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Credit Agreement
Dated as of April 3, 2002
among
Racing Champions, Inc.,
Racing Champions South, Inc.,
Racing Champions Worldwide Limited,
The Guarantors from time to time parties hereto,
the Lenders from time to time parties hereto,
and
▇▇▇▇▇▇ Trust and Savings Bank
as Administrative Agent
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TABLE OF CONTENTS
Section Heading Page
Section 1. The Credit Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Applicable Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans . . . . . . . . . . . . . . 5
Section 1.5. Manner of Borrowing Loans and Designating Applicable Interest Rates . . . . . . 5
Section 1.6. Interest Periods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.7. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.8. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.9. Default Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.10. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.11. Funding Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.12. Commitment Terminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.13. Substitution of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1.14. Appointment of RCI as Agent for Borrowers . . . . . . . . . . . . . . . . . . . 12
Section 1.15. Swing Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.1. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Place and Application of Payments . . . . . . . . . . . . . . . . . . . . . . . 15
Section 3.1. Place and Application of Payments . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4. The Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.1. Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.2. Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5. Definitions; Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.2. Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.3. Change in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 6. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.1. Organization and Qualification. . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.2. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.3. Authority and Validity of Obligations . . . . . . . . . . . . . . . . . . . . . 28
Section 6.4. Use of Proceeds; Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.5. Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.6. No Material Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.7. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.8. Trademarks, Franchises, and Licenses. . . . . . . . . . . . . . . . . . . . . . 30
Section 6.9. Governmental Authority and Licensing. . . . . . . . . . . . . . . . . . . . . . 30
Section 6.10. Good Title. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.11. Litigation and Other Controversies. . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.13. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.14. Affiliate Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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Section 6.15. Investment Company; Public Utility Holding Company. . . . . . . . . . . . . . . 31
Section 6.16. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.17. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.18. Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.19. Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 6.20. No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7. Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.1. All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.2. Initial Credit Event. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 8. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.1. Maintenance of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.2. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.3. Taxes and Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.5. Financial Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 8.6. Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.7. Borrowings and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.8. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 8.9. Investments, Acquisitions, Loans and Advances . . . . . . . . . . . . . . . . . 37
Section 8.10. Mergers, Consolidations and Sales . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.11. Maintenance of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.12. Dividends and Certain Other Restricted Payments . . . . . . . . . . . . . . . . 39
Section 8.13. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.14. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.15. Burdensome Contracts With Affiliates. . . . . . . . . . . . . . . . . . . . . . 39
Section 8.16. No Changes in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.17. Formation of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.18. Change in the Nature of Business. . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.19. Use of Loan Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.20. No Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.21. Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.22. Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 9. Events of Default and Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 9.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 9.2. Non-Bankruptcy Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.3. Bankruptcy Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.4. Collateral for Undrawn Letters of Credit. . . . . . . . . . . . . . . . . . . . 43
Section 9.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 9.6. Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 10. Change in Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 10.1. Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or Inadequacy of, LIBOR . 44
Section 10.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . 44
Section 10.4. Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 10.5. Discretion of Lender as to Manner of Funding. . . . . . . . . . . . . . . . . . 45
Section 11. The Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.1. Appointment and Authorization of Administrative Agent . . . . . . . . . . . . . 46
Section 11.2. Administrative Agent and its Affiliates . . . . . . . . . . . . . . . . . . . . 46
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Section 11.3. Action by Administrative Agent. . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 11.5. Liability of Administrative Agent; Credit Decision. . . . . . . . . . . . . . . 47
Section 11.6. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 11.7. Resignation of Administrative Agent and Successor Administrative Agent. . . . . 47
Section 11.8. L/C Issuer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements 48
Section 11.10. Designation of Additional Agents. . . . . . . . . . . . . . . . . . . . . . . . 48
Section 12. The Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 12.1. The Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 12.2. Guarantee Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in Certain Circumstances . . 50
Section 12.4. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.5. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.6. Limit on Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.7. Stay of Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.8. Benefit to Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 12.9. Guarantor Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 13.1. Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 13.2. No Waiver, Cumulative Remedies. . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.3. Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.4. Documentary Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.5. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.6. Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.7. Sharing of Set-Off. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 13.8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.9. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.10. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.11. Participants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 13.12. Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 13.13. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.14. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.15. Costs and Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . 55
Section 13.16. Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 13.17. Currency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 13.18. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.19. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.20. Severability of Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.21. Excess Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.22. Lender's Obligations Several. . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. . . . . . . . . . . . . . . . 58
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Exhibit A - Notice of Payment Request
Exhibit B - Notice of Borrowing
Exhibit C - Notice of Continuation/Conversion
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Exhibit D-1 - Revolving Note
Exhibit D-2 - Swing Note
Exhibit E - Compliance Certificate
Exhibit F - Additional Guarantor Supplement
Exhibit G - Assignment and Acceptance
Exhibit H - Liquidity Certificate
Schedule 1 - Commitments
Schedule 6.2 - Subsidiaries
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CREDIT AGREEMENT
This Credit Agreement is entered into as of April 3, 2002, by and among
Racing Champions, Inc., an Illinois corporation ("RCI"), Racing Champions South,
Inc., a North Carolina corporation ("RCS"), Racing Champions Worldwide Limited,
a corporation organized under the laws of the United Kingdom ("RCWL"; RCI, RCS
and RCWL being referred to collectively as the "Borrowers" and individually as a
"Borrower"), Racing Champions Ertl Corporation (formerly known as Racing
Champions Corporation), a Delaware corporation, as a Guarantor (the "Company"),
the direct and indirect Domestic Subsidiaries of the Company from time to time
party to this Agreement, as Guarantors, the several financial institutions from
time to time party to this Agreement, as Lenders, and ▇▇▇▇▇▇ Trust and Savings
Bank, as Administrative Agent as provided herein. All capitalized terms used
herein without definition shall have the same meanings herein as such terms are
defined in Section 5.1 hereof.
PRELIMINARY STATEMENT
The Borrowers have requested, and the Lenders have agreed to extend,
certain credit facilities on the terms and conditions of this Agreement.
Now, Therefore, in consideration of the mutual agreements contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. The Credit Facilities.
Section 1.1. Revolving Credit Commitments. Subject to the terms and
conditions hereof, each Lender, by its acceptance hereof, severally agrees to
make a loan or loans (individually a "Revolving Loan" and collectively the
"Revolving Loans") in U.S. Dollars and Alternative Currencies to any Borrower
from time to time on a revolving basis in an aggregate outstanding Original
Dollar Amount up to the amount of such Lender's Commitment, subject to any
reductions thereof pursuant to the terms hereof, before the Termination Date.
Neither the Original Dollar Amount nor the U.S. Dollar Equivalent of the
aggregate principal amount of Revolving Loans, Swing Loans and L/C Obligations
at any time outstanding shall exceed the Commitments in effect at such time.
Each Borrowing of Revolving Loans shall be made ratably by the Lenders in
proportion to their respective Percentages. As provided in Section 1.5(a)
hereof, RCI, on behalf of the applicable Borrower, may elect that each Borrowing
of Revolving Loans denominated in U.S. Dollars be either Base Rate Loans or
Eurodollar Loans. All Revolving Loans denominated in an Alternative Currency
shall be Eurodollar Loans. Revolving Loans may be repaid and the principal
amount thereof reborrowed before the Termination Date, subject to the terms and
conditions hereof.
Section 1.2. Letters of Credit. (a) General Terms. Subject to the
terms and conditions hereof, as part of the Revolving Credit, the L/C Issuer
shall issue standby letters of credit (each a "Letter of Credit") for the
account of the applicable Borrower in an aggregate undrawn face amount up to the
L/C Sublimit. Each Letter of Credit shall be issued by the L/C Issuer, but each
Lender shall be obligated to reimburse the L/C Issuer for such Lender's
Percentage of the amount of each drawing thereunder and, accordingly, each
Letter of Credit shall constitute usage of the Commitment of each Lender pro
rata in an amount equal to its Percentage of the L/C Obligations then
outstanding.
(b) Applications. At any time before the Termination Date, the L/C
Issuer shall, at the request of RCI, which is acting on behalf of the Borrowers,
issue one or more Letters of Credit in U.S. Dollars, in a form satisfactory to
the L/C Issuer, with expiration dates no later than the earlier of 12 months
from the date of issuance (or which are cancelable not later than 12 months
from the date of issuance and each renewal) or 30 days prior to the Termination
Date, in an aggregate face amount as set forth above, upon the receipt of an
application duly executed by RCI, on behalf of the applicable Borrower, for the
relevant Letter of Credit in the form then customarily prescribed by the L/C
Issuer for the Letter of Credit requested (each an "Application").
Notwithstanding anything contained in any Application to the contrary: (i) the
Borrowers shall pay fees in connection with each Letter of Credit as set forth
in Section 2.1 hereof, (ii) except as otherwise provided in Section 1.8 hereof,
before the occurrence of a Default or an Event of Default, the L/C Issuer will
not call for the funding by the Borrowers of any amount under a Letter of Credit
before being presented with a drawing thereunder, and (iii) if the L/C Issuer is
not timely reimbursed for the amount of any drawing under a Letter of Credit on
the date such drawing is paid, the Borrowers' obligation to reimburse the L/C
Issuer for the amount of such drawing shall bear interest (which the Borrowers
hereby jointly and severally promise to pay) from and after the date such
drawing is paid at a rate per annum equal to the sum of 2.0% plus the Applicable
Margin plus the Base Rate from time to time in effect (computed on the basis of
a year of 365 or 366 days, as the case may be, and the actual number of days
elapsed). If the L/C Issuer issues any Letter of Credit with an expiration date
that is automatically extended unless the L/C Issuer gives notice that the
expiration date will not so extend beyond its then scheduled expiration date,
unless the Required Lenders instruct the L/C Issuer otherwise, the L/C Issuer
will give such notice of non-renewal before the time necessary to prevent such
automatic extension if before such required notice date: (i) the expiration
date of such Letter of Credit if so extended would be after the Termination
Date, (ii) the Commitments have been termi-nated, or (iii) a Default or an Event
of Default exists and the Administrative Agent, at the request or with the
consent of the Required Lenders, has given the L/C Issuer instructions not to so
permit the extension of the expiration date of such Letter of Credit. The L/C
Issuer agrees to issue amendments to the Letter(s) of Credit increasing the
amount, or extending the expiration date, thereof at the request of RCI, on
behalf of the applicable Borrower subject to the conditions of Section 7 hereof
and the other terms of this Section 1.2.
(c) The Reimbursement Obligations. Subject to Section 1.2(b) hereof,
the obligation of the Borrowers to reimburse the L/C Issuer for all drawings
under a Letter of Credit (a "▇▇▇▇-▇▇▇▇▇-ment Obligation") shall be governed by
the Application related to such Letter of Credit, except that reimbursement
shall be made by no later than 12:00 Noon (Chicago time) on the date when each
drawing is to be paid, in immediately available funds at the Administrative
Agent's principal office in Chicago, Illinois or such other office as the
Administrative Agent may designate in writing to the applicable Borrower (who
shall thereafter cause to be distributed to the L/C Issuer such amount(s) in
like funds). If the applicable Borrower does not make any such reimbursement
payment on the date due and the Participating Lenders fund their participations
therein in the manner set forth in Section 1.2(d) below, then all payments
thereafter received by the Administrative Agent in discharge of any of the
relevant Reimbursement Obligations shall be distributed in accordance with
Section 1.2(d) below.
(d) The Participating Interests. Each Lender (other than the Lender
acting as L/C Issuer in issuing the relevant Letter of Credit), by its
acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C
Issuer hereby agrees to sell to each such Lender (a "Participating Lender"), an
undivided percentage participating interest (a "Participating Interest"), to the
extent of its Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by a
Borrower to pay any Reimburse-ment Obligation at the time required on the date
the related drawing is to be paid, as set forth in Section 1.2(c) above, or if
the L/C Issuer is required at any time to return to any Borrower or to a
trustee, receiver, liquidator, custodian or other Person any portion of any
payment of any Reimbursement Obligation, each Participating Lender shall, not
later than the Business Day it receives a certificate in the form of Exhibit A
hereto from the L/C Issuer (with a copy to the Administrative Agent) to such
effect, if such certificate is received before 1:00 p.m. (Chicago time), or not
later than 1:00 p.m. (Chicago time) the following Business Day, if such
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certificate is received after such time, pay to the Administrative Agent for the
account of the L/C Issuer an amount equal to such Participating Lender's
Percentage of such unpaid or recap-tured Reimbursement Obligation together with
interest on such amount accrued from the date the related payment was made by
the L/C Issuer to the date of such payment by such Participating Lender at a
rate per annum equal to: (i) from the date the related payment was made by the
L/C Issuer to the date two Business Days after payment by such Participating
Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from
the date two Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating
Lender, the Base Rate in effect for each such day. Each such Participating
Lender shall thereafter be entitled to receive its Percentage of each payment
received in respect of the relevant Reimbursement Obligation and of interest
paid thereon, with the L/C Issuer retaining its Percentage thereof as a Lender
hereunder.
The several obligations of the Participating Lenders to the L/C Issuer
under this Section 1.2 shall be absolute, irrevocable and unconditional under
any and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Participating Lender may have or
have had against any Borrower, the L/C Issuer, the Administrative Agent, any
Lender or any other Person whatsoever. Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event of
Default or by any reduction or termination of the Commitment of any Lender, and
each payment by a Participating Lender under this Section 1.2 shall be made
without any offset, abatement, withholding or reduction whatsoever.
(e) Indemnification. The Participating Lenders shall, to the extent of
their respective Percentages, indemnify the L/C Issuer (to the extent not
reimbursed by the applicable Borrower) against any cost, expense (including
reasonable counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the L/C Issuer's gross negligence or
willful misconduct) that the L/C Issuer may suffer or incur in connection with
any Letter of Credit issued by it. The obligations of the Participating Lenders
under this Section 1.2(e) and all other parts of this Section 1.2 shall survive
termination of this Agreement and of all Applications, Letters of Credit, and
all drafts and other documents presented in connection with drawings thereunder.
(f) Manner of Requesting a Letter of Credit. RCI, on behalf of the
applicable Borrower, shall provide at least five Business Days' advance written
notice to the Administrative Agent of each request for the issuance of a Letter
of Credit, such notice in each case to be accompanied by an Application for such
Letter of Credit properly completed and executed by RCI, on behalf of the
applicable Borrower and, in the case of an extension or an increase in the
amount of a Letter of Credit, a written request therefor, in a form acceptable
to the Administrative Agent and the L/C Issuer, in each case, together with the
fees called for by this Agreement. The Administrative Agent shall promptly
notify the L/C Issuer of the Administrative Agent's receipt of each such notice
and the L/C Issuer shall promptly notify the Administrative Agent and the
Lenders of the issuance of the Letter of Credit so requested.
Section 1.3. Applicable Interest Rates. (a) Base Rate Loans. Each
Base Rate Loan made or maintained by a Lender shall bear interest during each
Interest Period it is outstanding (computed on the basis of a year of 365 or 366
days, as the case may be, and the actual days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced, continued or created by
conversion from a Eurodollar Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable Margin plus
the Base Rate from time to time in effect, payable on the last day of its
Interest Period and at maturity (whether by acceleration or otherwise).
3
(b) Eurodollar Loans. Each Eurodollar Loan made or maintained by a
Lender shall bear interest during each Interest Period it is outstanding
(computed on the basis of a year of 360 days and actual days elapsed) on the
unpaid principal amount thereof from the date such Loan is advanced, continued
or created by conversion from a Base Rate Loan until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Adjusted LIBOR applicable for such Interest Period,
payable on the last day of the Interest Period and at maturity (whether by
acceleration or otherwise), and, if the applicable Interest Period is longer
than three months, on each day occurring every three months after the
commencement of such Interest Period.
(c) Alternative Currency. On the date RCI, on behalf of the relevant
Borrower, requests a Borrowing of Eurodollar Loans denominated in an Alternative
Currency, as provided in Section 1.5(a) below, the Administrative Agent shall
promptly notify each Lender. If a Lender determines that such Alternative
Currency is not available to it in sufficient amount and for a sufficient term
to enable it to advance or continue the Loan requested of it as part of such
Borrowing and so notifies the Administrative Agent no later than 1:00 p.m.
