Accession Date, certified by the Secretary or Assistant Secretary of such
Subsidiary as of the Additional Borrower Accession Date, and the bylaws (or
other applicable constitutional documents) of such Subsidiary as in effect
on the Additional Borrower Accession Date, certified by the Secretary or
Assistant Secretary of such Subsidiary as of the Additional Borrower
Accession Date; and (C) an opinion of counsel to such Subsidiary and
addressed to the Agent and the Banks, substantially in the form of Exhibit
F.
7.13 Notification of Disposition of Subsidiary Guarantors. Upon or
----------------------------------------------------
promptly following the consummation of any transaction or series of transactions
referenced in any certificate of a Responsible Officer of the Company delivered
to the Agent pursuant to Section 11.19, the Company shall notify the Agent of
the consummation thereof.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
8.1 Limitation on Liens. The Company shall not, and shall not suffer
-------------------
or permit any of its Subsidiaries to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property, whether now owned or hereafter acquired, other than the following
("Permitted Liens"):
---------------
(a) any Lien existing on the Closing Date and set forth in Schedule
--------
8.1 securing Indebtedness outstanding on the Closing Date;
---
60
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by subsection 7.7(a);
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of utility
deposits or pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation;
(f) Liens securing (i) the performance of bids, trade contracts (other
than for borrowed money), leases (other than capital leases), statutory
obligations, (ii) contingent obligations on surety and appeal bonds, and (iii)
other non-delinquent obligations of a like nature; in each case, incurred in the
ordinary course of business;
(g) Liens consisting of judgment or judicial attachment liens,
provided that (i) no Event of Default exists under subsection 9.1(i) with
--------
respect to the judgment giving rise thereto, and (ii) no foreclosure or other
enforcement proceedings have been commenced with respect thereto (unless
effectively stayed);
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens on assets of Persons which become Subsidiaries or are merged
into the Company or a Subsidiary after the date of this Agreement, or on assets
acquired by the Company or any Subsidiary after the date of this Agreement;
provided, however, that such Liens existed at the time the respective Persons
-------- -------
became Subsidiaries or such assets were acquired and were not created in
connection with such transaction;
(j) purchase money security interests on any property acquired or held
by the Company or its Subsidiaries, securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring or
constructing such property; provided that (i) any such Lien attaches to such
--------
property concurrently with or within 90 days after the acquisition or completion
of construction thereof, (ii) such Lien attaches solely to the property so
acquired or constructed, (iii) the principal amount of the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring or constructing such
property;
(k) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
--------
permitted hereunder;
61
(l) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
-------- ----
dedicated cash collateral account and is not subject to restrictions against
access by the Company or any Subsidiary in excess of those set forth by
regulations promulgated by the FRB, and (ii) such deposit account is not
intended by such Person to provide collateral to the depository institution; and
(m) Liens consisting of pledges of cash collateral, government
securities or other marketable securities to secure Swap Contracts so long as
the aggregate value of such collateral so pledged by the Company and the
Subsidiaries together in favor of all counterparties under such Swap Contracts
does not at any time exceed $25,000,000; and
(n) Liens on any property or assets of a Subsidiary in favor of the
Company or another Subsidiary;
(o) Liens in connection with leases or subleases in the ordinary
course of business;
(p) customary Liens in connection with documentary letters of credit,
provided that such Liens are limited to the goods and documents covered by such
--------
letters of credit and proceeds thereof;
(q) the extension, renewal or replacement of any Lien permitted by
subsections 8.1(a), (i), (j) and (k) in connection with the extension, renewal
or refinancing of the Indebtedness secured thereby, provided that any extension,
--------
modification or renewal Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of such Indebtedness being extended,
renewed or refinanced does not increase;
(r) Liens in connection with industrial development bonds or similar
conduit financings to secure the related Indebtedness, so long as such Lien is
limited to the assets of the related project;
(s) Liens on Permitted Receivables (and any related property that
would ordinarily be subjected to a Lien in connection with a Permitted
Receivables Purchase Facility, such as proceeds of Permitted Receivables and
records pertaining to Permitted Receivables) pursuant to Permitted Receivables
Purchase Facilities permitted under Section 8.2(d); and
(t) consensual Liens not otherwise permitted hereunder; provided that
--------
the aggregate principal amount of the Indebtedness secured by such Liens shall
not exceed 5% of Consolidated Total Assets measured as of the last day of the
fiscal quarter immediately preceding the date on which such Indebtedness is
incurred.
8.2 Disposition of Assets. The Company shall not, and shall not
---------------------
suffer or permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) any property (including accounts and notes receivable,
with or without recourse) or enter into any agreement to do any of the
foregoing, except:
62
(a) dispositions of inventory, or used, worn-out or surplus property,
all in the ordinary course of business;
(b) the sale of property to the extent that such property is exchanged
for credit against the purchase price of other property, or the proceeds of such
sale are reasonably promptly applied to the purchase price of other property;
(c) dispositions of property by the Company or any Subsidiary to the
Company or any Subsidiary or any Unrestricted Subsidiary pursuant to reasonable
business requirements or dispositions to a Joint Venture in which the Company or
any Subsidiary is making or has made an Investment permitted by subsection
8.4(f);
(d) dispositions of Permitted Receivables pursuant to Permitted
Receivables Purchase Facilities; provided that the aggregate net uncollected
--------
balances of all Permitted Receivables so sold by the Company and its
Subsidiaries together at any date of determination shall not exceed 5% of
Consolidated Total Assets measured as of the last day of the fiscal quarter
immediately preceding such date;
(e) the lease or sublease of property by the Company or any Subsidiary
to other Persons in the ordinary course of business;
(f) the sale of cash equivalents and other short term money market
investments in the ordinary course of business pursuant to the Company's usual
and customary cash management policies and procedures; and
(g) dispositions not otherwise permitted hereunder which are made for
fair market value; provided that (i) the aggregate value of all assets so sold
--------
by the Company and its Subsidiaries, together (but excluding any transaction
permitted by clauses (a) through (f)), shall not in any fiscal year exceed 20%
of Consolidated Total Assets measured as of the last day of the immediately
preceding fiscal year and (ii) no dispositions of accounts or notes receivable
shall be permitted under this subsection (g) unless in connection with the sale
of all or substantially all of a business unit, division or Subsidiary of such
Borrower and such sale is otherwise permitted hereunder.
8.3 Consolidations and Mergers. The Company shall not, and shall not
--------------------------
suffer or permit any of its Subsidiaries to, merge, consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) (i) any Subsidiary of the Company may merge with the Company,
provided that the Company shall be the continuing or surviving corporation; (ii)
--------
any Subsidiary of a Borrower may merge with any Borrower or any one or more
Subsidiaries of any Borrower, provided that (A) if any transaction shall be
--------
between a Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned Subsidiary
shall be the continuing or surviving corporation and (B) if the transaction is
between a Loan Party and a non-Loan Party, such Loan Party shall be the
continuing or surviving corporation; and (iii) all or substantially all of the
business, property or assets of a Subsidiary may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions (upon voluntary liquidation or otherwise), to any Loan Party or any
Wholly Owned Subsidiary;
63
(b) pursuant to an Acquisition permitted under Section 8.4; or
(c) pursuant to dispositions of assets permitted under Section 8.2.