(Chicago time) on the same day it receives notice from the Administrative Agent
of such requested Loan, the Administrative Agent shall so notify RCI, on behalf
of the relevant Borrower, by 1:45 p.m. (Chicago time). If the relevant Borrower
nevertheless desires such Borrowing, RCI, on behalf of the relevant Borrower
must notify the Administrative Agent by no later than 3:00 p.m. (Chicago time)
on such day. If the Administrative Agent does not receive such notice from RCI,
on behalf of the relevant Borrower, by 3:00 p.m. (Chicago time), the relevant
Borrower shall automatically be deemed to have revoked its request for such
Borrowing and the Administrative Agent will promptly notify the Lenders of such
revocation. If RCI, on behalf of the relevant Borrower, does give such notice
by 3:00 p.m. (Chicago time), each Lender that did not notify the Administrative
Agent by 1:00 p.m. (Chicago time) that the requested Alternative Currency is
unavailable to it to fund the requested Loan shall, subject to Section 7 hereof,
make its Loan in the requested Alternative Currency in accordance with Section
1.5(d) hereof; provided, however, that in the event that a Lender or Lenders
shall exercise this option (each, an "Unavailable Lender"), the Borrowers may,
but shall not be obligated to, at any time within 90 days of such exercise with
the consent of the Administrative Agent but without the consent of any
Unavailable Lenders (i) terminate the Commitment of each Unavailable Lender,
(ii) obtain a new Lender or Lenders pursuant to the assignment provisions set
forth in Section 13.12 hereof (except with regard to the minimum amount
requirements set forth in clauses (i) and (ii) of the first sentence of such
Section) to effect the assignment to such new Lender or Lenders of each
Unavailable Lender's interests, rights and obligations under this Agreement
(including without limitation all of such Unavailable Lender's Commitment as
well as its portion of all outstanding Loans and the Note held by such
Unavailable Lender) and the other Loan Documents and/or to increase the
Commitment of one or more existing Lenders, in each case so that after giving
effect thereto the Commitments shall be in the same amounts as prior to the
events described in this paragraph, (iii) repay in full to each Unavailable
Lender all outstanding Loans (including accrued interest thereon) and L/C
Obligations at the time of the assignment and/or increase in the Commitment
described in clause (ii) above with the proceeds of Loans made by such Persons
who are to become Lenders by assignment or with the proceeds of Loans made by
Lenders who have agreed to increase their Commitment and (iv) pay to each
Unavailable Lender all fees and other compensation due and owing such
Unavailable Lender under the terms of this Agreement and the other Loan
Documents; provided further that if the Borrowers choose to exercise their right
to replace an Unavailable Lender, the Borrowers, the Administrative Agent and
the Lender which replaces the Unavailable Lender shall execute such instruments
and documents as shall, in the opinion of the Administrative Agent, be
reasonably necessary in order to effect such replacement. Each Lender that did
so notify the Administrative Agent by 1:00 p.m. (Chicago time) that it would not
be able to make the Loan requested from it shall, subject to Section 7 hereof,
make a Eurodollar Loan denominated in U.S. Dollars in the Original Dollar Amount
of, and with the same Interest Period as, the Eurodollar Loan such Lender was
originally requested
4
to make. Such Eurodollar Loan denominated in U.S. Dollars shall be made by the
affected Lender on the same day as the other Lenders make their Eurodollar Loans
denominated in the applicable Alternative Currency as part of the relevant
Borrowing of Eurodollar Loans, but shall bear interest with reference to the
Adjusted LIBOR applicable to U.S. Dollars rather than the relevant Alternative
Currency for the applicable Interest Period and shall be made available in
accordance with the procedures for disbursing U.S. Dollar Loans under Section
1.5(d) hereof. Any Eurodollar Loan denominated in an Alternative Currency shall
be advanced in such currency, and all payments of principal and interest thereon
shall be made in such Alternative Currency.
(d) Rate Determinations. The Administrative Agent shall determine each
interest rate applicable to the Loans and the Reimbursement Obligations
hereunder and the Original Dollar Amount of Loans denominated in an Alternative
Currency, and its determination thereof shall be conclusive and binding except
in the case of manifest error. The Original Dollar Amount of each Eurodollar
Loan denominated in an Alternative Currency shall be determined or redetermined,
as applicable, effective as of the first day of each Interest Period applicable
to such Loan.
Section 1.4. Minimum Borrowing Amounts; Maximum Eurodollar Loans. Each
Borrowing of Base Rate Loans shall be in an amount not less than $250,000 or
such greater amount which is an integral multiple of $50,000. Each Borrowing of
Eurodollar Loans advanced, continued or converted shall be in an amount not less
than an Original Dollar Amount of $1,500,000 and, if greater, shall be in such
integral multiple as would have the Original Dollar Amount most closely
approximating $100,000. Without the Administrative Agent's consent, there shall
not be more than five Borrowings of Eurodollar Loans under the Revolving Credit
outstanding at any one time.
Section 1.5. Manner of Borrowing Loans and Designating Applicable
Interest Rates. (a) Notice to the Administrative Agent. RCI, on behalf of
itself or any other Borrower, shall give notice to the Administrative Agent by
no later than: (i) 12:00 Noon (Chicago time) at least four Business Days before
the date on which RCI on behalf of the applicable Borrower requests the Lenders
to advance a Borrowing of Eurodollar Loans denominated in an Alternative
Currency, (ii) 12:00 Noon (Chicago time) at least three Business Days before the
date on which RCI on behalf of the applicable Borrower requests the Lenders to
advance a Borrowing of Eurodollar Loans denominated in U.S. Dollars and (iii)
11:00 a.m. (Chicago time) on the date RCI on behalf of the applicable Borrower
requests the Lenders to advance a Borrowing of Base Rate Loans. The Loans
included in each Borrowing shall bear interest initially at the type of rate
specified in such notice of a new Borrowing. Thereafter, RCI, on behalf of the
applicable Borrower, may from time to time elect to change or continue the type
of interest rate borne by each Borrowing or, subject to the minimum amount
requirement contained in Section 1.4 for each outstanding Borrowing, a portion
thereof, as follows: (i) if such Borrowing is of Eurodollar Loans, on the last
day of the Interest Period applicable thereto, RCI, on behalf of the applicable
Borrower, may (subject to the notice requirement set forth herein) continue part
or all of such Borrowing as Eurodollar Loans or, if such Eurodollar Loan is
denominated in U.S. Dollars, convert part or all of such Borrowing into Base
Rate Loans or (ii) if such Borrowing is of Base Rate Loans, on any Business Day,
RCI, on behalf of itself or the applicable Borrower, may (subject to the notice
requirement set forth herein) convert all or part of such Borrowing into
Eurodollar Loans for an Interest Period or Interest Periods specified by RCI, on
behalf of itself or the applicable Borrower. RCI, on behalf of itself or the
applicable Borrower shall give all such notices requesting the advance,
continuation or conversion of a Borrowing to the Administrative Agent by
telephone or telecopy (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing), substantially in the form
attached hereto as Exhibit B (Notice of Borrowing) or Exhibit C (Notice of
Continuation/Conversion), as applicable, or in such other form acceptable to the
Administrative Agent. Notice of the continuation of a Borrowing of Eurodollar
Loans denominated in U.S. Dollars for an additional Interest Period or of the
5
conversion of part or all of a Borrowing of Eurodollar Loans denominated in U.S.
Dollars into Base Rate Loans or of Base Rate Loans into Eurodollar Loans
denominated in U.S. Dollars must be given by no later than 12:00 Noon (Chicago
time) at least three Business Days before the date of the requested continuation
or conversion. Notice of the continuation of a Borrowing of Eurodollar Loans
denominated in an Alternative Currency for an additional Interest Period or of
the conversion of part or all of a Borrowing of Eurodollar Loans denominated in
an Alternative Currency into Base Rate Loans or of Base Rate Loans into
Eurodollar Loans denominated in an Alternative Currency must be given no later
than 12:00 Noon (Chicago time) at least four Business Days before the requested
continuation or conversion. All such notices concerning the advance,
continuation or conversion of a Borrowing shall specify the date of the
requested advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced, continued
or converted, the type of Loans to comprise such new, continued or converted
Borrowing and, if such Borrowing is to be comprised of Eurodollar Loans, the
currency and Interest Period applicable thereto. The Borrowers agree that the
Administrative Agent may rely on any such telephonic or telecopy notice given by
any person the Administrative Agent in good faith believes is an Authorized
Representative of RCI without the necessity of independent investigation and, in
the event any such notice by telephone conflicts with any written confirmation,
such telephonic notice shall govern if the Administrative Agent has acted in
reliance thereon.
(b) Notice to the Lenders. The Administrative Agent shall give prompt
telephonic or telecopy notice to each Lender of any notice from RCI received
pursuant to Section 1.5(a) above and, if such notice requests the Lenders to
make Eurodollar Loans, the Administrative Agent shall give notice to RCI and
each Lender by like means of the interest rate applicable thereto, and, with
respect to Eurodollar Loans denominated in an Alternative Currency, the Original
Dollar Amount thereof, in each case, promptly after the Administrative Agent has
made such determinations.
(c) RCI's Failure to Notify; Automatic Continuations and Conversions.
Any outstanding Borrowing of Base Rate Loans shall automatically be continued
for an additional Interest Period on the last day of its then current Interest
Period unless RCI, on behalf of itself or the applicable Borrower, has notified
the Administrative Agent within the period required by Section 1.5(a) that such
Borrower intends to convert such Borrowing, subject to Section 7.1 hereof, into
a Borrowing of Eurodollar Loans or such Borrowing is prepaid in accordance with
Section 1.8(a). If RCI, on behalf of itself or the applicable Borrower, fails
to give notice pursuant to Section 1.5(a) above of the continuation or
conversion of any outstanding principal amount of a Borrowing of Eurodollar
Loans denominated in U.S. Dollars before the last day of its then current
Interest Period within the period required by Section 1.5(a) or, whether or not
such notice has been given, if one or more of the conditions set forth in
Section 7.1 for the continuation or conversion of a Borrowing of Eurodollar
Loans would not be satisfied, and such Borrowing is not prepaid in accordance
with Section 1.8(a), such Borrowing shall automatically be converted into a
Borrowing of Base Rate Loans. If RCI, on behalf of itself or the applicable
Borrower, fails to give notice pursuant to Section 1.5(a) above of the
continuation of any outstanding principal amount of a Borrowing of Eurodollar
Loans denominated in an Alternative Currency before the last day of its then
current Interest Period within the period required by Section 1.5(a), such
Borrowing shall automatically be continued as a Borrowing of Eurodollar Loans in
the same Alternative Currency with an Interest Period of one month if the
conditions set forth in Section 7.1 for the continuation or conversion of
Eurodollar Loans would be satisfied, but if one or more of the conditions set
forth in Section 7.1 for the continuation or conversion of a Borrowing of
Eurodollar Loans would not be satisfied, and such Borrowing is not prepaid in
accordance with Section 1.8(a), then such Borrowing shall automatically be
converted into a Borrowing of Base Rate Loans.
6
(d) Disbursement of Loans. Not later than 1:00 p.m. (Chicago time) on
the date of any requested advance of a new Borrowing, subject to Section 7
hereof, each Lender shall make available its Loan comprising part of such
Borrowing in funds immediately available at the principal office of the
Administrative Agent in Chicago, Illinois except that if such Borrowing is
denominated in an Alternative Currency each Lender shall, subject to Section
1.5(c) and Section 7, make available its Loan comprising part of such Borrowing
at such office as the Administrative Agent has previously specified in a notice
to each Lender, in such funds as are then customary for the settlement of
international transactions in such currency and no later than such local time as
is necessary for such funds to be received and transferred to the relevant
Borrower for same day value on the date of the Borrowing. The Administrative
Agent shall make the proceeds of each new Borrowing denominated in U.S. Dollars
available to the relevant Borrower at the Administrative Agent's principal
office in Chicago, Illinois and each new Borrowing denominated in Alternative
Currencies at such office as the Administrative Agent has previously agreed to
with the Borrowers, in each case, in the type of funds received by the
Administrative Agent from the Lenders.
(e) Administrative Agent Reliance on Lender Funding. Unless the
Administrative Agent shall have been notified by a Lender prior to (or, in the
case of a Borrowing of Base Rate Loans, by 1:00 p.m. (Chicago time) on) the date
on which such Lender is scheduled to make payment to the Administrative Agent of
the proceeds of a Loan (which notice shall be effective upon receipt) that such
Lender does not intend to make such payment, the Administrative Agent may assume
that such Lender has made such payment when due and the Administrative Agent may
in reliance upon such assumption (but shall not be required to) make available
to the applicable Borrower the proceeds of the Loan to be made by such Lender
and, if any Lender has not in fact made such payment to the Administrative
Agent, such Lender shall, on demand, pay to the Administrative Agent the amount
made available to the applicable Borrower attributable to such Lender together
with interest thereon in respect of each day during the period commencing on the
date such amount was made available to the applicable Borrower and ending on
(but excluding) the date such Lender pays such amount to the Administrative
Agent at a rate per annum equal to: (i) from the date the related advance was
made by the Administrative Agent to the date two Business Days after payment by
such Lender is due hereunder, the Federal Funds Rate (or, in the case of a Loan
denominated in an Alternative Currency, the cost to the Administrative Agent of
funding the amount it advanced to fund such Lender's Loan, as determined by the
Administrative Agent) for each such day and (ii) from the date two Business Days
after the date such payment is due from such Lender to the date such payment is
made by such Lender, the Base Rate in effect for each such day. If such amount
is not received from such Lender by the Administrative Agent immediately upon
demand, the applicable Borrower will, on demand, repay to the Administrative
Agent the proceeds of the Loan attributable to such Lender with interest thereon
at a rate per annum equal to the interest rate applicable to the relevant Loan,
but without such payment being considered a payment or prepayment of a Loan
under Section 1.11 hereof so that such Borrower will have no liability under
such Section with respect to such payment.
Section 1.6. Interest Periods. As provided in Section 1.5(a) hereof,
at the time of each request to advance, continue or create by conversion a
Borrowing of Eurodollar Loans or Swing Loans, RCI, on behalf of the applicable
Borrower, shall select an Interest Period applicable to such Loans from among
the available options. The term "Interest Period" means the period commencing
on the date a Borrowing of Loans is advanced, continued or created by conversion
and ending: (a) in the case of Base Rate Loans, on the last day of the calendar
quarter (i.e., the last day of March, June, September or December, as
applicable) in which such Borrowing is advanced, continued or created by
conversion (or on the last day of the following calendar quarter if such Loan is
advanced, continued or created by conversion on the last day of a calendar
quarter), (b) in the case of a Eurodollar Loan, one, two, three or six months
thereafter, and (c) in
7
the case of a Swing Loan, on the date one to five days thereafter as mutually
agreed to by RCI, on behalf of the applicable Borrower and the Administrative
Agent; provided, however, that:
(a) any Interest Period for a Borrowing of Loans consisting of Base
Rate Loans that otherwise would end after the Termination Date shall end on
the Termination Date;
(b) no Interest Period with respect to any portion of the Loans
consisting of Eurodollar Loans shall extend beyond the Termination Date;
(c) no Interest Period with respect to any portion of the Loans
consisting of Eurodollar Loans shall extend beyond a date on which the
Borrowers are required to make a scheduled payment of principal on the
Loans, unless the sum of (a) the aggregate principal amount of Loans that
are Base Rate Loans plus (b) the aggregate principal amount of Loans that
are Eurodollar Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount to be paid on the Loans on such
payment date;
(d) whenever the last day of any Interest Period would otherwise be a
day that is not a Business Day, the last day of such Interest Period shall
be extended to the next succeeding Business Day, provided that, if such
extension would cause the last day of an Interest Period for a Borrowing of
Eurodollar Loans to occur in the following calendar month, the last day of
such Interest Period shall be the immediately preceding Business Day; and
(e) for purposes of determining an Interest Period for a Borrowing of
Eurodollar Loans, a month means a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next calendar
month; provided, however, that if there is no numerically corresponding day
in the month in which such an Interest Period is to end or if such an
Interest Period begins on the last Business Day of a calendar month, then
such Interest Period shall end on the last Business Day of the calendar
month in which such Interest Period is to end.