8.4 Loans and Investments. The Company shall not purchase or
---------------------
acquire, or suffer or permit any of its Subsidiaries to purchase or acquire, any
capital stock, equity interest, or any obligations or other securities of, or
any interest in, any Person, or make any Acquisitions, or make any advance,
loan, extension of credit or capital contribution to or any other investment in,
any Person including any Affiliate of such Borrower or Subsidiary (collectively,
"Investments"), except for:
-----------
(a) Investments held by such Borrower or its Subsidiaries in the form
of cash equivalents and short term money market investments in the ordinary
course of business pursuant to such Borrower's or such Subsidiary's usual and
customary cash management policies and procedures;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business, and any Investment acquired in exchange for or as a
restructuring of any of the foregoing in this subsection (b) in connection with
collection efforts;
(c) notes receivable or other deferred payment obligations created in
connection with a disposition of assets permitted under Section 8.2;
(d) Investments in the capital stock of Subsidiaries or any
Unrestricted Subsidiaries, and extensions of credit by the Company to any of its
Subsidiaries or Unrestricted Subsidiaries or by any of its Subsidiaries to the
Company or to any other Subsidiaries or any Unrestricted Subsidiaries; provided
--------
that no extension of credit or other Investment by the Company or any
Subsidiaries to or in any Unrestricted Subsidiary shall be permitted if after
giving effect thereto and to any dispositions of assets referred to in
subsection 8.2(c), the aggregate value of all such extensions of credit and
other Investments and asset dispositions to and in Unrestricted Subsidiaries
when made would exceed 10% of the Company's Consolidated Net Worth as of the
last day of the immediately preceding fiscal quarter;
(e) Investments incurred in order to consummate Acquisitions otherwise
permitted herein, provided that (i) such Acquisitions are initiated and
--------
undertaken in all material respects in accordance with all applicable
Requirements of Law; (ii) the board of directors or equivalent governing body of
the acquiree has not notified the Company that it opposes such action or, if it
had done so, such opposition has been withdrawn; (iii) after giving effect to
such Acquisition, the Company would be in compliance with Section 8.9; (iv) such
Acquisition either (A) results in the acquired Person becoming a Wholly Owned
Subsidiary of a Guarantor or any of its Subsidiaries, or (B) results in such
acquired Person or the assets of such Person being subsumed by (1) a Guarantor,
or (2) a Subsidiary of a Guarantor; and (v) immediately prior to and after
giving effect thereto, no Event of Default would exist;
(f) Investments in Joint Ventures;
64
(g) Investments constituting Swap Contracts or payments or advances
under Swap Contracts;
(h) employee loans and guarantees in accordance with such Borrower's
usual and customary practices with respect thereto; and
(i) other Investments not otherwise permitted hereunder not to exceed
in the aggregate in any fiscal year an amount equal to 5% of Consolidated Total
Assets as of the last day of the most recently ended fiscal year.
8.5 Limitation on Indebtedness. The Company shall not suffer or
--------------------------
permit any of its Subsidiaries who are not Guarantors to create, incur, assume,
suffer to exist, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except
(i) Indebtedness secured by Liens permitted by subsection 8.1(j);
(ii) Indebtedness in respect of capital leases in the ordinary course
of business;
(iii) subject to Section 8.4(d), Indebtedness of such Subsidiaries
to the Company or to any other Subsidiaries; and
(iv) other Indebtedness of such Subsidiaries not exceeding in the
aggregate the amount of such Indebtedness outstanding on the Closing Date
plus $50,000,000;
----
provided in each case that no Event of Default then exists or would result from
--------
the incurrence of such additional Indebtedness permitted hereunder.
8.6 Use of Proceeds. Each Borrower shall not, and shall not suffer
---------------
or permit any of its Subsidiaries to, use any portion of the Loan proceeds or
any Letter of Credit, directly or indirectly, (i) to purchase or carry Margin
Stock, (ii) to repay or otherwise refinance indebtedness of any Borrower or
others incurred to purchase or carry Margin Stock, or (iii) to extend credit for
the purpose of purchasing or carrying any Margin Stock, in each case in
violation of Regulation G, U or X of the FRB.
8.7 Restricted Payments. The Company shall not declare or make any
-------------------
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its capital
stock or purchase, redeem or otherwise acquire for value any shares of its
capital stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding; except that the Company may:
(a) declare and make dividend payments or other distributions payable
solely in shares of its capital stock;
(b) purchase, redeem or otherwise acquire shares of its common stock
or warrants or options to acquire any such shares with the proceeds received
from the substantially concurrent issue of new shares of its capital stock; and
65
(c) declare or pay dividends to its stockholders and purchase, redeem
or otherwise acquire shares of its capital stock or warrants, rights or options
to acquire any such shares for cash;
provided, that, immediately after giving effect to any such proposed action
--------
described in clauses (a) through (c), no Event of Default would exist.
8.8 ERISA. The Company shall not, and shall not suffer or permit any
-----
of its ERISA Affiliates to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted or would reasonably be expected to result in liability of the Company
that would have a Material Adverse Effect upon the Company; or (b) engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
8.9 Change in Business. The Company shall not, and shall not suffer
------------------
or permit any of its Subsidiaries to, engage in any material line of business
substantially different from the same general line of business that the Company
is engaged in on the Closing Date plus extensions and expansions thereof and
business and activity incidental or related thereto.
8.10 Minimum Fixed Charge Coverage Ratio. The Company shall not
-----------------------------------
permit, as of the last day of any fiscal quarter, the ratio of (a) EBIT,
measured for the period consisting of the four consecutive fiscal quarters
ending on such day, to (b) interest expense (net of interest income), measured
for the period consisting of the four consecutive fiscal quarters ending on such
day, which was deductible in determining Consolidated Net Income or Consolidated
Net Loss for such period, to be less than 2.50 to 1.00.
8.11 Maximum Leverage Ratio. The Company shall not permit, as of the
----------------------
last day of any fiscal quarter, the Leverage Ratio to exceed 3.50 to 1.00.
8.12 Minimum Consolidated Net Worth. The Company shall not permit,
------------------------------
as of the last day of any fiscal quarter, Consolidated Net Worth to be less than
the sum of:
(a) $520,000,000, plus
----
(b) 50% of Consolidated Net Income after December 31, 1997, through
the end of each fiscal quarter thereafter, determined on a quarterly basis with
no reduction for any Consolidated Net Loss, plus
----
(c) 75% of the Net Securities Proceeds arising after December 31,
1997, to the date of determination.
As used herein, "Net Securities Proceeds" means, with respect to any sale or
-----------------------
issuance of equity securities (whether common or preferred, options, warrants or
capital appreciation rights, but excluding any sales or issuances of stock
pursuant to employee stock purchase plans, employee stock option plans or other
employee benefit plans), the excess of (A) the gross cash and noncash proceeds
received or receivable by the Company or any Subsidiary from such issuance minus
-----
(B) the sum of (i) all Attorney Costs and underwriting and accounting fees and
disbursements and government fees actually paid (or reasonably expected to be
paid during the fiscal year in
66
which such sale or issuance occurs) in connection with such sale or issuance
which are not payable to the Company or to any Affiliate of the Company or any
Subsidiary; and (ii) all taxes actually paid in connection with such sale or
issuance.