Section 1.7. Maturity of Loans. Each Loan, both for principal and
interest, shall mature and become due and payable by the Borrowers, jointly and
severally, on the Termination Date.
Section 1.8. Prepayments. (a) Optional. The Borrowers shall have the
privilege of prepaying without premium or penalty (except as set forth in
Section 1.11 below) and in whole or in part (but, if in part, then: (i) if such
Borrowing is of Base Rate Loans, in an amount not less than $500,000, (ii) if
such Borrowing is of Eurodollar Loans denominated in U.S. Dollars, in an amount
not less than $1,000,000, (iii) if such Borrowing is of Eurodollar Loans
denominated in an Alternative Currency, in an amount for which the U.S. Dollar
Equivalent is not less than $1,000,000 and (iv) in each case, in an amount such
that the minimum amount required for a Borrowing pursuant to Section 1.4 hereof
remains outstanding) any Borrowing of Eurodollar Loans at any time upon (x)
three Business Days' prior notice (in the case of Eurodollar Loans denominated
in U.S. Dollars) and (y) four Business Days' prior notice (in the case of
Eurodollar Loans denominated in an Alternative Currency) by RCI, on behalf of
the Borrowers, to the Administrative Agent or, in the case of a Borrowing of
Base Rate Loans, notice delivered by RCI, on behalf of the Borrowers, to the
Administrative Agent no later than 10:00 a.m. (Chicago time) on the date of
prepayment, such prepayment to be made by the payment of the principal amount to
be prepaid and, in the case of any Eurodollar Loans or Swing Loans, accrued
interest thereon to the date fixed for prepayment plus any amounts due the
Lenders under Section 1.11 hereof.
8
(b) Mandatory. (i) Dispositions. If the Company or any Subsidiary
shall at any time or from time to time make or agree to make a Disposition
resulting in Net Cash Proceeds in excess of $500,000 individually or on a
cumulative basis in any fiscal year of the Borrowers, then (x) the Company shall
promptly notify the Administrative Agent of such proposed Disposition (including
the amount of the estimated Net Cash Proceeds to be received by such Person in
respect thereof) and (y) promptly upon receipt by such Person of the Net Cash
Proceeds of such Disposition, the Company shall cause such Person to prepay the
Loans (or all outstanding Loans and L/C Obligations if an Event of Default
exists) in an aggregate amount equal to 100% of the amount of all such Net Cash
Proceeds and the Commitments shall be ratably terminated by a like amount;
provided that in the case of each Disposition, if the Company states in its
notice of such event that such Person intends to reinvest, within 360 days of
the applicable Disposition, the Net Cash Proceeds thereof in assets similar to
the assets which were subject to such Disposition, then so long as no Default or
Event of Default then exists, such Person shall not be required to make a
mandatory prepayment under this Section in respect of such Net Cash Proceeds to
the extent such Net Cash Proceeds are actually reinvested in such similar assets
with such 360-day period. Promptly after the end of such 360-day period, such
Person shall notify the Administrative Agent whether such Person has reinvested
such Net Cash Proceeds in such similar assets, and to the extent such Net Cash
Proceeds have not been so reinvested, the Company shall cause such Person to
promptly prepay the Loans (or all outstanding Loans and L/C Obligations if an
Event of Default exists) in the amount of such Net Cash Proceeds not so
reinvested. The amount of each such prepayment shall be applied on a ratable
basis among the relevant outstanding Obligations based on the principal amounts
thereof.
(ii) Equity Issuance. If after the Closing Date the Company or any
Subsidiary shall issue new equity securities (whether common or preferred stock
or otherwise), other than equity securities issued in connection with employee
stock purchase plans, the exercise of employee stock options and outstanding
warrants, and capital stock issued to the seller of an Acquired Business in
connection with an Acquisition permitted hereby, the Company shall promptly
notify the Administrative Agent of the estimated Net Cash Proceeds of such
issuance to be received by or for the account of such Person in respect thereof.
Promptly upon receipt by such Person of Net Cash Proceeds of such issuance, the
Company shall cause such Person to prepay the Loans (or all outstanding Loans
and L/C Obligations if an Event of Default exists) in an aggregate amount equal
to 50% of the amount of such Net Cash Proceeds and the Commitments shall be
ratably terminated by a like amount. The amount of each such prepayment shall
be applied, on a ratable basis among the relevant outstanding Obligations based
on the principal amounts thereof. The Credit Parties acknowledge that their
performance hereunder shall not limit the rights and remedies of the Lenders for
any breach of Section 8.9 hereof or any other terms of this Agreement.
(iii) Debt Issuance. If after the Closing Date the Company or any
Subsidiary shall issue any Indebted-ness for Borrowed Money, other than
Indebtedness for Borrowed Money permitted by Section 8.7(a)-(f) hereof, the
Company shall promptly notify the Administrative Agent of the estimated Net Cash
Proceeds of such issuance to be received by or for the account of such Person in
respect thereof. Promptly upon receipt by such Person of Net Cash Proceeds of
such issuance, the Company shall cause such Person to prepay the Loans (or all
outstanding Loans and L/C Obligations if an Event of Default exists) in an
aggregate amount equal to 100% of the amount of such Net Cash Proceeds and the
Commitments shall be ratably terminated by a like amount. The amount of each
such prepayment shall be applied on a ratable basis among the relevant
outstanding Obligations based on the principal amounts thereof. The Credit
Parties acknowledge that their performance hereunder shall not limit the rights
and remedies of the Lenders for any breach of Section 8.7 hereof or any other
terms of this Agreement.
9
(iv) Commitment Terminations. The Borrowers shall, on each date the
Commitments are reduced pursuant to Section 1.12 hereof, prepay the Loans, and,
if necessary, prefund the L/C Obligations by the amount, if any, necessary to
reduce the sum of the aggregate principal amount of Loans and L/C Obligations
then outstanding to the amount to which the Commitments have been so reduced.
(v) Application of Prepayments. Unless RCI, on behalf of the
Borrowers, otherwise directs, prepayments of Loans under this Section 1.8(b)
shall be applied first to Borrowings of Base Rate Loans until payment in full
thereof with any balance applied to Borrowings of Eurodollar Loans and Swing
Loans in the order in which their Interest Periods expire. Each prepayment of
Loans under this Section 1.8(b) shall be made by the payment of the principal
amount to be prepaid and, in the case of any Eurodollar Loans or Swing Loans,
accrued interest thereon to the date of prepayment together with any amounts due
the Lenders under Section 1.11 hereof. Each prefunding of L/C Obligations shall
be made in accordance with Section 9.4 hereof.
(c) Notice; Reborrowing. The Administrative Agent will promptly advise
each Lender of any notice of prepayment it receives from the Borrowers. Any
amount of Loans paid or prepaid before the Termination Date may, subject to the
terms and conditions of this Agreement, be borrowed, repaid and borrowed again.
Section 1.9. Default Rate. Notwithstanding anything to the contrary
contained in Section 1.3 hereof, while any Event of Default exists or after
acceleration, the Borrowers shall, jointly and severally, pay interest (after as
well as before entry of judgment thereon to the extent permitted by law) on the
principal amount of all Loans owing by them at a rate per annum equal to:
(a) for any Base Rate Loan, the sum of 2.0% plus the Applicable Margin
plus the Base Rate from time to time in effect; and
(b) for any Eurodollar Loan denominated in U.S. Dollars or any Swing
Loan, the sum of 2.0% plus the rate of interest in effect thereon at the
time of such default until the end of the Interest Period applicable
thereto and, thereafter, at a rate per annum equal to the sum of 2.0% plus
the Applicable Margin for Base Rate Loans plus the Base Rate from time to
time in effect; and
(c) for any Eurodollar Loan denominated in an Alternative Currency,
the sum of 2% plus the rate of interest in effect thereon at the time of
such default until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of 2.0% plus the
Applicable Margin for Eurodollar Loans plus the Overnight Foreign Currency
Rate from time to time in effect; and
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Administrative Agent,
acting at the request or with the consent of the Required Lenders, with written
notice to the Borrowers. While any Event of Default exists or after
acceleration, interest shall be paid on demand of the Administrative Agent at
the request or with the consent of the Required Lenders.
Section 1.10. The Notes. (a) The Revolving Loans made to the
Borrowers, or any of them, by a Lender shall be evidenced by a single promissory
note of the Borrowers issued, jointly and severally, to such Lender in the form
of Exhibit D-1 hereto. Each such promissory note is hereinafter referred to as
a "Revolving Note" and collectively such promissory notes are referred to as the
"Revolving Notes."
10
(b) The Swing Loans made to the Borrowers, or any of them, by the
Administrative Agent shall be evidenced by a single promissory note of the
Borrower issued to the Administrative Agent in the form of Exhibit D-2 hereto.
Such promissory note is hereinafter referred to as the "Swing Note."
(c) Each Lender shall record on its books and records or on a schedule
to its appropriate Note the amount of each Loan advanced, continued or converted
by it, the Borrower to whom such Loan was made, all payments of principal and
interest and the principal balance from time to time outstanding thereon, the
type of such Loan, and, for any Eurodollar Loan or Swing Loan, the currency in
which such Loan is denominated, the Interest Period and the interest rate
applicable thereto. The record thereof, whether shown on such books and records
of a Lender or on a schedule to its Note, shall be prima facie evidence as to
all such matters; provided, however, that the failure of any Lender to record
any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrowers to repay all Loans made
hereunder together with accrued interest thereon. At the request of any Lender
and upon such Lender tendering to RCI, on behalf of the Borrowers, the
appropriate Note to be replaced, the Borrowers shall furnish a new Note to such
Lender to replace its outstanding Note, and at such time the first notation
appearing on a schedule on the reverse side of, or attached to, such Note shall
set forth the aggregate unpaid principal amount of all Loans, if any, then
outstanding thereon.
Section 1.11. Funding Indemnity. If any Lender shall incur any loss,
cost or expense (including, without limitation, any loss of profit, and any
loss, cost or expense incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by such Lender to fund or maintain any
Eurodollar Loan or Swing Loan or the relending or reinvesting of such deposits
or amounts paid or prepaid to such Lender) as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan or
Swing Loan on a date other than the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions of
Section 7 or otherwise) by any Borrower to borrow or continue a Eurodollar
Loan or Swing Loan, or to convert a Base Rate Loan into a Eurodollar Loan
or Swing Loan, on the date specified in a notice given pursuant to Section
1.5(a) or Section 1.15 hereof,
(c) any failure by any Borrower to make any payment of principal on
any Eurodollar Loan or Swing Loan when due (whether by acceleration or
otherwise), or
(d) any acceleration of the maturity of a Eurodollar Loan or Swing
Loan as a result of the occurrence of any Event of Default hereunder,
then, within 15 days after the demand by such Lender, the Borrowers shall pay to
such Lender such amount as will reimburse such Lender for such loss, cost or
expense. If any Lender makes such a claim for compensation, it shall provide to
the Borrowers, with a copy to the Administrative Agent, a certificate setting
forth the amount of such loss, cost or expense in reasonable detail (including
an explanation of the basis for and the computation of such loss, cost or
expense) and the amounts shown on such certificate shall be deemed prime facie
correct, absent manifest error.
Section 1.12. Commitment Terminations. (a) Optional Terminations. The
Borrowers shall have the right at any time and from time to time, upon five
Business Days prior written notice to the Administrative Agent, to terminate the
Commitments in whole or in part, any partial termination to be (i) in an amount
not less than $2,000,000 and (ii) allocated ratably among the Lenders in
proportion to their respective Percentages, provided that the Commitments may
not be reduced to an amount less than the sum of the aggregate principal amount
of Loans and of
11
L/C Obligations then outstanding. Any termination of the Commitments below the
L/C Sublimit or Swing Line Sublimit then in effect shall reduce the L/C Sublimit
and Swing Line Sublimit, as applicable, by a like amount. The Administrative
Agent shall give prompt notice to each Lender of any such termination of the
Commitments.
(b) Mandatory Terminations. The Commitments shall not, during the
periods set forth below, exceed the amount set forth opposite such periods:
Aggregate Commitments
From and Including To and Including: shall not exceed:
date hereof. . . . 12/30/02 $ 50,000,000
12/31/02 12/30/03 $ 45,000,000
12/31/03 12/30/04 $ 40,000,000
12/31/04 the Termination Date $ 35,000,000
(c) No Reinstatement. Any termination of the Commitments pursuant to
this Section 1.12 may not be reinstated.
Section 1.13. Substitution of Lenders. Upon the receipt by the
Borrowers of (a) a claim from any Lender for compensation under Section 10.3 or
13.1 hereof, (b) notice by any Lender to the Borrowers of any illegality
pursuant to Section 10.1 hereof or (c) in the event any Lender is in default in
any material respect with respect to its obligations under the Loan Documents
(any such Lender referred to in clause (a), (b) or (c) above being hereinafter
referred to as an "Affected Lender"), the Borrowers may, in addition to any
other rights the Borrowers may have hereunder or under applicable law, require,
at its expense, any such Affected Lender to assign, at par plus accrued interest
and fees, without recourse, all of its interest, rights, and obligations
hereunder (including all of its Commitments and the Loans and participation
interests in Letters of Credit and other amounts at any time owing to it
hereunder and the other Loan Documents) to a bank or other institutional lender
specified by the Borrowers, provided that (i) such assignment shall not conflict
with or violate any law, rule or regulation or order of any court or other
governmental authority, (ii) the Borrowers shall have received the written
consent of the Administrative Agent, which consent shall not be unreasonably
withheld, to such assignment, (iii) the Borrowers shall have paid to the
Affected Lender all monies (together with amounts due such Affected Lender under
Section 1.11 hereof as if the Loans owing to it were prepaid rather than
assigned except if such Lender is being replaced pursuant to clause (c) above)
other than such principal, interest, and fees accrued and owing to it hereunder,
and (iv) the assignment is entered into in accordance with the other
requirements of Section 13.12 hereof.
Section 1.14. Appointment of RCI as Agent for Borrowers. Each Borrower
hereby irrevocably appoints RCI as its agent hereunder to make requests on such
Borrower's behalf under Section 1 hereof for Borrowings, to request on such
Borrower's behalf Letters of Credit and to execute all Applications therefor,
and to take any other action contemplated by the Loan Documents with respect to
the credit extended hereunder to such Borrower. The Administrative Agent and
the Lenders shall be entitled to conclusively presume that any action by RCI
under the Loan Documents is taken on behalf of all of the Borrowers whether or
not RCI so indicates.
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Section 1.15. Swing Loans. (a) Generally. Subject to the terms and
conditions hereof, as part of the Revolving Credit, the Administrative Agent
agrees to make loans in U.S. Dollars to the Borrowers, or any of them, under the
Swing Line (individually a "Swing Loan" and collectively the "Swing Loans")
which shall not in the aggregate at any time outstanding exceed the Swing Line
Sublimit. The Swing Loans may be availed of the Borrowers from time to time and
borrowings thereunder may be repaid and used again during the period ending on
the Termination Date; provided that each Swing Loan must be repaid on the last
day of the Interest Period applicable thereto. Each Swing Loan shall be in a
minimum amount of $250,000 or such greater amount which is an integral multiple
of $50,000.
(b) Interest on Swing Loans. Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal to (i)
the sum of the Base Rate plus the Applicable Margin for Base Rate Loans as from
time to time in effect (computed on the basis of a year of 365 or 366 days, as
the case may be, for the actual number of days elapsed) or (ii) the
Administrative Agent's Quoted Rate (computed on the basis of a year of 360 days
for the actual number of days elapsed). Interest on each Swing Loan shall be due
and payable prior to such maturity on the last day of each Interest Period
applicable thereto.
(c) Requests for Swing Loans. RCI, on behalf of the applicable
Borrower, shall give the Administrative Agent prior notice (which may be written
or oral) no later than 12:00 Noon (Chicago time) on the date upon which a
Borrower requests that any Swing Loan be made, of the amount and date of such
Swing Loan, and the Interest Period requested therefor. Within 30 minutes after
receiving such notice, the Administrative Agent shall in its discretion quote an
interest rate to RCI, on behalf of the applicable Borrower, at which the
Administrative Agent would be willing to make such Swing Loan available to such
Borrower for the Interest Period so requested (the rate so quoted for a given
Interest Period being herein referred to as "Administrative Agent's Quoted
Rate"). The Borrowers acknowledge and agree that the interest rate quote is
given for immediate and irrevocable acceptance. If RCI, on behalf of the
applicable Borrower, does not so immediately accept the Administrative Agent's
Quoted Rate for the full amount requested by the applicable Borrower for such
Swing Loan, the Administrative Agent's Quoted Rate shall be deemed immediately
withdrawn and such Swing Loan shall bear interest at the rate per annum
determined by adding the Applicable Margin for Base Rate Loans to the Base Rate
as from time to time in effect. Subject to the terms and conditions hereof, the
proceeds of such Swing Loan shall be made available to the applicable Borrower
on the date so requested at the offices of the Administrative Agent in Chicago,
Illinois. Anything contained in the foregoing to the contrary notwithstanding
(i) the obligation of the Administrative Agent to make Swing Loans shall be
subject to all of the terms and conditions of this Agreement, and (ii) the
Administrative Agent shall not be obligated to make more than one Swing Loan
during any one day.
(d) Refunding Loans;. In its sole and absolute discretion, the
Administrative Agent may at any time, on behalf of the Borrowers (which hereby
irrevocably authorize the Administrative Agent to act on their behalf for such
purpose) and with notice to the Borrowers, request each Lender to make a
Revolving Loan in the form of a Base Rate Loan in an amount equal to such
Lender's Percentage of the amount of the Swing Loans outstanding on the date
such notice is given. Unless an Event of Default described in Section 9.1(j) or
9.1(k) exists with respect to the applicable Borrower, regardless of the
existence of any other Event of Default, each Lender shall make the proceeds of
its requested Revolving Loan available to the Administrative Agent, in
immediately available funds, at the Administrative Agent's principal office in
Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day
following the day such notice is given. The proceeds of such Borrowing of
Revolving Loans shall be immediately applied to repay the outstanding Swing
Loans.
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(e) Participations;. If any Lender refuses or otherwise fails to make
a Revolving Loan when requested by the Administrative Agent pursuant to Section
1.15(d) above (because an Event of Default described in Section 9.1(j) or 9.1(k)
exists with respect to the applicable Borrower or otherwise), such Lender will,
by the time and in the manner such Revolving Loan was to have been funded to the
Administrative Agent, purchase from the Administrative Agent an undivided
participating interest in the outstanding Swing Loans in an amount equal to its
Percentage of the aggregate principal amount of Swing Loans that were to have
been repaid with such Revolving Loans. Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Percentage of each payment of principal received on the Swing Loan and of
interest received thereon accruing from the date such Lender funded to the
Administrative Agent its participation in such Loan. The several obligations of
the Lenders under this Section shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever and shall not be subject to any
set-off, counterclaim or defense to payment which any Lender may have or have
had against any Borrower, any other Lender or any other Person whatever.
Without limiting the generality of the foregoing, such obligations shall not be
affected by any Default or Event of Default or by any reduction or termination
of the Commitments of any Lender, and each payment made by a Lender under this
Section shall be made without any offset, abatement, withholding or reduction
whatsoever.
Section 2. Fees.
Section 2.1. Fees. (a) Commitment Fee. The Borrowers shall pay to the
Administrative Agent for the ratable account of the Lenders in accordance with
their Percentages a commitment fee at the rate per annum equal to the Applicable
Margin (computed on the basis of a year of 360 days and the actual number of
days elapsed) on the average daily Unused Commitments. Such commitment fee
shall be payable quarter-annually in arrears on the last day of each March,
June, September, and December in each year (commencing on the first such date
occurring after the date hereof) and on the Termination Date, unless the
Commitments are terminated in whole on an earlier date, in which event the
commitment fee for the period to the date of such termination in whole shall be
paid on the date of such termination.
(b) Letter of Credit Fees. On the date of issuance or extension, or
increase in the amount, of any Letter of Credit pursuant to Section 1.2 hereof,
the applicable Borrower shall pay to the L/C Issuer for its own account an
issuance fee equal to 0.125% of the face amount of (or of the increase in the
face amount of) such Letter of Credit. Quarterly in arrears, on the last day of
each March, June, September, and December, commencing on the first such date
occurring after the date hereof, the Borrower shall pay to the Administrative
Agent, for the ratable benefit of the Lenders in accordance with their
Percentages, a letter of credit fee at a rate per annum equal to the Applicable
Margin (computed on the basis of a year of 360 days and the actual number of
days elapsed) in effect during each day of such quarter applied to the daily
average face amount of Letters of Credit outstanding during such quarter. In
addition, the applicable Borrower shall pay to the L/C Issuer for its own
account the L/C Issuer's standard drawing, negotiation, amendment, and other
administrative fees for each Letter of Credit. Such standard fees referred to
in the preceding sentence may be established by the L/C Issuer from time to
time.
(c) Upfront Fees. On the date hereof, the Borrowers shall pay to the
Administrative Agent, for the ratable account of the Lenders, upfront fees in
the amounts previously agreed to by the Borrowers, the Lenders and the
Administrative Agent.
(d) Administrative Agent Fees. The Borrowers shall pay to the
Administrative Agent, for its own use and benefit, the arrangement fees and
administrative fees agreed to between the Administrative Agent and the Borrowers
in a fee letter dated as of even date herewith or as otherwise agreed to in
writing between them.
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Section 3. Place and Application of Payments.
Section 3.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations, and of
all other Obligations payable by the Borrowers under this Agreement and the
other Loan Documents, shall be made by the Borrowers to the Administrative Agent
by no later than 12:00 Noon (Chicago time) on the due date thereof at the office
of the Administrative Agent in Chicago, Illinois (or such other location as the
Administrative Agent may designate to the Borrowers) or, if such payment is to
be made in an Alternative Currency, no later than 12:00 Noon local time at the
place of payment to such office as the Administrative Agent has previously
specified in a notice to the Borrowers, in each case, for the benefit of the
Lender or Lenders entitled thereto. Any payments received after such time shall
be deemed to have been received by the Administrative Agent on the next Business
Day. All such payments shall be made (i) in U.S. Dollars, in immediately
available funds at the place of payment, or (ii) in the case of amounts payable
hereunder in an Alternative Currency, in such Alternative Currency in such funds
then customary for the settlement of international transactions in such
currency, in each case without set-off or counterclaim. The Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest on Loans and on Reimbursement Obligations
in which the Lenders have purchased Participating Interests ratably to the
Lenders and like funds relating to the payment of any other amount payable to
any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement.
Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Obligations by the Administrative Agent
or any of the Lenders after the occurrence and during the continuation of an
Event of Default shall be remitted to the Administrative Agent and distributed
as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Administrative Agent, in protecting, preserving or
enforcing rights under the Loan Documents, and in any event all costs and
expenses of a character which the Borrowers have agreed to pay the
Administrative Agent under Section 13.15 hereof (such funds to be retained
by the Administrative Agent for its own account unless it has previously
been reimbursed for such costs and expenses by the Lenders, in which event
such amounts shall be remitted to the Lenders to reimburse them for
payments theretofore made to the Administrative Agent);
(b) second, to the payment of principal and interest on the Swing Note
until paid in full;
(c) third, to the payment of any outstanding interest and fees due
under the Loan Documents to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof;
(d) fourth, to the payment of principal on the Notes and unpaid
Reimbursement Obligations, together with amounts to be held by the
Administrative Agent as collateral security for any outstanding L/C
Obligations pursuant to Section 9.4 hereof (until the Administrative Agent
is holding an amount of cash equal to the then outstanding amount of all
such L/C Obligations), the aggregate amount paid to, or held as collateral
security for, the Lenders to be allocated pro rata in accordance with the
aggregate unpaid amounts owing to each holder thereof;
(e) fifth, to RCI, on behalf of the Borrowers or whoever else may be
lawfully entitled thereto.
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Section 4. The Guaranties.
Section 4.1. Guaranties. The payment and performance of the
Obligations shall at all times be guaranteed by the Company and by each direct
and indirect Domestic Subsidiary of the Company pursuant to Section 12 hereof or
pursuant to one or more Additional Guarantor Supplements delivered to the
Administrative Agent after the date hereof.
Section 4.2. Further Assurances. The Company and each Borrower agree
that each shall, and shall cause each of its Domestic Subsidiaries to, from time
to time at the request of the Administrative Agent or the Required Lenders,
execute and deliver such documents and do such acts and things as the
Administrative Agent or the Required Lenders may reasonably request in order to
provide for the guarantees contemplated by this Section 4. In the event the
Company, any Borrower or any other Subsidiary of the Company forms or acquires
any Domestic Subsidiary after the date hereof, the Company and the Borrowers
shall promptly upon such formation or acquisition cause such newly formed or
acquired Domestic Subsidiary to execute a Guaranty, and the Company and the
Borrowers shall also deliver to the Administrative Agent, or cause such Domestic
Subsidiary to deliver to the Administrative Agent, at the Borrowers' cost and
expense, such other instruments, documents, certificates, and opinions
reasonably required by the Administrative Agent in connection therewith.
Section 5. Definitions; Interpretation.
Section 5.1. Definitions. The following terms when used herein shall
have the following meanings:
"Acquired Business" means the entity or assets acquired by any Borrower or
any Subsidiary in an Acquisition, whether before or after the date hereof.
"Acquisition" means any transaction or series of related transactions 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
(other than a Person that is a Subsidiary), 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 a
Borrower or a Subsidiary of a Borrower is the surviving entity.
"Additional Guarantor Supplement" means a letter to the Administrative
Agent in the form attached hereto as Exhibit F executed by a Domestic Subsidiary
of the Company after the date hereof whereby it acknowledges that it is a party
hereto as a Guarantor and is liable for the Obligations pursuant to Section 12
hereof.
"Adjusted LIBOR" means, for any Borrowing of Eurodollar Loans, a rate per
annum determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
---------------------------------
1 - Eurodollar Reserve Percentage
"Administrative Agent" means ▇▇▇▇▇▇ Trust and Savings Bank and any
successor pursuant to Section 11.7 hereof.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
16
definition if such 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, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 10%
or more of the securities having the ordinary voting power for the election of
directors or governing body of a corporation or 10% or more of the partnership
or other ownership interest of any other Person (other than as a limited partner
of such other Person) will be deemed to control such corporation or other
Person.
"Agreement" means this Credit Agreement, as the same may be amended,
modified, restated or supplemented from time to time pursuant to the terms
hereof.
"Alternative Currency" means Pounds Sterling, Euros and Hong Kong dollars,
in each case only to the extent such currencies are freely transferable and
convertible into U.S. Dollars and are traded and readily available to each
Lender in the London interbank market.
"Applicable Margin" means, with respect to Loans, Reimbursement
Obligations, and the commitment fees and letter of credit fees payable under
Section 2.1 hereof until the first Pricing Date, the rates per annum shown
opposite Level II below, and thereafter from one Pricing Date to the next the
Applicable Margin means the rates per annum determined in accordance with the
following schedule:
Applicable Applicable
Margin for Base Margin for
Rate Loans and Eurodollar Applicable
Leverage Ratio Reimbursement Loans and Margin for
for such Pricing Obligations shall Letter of Credit Commitment Fee
Level Date be: Fee shall be: shall be:
IV Greater than or
equal to 1.25 to
1.0 0% 1.40% 0.30%
III Less than 1.25 to
1.0, but greater
than or equal to
1.0 to 1.0 0% 1.15% 0.25%
II Less than 1.0 to
1.0, but greater
than or equal to
0.75 to 1.0 0% 0.90% 0.225%
I Less than 0.75 to
1.0 0% 0.75% 0.20%
For purposes hereof, the term "Pricing Date" means, for any fiscal quarter of
the Borrowers ending on or after June 30, 2002, the date on which the
Administrative Agent is in receipt of the Borrowers' most recent financial
statements (and, in the case of the year-end financial statements, audit report)
for the fiscal quarter then ended, pursuant to Section 8.5 hereof. The
Applicable Margin shall be established based on the Leverage Ratio for the most
recently completed fiscal quarter and the Applicable Margin established on a
Pricing Date shall remain in effect until the next Pricing Date. If the
Borrowers have not delivered their financial statements by the date such
financial statements (and, in the case of the year-end financial statements,
audit report) are required to be delivered under Section 8.5 hereof, until such
financial statements and audit report are delivered, the Applicable Margin shall
be the highest Applicable Margin (i.e., the
17
Leverage Ratio shall be deemed to be greater than 1.25 to 1.0). If the
Borrowers subsequently deliver such financial statements before the next Pricing
Date, the Applicable Margin established by such late delivered financial
statements shall take effect from the date of delivery until the next Pricing
Date. In all other circumstances, the Applicable Margin established by such
financial statements shall be in effect from the Pricing Date that occurs
immediately after the end of the fiscal quarter covered by such financial
statements until the next Pricing Date. Each determination of the Applicable
Margin made by the Administrative Agent in accordance with the foregoing shall
be conclusive and binding on the Borrowers and the Lenders if reasonably
determined.
"Application" is defined in Section 1.2(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Borrowers pursuant to Section 6.2 hereof or on any
update of any such list provided by the Borrowers to the Administrative Agent,
or any further or different officers of any Borrower so named by any Authorized
Representative of such Borrower in a written notice to the Administrative Agent.
"Base Rate" means for any day the greater of: (i) the rate of interest
announced or otherwise established by the Administrative Agent from time to time
as its prime commercial rate as in effect on such day, with any change in the
Base Rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate (it being
acknowledged and agreed that such rate may not be the Administrative Agent's
best or lowest rate) and (ii) the sum of (x) the rate determined by the
Administrative Agent to be the average (rounded upward, if necessary, to the
next higher 1/100 of 1%) of the rates per annum quoted to the Administrative
Agent at approximately 10:00 a.m. (Chicago time) (or as soon thereafter as is
practicable) on such day (or, if such day is not a Business Day, on the
immediately preceding Business Day) by two or more Federal funds brokers
selected by the Administrative Agent for sale to the Administrative Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount owed to the Administrative Agent for which
such rate is being determined, plus (y) 1/2 of 1%.
"Base Rate Loan" means a Loan bearing interest at a rate specified in
Section 1.3(a) hereof.
"Borrowers" is defined in the introductory paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced, continued
for an additional Interest Period, or converted from a different type into such
type by the Lenders under the Revolving Credit on a single date and, in the case
of Eurodollar Loans, for a single Interest Period. Borrowings of Loans are made
and maintained ratably from each of the Lenders under the Revolving Credit
according to their Percentages. A Borrowing is "advanced" on the day Lenders
advance funds comprising such Borrowing to the applicable Borrower, is
"continued" on the date a new Interest Period for the same type of Loans
commences for such Borrowing, and is "converted" when such Borrowing is changed
from one type of Loans to the other, all as requested by RCI, on behalf of the
applicable Borrower, pursuant to Section 1.5(a) hereof. Borrowings of Swing
Loans are made by the Administrative Agent in accordance with the procedures set
forth in Section 1.15 hereof.
"Business Day" means any day (other than a Saturday or Sunday) on which
banks are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to the advance or continuation of, or conversion
into, or payment of a Eurodollar Loan, on which banks are dealing in U.S. Dollar
deposits or the relevant Alternative Currency in the interbank eurodollar market
in London, England and, if the applicable Business Day relates to the advance
18
or continuation of, or conversion into, or payment of a Eurodollar Loan
denominated in an Alternative Currency, on which banks and foreign exchange
markets are open for business in the city where disbursements of or payments on
such Loan are to be made and, if such Alternative Currency is the Euro or any
national currency of a nation that is a member of the European Economic and
Monetary Union, which is a TARGET Settlement Day.
"Capital Expenditures" means, with respect to any period, the aggregate
amount of all expenditures (whether paid in cash or accrued as a liability) by
the Company and its Subsidiaries during that period for the acquisition or
leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of the Company
and its Subsidiaries in accordance with GAAP.
"Capital Lease" means any lease of Property which in accordance with GAAP
is required to be capitalized on the balance sheet of the lessee.
"Capitalized Lease Obligation" means, for any Person, the amount of the
liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. 9601 et seq., and any future amendments.