8.13 Non-Material Subsidiaries. The Company shall not permit the
-------------------------
total revenues or total assets of all non-Material Subsidiaries together to
exceed at any time 20% of the total revenues or total assets, as the case may
be, of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
8.14 Unrestricted Subsidiaries. The Company may from time to time
-------------------------
deliver to the Agent a notice of a Responsible Officer of the Company, in
substantially the form of Exhibit L, designating one or more of its Subsidiaries
(other than any Borrower or Guarantor) as Unrestricted Subsidiaries; provided
--------
that no Subsidiary shall be designated as an Unrestricted Subsidiary if, upon
giving effect to such designation, the Company would not be in compliance with
subsection 8.4(d) or an Event of Default then exists or would otherwise result
therefrom. The Company shall not, and shall not permit its Subsidiaries, to
enter into any contract, agreement, financing or other arrangement that would
provide the creditors of any Unrestricted Subsidiary (including Persons with
contingent claims against any Unrestricted Subsidiary) with any recourse to or
against the Company or any of its Subsidiaries or any of their respective assets
or revenues. Any such certificate of a Responsible Officer designating any
Unrestricted Subsidiaries shall certify to the Agent and the Banks that no Event
of Default then exists or would result from such designation and that the
Company and its Subsidiaries are not parties to any contract or agreement that
would provide any creditors of such Unrestricted Subsidiary with recourse to or
against the Company or any of its Subsidiaries and that no such creditor of such
Unrestricted Subsidiary would have recourse to or against the Company or any of
its Subsidiaries as a matter of law. Any Person designated as an Unrestricted
Subsidiary in a notice of a Responsible Officer of the Company as provided in
this Section 8.14 shall become an Unrestricted Subsidiary on the tenth Business
Day after the Agent's receipt of such notice.
ARTICLE IX
EVENTS OF DEFAULT
-----------------
9.1 Event of Default. Any of the following shall constitute an
----------------
"Event of Default":
-----------------
(a) Non-Payment. Any Borrower fails to pay, (i) when and as required
-----------
to be paid herein, any amount of principal of any Loan or of any L/C Obligation,
or (ii) within three days after the same becomes due, any interest, fee or any
other amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
---------------------------
Company or any Subsidiary made or deemed made herein, in any other Loan
Document, or which is contained in any certificate, document or financial or
other statement by the Company or any Subsidiary, or any Responsible Officer,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or
67
(c) Specific Defaults. The Company or any other Borrower fails to
-----------------
perform or observe any term, covenant or agreement contained in any of Section
7.4(a)(i), 7.10, 7.11 or in Article VIII other than Section 8.14 thereof; or
(d) Other Defaults. The Company or any other Borrower fails to
--------------
perform or observe any other term or covenant contained in this Agreement or any
other Loan Document, and such default shall continue unremedied for a period of
30 days after the earlier of (i) the date upon which a Responsible Officer had
actual knowledge of such failure or (ii) the date upon which written notice
thereof is given to the Borrowers' Designee by the Agent or any Bank; or
(e) Cross-Default. The Company or any Subsidiary (i) fails to make
-------------
any payment in respect of any outstanding Indebtedness having an aggregate
principal amount of more than $25,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any, specified
in the relevant document on the date of such failure; or (ii) fails to perform
or observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such failure
if the effect of such failure, event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause such Indebtedness to be declared to be
due and payable prior to its stated maturity; or
(f) Insolvency; Voluntary Proceedings. The Company or any Subsidiary
---------------------------------
(i) generally fails to pay, or admits in writing its inability to pay, its debts
as they become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise; (ii) commences any Insolvency Proceeding with
respect to itself; or (iii) takes any action to effectuate or authorize any of
the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
-----------------------
Proceeding is commenced or filed against the Company or any Subsidiary, and such
proceeding shall remain undismissed and unstayed for a period of 60 days; (ii)
the Company or any Subsidiary admits the material allegations of a petition
against it in any Insolvency Proceeding, or an order for relief (or similar
order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) the
Company or any Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
-----
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect on the Company, any other Loan Party under
Title IV of ERISA, the Pension Plan, Multiemployer Plan or the PBGC; (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans at any
time exceeds $25,000,000; or (iii) the Company or any ERISA Affiliate shall fail
to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount that has resulted or
could reasonably be expected to result in a Material Adverse Effect on the
Company;
68
(i) Monetary Judgments. One or more non-interlocutory judgments, non-
------------------
interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related or unrelated series of
transactions, incidents or conditions, of $25,000,000 or more, and the same
shall remain unsatisfied, unvacated and unstayed pending appeal for a period of
30 days after the entry thereof; or
(j) Change of Control. There occurs any Change of Control; or
-----------------
(k) Guarantor Defaults. Any Guarantor fails in any material respect
------------------
to perform or observe any term, covenant or agreement in its Guaranty; or the
Guaranty of any Guarantor is for any reason partially (including with respect to
future advances) or wholly revoked or invalidated, or otherwise ceases to be in
full force and effect, or any Guarantor or any other Person contests in any
manner the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder.
9.2 Remedies. If any Event of Default occurs, the Agent shall, at
--------
the request of, or may, with the consent of, the Majority Banks, do any or all
of the following:
(a) declare the obligation of each Bank to make any Loans hereunder
and any obligation of the Issuing Bank to Issue any Letters of Credit hereunder
to be terminated, whereupon such obligations and each Bank's Commitment, the
Swingline Commitment and the L/C Commitment shall be terminated;
(b) declare an amount equal to the maximum aggregate amount that is or
at any time thereafter may become available for drawing under any outstanding
Letters of Credit (whether or not any beneficiary shall have presented, or shall
be entitled at such time to present, the drafts or other documents required to
draw under such Letters of Credit) to be immediately due and payable, which
amount shall be held by the Agent as security for the Company's reimbursement
obligations for drawings that may subsequently occur under outstanding Letters
of Credit, and declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrowers; and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
-------- -------
(f) or (g) of Section 9.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the Commitment of each Bank
and any obligation of the Issuing Bank to Issue Letters of Credit shall
automatically terminate and the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable without further act of the Agent, the Issuing Bank or any Bank.
69
ARTICLE X
THE AGENT
---------
10.1 Appointment and Authorization; "Agent". (a) Each Bank hereby
--------------------------------------
irrevocably (subject to Section 10.9) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) The Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit Issued by it and the documents associated therewith until
such time and except for so long as the Agent may agree at the request of the
Majority Banks to act for such Issuing Bank with respect thereto; provided,
--------
however, that the Issuing Bank shall have all of the benefits and immunities (i)
-------
provided to the Agent in this Article X with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article X, included the Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
10.2 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
10.3 Liability of Agent. None of the Agent-Related Persons shall (i)
------------------
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company, any other Loan Party,
the Borrowers' Designee or any Subsidiary or Affiliate of the Company, or any
officer thereof, contained in this Agreement or in any other Loan Document, or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Agent under or in connection with, this Agreement or
any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Company, any other Borrower or any other party to any
Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any
70
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of the Company, any other Borrower or any of the Company's Subsidiaries
or Affiliates.
10.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company or any Loan Party), independent accountants and other experts
selected by the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Majority Banks as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent (or made available) by the Agent to such
Bank for consent, approval, acceptance or satisfaction, or required thereunder
to be consented to or approved by or acceptable or satisfactory to such Bank.
10.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Banks, unless the Agent shall
have received written notice from a Bank, the Borrowers' Designee or any other
Loan Party referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Majority Banks in accordance with Article IX; provided, however, that unless
-------- -------
and until the Agent has received any such request, the Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in the
best interest of the Banks.
10.6 Credit Decision. Each Bank acknowledges that none of the Agent-
---------------
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to each Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
71
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of each Borrower. Unless otherwise provided in
this Agreement, the Agent will forward to all of the Banks copies of all
financial statements, notices, reports and other documents required to be
furnished to the Agent hereunder by any Loan Party which are not by the terms
hereof required to be distributed by such Loan Party directly to the Banks.
Except for any financial statements, notices, reports and other documents
expressly herein required to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company or any
Subsidiary which may come into the possession of any of the Agent-Related
Persons.
10.7 Indemnification of Agent. Whether or not the transactions
------------------------
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), in
accordance with the Banks' Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Bank shall be liable for the
-------- -------
payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities to the extent they are found by a final decision of a court of
competent jurisdiction to have resulted from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Bank shall
reimburse the Agent upon demand for its ratable share of any costs or out-of-
pocket expenses (including Attorney Costs) incurred by the Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Company or any other Loan Party. The
undertaking in this Section shall survive the termination of the Commitments,
the termination or expiration of all Letters of Credit, the payment of all other
Obligations hereunder and the resignation or replacement of the Agent.
10.8 Agent in Individual Capacity. BofA and its Affiliates may make
----------------------------
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent or the Issuing
Bank hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Subsidiaries or Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Subsidiary or Affiliate) and acknowledge that the
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, BofA shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though it were not the
Agent or the Issuing Bank.
10.9 Successor Agent. The Agent may, and at the request of the
---------------
Majority Banks shall, resign as Agent upon 30 days' notice to the Banks. If the
Agent resigns under this Agreement, the Majority Banks, after consulting with
and giving due regard to the suggestions of the Company, shall appoint from
among the Banks a successor agent for the Banks which successor agent shall be
approved by the Borrowers' Designee (such approval not to be unreasonably
72
withheld). If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Banks and the Borrowers' Designee, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article X and
Sections 11.4 and 11.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above. Notwithstanding
the foregoing, however, BofA may not be removed as the Agent at the request of
the Majority Banks unless BofA shall also simultaneously be replaced as "Issuing
Bank" and "Swingline Bank" hereunder pursuant to documentation in form and
substance reasonably satisfactory to BofA.
10.10 Withholding Tax. (a) With respect to any Loan to the Company,
---------------
JMII or any Additional Borrower that is organized in the United States, any Bank
that is a "foreign corporation" within the meaning of the Code shall deliver to
the Agent and the Borrowers' Designee on or prior to the date of its execution
and delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, before the payment of any interest or fees in each third
succeeding calendar year during which interest or fees may be paid under this
Agreement or before such form expires or becomes obsolete:
(i) two properly completed and executed copies of IRS Form 1001 (or
successor form), certifying that such Bank is entitled to benefits under an
income tax treaty to which the United States is a party which completely
exempts the Bank from United States withholding tax on payments of interest
for the account of such Bank under this Agreement or the Notes;
(ii) two properly completed and executed copies of IRS Form 4224 (or
successor form), certifying that income receivable by such Bank pursuant to
this Agreement or the Notes is effectively connected with the conduct of
such Bank's trade or business in the United States and such income is
completely exempt from United States withholding tax; or
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to complete exemption from
United States withholding tax with respect to any interest payment
hereunder or under the Notes;
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption.
(b) If any Bank claims exemption from withholding tax under a United
States tax treaty by providing IRS Form 1001 (or successor form) and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of any Borrower owing to such Bank, such Bank agrees to notify
the Agent of the percentage amount in which it is no
73
longer the beneficial owner of Obligations of such Borrower owing to such Bank.
To the extent of such percentage amount, the Agent will treat such Bank's IRS
Form 1001 (or successor form) as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 (or successor form) with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the Obligations
of any Borrower owing to such Bank, such Bank agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If the forms or other documentation required by subsection (a) of
this Section are not timely delivered to the Agent, then the Agent may withhold
from any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Bank (because the
appropriate form was not delivered or was not properly executed, or because such
Bank failed to notify the Agent of a change in circumstances which rendered the
exemption from withholding tax ineffective, or for any other reason) such Bank
shall indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to the Agent under
this Section, together with all costs and expenses (including Attorney Costs).
The obligation of the Banks under this subsection shall survive the termination
of the Commitments, the termination or expiration of all Letters of Credit, the
payment of all other Obligations hereunder and the resignation or replacement of
the Agent.
10.11 Co-Agents; Lead Managers. None of the Banks identified on the
------------------------
facing page or signature pages of this Agreement as a "co-agent," "syndication
agent," or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Banks as such. Without limiting the foregoing, none of the Banks so identified
as a "co-agent," "syndication agent," or "lead manager" shall have or be deemed
to have any fiduciary relationship with any Bank. Each Bank acknowledges that
it has not relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.
ARTICLE XI
MISCELLANEOUS
-------------
11.1 Amendments and Waivers. No amendment or waiver of any provision
----------------------
of this Agreement or any other Loan Document, and no consent with respect to any
departure by any Loan Party therefrom, shall be effective unless the same shall
be in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Borrowers' Designee and acknowledged by
the Agent, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
--------
however,
-------
74
that no such waiver, amendment, or consent shall, unless in writing and signed
by the Bank affected thereby and the Borrowers' Designee and acknowledged by the
Agent, do any of the following:
(a) increase or extend the Commitment of such Bank (or reinstate any
Commitment of such Bank terminated pursuant to Section 9.2);
(b) postpone or delay any date fixed by this Agreement or the Notes
for any payment of principal, interest or fees due to such Bank hereunder
(including the date of any mandatory prepayment hereunder); or
(c) reduce the principal of, or the rate of interest specified herein
on, any Loan made by such Bank, or any fees payable to such Bank hereunder or
under the Notes;
and provided further that no such waiver, amendment or consent shall, unless in
-------- -------
writing and signed by all the Banks and the Borrowers' Designee and acknowledged
by the Agent, do any of the following:
(A) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any
of them to take any action hereunder;
(B) amend this Section 11.1, subsection 2.5(e), Section 2.14, Section
2.18, the definition of "Majority Banks" herein, or any provision herein
providing for consent or other action by all Banks or some specified amount
of Banks; or
(C) release any Borrower from its obligations hereunder or any
Guarantor from its obligations under its Guaranty, other than pursuant to
the operation of Section 11.19;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
-------- -------
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Swingline Bank in addition to the Majority
Banks or all the Banks, as the case may be, increase the Swingline Commitment or
otherwise affect the rights or duties of the Swingline Bank under this
Agreement, (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Majority Banks or all the Banks, as the
case may be, affect the rights or duties of the Agent under this Agreement or
any other Loan Document, and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed by the parties thereto and
the additional parties benefitting therefrom. Each Loan Party authorizes the
Borrowers' Designee to execute any such amendment, waiver or consent for and on
behalf of all Loan Parties.
11.2 Notices. (a) All notices, requests, consents, approvals,
-------
waivers and other communications shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by any Borrower or the Borrowers' Designee by facsimile
(i) shall be promptly confirmed by a telephone call to the recipient at the
number specified on Schedule 11.2, and (ii) shall be followed promptly by
-------------
75
delivery of a hard copy original thereof) and mailed, faxed or delivered, to the
address or facsimile number specified for notices on Schedule 11.2; or, as
-------------
directed to Borrowers' Designee or the Agent, to such other address as shall be
designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Borrowers' Designee and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mails, or if delivered, upon delivery; except that
notices pursuant to Article II, III or X to the Agent shall not be effective
until actually received by the Agent, and notices pursuant to Article III to the
Issuing Bank shall not be effective until actually received by the Issuing Bank
at the address specified for the "Issuing Bank" on the applicable signature page
hereof.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrowers. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the
Borrowers to give such notice and the Agent and the Banks shall not have any
liability to the Borrowers or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Borrowers to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic notice or the
receipt by the Agent and the Banks of a confirmation which is at variance with
the terms understood by the Agent and the Banks to be contained in the
telephonic or facsimile notice.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Agent or any Bank, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
11.4 Costs and Expenses. The Company shall:
------------------
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent and
Issuing Bank) within 30 days after demand (subject to subsection 5.1(e)) for all
reasonable costs and expenses incurred by BofA (including in its capacity as
Agent and Issuing Bank) in connection with (i) the development, preparation,
delivery and execution of, and any amendment, supplement, waiver or modification
to (in each case, whether or not consummated), this Agreement, any Loan Document
and any other documents prepared in connection herewith or therewith, and (ii)
the consummation of the transactions contemplated hereby and thereby; and
76
(b) pay or reimburse the Agent, the Arranger and each Bank within five
Business Days after demand (subject to subsection 5.1(e)) for all costs and
expenses (including Attorney Costs) incurred by them in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Agreement or any other Loan Document during the existence of an Event
of Default or after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in any Insolvency
Proceeding or appellate proceeding).