"Change of Control" means any of (a) the acquisition by any "person" or
"group" (as such terms are used in sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) at any time of beneficial ownership of 33-1/3%
or more of the outstanding capital stock or other equity interest of the Company
on a fully-diluted basis, (b) the failure of the Company to own 100% of the
Voting Stock of any Borrower, (c) the failure of individuals who are members of
the board of directors (or similar governing body) of the Company or any
Borrower on the Closing Date (together with any new or replacement directors
whose initial nomination for election was approved by a majority of the
directors who were either directors on the Closing Date or previously so
approved) to constitute a majority of the board of directors (or similar
governing body) of the Company or such Borrower, as the case may be, or (d) any
"Change of Control" (or words of like import), as defined in any agreement or
indenture relating to any issue of Indebtedness for Borrowed Money shall occur.
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Section 7.2 shall be satisfied or waived
in a manner acceptable to the Administrative Agent in its discretion.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"Collateral Account" is defined in Section 9.4 hereof.
"Commitment" means, as to any Lender, the obligation of such Lender to make
Revolving Loans and to participate in Letters of Credit issued for the account
of any Borrower hereunder in an aggregate principal or face amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule 1 attached hereto and made a part hereof, as the same may be reduced
or modified at any time or from time to time pursuant to the terms hereof. The
Borrowers and the Lenders acknowledge and agree that the Commitments of the
Lenders aggregate $50,000,000 on the date hereof.
19
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Credit Event" means the advancing of any Loan, the continuation of or
conversion into a Eurodollar Loan, or the issuance of, or extension of the
expiration date or increase in the amount of, any Letter of Credit.
"Credit Parties" means, collectively, the Borrowers and the Guarantors.
"Damages" means all damages including, without limitation, punitive
damages, liabilities, costs, expenses, losses, diminutions in value, fines,
penalties, demands, claims, cost recovery actions, lawsuits, administrative
proceedings, orders, response action, removal and remedial costs, compliance
costs, investigation expenses, consultant fees, attorneys' and paralegals' fees
and litigation expenses.
"Default" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Disposition" means the sale, lease, conveyance or other disposition of
Property, other than sales or other dispositions expressly permitted under
subsections (a) through (e) of Section 8.10 hereof.
"Domestic Subsidiary" means each Subsidiary which is organized under the
laws of the United States of America or any state or commonwealth thereof or
under the laws of the District of Columbia.
"EBITDA" means, with reference to any period, Net Income for such period
plus the sum of all amounts deducted in arriving at such Net Income amount in
respect of (a) Interest Expense for such period, (b) federal, state, and local
income taxes for such period, and (c) depreciation of fixed assets and
amortization of intangible assets for such period.
"Eligible Line of Business" means any business engaged in as of the date of this
Agreement by the Credit Parties or any of their Subsidiaries or any business
substantially similar thereto.
"Environmental Law" means any current or future Legal Requirement
pertaining to (a) the protection of health, safety and the indoor or outdoor
environment, (b) the conservation, management or use of natural resources and
wildlife, (c) the protection or use of surface water or groundwater, (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or (e)
pollution (including any release to air, land, surface water or groundwater),
and any amendment, rule, regulation, order or directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"Eurodollar Loan" means a Loan bearing interest at the rate specified in
Section 1.3(b) hereof.
"Eurodollar Reserve Percentage" means, for any Borrowing of Eurodollar
Loans, the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal, and emergency
20
reserves) are imposed during such Interest Period by the Board of Governors of
the Federal Reserve System (or any successor) on "eurocurrency liabilities", as
defined in such Board's Regulation D (or in respect of any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Loans is determined or any category of extensions of credit or other
assets that include loans by non-United States offices of any Lender to United
States residents), subject to any amendments of such reserve requirement by such
Board or its successor, taking into account any transitional adjustments
thereto. For purposes of this definition, the Eurodollar Loans shall be deemed
to be "eurocurrency liabilities" as defined in Regulation D without benefit or
credit for any prorations, exemptions or offsets under Regulation D.
"Event of Default" means any event or condition identified as such in
Section 9.1 hereof.
"Existing Credit Agreement" means that certain Credit Agreement dated as of
April 13, 1999 among the Borrowers, the Company, certain other guarantors, First
Union National Bank, as administrative agent, and the other financial
institutions party thereto, as amended from time to time prior to the date
hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate.
"Funds Transfer and Deposit Account Liability" means the liability of each
Borrower or any of its Subsidiaries owing to any of the Lenders, or any
Affiliates of such Lenders, arising out of (a) the execution or processing of
electronic transfers of funds by automatic clearing house transfer, wire
transfer or otherwise to or from the deposit accounts of such Borrower and/or
any Subsidiary now or hereafter maintained with any of the Lenders or their
Affiliates, (b) the acceptance for deposit or the honoring for payment of any
check, draft or other item with respect to any such deposit accounts, and (c)
any other deposit, disbursement, and cash management services afforded to such
Borrower or any such Subsidiary by any of such Lenders or their Affiliates.
"GAAP" means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
"Guarantors" means the Company, the Domestic Subsidiaries of the Company
identified as "Guarantors" on the signature pages hereto and each other direct
or indirect Domestic Subsidiary of the Company executing a Guaranty after the
date hereof.
"Guaranty" means this Agreement as to the Guarantors party hereto and the
Additional Guarantor Supplements as to any Domestic Subsidiaries guaranteeing
the Obligations and becoming party hereto after the date hereof.
"Hazardous Material" means any substance, chemical, compound, product,
solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as "hazardous" or "toxic"
or words of like import pursuant to an Environmental Law.
21
"Hedging Liability" means the liability of any Borrower or any Subsidiary
to any of the Lenders, or any Affiliates of such Lenders, in respect of any
interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements, interest rate floor agreements, interest rate exchange
agreements, foreign currency contracts, currency swap contracts, or other
similar interest rate or currency hedging arrangements as such Borrower or such
Subsidiary, as the case may be, may from time to time enter into with any one or
more of the Lenders party to this Agreement or their Affiliates.
"Hostile Acquisition" means the acquisition of the capital stock or other
equity interests of a Person through a tender offer or similar solicitation of
the owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of the Board of Directors of
such Person or by similar action if such Person is not a corporation, and as to
which such approval has not been withdrawn.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) (a) all indebtedness of such Person for borrowed money, whether
current or funded, or secured or unsecured, (b) all indebtedness for the
deferred purchase price of Property or services, (c) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of a default are
limited to repossession or sale of such Property), (d) all indebtedness secured
by a purchase money mortgage or other Lien to secure all or part of the purchase
price of Property subject to such mortgage or Lien, (e) all obligations under
leases which shall have been or must be, in accordance with GAAP, recorded as
Capital Leases in respect of which such Person is liable as lessee, (f) any
liability in respect of banker's acceptances or letters of credit, and (g) any
indebtedness, whether or not assumed, secured by Liens on Property acquired by
such Person at the time of acquisition thereof, it being understood that the
term "Indebtedness for Borrowed Money" shall not include trade payables arising
in the ordinary course of business.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Interest Period" is defined in Section 1.6 hereof.
"L/C Issuer" means ▇▇▇▇▇▇ Trust and Savings Bank.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"L/C Sublimit" means $10,000,000, as reduced pursuant to the terms hereof.
"Legal Requirement" means any treaty, convention, statute, law, regulation,
ordinance, license, permit, governmental approval, injunction, judgment, order,
consent decree or other requirement of any governmental authority, whether
federal, state, or local.
"Lenders" means and includes each financial institution party hereto and
the other financial institutions from time to time party to this Agreement,
including each assignee Lender pursuant to Section 13.12 hereof.
"Lending Office" is defined in Section 10.4 hereof.
"Letter of Credit" is defined in Section 1.2(a) hereof.
22
"Leverage Ratio" means, at any time the same is to be determined, the ratio
of (i) Total Funded Debt of the Company and its Subsidiaries as of the last day
of the most recently completed fiscal quarter of the Company to (ii) EBITDA of
the Company and its Subsidiaries for the period of four fiscal quarters then
ended.
"LIBOR" means, for an Interest Period for a Borrowing of Eurodollar Loans,
(a) the LIBOR Index Rate for such Interest Period, if such rate is available,
and (b) if the LIBOR Index Rate cannot be determined, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) at which deposits in U.S. Dollars or the relevant Alternative
Currency, as appropriate, in immediately available funds are offered to the
Administrative Agent at 11:00 a.m. (London, England time) two Business Days
before the beginning of such Interest Period by three or more major banks in the
interbank eurodollar market selected by the Administrative Agent for delivery on
the first day of and for a period equal to such Interest Period and in an amount
equal or comparable to the principal amount of the Eurodollar Loan scheduled to
be made by the Administrative Agent as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in U.S. Dollars or the relevant Alternative
Currency, as appropriate, for a period equal to such Interest Period, which
appears on the appropriate Telerate Page as of 11:00 a.m. (London, England time)
on the day two Business Days before the commencement of such Interest Period.
"Lien" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"Loan" means any Revolving Loan or Swing Loan, whether outstanding as a
Base Rate Loan or Eurodollar Loan or otherwise, each of which is a "type" of
Loan hereunder.
"Loan Documents" means this Agreement, the Notes, the Applications, the
Guaranties, and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"Material Adverse Effect" means (a) a material adverse change in, or
material adverse effect upon, the operations, business, Property or condition
(financial or otherwise) of the Company or of any Borrower or of the Borrowers
and their Subsidiaries taken as a whole, (b) a material impairment of the
ability of any Credit Party to perform its obligations under any Loan Document
or (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Credit Party of any Loan Document or the rights and
remedies of the Administrative Agent and the Lenders thereunder.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition and (ii) sale, use or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, and (b) with respect to any
offering of equity securities of a Person or the issuance of any Indebtedness
for Borrowed Money by a Person, cash and cash equivalent proceeds received by or
for such Person's account, net of reasonable legal, underwriting, and other fees
and expenses incurred as a direct result thereof.
23
"Net Income" means, with reference to any period, the net income (or net
loss) of the Company and its Subsidiaries for such period computed on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income (a) the net income (or net loss) of any Person accrued
prior to the date it becomes a Subsidiary of, or has merged into or consolidated
with, the Company or another Subsidiary, and (b) the net income (or net loss) of
any Person (other than a Subsidiary) in which the Company or any Subsidiary has
an equity interest in, except to the extent of the amount of dividends or other
distributions actually paid to the Company or such Subsidiary during such
period.
"Notes" means and includes the Revolving Notes and the Swing Note.
"Obligations" means all obligations of the Borrowers, or any of them, to
pay principal and interest on the Loans, all Reimbursement Obligations owing
under the Applications, all fees and charges payable hereunder, and all other
payment obligations of any Credit Party arising under or in relation to any Loan
Document, in each case whether now existing or hereafter arising, due or to
become due, direct or indirect, absolute or contingent, and howsoever evidenced,
held or acquired.
"Original Dollar Amount" means the amount of any Obligation denominated in
U.S. Dollars and, in relation to any Loan denominated in an Alternative
Currency, the U.S. Dollar Equivalent of such Loan on the day it is advanced or
continued for an Interest Period.
"Overnight Foreign Currency Rate" shall mean for any amount payable in a
currency other than U.S. Dollars, the rate of interest per annum as determined
by the Administrative Agent (rounded upwards, if necessary, to the nearest whole
multiple of one-sixteenth of one percent (1/16 of 1%)) at which overnight or
weekend deposits of the appropriate currency (or, if such amount due remains
unpaid more than three Business Days, then for such period of time not longer
than six months as the Administrative Agent may elect in its absolute
discretion) for delivery in immediately available and freely transferable funds
would be offered by the Administrative Agent to major banks in the interbank
market upon request of such major banks for the applicable period as determined
above and in an amount comparable to the unpaid principal amount of the related
Loan (or, if the Administrative Agent is not placing deposits in such currency
in the interbank market, then the Administrative Agent's cost of funds in such
currency for such period).
"Participating Interest" is defined in Section 1.2(d) hereof.
"Participating Lender" is defined in Section 1.2(d) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"Percentage" means, for each Lender, the percentage of the Commitments
represented by such Lender's Commitment or, if the Commitments have been
terminated, the percentage held by such Lender (including through participation
interests in Reimbursement Obligations) of the aggregate principal amount of all
Loans and L/C Obligations then outstanding.
"Permitted Acquisition" means any Acquisition with respect to which all of
the following conditions shall have been satisfied:
(a) the Acquired Business is in an Eligible Line of Business;
(b) the Acquisition shall not be a Hostile Acquisition;
24
(c) the financial statements of the Acquired Business shall have been
audited by one of the "Big Five" accounting firms or by another independent
accounting firm of national or regional repute or otherwise reasonably
satisfactory to the Administrative Agent, or if such financial statements
have not been audited by such an accounting firm, (i) such financial
statements shall have been approved by the Administrative Agent and (ii)
the Acquired Business has undergone a successful so-called businessman's
review by one of the "Big Five" accounting firms as part of the Borrowers'
due diligence on the Acquisition;
(d) the Total Consideration for the Acquired Business, when taken
together with the Total Consideration for all Acquired Businesses acquired
after the date hereof, does not exceed $10,000,000 in the aggregate during
any fiscal year of the Company and $20,000,000 in the aggregate for all
Acquisitions completed after the date hereof;
(e) the Borrowers shall have notified the Administrative Agent and
Lenders not less than 30 days prior to any such Acquisition and furnished
to the Administrative Agent and Lenders at such time reasonable details as
to such Acquisition (including sources and uses of funds therefor), and
3-year historical financial information and 3-year pro forma financial
forecasts of the Acquired Business on a stand alone basis as well as of the
Borrowers on a consolidated basis after giving effect to the Acquisition
and covenant compliance calculations reasonably satisfactory to the
Administrative Agent;
(f) if a new Subsidiary is formed or acquired as a result of or in
connection with the Acquisition, the relevant Credit Party shall have
complied with the requirements of Section 4 hereof in connection therewith;
and
(g) after giving effect to the Acquisition, no Default or Event of
Default shall exist, including with respect to the covenants contained in
Sections 8.22 and 8.23 on a pro forma basis.
"Person" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
"Plan" means any employee pension benefit plan covered by Title IV of ERISA
or subject to the minimum funding standards under Section 412 of the Code that
either (a) is maintained by a member of the Controlled Group for employees of a
member of the Controlled Group or (b) is maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Property" means, as to any Person, all types of real, personal, tangible,
intangible or mixed property owned by such Person whether or not included in the
most recent balance sheet of such Person and its subsidiaries under GAAP.
"Reimbursement Obligation" is defined in Section 1.2(c) hereof.
"Required Lenders" means, as of the date of determination thereof, Lenders
whose outstanding Loans and interests in Letters of Credit and Unused
Commitments constitute more than 66-2/3% of the sum of the total outstanding
Loans, interests in Letters of Credit, and Unused Commitments of the Lenders.
25
"Revolving Credit" means the credit facility for making Revolving Loans and
issuing Letters of Credit described in Sections 1.1 and 1.2 hereof.
"Revolving Loan" is defined in Section 1.1 hereof and, as so defined,
includes a Base Rate Loan or a Eurodollar Loan, each of which is a "type" of
Revolving Loan under the Revolving Credit.
"Revolving Note" is defined in Section 1.10 hereof.
"S&P" means Standard & Poor's Ratings Services Group, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subsidiary" means, as to any particular parent corporation or
organization, any other corporation or organization more than 50% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or organization or by any one or more other entities
which are themselves subsidiaries of such parent corporation or organization.
Unless otherwise expressly noted herein, the term "Subsidiary" means a
Subsidiary of the Company or any other Credit Party or of any of their direct or
indirect Subsidiaries, as applicable.
"Swing Line" means the credit facility for making one or more Swing Loans
described in Section 1.15 hereof.
"Swing Line Sublimit" means $2,500,000, as reduced pursuant to the terms
hereof.
"Swing Loan" and "Swing Loans" each is defined in Section 1.15 hereof.
"Swing Note" is defined in Section 1.11 hereof.
"TARGET Settlement Day" means any day on which the Trans-European Automated
Real-Time Gross Settlement Express Transfer (TARGET) System is open.
"Telerate Page" means the display designated on the Telerate Service (or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates) for U.S. Dollar deposits (currently
displayed on Page 3750) or for deposits of the relevant Alternative Currency, as
applicable.
"Termination Date" means April 3, 2005, or such earlier date on which the
Commitments are terminated in whole pursuant to Section 1.12, 9.2 or 9.3 hereof.
"Total Consideration" means the total amount (but without duplication) of
(a) cash paid in connection with any Acquisition, plus (b) indebtedness payable
to the seller in connection with such Acquisition, plus (c) the fair market
value of any equity securities, including any warrants or options therefor,
delivered in connection with any Acquisition, plus (d) the present value of
covenants not to compete entered into in connection with such Acquisition or
other future payments which are required to be made over a period of time and
are not contingent upon the Borrower or its Subsidiary meeting financial
performance objectives (exclusive of salaries paid in the ordinary course of
business) (discounted at the Base Rate), but only to the extent not included in
clause (a), (b) or (c) above, plus (e) the amount of indebtedness assumed in
connection with such Acquisition.
26
"Total Funded Debt" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of the Company and its
Subsidiaries at such time, including all Indebtedness for Borrowed Money of any
other Person which is directly or indirectly guaranteed by the Company or any
Subsidiary or which the Company or any Subsidiary has agreed (contingently or
otherwise) to purchase or otherwise acquire or in respect of which the Company
or any Subsidiary has otherwise assured a creditor against loss.
"Unfunded Vested Liabilities" means, for any Plan at any time, the amount
(if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"Unused Commitments" means, at any time, the difference between the
Commitments then in effect and the aggregate outstanding principal amount of
Revolving Loans and L/C Obligations, provided that Swing Loans outstanding from
time to time shall be deemed to reduce the Unused Commitment of the
Administrative Agent for purposes of computing the commitment fee under Section
2.1(a) hereof.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would be
realized by converting the relevant Alternative Currency into U.S. Dollars in
the spot market at the exchange rate quoted by the Administrative Agent, at
approximately 11:00 a.m. (London time) two Business Days prior to the date on
which a computation thereof is required to be made, to major banks in the
interbank foreign exchange market for the purchase of U.S. Dollars for such
Alternative Currency.
"U.S. Dollars" and "$" each means the lawful currency of the United States
of America.
"Voting Stock" of any Person means capital stock or other equity interests
of any class or classes (however designated) having ordinary power for the
election of directors or other similar governing body of such Person, other than
stock or other equity interests having such power only by reason of the
happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of ERISA.
"Wholly-owned Subsidiary" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law) or other equity interests are owned by any Borrower and/or one
or more Wholly-owned Subsidiaries within the meaning of this definition.
Section 5.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The
words "hereof", "herein", and "hereunder" and words of like import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All references to time of day herein
are references to Chicago, Illinois, time unless otherwise specifically
provided. Where the character or amount of any asset or liability or item of
income or expense is required to be determined or any consolidation or other
accounting computation is required to be made for the purposes of this
Agreement, it shall be done in accordance with GAAP except where such principles
are inconsistent with the specific provisions of this Agreement.
Section 5.3. Change in Accounting Principles. If, after the date of
this Agreement, there shall occur any change in GAAP from those used in the
preparation of the financial statements referred to in Section 6.5 hereof and
such change shall result in a change in the method of calculation of any
financial covenant, standard or term found in this Agreement, either the
27
Borrowers or the Required Lenders may by notice to the Lenders and the
Borrowers, respectively, require that the Lenders and the Borrowers negotiate in
good faith to amend such covenants, standards, and term so as equitably to
reflect such change in accounting principles, with the desired result being that
the criteria for evaluating the financial condition of the Borrowers and their
Subsidiaries shall be the same as if such change had not been made. No delay by
the Borrowers or the Required Lenders in requiring such negotiation shall limit
their right to so require such a negotiation at any time after such a change in
accounting principles. Until any such covenant, standard, or term is amended in
accordance with this Section 5.3, financial covenants shall be computed and
determined in accordance with GAAP in effect prior to such change in accounting
principles. Without limiting the generality of the foregoing, the Borrowers
shall neither be deemed to be in compliance with any financial covenant
hereunder nor out of compliance with any financial covenant hereunder if such
state of compliance or noncompliance, as the case may be, would not exist but
for the occurrence of a change in accounting principles after the date hereof.
Section 6. Representations and Warranties.
To induce the Lenders to enter into this Agreement and to make the
extensions of credit contemplated hereby, each of the Credit Parties represents
and warrants to the Administrative Agent and the Lenders as follows:
Section 6.1. Organization and Qualification. Each Credit Party is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has full and adequate power to own its
Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to do so would
not have a Material Adverse Effect.
Section 6.2. Subsidiaries. The Company holds 100% of the issued and
outstanding stock of each of the Borrowers. Each Subsidiary of the Borrowers is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, as the case may be, has
full and adequate power to own its Property and conduct its business as now
conducted, and is duly licensed or qualified and in good standing in each
jurisdiction in which the nature of the business conducted by it or the nature
of the Property owned or leased by it requires such licensing or qualifying,
except where the failure to do so would not have a Material Adverse Effect.
Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction of its
incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by the Company, any Borrower and the other Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and other
equity interests and the number of shares of each class issued and outstanding.
All of the outstanding shares of capital stock and other equity interests of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable and all such shares and other equity interests indicated on
Schedule 6.2 as owned by the Company, a Borrower or another Subsidiary are
owned, beneficially and of record, by the Company, such Borrower or such
Subsidiary, as the case may be, free and clear of all Liens. There are no
outstanding commitments or other obligations of any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Subsidiary.
Section 6.3. Authority and Validity of Obligations. Each Borrower has
full right and authority to enter into this Agreement and the other Loan
Documents executed by it, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, and to perform all of its
28
obligations hereunder and under the other Loan Documents executed by it. Each
Guarantor has full right and authority to enter into the Loan Documents executed
by it, to guarantee the Obligations, Hedging Liability, and Funds Transfer and
Deposit Account Liability, and to perform all of its obligations under the Loan
Documents executed by it. The Loan Documents delivered by each Credit Party
have been duly authorized, executed, and delivered by such Credit Party and
constitute valid and binding obligations of such Credit Party enforceable
against it in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by any Credit Party of any of the
matters and things herein or therein provided for, (a) contravene or constitute
a default under any provision of law or any judgment, injunction, order or
decree binding upon any Credit Party or any provision of the organizational
documents (e.g., charter, articles of incorporation or by-laws, articles of
association or operating agreement, partnership agreement or other similar
document) of any Credit Party, (b) contravene or constitute a default under any
covenant, indenture or agreement of or affecting any Credit Party or any of its
Property, in each case where such contravention or default, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect
or (c) result in the creation or imposition of any Lien on any Property of any
Credit Party.
Section 6.4. Use of Proceeds; Margin Stock. The Borrowers shall use
the proceeds of the Revolving Credit and the Swing Loans to refinance existing
indebtedness and for its general working capital purposes and for such other
legal and proper purposes as are consistent with all applicable laws. Neither
any Borrower nor any Subsidiary is engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System), and no
part of the proceeds of any Loan or any other extension of credit made hereunder
will be used to purchase or carry any such margin stock or to extend credit to
others for the purpose of purchasing or carrying any such margin stock. Margin
stock (as hereinabove defined) constitutes less than 25% of the assets of each
Borrower and its Subsidiaries which are subject to any limitation on sale,
pledge or other restriction hereunder.
Section 6.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 2001, and the related
consolidated statements of income, retained earnings and cash flows of the
Company and its Subsidiaries for the fiscal year then ended, and accompanying
notes thereto, which financial statements are accompanied by the audit report of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants, heretofore furnished to the
Administrative Agent and the Lenders, fairly present the consolidated financial
condition of the Company and its Subsidiaries as at said date and the
consolidated results of their operations and cash flows for the period then
ended in conformity with GAAP applied on a consistent basis. Neither the
Company nor any of its Subsidiaries has contingent liabilities which are
material to it other than as indicated on such financial statements or, with
respect to future periods, on the financial statements furnished pursuant to
Section 8.5 hereof.
Section 6.6. No Material Adverse Change. Since December 31, 2001,
there has been no change in the condition (financial or otherwise) of the
Company or any Subsidiary except those occurring in the ordinary course of
business, none of which individually or in the aggregate have been materially
adverse.
Section 6.7. Full Disclosure. The statements and information furnished
to the Administrative Agent and the Lenders in connection with the negotiation
of this Agreement and the other Loan Documents and the commitments by the
Lenders to provide all or part of the financing contemplated hereby do not
contain any untrue statements of a material fact or omit a material fact
necessary to make the material statements contained herein or therein not
29
misleading, the Administrative Agent and the Lenders acknowledging that as to
any projections furnished to the Administrative Agent and the Lenders, the
Credit Parties only represent that the same were prepared on the basis of
information and estimates the Credit Parties believed to be reasonable.
Section 6.8. Trademarks, Franchises, and Licenses. Each Credit Party
and its Subsidiaries own, possess, or have the right to use all necessary
patents, licenses, franchises, trademarks, trade names, trade styles,
copyrights, trade secrets, know how, and confidential commercial and proprietary
information to conduct their businesses as now conducted, without known conflict
with any patent, license, franchise, trademark, trade name, trade style,
copyright or other proprietary right of any other Person.
Section 6.9. Governmental Authority and Licensing. Each Credit Party
and its Subsidiaries have received all licenses, permits, and approvals of all
federal, state, and local governmental authorities, if any, necessary to conduct
their businesses, in each case where the failure to obtain or maintain the same
could reasonably be expected to have a Material Adverse Effect. No
investigation or proceeding which, if adversely determined, could reasonably be
expected to result in revocation or denial of any material license, permit or
approval is pending or, to the knowledge of any Credit Party, threatened.
Section 6.10. Good Title. Each Credit Party and its Subsidiaries have
good and defensible title (or valid leasehold interests) to their assets as
reflected on the most recent consolidated balance sheet furnished to the
Administrative Agent and the Lenders (except for sales of assets in the ordinary
course of business), subject to no Liens other than such thereof as are
permitted by Section 8.8 hereof.
Section 6.11. Litigation and Other Controversies. There is no
litigation or governmental proceeding or labor controversy pending, nor to the
knowledge of any Credit Party threatened, against any Credit Party or any
Subsidiary which if adversely determined, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
Section 6.12. Taxes. All tax returns required to be filed by any
Credit Party (to the best of such Credit Party's knowledge with respect to any
local tax returns) or any Subsidiary in any jurisdiction have, in fact, been
filed, and all taxes, assessments, fees, and other governmental charges upon any
Credit Party or any Subsidiary or upon any of its Property, income or
franchises, which are shown to be due and payable in such returns, have been
paid, except such taxes, assessments, fees and governmental charges, if any, as
are being contested in good faith and by appropriate proceedings which prevent
enforcement of the matter under contest and as to which adequate reserves
established in accordance with GAAP have been provided. No Credit Party knows
of any proposed additional tax assessment against it or its Subsidiaries for
which adequate provisions in accordance with GAAP have not been made on their
accounts. Adequate provisions in accordance with GAAP for taxes on the books of
each Credit Party and its Subsidiaries have been made for all open years, and
for each such Person's current fiscal period.
Section 6.13. Approvals. No authorization, consent, license or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of any other
Person, is or will be necessary to the valid execution, delivery or performance
by any Credit Party of any Loan Document, except for such approvals which have
been obtained prior to the date of this Agreement and remain in full force and
effect and except where failure to obtain such authorization, consent, license,
exemption, registration or approval would not have a Material Adverse Effect.
Section 6.14. Affiliate Transactions. Neither any Credit Party nor any
Subsidiary is a party to any contracts or agreements with any of its Affiliates
(other than with Wholly-owned
30
Subsidiaries) on terms and conditions which are less favorable to such Credit
Party or such Subsidiary than would be usual and customary in similar contracts
or agreements between Persons not affiliated with each other.
Section 6.15. Investment Company; Public Utility Holding Company.
Neither any Credit Party nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 6.16. ERISA. Each Credit Party and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA. Neither any Credit Party nor any
Subsidiary has any contingent liabilities with respect to any post-retirement
benefits under a Welfare Plan, other than liability for continuation coverage
described in article 6 of Title I of ERISA.
Section 6.17. Compliance with Laws. The Credit Parties and their
Subsidiaries are in compliance with the requirements of all federal, state and
local laws, rules and regulations applicable to or pertaining to their Property
or business operations (including, without limitation, the Occupational Safety
and Health Act of 1970, the Americans with Disabilities Act of 1990, and
Environmental Laws), where any such non-compliance, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Neither any Credit Party nor any Subsidiary has received notice to the effect
that its operations are not in compliance with any of the requirements of
applicable federal, state or local environmental, health, and safety statutes
and regulations or is the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, where any such non-compliance
or remedial action, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
Section 6.18. Other Agreements. Neither any Credit Party nor any
Subsidiary is in default under the terms of any covenant, indenture or agreement
of or affecting such Person or any of its Property, which default if uncured
could reasonably be expected to have a Material Adverse Effect.
Section 6.19. Solvency. Each Credit Party and its Subsidiaries are
solvent, able to pay their debts as they become due, and have sufficient capital
to carry on their business and all businesses in which they are about to engage.
Section 6.20. No Default. No Default or Event of Default has occurred
and is continuing.
Section 7. Conditions Precedent.
The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a Base Rate Loan) or of the
L/C Issuer to issue, extend the expiration date (including by not giving notice
of non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:
Section 7.1. All Credit Events. At the time of each Credit Event
hereunder:
(a) each of the representations and warranties set forth herein shall
be and remain true and correct as of said time, except to the extent the
same expressly relate to an earlier date;
31
(b) each Credit Party and each Subsidiary shall be in compliance with
all of the terms and conditions hereof and of the other Loan Documents, and
no Default or Event of Default shall have occurred and be continuing or
would occur as a result of such Credit Event;
(c) in the case of a Borrowing, the Administrative Agent shall have
received the notice required by Section 1.5 hereof, in the case of the
issuance of any Letter of Credit the L/C Issuer shall have received a duly
completed Application for such Letter of Credit together with any fees
called for by Section 2.1 hereof, and, in the case of an extension or
increase in the amount of a Letter of Credit, a written request therefor in
a form acceptable to the L/C Issuer together with fees called for by
Section 2.1 hereof; and
(d) such Credit Event shall not violate any order, judgment or decree
of any court or other authority or any provision of law or regulation
applicable to the Administrative Agent or any Lender (including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System) as then in effect.
Each request for a Borrowing hereunder and each request for the issuance
of, increase in the amount of, or extension of the expiration date of, a Letter
of Credit shall be deemed to be a representation and warranty by the Borrowers
on the date of such Credit Event as to the facts specified in subsections (a)
through (c), both inclusive, of this Section.
Section 7.2. Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) the Administrative Agent shall have received for each Lender this
Agreement duly executed by the Borrowers, the Guarantors party hereto and
the Lenders;
(b) the Administrative Agent shall have received for each Lender such
Lender's duly executed Notes dated the date hereof and otherwise in
compliance with the provisions of Section 1.10 hereof;
(c) the Administrative Agent shall have received evidence satisfactory
to it that, simultaneously with the initial advance hereunder, the
obligations of the Borrowers under the Existing Credit Agreement are paid
in full and the Existing Credit Agreement is cancelled;
(d) the Company shall have completed a secondary equity issuance
pursuant to the Company's prospectus dated on or about March 27, 2002
offering 1,500,000 shares of common stock and received net proceeds of at
least $20,000,000, and the Administrative Agent shall have received
satisfactory evidence thereof;
(e) the Administrative Agent shall have received copies of each Credit
Party's articles of incorporation and bylaws (or comparable organizational
documents) and any amendments thereto, certified in each instance by its
Secretary or Assistant Secretary (or officer or manager holding a
comparable office);
(f) the Administrative Agent shall have received for each Lender
copies of resolutions of each Credit Party's Board of Directors (or similar
governing body) authorizing the execution, delivery and performance of this
Agreement and the other Loan Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby, together
with specimen signatures of the persons authorized to execute such
documents on such Credit Party's behalf, all certified in each
32
instance by its Secretary or Assistant Secretary (or officer or manager
holding a comparable office);
(g) the Administrative Agent shall have received for each Lender
copies of the certificates of good standing for each Credit Party (dated no
earlier than 30 days prior to the date hereof) from the office of the
secretary of the state of its incorporation or organization and of each
state in which it is qualified to do business as a foreign corporation or
organization;
(h) the Administrative Agent shall have received for each Lender a
list of each Borrower's Authorized Representatives;
(i) the Administrative Agent shall have received evidence satisfactory
to it that the Borrowers' EBITDA for the period ended December 31, 2001 was
equal to or greater than $40,000,000;
(j) the Administrative Agent shall have received for itself and for
the Lenders the initial fees called for by Section 2.1 hereof;
(k) each Lender shall have received such evaluations and
certifications as it may reasonably require in order to satisfy itself as
to the financial condition of the Borrowers and their Subsidiaries, and the
lack of material contingent liabilities of the Borrowers and their
Subsidiaries;
(l) the Administrative Agent shall have received pay-off and lien
release letters from secured creditors of the Borrowers setting forth,
among other things, the total amount of indebtedness outstanding and owing
to them (or outstanding letters of credit issued for the account of any
Borrower) and containing an undertaking to cause to be delivered to the
Administrative Agent UCC termination statements and any other lien release
instruments necessary to release their Liens on the assets of the
Borrowers, which pay-off and lien release letters shall be in form and
substance acceptable to the Administrative Agent;
(m) the Administrative Agent shall have received for each Lender the
favorable written opinion of counsel to the Credit Parties, in form and
substance satisfactory to the Administrative Agent; and
(n) the Administrative Agent shall have received for the account of
the Lenders such other agreements, instruments, documents, certificates,
and opinions as the Administrative Agent may reasonably request.