11.5 Indemnification. Whether or not the transactions contemplated
---------------
hereby are consummated, each Loan Party shall indemnify, defend and hold the
Agent-Related Persons, and each Bank and each of its respective officers,
directors, employees, counsel, agents and attorneys-in-fact (each an
"Indemnified Person") harmless from and against any and all liabilities, claims,
-------------------
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including reasonable Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any Bank)
be imposed on, incurred by or asserted against any such Person in connection
with any investigation, litigation or proceeding (including any Insolvency
Proceeding or appellate proceeding) in any way relating to or arising out of
this Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby or the use of the Proceeds of any Loans, or any
action taken or omitted by any such Person under or in connection with any of
the foregoing, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided that the
----------------------- --------
Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities to the extent they are found by a final
decision of a court of competent jurisdiction to have resulted solely from the
gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section and in Section 11.4 shall survive the termination of
the Commitments, the termination or expiration of all Letters of Credit and the
payment of all other Obligations.
11.6 Payments Set Aside. To the extent that any Loan Party makes a
------------------
payment to the Agent or the Banks, or the Agent or the Banks exercise their
right of set-off, and such payment or the proceeds of such set-off or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
11.7 Successors and Assigns. The provisions of this Agreement shall
----------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that no Loan Party may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Agent and each Bank.
11.8 Assignments, Participations, Etc. (a) Any Bank may, with the
--------------------------------
written consent of the Borrowers' Designee, the Agent, the Swingline Bank and
the Issuing Bank (which in each case shall not be unreasonably withheld), at any
time assign and delegate to one or more Eligible Assignees (each an "Assignee")
--------
all, or any ratable part of all, of the Loans, the Commitment, the
77
L/C Obligations and the other rights and obligations of such Bank hereunder;
provided, however, that (i) no written consent of the Borrowers' Designee or the
-------- -------
Agent or the Issuing Bank or the Swingline Bank shall be required in connection
with any assignment and delegation by a Bank to an Eligible Assignee that is
another Bank or an Affiliate of such Bank; and (ii) except in connection with an
assignment of all of a Bank's rights and obligations with respect to its
Commitment, Loans and L/C Obligations, any such assignment to an Eligible
Assignee that is not a Bank hereunder shall be equal to or greater than
$10,000,000; and provided further, however, that the Borrowers' Designee and the
-------- ------- -------
Agent may continue to deal solely and directly with such Bank in connection with
the interest so assigned to an Assignee until (A) such Bank and its Assignee
shall have delivered to the Borrowers' Designee and the Agent an Assignment and
Acceptance Agreement substantially in the form of Exhibit G (an "Assignment and
--------- --------------
Acceptance"), together with any Note or Notes subject to such assignment; (B) a
----------
written notice of such assignment, together with payment instructions, addresses
and related information with respect to the Assignee, in substantially the form
of the Notice of Assignment and Acceptance attached as Schedule 1 to the
----------
Assignment and Acceptance, shall have been given to the Borrowers' Designee and
the Agent by such Bank and the Assignee; (C) the assignor Bank or Assignee shall
have paid to the Agent a processing fee in the amount of $3,500; and (D) the
Issuing Bank, the Swingline Bank and the Borrowers' Designee each consents to
such assignment in accordance with this Section. In connection with any
assignment by BofA, its Swingline Commitment may be assigned in whole (and not
part) and only in connection with an assignment transaction involving an
assignment of all of its Commitment and Loans, and the Assignment and Acceptance
may be appropriately modified to include an assignment and delegation of its
Swingline Commitment and any outstanding Swingline Loans.
(b) From and after the date that the Agent notifies the assignor Bank
that the Agent has received (and, if required, provided its consent with respect
to and, if necessary, received the consent of the Borrowers' Designee with
respect to) an executed Assignment and Acceptance and payment of the above-
referenced processing fee, (i) 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 and Acceptance, shall have the rights and
obligations of a Bank under the Loan Documents, (ii) this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom, and (iii) the assignor Bank shall, to the extent that rights
and obligations hereunder and under the other Loan Documents have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Loan Documents; provided, however, that
-------- -------
the assignor Bank shall not relinquish its rights under Article IV or under
Sections 11.4 and 11.5 to the extent such rights relate to the time prior to the
effective date of the Assignment and Acceptance. The Commitment allocated to
each Assignee shall reduce the Commitment of the assigning Bank pro tanto.
--- -----
(c) Within five Business Days after its receipt of notice by the Agent
that it has received (and, if necessary, consented to) an executed Assignment
and Acceptance and payment of the processing fee (and provided that the Issuing
Bank, the Swingline Bank and the Borrowers' Designee each consents to such
assignment in accordance with subsection 11.8(a)), the Borrowers' Designee shall
execute and deliver to the Agent any new Notes requested by such Assignee
evidencing such Assignee's assigned Loans and Commitment and, if the assignor
Bank
78
has retained a portion of its Loans and its Commitment, replacement Notes as
requested by the assignor Bank evidencing the Loans and Commitment retained by
the assignor Bank (such Notes to be in exchange for, but not in payment of, the
Notes held by such Bank, if any).
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of any Borrower (a "Participant") participating
-----------
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
-------- -------
Agreement shall remain unchanged, (ii) the originating Bank shall remain solely
responsible for the performance of such obligations, (iii) the Borrowers, the
Borrowers' Designee, the Issuing Bank and the Agent shall continue to deal
solely and directly with the originating Bank in connection with the originating
Bank's rights and obligations under this Agreement and the other Loan Documents,
and (iv) no Bank shall transfer or grant any participating interest under which
the Participant has rights to approve any amendment to, or any consent or waiver
with respect to, this Agreement or any other Loan Document, except to the extent
such amendment, consent or waiver would require unanimous consent of the Banks
as described in the first proviso to Section 11.1. In the case of any such
----- -------
participation, the Participant shall be entitled to the benefit of Sections 4.1,
4.3 and 11.5 as though it were also a Bank hereunder, and if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement, provided that such Participant shall not be entitled
--------
to the benefits of Section 4.1 as a result of such Participant's failure to
comply with the requirements of Section 10.10(a).
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and any Note held by it (other
than in respect of Swingline Loans) in favor of any Federal Reserve Bank in
accordance with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
'203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law.
11.9 Confidentiality. Each Bank agrees to take and to cause its
---------------
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information provided to it by the Company or
any Subsidiary, or by the Agent on the Company's or such Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this Agreement and the other Loan Documents or in connection with
other business now or hereafter existing or contemplated with the Company or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by such Bank, or
(ii) was or becomes available on a non-confidential basis from a source other
than the Company or any Subsidiary, provided that such source is not bound by a
--------
confidentiality agreement with a Borrower known to such Bank; provided, however,
-------- -------
that any Bank may disclose such information (A) at the request or pursuant to
any requirement of any Governmental Authority to which such Bank is subject or
in connection with an examination of such Bank by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the
79
Agent, any Bank or their respective Affiliates may be party; (E) to
the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Bank's independent
auditors, legal counsel and other professional advisors; (G) to any Participant
or Assignee, actual or potential, provided that such Person agrees in writing to
--------
keep such information confidential to the same extent required of the Banks
hereunder; (H) as to any Bank or its Affiliate, as expressly permitted under the
terms of any other document or agreement regarding confidentiality to which a
Borrower or any Subsidiary is party or is deemed party with such Bank or such
Affiliate; and (I) to its Affiliates.
11.10 Set-off. In addition to any rights and remedies of the Banks
-------
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Loan Parties or the Borrowers' Designee, any such notice
being waived by the Borrowers to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held by, and other indebtedness at any time owing by, such
Bank to or for the credit or the account of any Loan Party against any and all
Obligations owing to such Bank, now or hereafter existing, irrespective of
whether or not the Agent or such Bank shall have made demand under this
Agreement or any Loan Document and although such Obligations may be contingent
or unmatured. Each Bank agrees promptly to notify the Borrowers' Designee and
the Agent after any such set-off and application made by such Bank; provided,
--------
however, that the failure to give such notice shall not affect the validity of
-------
such set-off and application.
11.11 Notification of Addresses, Lending Offices, Etc. Each Bank
-----------------------------------------------
shall notify the Agent in writing of any changes in the address to which notices
to such Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.12 Counterparts. This Agreement may be executed in any number of
------------
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.13 Severability. The illegality or unenforceability of any
------------
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.
11.14 No Third Parties Benefited. This Agreement is made and entered
--------------------------
into for the sole protection and legal benefit of the Loan Parties, the Banks,
the Agent and the Agent-Related Persons, the Indemnified Persons and their
permitted successors and assigns, and no other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents.
11.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND THE
------------------------------
NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF CALIFORNIA.
80
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF CALIFORNIA
OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF CALIFORNIA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE LOAN PARTIES, THE AGENT
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE LOAN PARTIES, THE AGENT AND
THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
--------------------
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
LOAN PARTIES, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY CALIFORNIA LAW.
11.16 Waiver of Jury Trial. THE LOAN PARTIES, THE BANKS AND THE
--------------------
AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE,
WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE LOAN
PARTIES, THE BANKS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
11.17 Judgment. If, for the purposes of obtaining judgment in any
--------
court, it is necessary to convert a sum due hereunder or any other Loan Document
in one currency into another currency, the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of any Loan Party in respect
of any such sum due from it to the Agent hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the "Judgment
--------
Currency") other than that in which such sum is denominated in accordance with
--------
the applicable provisions of this Agreement (the "Agreement Currency"), be
------------------
discharged only to the extent that on the Business Day following receipt by the
Agent of any sum adjudged to be so due in the Judgment Currency, the Agent may
in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so
purchased is less than the sum originally due to the Agent in the Agreement
Currency, each Loan Party agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Agent or the Person to
81
whom such obligation was owing against such loss. If the amount of the Agreement
currency so purchased is greater than the sum originally due to the Agent in
such currency, the Agent agrees to return the amount of any excess to the
applicable Loan Party (or to any other Person who may be entitled thereto under
applicable law).
11.18 Guaranty.
--------
(a) Guaranty. Each of the Guarantors, unconditionally and
--------
irrevocably, jointly and severally guarantees to the Agent, the Swingline Bank,
the Issuing Bank, the Arranger and the Banks, and their respective successors,
endorsers, transferees and assigns (the "Guaranteed Persons"), the full and
------------------
prompt payment when due (whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise) and performance of the
Obligations of the Borrowers to any Guaranteed Person (the "Guaranteed
----------
Obligations"). The Guaranteed Obligations include interest which, but for an
-----------
Insolvency Proceeding, would have accrued on such Guaranteed Obligations,
whether or not a claim is allowed against the Borrowers for such interest in any
such Insolvency Proceeding.
(b) Separate Obligation. Each Guarantor acknowledges and agrees (i)
-------------------
that the Guaranteed Obligations are separate and distinct from any indebtedness,
obligations or liabilities arising under or in connection with any other
agreement, instrument or guaranty, including under any provision of this
Agreement other than this Section 11.18, executed at any time by such Guarantor
in favor of any Guaranteed Person, and (ii) such Guarantor shall pay and perform
all of the Guaranteed Obligations as required under this Section 11.18, and each
Guaranteed Person may enforce any and all of its rights and remedies hereunder,
without regard to any other agreement, instrument or guaranty, including any
provision of this Agreement other than this Section 11.18, at any time executed
by such Guarantor in favor of any Guaranteed Person, regardless of whether or
not any such other agreement, instrument or guaranty, or any provision thereof
or hereof, shall for any reason become unenforceable or any of the indebtedness,
obligations or liabilities thereunder shall have been discharged, whether by
performance, avoidance or otherwise. Each Guarantor acknowledges that in
providing benefits to the Borrowers and such Guarantor, the Guaranteed Persons
are relying upon the enforceability of this Section 11.18 and the Guaranteed
Obligations as separate and distinct indebtedness, obligations and liabilities
of such Guarantor, and each Guarantor agrees that each Guaranteed Person would
be denied the full benefit of their bargain if at any time this Section 11.18 or
the Guaranteed Obligations were treated any differently. The fact that the
Guaranty of each Guarantor is set forth in this Agreement rather than in a
separate guaranty document is for the convenience of the Borrowers and the
Guarantors and shall in no way impair or adversely affect the rights or benefits
of any Guaranteed Person under this Section 11.18. Each Guarantor agrees to
execute and deliver a separate agreement, immediately upon request at any time
of any Guaranteed Person, evidencing such Guarantor's obligations under this
Section 11.18. Upon the occurrence of any Event of Default, a separate action
or actions may be brought against each Guarantor, whether or not the Borrowers
or any other Guarantor or Person is joined therein or a separate action or
actions are brought against the Borrowers or any other Guarantor or Person.
(c) Limitation of Guaranty. To the extent that any court of competent
----------------------
jurisdiction shall impose by final judgment under applicable law (including the
California Uniform Fraudulent Transfer Act and (S)544 and 548 of the Bankruptcy
Code) any limitations on the amount of any Guarantor's liability with respect to
the Guaranteed Obligations which any
82
Guaranteed Person can enforce under this Section 11.18, each Guaranteed Person
by its acceptance hereof accepts such limitation on the amount of such
Guarantor's liability hereunder to the extent needed to make this Section 11.18
fully enforceable and nonavoidable.