Section 8. Covenants.
The Credit Parties agree that, so long as any credit is available to or in
use by the Borrowers, or any of them, hereunder, except to the extent compliance
in any case or cases is waived in writing pursuant to the terms of Section 13.13
hereof:
Section 8.1. Maintenance of Business.
(a) Each Credit Party shall, and shall cause each Subsidiary to,
preserve and maintain its existence, except as otherwise provided in Section
8.10(c) hereof.
(b) Each Credit Party shall, and shall cause each Subsidiary to,
preserve and keep in force and effect all licenses, permits, franchises,
approvals, patents, trademarks, trade names,
33
trade styles, copyrights, and other proprietary rights necessary to the proper
conduct of its business where the failure to do so could reasonably be expected
to have a Material Adverse Effect.
Section 8.2. Maintenance of Properties. Each Credit Party shall, and
shall cause each Subsidiary to, maintain, preserve, and keep its Property,
plant, and equipment used or useful in its business in good repair, working
order and condition (ordinary wear and tear excepted), and shall from time to
time make all needful and proper repairs, renewals, replacements, additions, and
betterments thereto so that at all times the efficiency thereof shall be fully
preserved and maintained.
Section 8.3. Taxes and Assessments. Each Credit Party shall duly pay
and discharge, and shall cause each Subsidiary to duly pay and discharge, all
taxes, rates, assessments, fees, and governmental charges upon or against it or
its Property, in each case before the same become delinquent and before
penalties accrue thereon, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings which prevent enforcement
of the matter under contest and adequate reserves are provided therefor and
except to the extent that failure to so pay or discharge would not have a
Material Adverse Effect.
Section 8.4. Insurance. Each Credit Party shall insure and keep
insured, and shall cause each Subsidiary to insure and keep insured, with good
and responsible insurance companies, all insurable Property owned by it which is
of a character usually insured by Persons similarly situated and operating like
Properties against loss or damage from such hazards and risks, and in such
amounts, as are insured by Persons similarly situated and operating like
Properties; and each Credit Party shall insure, and shall cause each Subsidiary
to insure, such other hazards and risks (including, without limitation,
employers' and public liability risks) with good and responsible insurance
companies as and to the extent usually insured by Persons similarly situated and
conducting similar businesses. Each Credit Party shall, upon the request of the
Administrative Agent, furnish to the Administrative Agent and the Lenders a
certificate setting forth in summary form the nature and extent of the insurance
maintained pursuant to this Section.
Section 8.5. Financial Reports. The Company shall, and shall cause
each Subsidiary to, maintain a standard system of accounting in accordance with
GAAP. The Company and each Borrower shall furnish to the Administrative Agent,
each Lender and each of their duly authorized representatives such information
respecting the business and financial condition of the Company, the Borrowers
and their respective Subsidiaries as the Administrative Agent or such Lender may
reasonably request; and without any request, the Company and the Borrowers shall
furnish to the Administrative Agent and the Lenders:
(a) as soon as available, and in any event within 45 days after the
close of each fiscal quarter of each fiscal year of the Company, a copy of
the consolidated and consolidating balance sheet of the Company and its
Subsidiaries as of the last day of such fiscal quarter and the consolidated
and consolidating statements of income, retained earnings, and cash flows
of the Company and its Subsidiaries for the fiscal quarter and for the
fiscal year-to-date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in the
previous fiscal year, prepared by the Company in accordance with GAAP
(subject to the absence of footnote disclosures and year-end audit
adjustments) and certified to by its chief financial officer or another
officer of the Company acceptable to the Administrative Agent;
(b) as soon as available, and in any event within 90 days after the
close of each fiscal year of the Company, a copy of the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the
last day of the fiscal year then ended and the consolidated and
consolidating statements of income, retained earnings, and cash
34
flows of the Company and its Subsidiaries for the fiscal year then ended,
and accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied by
an unqualified opinion of a firm of independent public accountants of
recognized national standing, selected by the Company and reasonably
satisfactory to the Administrative Agent and the Required Lenders, to the
effect that the financial statements have been prepared in accordance with
GAAP and present fairly in accordance with GAAP the consolidated financial
condition of the Company and its Subsidiaries as of the close of such
fiscal year and the results of their operations and cash flows for the
fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, such examination
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;
(c) within the period provided in subsection (b) above, the written
statement of the accountants who certified the audit report thereby
required that in the course of their audit they have obtained no knowledge
of any Default or Event of Default, or, if such accountants have obtained
knowledge of any such Default or Event of Default, they shall disclose in
such statement the nature and period of the existence thereof;
(d) promptly after receipt thereof, any additional written reports,
management letters or other detailed information contained in writing
concerning significant aspects of the Company's or any Subsidiary's
operations and financial affairs given to it by its independent public
accountants;
(e) promptly after the sending or filing thereof, copies of each
financial statement, report, notice or proxy statement sent by the Company
or any Subsidiary to its stockholders or other equity holders, and copies
of each regular, periodic or special report, registration statement or
prospectus (including all Form 10-K, Form 10-Q and Form 8-K reports) filed
by the Company or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency;
(f) promptly after receipt thereof, a copy of each audit made by any
regulatory agency of the books and records of the Company or any Subsidiary
or of notice of any material noncompliance with any applicable law,
regulation or guideline relating to the Company or any Subsidiary, or its
business;
(g) notice of any Change in Control;
(h) promptly after knowledge thereof shall have come to the attention
of any responsible officer of any Credit Party, written notice of any
threatened or pending litigation or governmental proceeding or labor
controversy against the Company or any Subsidiary which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect
or of the occurrence of any Default or Event of Default hereunder; and
(i) with each of the financial statements furnished to the Lenders
pursuant to subsections (a) and (b) above, a written certificate in the
form attached hereto as Exhibit E signed by the chief financial officer of
the Company or another officer of the Company acceptable to the
Administrative Agent to the effect that to the best of such officer's
knowledge and belief no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description of
such Default or Event of Default and specifying the action, if any, taken
by the Credit Parties or any Subsidiary to
35
remedy the same. Such certificate shall also set forth the calculations
supporting such statements in respect of Sections 8.21 and 8.22 hereof.
Section 8.6. Inspection. The Credit Parties shall, and shall cause
each Subsidiary to, permit the Administrative Agent, each Lender, and each of
their duly authorized representatives and agents to visit and inspect any of its
Property, corporate books, and financial records, to examine and make copies of
its books of accounts and other financial records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers,
employees and independent public accountants (and by this provision each Credit
Party hereby authorizes such accountants to discuss with the Administrative
Agent and such Lenders the finances and affairs of such Credit Party and its
Subsidiaries) at such reasonable times and intervals as the Administrative Agent
or any such Lender may designate and, so long as no Default or Event of Default
exists, with reasonable prior notice to the Borrowers.
Section 8.7. Borrowings and Guaranties. The Credit Parties shall not,
nor shall they permit any Subsidiary to, issue, incur, assume, create or have
outstanding any Indebtedness for Borrowed Money, or be or become liable as
endorser, guarantor, surety or otherwise for any debt, obligation or undertaking
of any other Person, or otherwise agree to provide funds for payment of the
obligations of another, or supply funds thereto or invest therein or otherwise
assure a creditor of another against loss, or apply for or become liable to the
issuer of a letter of credit which supports an obligation of another, or
subordinate any claim or demand it may have to the claim or demand of any other
Person; provided, however, that the foregoing shall not restrict nor operate to
prevent:
(a) the Obligations, Hedging Liability, and Funds Transfer and Deposit
Account Liability of the Borrowers and their Subsidiaries owing to the
Administrative Agent and the Lenders (and their Affiliates);
(b) the Guaranties;
(c) purchase money indebtedness and Capitalized Lease Obligations of
the Borrower and its Subsidiaries in an amount not to exceed $500,000 in
the aggregate at any one time outstanding;
(d) endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;
(e) unsecured intercompany indebtedness among the Company and its
Subsidiaries, provided that any such indebtedness shall be fully
subordinated to the Obligations on terms reasonably satisfactory to the
Administrative Agent; and
(f) other unsecured indebtedness and guaranty obligations not
otherwise permitted by this Section in an amount not to exceed $1,000,000
in the aggregate at any one time outstanding.
Section 8.8. Liens. The Credit Parties shall not, nor shall they
permit any Subsidiary to, create, incur or permit to exist any Lien of any kind
on any Property owned by any such Person; provided, however, that the foregoing
shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges (other
than Liens arising under ERISA), good faith cash deposits in connection
with tenders, contracts or leases to which any Credit Party or any
Subsidiary is a party or other cash deposits required to be made in the
36
ordinary course of business, provided in each case that the obligation is
not for borrowed money and that the obligation secured is not overdue or,
if overdue, is being contested in good faith by appropriate proceedings
which prevent enforcement of the matter under contest and adequate reserves
have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers' or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good faith
by appropriate proceedings which prevent enforcement of the matter under
contest;
(c) judgment liens and judicial attachment liens not constituting an
Event of Default under Section 9.1(g) hereof and the pledge of assets for
the purpose of securing an appeal, stay or discharge in the course of any
legal proceeding, provided that the aggregate amount of such judgment liens
and attachments and liabilities of the Credit Parties and their
Subsidiaries secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in excess of
$1,000,000 at any one time outstanding;
(d) Liens on property of any Credit Party or any Subsidiary created
solely for the purpose of securing indebtedness permitted by Section 8.7(c)
hereof, representing or incurred to finance the purchase price of Property,
provided that no such Lien shall extend to or cover other Property of such
Credit Party or such Subsidiary other than the respective Property so
acquired, and the principal amount of indebtedness secured by any such Lien
shall at no time exceed the purchase price of such Property, as reduced by
repayments of principal thereon;
(e) any interest or title of a lessor under any operating lease; and
(f) easements, rights-of-way, restrictions, and other similar
encumbrances against real property incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount and which
do not materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary.
Section 8.9. Investments, Acquisitions, Loans and Advances. The Credit
Parties shall not, nor shall they permit any Subsidiary to, directly or
indirectly, make, retain or have outstanding any investments (whether through
purchase of stock or obligations or otherwise) in, or loans or advances to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof; provided, however, that the foregoing
shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper rated at least P-1 by ▇▇▇▇▇'▇ and
at least A-1 by S&P maturing within one year of the date of issuance
thereof;
(c) investments in certificates of deposit issued by any Lender or by
any United States commercial bank having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less;
37
(d) investments in repurchase obligations with a term of not more than
seven days for underlying securities of the types described in subsection
(a) above entered into with any bank meeting the qualifications specified
in subsection (c) above, provided all such agreements require physical
delivery of the securities securing such repurchase agreement, except those
delivered through the Federal Reserve Book Entry System;
(e) investments in money market funds that invest solely, and which
are restricted by their respective charters to invest solely, in
investments of the type described in the immediately preceding subsections
(a), (b), (c), and (d) above;
(f) each Credit Party's investments from time to time in its
Subsidiaries, and investments made from time to time by any such Subsidiary
in one or more of its Subsidiaries;
(g) intercompany advances made from time to time from a Borrower to
any one or more of its Subsidiaries in the ordinary course of business to
finance working capital needs;
(h) Permitted Acquisitions so long as, at the time of such
Acquisition, and immediately after giving effect thereto, the Unused
Commitments equal or exceed $10,000,000; and
(i) other investments, loans, and advances in addition to those
otherwise permitted by this Section in an amount not to exceed $500,000 in
the aggregate at any one time outstanding.
In determining the amount of investments, acquisitions, loans, and advances
permitted under this Section, investments and acquisitions shall always be taken
at the original cost thereof (regardless of any subsequent appreciation or
depreciation therein), and loans and advances shall be taken at the principal
amount thereof then remaining unpaid.
Section 8.10. Mergers, Consolidations and Sales. The Credit Parties
shall not, nor shall they permit any Subsidiary to, be a party to any merger or
consolidation, or sell, transfer, lease or otherwise dispose of all or any part
of its Property, including any disposition of Property as part of a sale and
leaseback transaction, or in any event sell or discount (with or without
recourse) any of its notes or accounts receivable; provided, however, that this
Section shall not apply to nor operate to prevent:
(a) the sale or lease of inventory in the ordinary course of business;
(b) the sale, transfer, lease or other disposition of Property of any
Credit Party and its Subsidiaries to one another in the ordinary course of
its business;
(c) the merger of any Subsidiary of a Borrower with and into such
Borrower or any other Subsidiary of such Borrower, provided that, in the
case of any merger involving a Borrower, such Borrower is the corporation
surviving the merger;
(d) the sale of delinquent notes or accounts receivable in the
ordinary course of business for purposes of collection only (and not for
the purpose of any bulk sale or securitization transaction);
(e) the sale, transfer or other disposition of any tangible personal
property that, in the reasonable business judgment of the relevant Credit
Party or its Subsidiary,
38
has become obsolete or worn out, and which is disposed of in the ordinary
course of business; and
(f) the sale, transfer, lease or other disposition of Property of any
Credit Party or any Subsidiary (including any disposition of Property as
part of a sale and leaseback transaction) aggregating for the Credit
Parties and their Subsidiaries not more than $1,000,000 during any fiscal
year of the Credit Parties.
Section 8.11. Maintenance of Subsidiaries. The Credit Parties shall
not assign, sell or transfer, nor shall it permit any Subsidiary to issue,
assign, sell or transfer, any shares of capital stock or other equity interests
of a Subsidiary; provided, however, that the foregoing shall not operate to
prevent (a) the issuance, sale, and transfer to any person of any shares of
capital stock of a Subsidiary solely for the purpose of qualifying, and to the
extent legally necessary to qualify, such person as a director of such
Subsidiary and (b) any transaction permitted by Section 8.10(c) above.
Section 8.12. Dividends and Certain Other Restricted Payments. The
Credit Parties shall not, nor shall they permit any Subsidiary to, (a) declare
or pay any dividends on or make any other distributions in respect of any class
or series of its capital stock or other equity interests or (b) directly or
indirectly purchase, redeem, or otherwise acquire or retire any of its capital
stock or other equity interests or any warrants, options, or similar instruments
to acquire the same; provided, however, that the foregoing shall not operate to
prevent (i) the making of dividends or distributions by any Wholly-owned
Subsidiary of any Credit Party to its parent corporation, (ii) dividends payable
solely in the same class of capital stock of such Person and (iii) provided that
(x) no Default or Event of Default has occurred and is continuing at such time
or would be directly or indirectly caused as a result thereof on an actual or
pro forma basis (y) the Company has cash on hand and Unused Commitments, before
and after giving effect to the subject repurchase, of at least $10,000,000 and
(z) the Company shall have delivered to the Administrative Agent, a liquidity
certificate in the form attached hereto as Exhibit H signed by the chief
financial officer of the Company or another officer of the Company acceptable to
the Administrative Agent, the Company may repurchase shares of its capital stock
on the open market in an aggregate amount not to exceed $10,000,000 in the
aggregate during any fiscal year.