(d) Liability of Guarantor. The liability of each Guarantor under
----------------------
this Section 11.18 shall be irrevocable, absolute, independent and
unconditional, and shall not be affected by any circumstance which might
constitute a discharge of a surety or guarantor other than the indefeasible
payment and performance in full of all Guaranteed Obligations. In furtherance
of the foregoing and without limiting the generality thereof, each Guarantor
agrees as follows:
(i) such Guarantor's liability hereunder shall be the immediate,
direct, and primary obligation of such Guarantor and shall not be
contingent upon any Guaranteed Person's exercise or enforcement of any
remedy it may have against the Borrowers or any other Person, or against
any collateral or other security for any Guaranteed Obligations;
(ii) this Guaranty is a guaranty of payment when due and not merely
of collectibility;
(iii) such Guarantor's payment of a portion, but not all, of the
Guaranteed Obligations shall in no way limit, affect, modify or abridge
such Guarantor's liability for any portion of the Guaranteed Obligations
remaining unsatisfied; and
(iv) such Guarantor's liability with respect to the Guaranteed
Obligations shall remain in full force and effect without regard to, and
shall not be impaired or affected by, nor shall such Guarantor be
exonerated or discharged by, any of the following events:
(1) any Insolvency Proceeding;
(2) any limitation, discharge, or cessation of the liability of
any Borrower or any other guarantor or Person for any Guaranteed
Obligations due to any statute, regulation or rule of law, or any
invalidity or unenforceability in whole or in part of any of the
Guaranteed Obligations or the Loan Documents;
(3) any merger, acquisition, consolidation or change in structure
of any Borrower or any other Guarantor or Person, or any sale, lease,
transfer or other disposition of any or all of the assets or shares of
any Borrower or any other Guarantor or other Person;
(4) any assignment or other transfer, in whole or in part, of any
Guaranteed Person's interests in and rights under this Guaranty or the
other Loan Documents;
(5) any claim, defense, counterclaim or set-off, other than that
of prior performance, that any Borrower, such Guarantor, any other
guarantor or other Person may have or assert, including any defense of
incapacity or lack of corporate or other authority to execute any of
the Loan Documents;
83
(6) any Guaranteed Person's amendment, modification, renewal,
extension, cancellation or surrender of any Loan Document or any
Guaranteed Obligations;
(7) any Guaranteed Person's exercise or nonexercise of any power,
right or remedy with respect to any Guaranteed Obligations or any
collateral;
(8) any Guaranteed Person's vote, claim, distribution, election,
acceptance, action or inaction in any Insolvency Proceeding;
(9) any other guaranty, whether by any Guarantor or any other
Person, of all or any part of the Guaranteed Obligations or any other
indebtedness, obligations or liabilities of any Guaranteed Person.
(e) Consents of Guarantor. Each Guarantor hereby unconditionally
---------------------
consents and agrees that, without notice to or further assent from such
Guarantor:
(i) the principal amount of the Guaranteed Obligations may be
increased or decreased and additional indebtedness or obligations of the
Borrowers under the Loan Documents may be incurred and the time, manner,
place or terms of any payment under any Loan Document be extended or
changed, by one or more amendments, modifications, renewals or extensions
of any Loan Document or otherwise;
(ii) the time for any Borrower's (or any other Person's) performance
of or compliance with any term, covenant or agreement on its part to be
performed or observed under any Loan Document may be extended, or such
performance or compliance waived, or failure in or departure from such
performance or compliance consented to, all in such manner and upon such
terms as any Guaranteed Person (or the Majority Banks, as the case may be)
may deem proper;
(iii) each Guaranteed Person may request and accept other guarantees
and may take and hold other security as collateral for the Guaranteed
Obligations, and may, from time to time, in whole or in part, exchange,
sell, surrender, release, subordinate, modify, waive, rescind, compromise
or extend such other guaranties or security and may permit or consent to
any such action or the result of any such action, and may apply such
security and direct the order or manner of sale thereof;
(iv) each Guaranteed Person may exercise, or waive or otherwise
refrain from exercising, any other right, remedy, power or privilege even
if the exercise thereof affects or eliminates any right of subrogation or
any other right of such Guarantor against the Borrower;
(f) Guarantor's Waivers. Each Guarantor waives and agrees not to
-------------------
assert:
(i) any right to require any Guaranteed Person to proceed against
any Borrower, any other guarantor or any other Person, or to pursue any
other right, remedy, power or privilege of such Guaranteed Person
whatsoever;
84
(ii) the defense of the statute of limitations in any action
hereunder or for the collection or performance of the Guaranteed
Obligations;
(iii) any defense arising by reason of any lack of corporate or
other authority or any other defense of any Borrower, such Guarantor or any
other Person;
(iv) any defense based upon any Guaranteed Person's errors or
omissions in the administration of the Guaranteed Obligations;
(v) any rights to set-offs and counterclaims;
(vi) without limiting the generality of the foregoing, to the fullest
extent permitted by law, any defenses or benefits that may be derived from
or afforded by applicable law limiting the liability of or exonerating
guarantors or sureties, or which may conflict with the terms of this
Section 11.18, including any and all benefits that otherwise might be
available to such Guarantor under California Civil Code (S)(S)1432, 2809,
2810, 2815, 2819, 2839, 2845, 2848, 2849, 2850, 2899 and 3433 and
California Code of Civil Procedure (S)(S)580a, 580b, 580d and 726; and
(vii) any and all notice of the acceptance of this Guaranty, and any
and all notice of the creation, renewal, modification, extension or accrual
of the Guaranteed Obligations, or the reliance by any Guaranteed Person
upon this Guaranty, or the exercise of any right, power or privilege
hereunder. The Guaranteed Obligations shall conclusively be deemed to have
been created, contracted, incurred and permitted to exist in reliance upon
this Guaranty. Each Guarantor waives promptness, diligence, presentment,
protest, demand for payment, notice of default, dishonor or nonpayment and
all other notices to or upon any Borrower, such Guarantor or any other
Person with respect to the Guaranteed Obligations.
(g) Financial Condition of Borrowers. No Guarantor shall have any
--------------------------------
right to require any Guaranteed Person to obtain or disclose any information
with respect to: the financial condition or character of the Borrowers or the
ability of the Borrowers to pay and perform the Guaranteed Obligations; the
Guaranteed Obligations; any collateral or other security for any or all of the
Guaranteed Obligations; the existence or nonexistence of any other guarantees of
all or any part of the Guaranteed Obligations; any action or inaction on the
part of any Guaranteed Person or any other Person; or any other matter, fact or
occurrence whatsoever. Each Guarantor hereby acknowledges that it has
undertaken its own independent investigation of the financial condition of the
Borrowers and all other matters pertaining to this Guaranty and further
acknowledges that it is not relying in any manner upon any representation or
statement of any Guaranteed Person with respect thereto.
(h) Subrogation. Until the Guaranteed Obligations shall be satisfied
-----------
in full and the Revolving Commitments shall be terminated, each Guarantor shall
not have, and shall not directly or indirectly exercise (i) any rights that it
may acquire by way of subrogation under this Section 11.18, by any payment
hereunder or otherwise, (ii) any rights of contribution, indemnification,
reimbursement or similar suretyship claims arising out of this Section 11.18 or
(iii) any other right which it might otherwise have or acquire (in any way
whatsoever) which could entitle it at any time to share or participate in any
right, remedy or security of any
85
Guaranteed Person as against the Borrowers or other guarantors, whether in
connection with this Section 11.18, any of the other Loan Documents or
otherwise. If any amount shall be paid to any Guarantor on account of the
foregoing rights at any time when all the Guaranteed Obligations shall not have
been paid in full, such amount shall be held in trust for the benefit of each
Guaranteed Person and shall forthwith be paid to the Agent to be credited and
applied to the Guaranteed Obligations, whether matured or unmatured, in
accordance with the terms of the Loan Documents.
(i) Continuing Guaranty. This Guaranty is a continuing guaranty and
-------------------
agreement of subordination and shall continue in effect and be binding upon each
Guarantor until termination of the Commitments and payment and performance in
full of all Guaranteed Obligations, including Guaranteed Obligations which may
exist continuously or which may arise from time to time under successive
transactions, and each Guarantor expressly acknowledges that this Guaranty shall
remain in full force and effect notwithstanding that there may be periods in
which no Guaranteed Obligations exist.
(j) Reinstatement. This Guaranty shall continue to be effective or
-------------
shall be reinstated and revived, as the case may be, if, for any reason, any
payment of the Guaranteed Obligations by or on behalf of any Borrower (or
receipt of any proceeds of collateral) shall be rescinded, invalidated, declared
to be fraudulent or preferential, set aside, voided or otherwise required to be
repaid to any Borrower, its estate, trustee, receiver or any other Person
(including under the Bankruptcy Code or other state or federal law), or must
otherwise be restored by any Guaranteed Person, whether as a result of
Insolvency Proceedings or otherwise. All losses, damages, costs and expenses
that any Guaranteed Person may suffer or incur as a result of any voided or
otherwise set aside payments shall be specifically covered by the indemnity in
favor of the Banks, the Issuing Bank and the Agent contained in Section 11.5.
(k) Substantial Benefits. The funds that have been borrowed from the
--------------------
Banks by the Borrowers, and the Issuance of any Letter of Credit by the Issuing
Bank, have been and are to be contemporaneously used for the direct or indirect
benefit of the Borrowers and each Guarantor. It is the position, intent and
expectation of the parties that the Borrowers and each Guarantor have derived
and will derive significant and substantial direct or indirect benefits from the
accommodations that have been made by the Banks, the Swingline Bank and the
Issuing Bank under the Loan Documents.
(l) Knowing and Explicit Waivers. EACH GUARANTOR ACKNOWLEDGES THAT IT
----------------------------
EITHER HAS OBTAINED THE ADVICE OF LEGAL COUNSEL OR HAS HAD THE OPPORTUNITY TO
OBTAIN SUCH ADVICE IN CONNECTION WITH THE TERMS AND PROVISIONS OF THIS SECTION
11.18. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT EACH OF THE WAIVERS AND
CONSENTS SET FORTH HEREIN ARE MADE WITH FULL KNOWLEDGE OF THEIR SIGNIFICANCE AND
CONSEQUENCES, AND THAT ALL SUCH WAIVERS AND CONSENTS HEREIN ARE EXPLICIT AND
KNOWING AND WHICH EACH GUARANTOR EXPECTS TO BE FULLY ENFORCEABLE.
11.19 Release of Subsidiary Guarantors and Additional Borrowers. The
---------------------------------------------------------
Company may at any time deliver to the Agent a certificate from a Responsible
Officer, certifying as of the date of the certificate that, after the
consummation of the transaction or series of transactions described in such
certificate (which certification shall also state that such transactions,
86
individually or in the aggregate, will be in compliance with the terms and
conditions of this Agreement, including to the extent applicable Sections 8.2
and 8.3, and that no Event of Default existed, exists or will exist, as the case
may be, immediately before, as a result of or immediately after giving effect to
such transaction or transactions and termination), the Subsidiary Guarantor or
Additional Borrower, as the case may be, identified in such certification will
no longer be a Subsidiary of the Company. Effective upon the consummation of
the transaction or series of transactions described in such certificate and, in
the case of any Additional Borrower, the payment in full of all principal of,
interest on, reimbursement obligations in respect of and fees related to any
outstanding Credit Extensions in favor of such Additional Borrower and the
termination (or arrangement to the satisfaction of the Issuing Bank for the
termination) of any Letter of Credit issued for the account of such Additional
Borrower, the Subsidiary identified in such certification shall thereupon
automatically cease to be a Subsidiary Guarantor or Additional Borrower, as the
case may be, hereunder and shall cease to be a party hereto and, in the case of
a Subsidiary Guarantor, shall thereupon automatically be released from its
obligations under Section 11.18. The Company shall promptly notify the Agent of
the consummation of any such transaction or series of transactions, as provided
in Section 7.13. The Agent and each Bank shall, at the Company's expense,
execute and deliver such instruments as the Company may reasonably request to
evidence such release.
11.20 Entire Agreement. This Agreement, together with the other Loan
----------------
Documents, embodies the entire agreement and understanding among the Company,
the Banks, the Swingline Bank and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, oral or written,
relating to the subject matter hereof and thereof.
(remainder of page intentionally left blank)
87
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in San Francisco, California by their proper and
duly authorized officers as of the day and year first above written.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ CORPORATION,
as Borrower and Guarantor
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------
Title:Treasurer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INTERNATIONAL, INC.,
as Borrower and Guarantor
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------
Title:Treasurer
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent, Issuing Bank,
Swingline Bank and a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Title:Vice President
THE BANK OF NOVA SCOTIA, as Co-Agent and
a Bank
By: /s/ M. Van Olterloo
-----------------------
Title:Senior Relationship Manager
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Agent and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------
Title:Senior Vice President
FIRST UNION NATIONAL BANK, as Co-Agent
and a Bank
By: /s/ ▇▇▇▇▇▇▇ Colllins
------------------------
Title:Vice President
88
KEYBANK NATIONAL ASSOCIATION,
as Co-Agent and a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------
Title:Commercial Banking Officer
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, as Co-Agent and a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------
Title:Vice President
NATIONSBANK, N.A., as Co-Agent and a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title:Vice President
THE BANK OF NEW YORK, as
Syndication Agent and a Bank
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------
Title:Vice President
BANK ONE, COLORADO, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------
Title:Vice President
BANQUE NATIONALE DE PARIS
By: /s/ (unreadable signature)
------------------------------
Title:Senior Vice President and Manager
By: /s/ (unreadable signature)
------------------------------
Title:Vice President
89
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By: /s/ Koh ▇▇▇▇▇▇▇▇
--------------------
Title:General Manager
MELLON BANK, N.A.
By: /s/ (unreadable signature)
------------------------------
Title:Assistant Vice President
NORWEST BANK COLORADO, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------
Title:Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Title:Vice President
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Title:Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------
Title:Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Title:Vice President
90
ANNEX I
PRICING GRID
Leverage Facility Fee Letter of Credit Offshore Rate
Level Ratio Fee Spread
Level 1 Less than 1.25 to 1.0 0.1375% 0.2625% 0.2625%
(Lowest)
Level 2 Greater than or equal to 1.25 0.150% 0.350% 0.350%
to 1.00 but less than 1.75 to
1.00
Level 3 Greater than or equal to 1.75 0.175% 0.425% 0.425%
to 1.00 but less than 2.25 to
1.00
Level 4 Greater than or equal to 2.25 0.200% 0.450% 0.450%
to 1.00 but less than 2.75 to
1.00
Level 5 Greater than or equal to 2.75 0.225% 0.525% 0.525%
to 1.00 but less than 3.00 to
1.00
Level 6 Greater than or equal to 3.00 0.250% 0.625% 0.625%
(Highest) to 1.0
===============================================================================================================
The Leverage Ratio used to compute the Applicable Fee Amount and the
Applicable Margin shall be the Leverage Ratio set forth in the Compliance
Certificate most recently delivered by the Company to the Agent pursuant to
Section 7.2(a) of the Credit Agreement; changes in the Applicable Fee Amount and
the Applicable Margin resulting from a change in the Leverage Ratio shall become
effective upon delivery by the Company to the Agent of a new Compliance
Certificate pursuant to Section 7.2(a). If the Company shall fail to deliver a
Compliance Certificate within the number of days after the end of any fiscal
quarter or fiscal year as required pursuant to Section 7.2(a) (without giving
effect to any grace period), the Applicable Fee Amount and the Applicable Margin
from the first day after the date on which such Compliance Certificate was
required to be delivered to the Agent to the day the Company delivers to the
Agent a Compliance Certificate shall conclusively equal the highest Applicable
Fee Amount and Applicable Margin set forth above. Notwithstanding the
foregoing, the Applicable Fee Amount and the Applicable Margin shall be no lower
than Level 3 for the period commencing on the Closing Date and ending on
December 31, 1998.
If on any date (including any date during the 6-month period following
the Closing Date) the Effective Amount of all Revolving Loans plus the Effective
----
Amount of all Swingline Loans plus the Effective Amount of all L/C Obligations
----
exceeds 50% of the Aggregate Commitment then in effect, the Applicable Fee
Amount and the Applicable Margin then in effect shall be each increased by 0.10%
for such date.
1