Section 8.13. ERISA. The Credit Parties shall, and shall cause each
Subsidiary to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed could
reasonably be expected to result in the imposition of a Lien against any of its
Property. The Credit Parties shall, and shall cause each Subsidiary to,
promptly notify the Administrative Agent and each Lender of: (a) the occurrence
of any reportable event (as defined in ERISA) with respect to a Plan, (b)
receipt of any notice from the PBGC of its intention to seek termination of any
Plan or appointment of a trustee therefor, (c) its intention to terminate or
withdraw from any Plan, and (d) the occurrence of any event with respect to any
Plan which would result in the incurrence by any Credit Party or any Subsidiary
of any material liability, fine or penalty, or any material increase in the
contingent liability of any Credit Party or any Subsidiary with respect to any
post-retirement Welfare Plan benefit.
Section 8.14. Compliance with Laws. Each Credit Party shall, and shall
cause each Subsidiary to, comply in all respects with all Legal Requirements
applicable to or pertaining to its Property or business operations, where any
such non-compliance, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or result in a Lien upon any of its
Property.
Section 8.15. Burdensome Contracts With Affiliates. The Credit Parties
shall not, nor shall they permit any Subsidiary to, enter into any contract,
agreement or business arrangement with any of its Affiliates (other than with
Wholly-owned Subsidiaries) on terms and conditions
39
which are less favorable to such Credit Party or such Subsidiary than would be
usual and customary in similar contracts, agreements or business arrangements
between Persons not affiliated with each other.
Section 8.16. No Changes in Fiscal Year. The fiscal year of the
Company and its Subsidiaries ends on December 31 of each year; and the Company
shall not, nor shall it permit any Subsidiary to, change its fiscal year from
its present basis.
Section 8.17. Formation of Subsidiaries. Promptly upon the formation
or acquisition of any Subsidiary of the Company (whether direct or indirect),
the Company shall provide the Administrative Agent and the Lenders notice
thereof (at which time Schedule 6.2 shall be deemed amended to include reference
to such Subsidiary) and, in the case of the formation or acquisition of a
Domestic Subsidiary of the Company, comply with the requirements of Section 4
hereof on a timely basis.
Section 8.18. Change in the Nature of Business. The Credit Parties
shall not, nor shall they permit any Subsidiary to, engage in any business or
activity if as a result the general nature of the business of such Credit Party
or such Subsidiary would be changed in any material respect from the general
nature of the business engaged in by it as of the Closing Date.
Section 8.19. Use of Loan Proceeds. The Borrowers shall use the credit
extended under this Agreement solely for the purposes set forth in, or otherwise
permitted by, Section 6.4 hereof.
Section 8.20. No Restrictions. Except as provided herein, the Credit
Parties shall not, nor shall they permit any Subsidiary to, directly or
indirectly create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of such Credit
Party or such Subsidiary to: (a) pay dividends or make any other distribution
on any Subsidiary's capital stock or other equity interests owned by such Credit
Party or such Subsidiary, (b) pay any indebtedness owed to any Borrower or any
Subsidiary, (c) make loans or advances to any Borrower or any Subsidiary, (d)
transfer any of its Property to any Borrower or any Subsidiary or (e) guarantee
the Obligations and/or grant Liens on its assets to the Administrative Agent as
required by the Loan Documents.
Section 8.21. Leverage Ratio. As of the last day of each fiscal
quarter of the Company, the Company shall not permit the Leverage Ratio to be
greater than 1.50 to 1.0.
Section 8.22. Interest Coverage Ratio. As of the last day of each
fiscal quarter of the Company, the Company shall maintain a ratio of (a) EBITDA
for the four fiscal quarters of the Company then ended minus Capital
Expenditures during the same four fiscal quarters then ended to (b) Interest
Expense for the same four fiscal quarters then ended of not less than 3.0 to
1.0.
Section 9. Events of Default and Remedies.
Section 9.1. Events of Default. Any one or more of the following shall
constitute an "Event of Default" hereunder:
(a) default (i) in the payment when due of all or any part of the
principal of any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or of any Reimbursement
Obligation or (ii) for a period of five days in the payment when due of all
or any part of the interest on any Note (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any fee
or other Obligation payable hereunder or under any other Loan Document;
40
(b) default in the observance or performance of any covenant set forth
in Sections 8.1(a), 8.4, 8.5, 8.7, 8.8, 8.9, 8.10, 8.11, 8.12, 8.21 or 8.22
hereof;
(c) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within 30 days
after the earlier of (i) the date on which such failure shall first become
known to any officer of any Borrower or (ii) written notice thereof is
given to the Borrowers by the Administrative Agent;
(d) any representation or warranty made herein or in any other Loan
Document or in any certificate furnished to the Administrative Agent or the
Lenders pursuant hereto or thereto or in connection with any transaction
contemplated hereby or thereby proves untrue in any material respect as of
the date of the issuance or making or deemed making thereof;
(e) any event occurs or condition exists (other than those described
in subsections (a) through (d) above) which is specified as an event of
default under any of the other Loan Documents, or any of the Loan Documents
shall for any reason not be or shall cease to be in full force and effect
or is declared to be null and void, or any Credit Party takes any action
for the purpose of terminating, repudiating or rescinding any Loan Document
executed by it or any of its obligations thereunder;
(f) default shall occur under any Indebtedness for Borrowed Money
issued, assumed or guaranteed by any Credit Party or any Subsidiary
aggregating in excess of $1,000,000, or under any indenture, agreement or
other instrument under which the same may be issued, and such default shall
continue for a period of time sufficient to permit the acceleration of the
maturity of any such Indebtedness for Borrowed Money (whether or not such
maturity is in fact accelerated), or any such Indebtedness for Borrowed
Money shall not be paid when due (whether by demand, lapse of time,
acceleration or otherwise);
(g) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes, shall be entered or filed
against any Credit Party or any Subsidiary, or against any of its Property,
in an aggregate amount in excess of $1,000,000 (except to the extent fully
covered by insurance pursuant to which the insurer has accepted liability
therefor in writing), and which remains undischarged, unvacated, unbonded
or unstayed for a period of 30 days;
(h) any Credit Party or any Subsidiary, or any member of its
Controlled Group, shall fail to pay when due an amount or amounts
aggregating in excess of $1,000,000 which it shall have become liable to
pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent
to terminate a Plan or Plans having aggregate Unfunded Vested Liabilities
in excess of $1,000,000 (collectively, a "Material Plan") shall be filed
under Title IV of ERISA by any Credit Party or any Subsidiary, or any other
member of its Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any
Material Plan against any Credit Party Borrower or any Subsidiary, or any
member of its Controlled Group, to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated;
(i) any Change of Control shall occur;
41
(j) any Credit Party or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
assignment for the benefit of creditors, (iv) apply for, seek, consent to
or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of
its Property, (v) institute any proceeding seeking to have entered against
it an order for relief under the United States Bankruptcy Code, as amended,
to adjudicate it insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any action in furtherance of any matter described in
parts (i) through (v) above, or (vii) fail to contest in good faith any
appointment or proceeding described in Section 9.1(k) hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Credit Party or any Subsidiary, or any
substantial part of any of its Property, or a proceeding described in
Section 9.1(j)(v) shall be instituted against any Credit Party or any
Subsidiary, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 days.
Section 9.2. Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsection (j) or (k) of Section 9.1 hereof has occurred
and is continuing, the Administrative Agent shall, by written notice to the
Borrowers: (a) if so directed by the Required Lenders, terminate the remaining
Commitments and all other obligations of the Lenders hereunder on the date
stated in such notice (which may be the date thereof); (b) if so directed by the
Required Lenders, declare the principal of and the accrued interest on all
outstanding Notes to be forthwith due and payable and thereupon all outstanding
Notes, including both principal and interest thereon, shall be and become
immediately due and payable together with all other amounts payable under the
Loan Documents without further demand, presentment, protest or notice of any
kind; and (c) if so directed by the Required Lenders, demand that the Borrowers
immediately pay to the Administrative Agent the full amount then available for
drawing under each or any Letter of Credit, and the Borrowers agree to
immediately make such payment and acknowledge and agree that the Lenders would
not have an adequate remedy at law for failure by the Borrowers to honor any
such demand and that the Administrative Agent, for the benefit of the Lenders,
shall have the right to require the Borrowers to specifically perform such
undertaking whether or not any drawings or other demands for payment have been
made under any Letter of Credit. The Administrative Agent, after giving notice
to the Borrowers pursuant to Section 9.1(c) or this Section 9.2, shall also
promptly send a copy of such notice to the other Lenders, but the failure to do
so shall not impair or annul the effect of such notice.
Section 9.3. Bankruptcy Defaults. When any Event of Default described
in subsections (j) or (k) of Section 9.1 hereof has occurred and is continuing,
then all outstanding Notes shall immediately become due and payable together
with all other amounts payable under the Loan Documents without presentment,
demand, protest or notice of any kind, the obligation of the Lenders to extend
further credit pursuant to any of the terms hereof shall immediately terminate
and the Borrowers shall immediately pay to the Administrative Agent the full
amount then available for drawing under all outstanding Letters of Credit, the
Borrowers acknowledging and agreeing that the Lenders would not have an adequate
remedy at law for failure by the Borrowers to honor any such demand and that the
Lenders, and the Administrative Agent on their behalf, shall have the right to
require the Borrowers to specifically perform such undertaking whether or not
any draws or other demands for payment have been made under any of the Letters
of Credit.
42
Section 9.4. Collateral for Undrawn Letters of Credit. (a) If the
prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.8(b) or under Section 9.2 or 9.3
above, the Borrowers shall forthwith pay the amount required to be so prepaid,
to be held by the Administrative Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be held
by the Administrative Agent in one or more separate collateral accounts (each
such account, and the credit balances, properties, and any investments from time
to time held therein, and any substitutions for such account, any certificate of
deposit or other instrument evidencing any of the foregoing and all proceeds of
and earnings on any of the foregoing being collectively called the "Collateral
Account") as security for, and for application by the Administrative Agent (to
the extent available) to, the reimbursement of any payment under any Letter of
Credit then or thereafter made by the Administrative Agent, and to the payment
of the unpaid balance of any other Obligations. The Collateral Account shall be
held in the name of and subject to the exclusive dominion and control of the
Administrative Agent for the benefit of the Administrative Agent, the Lenders,
and the L/C Issuer. If and when requested by RCI, on behalf of the Borrowers,
the Administrative Agent shall invest funds held in the Collateral Account from
time to time in direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America with a remaining maturity of one year or less, provided that the
Administrative Agent is irrevocably authorized to sell investments held in the
Collateral Account when and as required to make payments out of the Collateral
Account for application to amounts due and owing from the Borrowers to the L/C
Issuer, the Administrative Agent or the Lenders; provided, however, that if (i)
the Borrowers shall have made payment of all such obligations referred to in
subsection (a) above, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) no Letters of
Credit, Commitments, Loans or other Obligations remain outstanding hereunder,
then the Administrative Agent shall release to RCI, on behalf of the Borrowers,
any remaining amounts held in the Collateral Account.
Section 9.5. Notice of Default. The Administrative Agent shall give
notice to the Borrowers under Section 9.1(c) hereof promptly upon being
requested to do so by any Lender and shall thereupon notify all the Lenders
thereof.
Section 9.6. Expenses. The Borrowers jointly and severally agree to
pay to the Administrative Agent and each Lender, and any other holder of any
Note outstanding hereunder, all costs and expenses incurred or paid by the
Administrative Agent and such Lender or any such holder, including reasonable
attorneys' fees and court costs, in connection with any Default or Event of
Default by the Borrowers hereunder or in connection with the enforcement of any
of the Loan Documents (including all such costs and expenses incurred in
connection with any proceeding under the United States Bankruptcy Code involving
any Borrower or any Subsidiary as a debtor thereunder).
Section 10. Change in Circumstances.
Section 10.1. Change of Law. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any change in applicable law or
regulation or in the interpretation thereof makes it unlawful for any Lender to
make or continue to maintain any Eurodollar Loans or to perform its obligations
as contemplated hereby, such Lender shall promptly give notice thereof to the
Borrowers and such Lender's obligations to make or maintain Eurodollar Loans
under this Agreement shall be suspended until it is no longer unlawful for such
Lender to make or maintain Eurodollar Loans. The applicable Borrower shall
prepay on demand the outstanding principal amount of any such affected
Eurodollar Loans, together with all interest accrued thereon and all other
amounts then due and payable to such Lender under this Agreement; provided,
however,
43
subject to all of the terms and conditions of this Agreement, RCI, on behalf of
the applicable Borrower, may then elect to borrow the principal amount of the
affected Eurodollar Loans from such Lender by means of Base Rate Loans from such
Lender, which Base Rate Loans shall not be made ratably by the Lenders but only
from such affected Lender.
Section 10.2. Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period
for any Borrowing of Eurodollar Loans:
(a) the Administrative Agent determines that deposits in U.S. Dollars
or the applicable Alternative Currency (in the applicable amounts) are not
being offered to it in the interbank eurodollar market for such Interest
Period, or that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR, or
(b) the Required Lenders advise the Administrative Agent that (i)
LIBOR as determined by the Administrative Agent will not adequately and
fairly reflect the cost to such Lenders of funding their Eurodollar Loans
for such Interest Period or (ii) that the making or funding of Eurodollar
Loans become impracticable,
then the Administrative Agent shall forthwith give notice thereof to the
Borrowers and the Lenders, whereupon until the Administrative Agent notifies the
Borrowers that the circumstances giving rise to such suspension no longer exist,
the obligations of the Lenders to make Eurodollar Loans shall be suspended.
Section 10.3. Increased Cost and Reduced Return. (a) If, on or after
the date hereof, the adoption of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
Lending Office) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) shall subject any Lender (or its Lending Office) to any tax, duty
or other charge with respect to its Eurodollar Loans, its Notes, its
Letter(s) of Credit, or its participation in any thereof, any Reimbursement
Obligations owed to it or its obligation to make Eurodollar Loans, issue a
Letter of Credit, or to participate therein, or shall change the basis of
taxation of payments to any Lender (or its Lending Office) of the principal
of or interest on its Eurodollar Loans, Letter(s) of Credit, or
participations therein or any other amounts due under this Agreement or any
other Loan Document in respect of its Eurodollar Loans, Letter(s) of
Credit, any participation therein, any Reimbursement Obligations owed to
it, or its obligation to make Eurodollar Loans, or issue a Letter of
Credit, or acquire participations therein (except for changes in the rate
of tax on the overall net income of such Lender or its Lending Office
imposed by the jurisdiction in which such Lender's principal executive
office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurodollar Loans any such
requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, any Lender (or its Lending Office) or shall impose on any Lender (or
its Lending Office) or on the interbank market any other condition
affecting its Eurodollar Loans, its Notes, its Letter(s) of Credit, or its
participation in any thereof, any Reimbursement Obligation
44
owed to it, or its obligation to make Eurodollar Loans, or to issue a
Letter of Credit, or to participate therein;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Lender (or its Lending Office)
under this Agreement or under any other Loan Document with respect thereto, by
an amount deemed by such Lender to be material, then, within 15 days after
demand by such Lender (with a copy to the Administrative Agent), the Borrowers
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduction. Any demand on the Borrowers
by a Lender under this Section shall be accompanied by a certificate setting
forth the amount of such increased cost or reduced sum in reasonable detail
(including an explanation of the basis for and the computation of such increased
cost or reduced sum).
(b) If, after the date hereof, any Lender or the Administrative Agent
shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Lending Office) or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has had the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, within 15 days after demand by such Lender (with a copy
to the Administrative Agent), the Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
Any demand on the Borrowers by a Lender under this Section shall be accompanied
by a certificate setting forth the amount of such reduced return in reasonable
detail (including an explanation of the basis for and the computation of such
reduced return).
(c) A certificate of a Lender claiming compensation under this Section
10.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive, absent manifest error, if reasonably determined.
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
Section 10.4. Lending Offices. Each Lender may, at its option, elect
to make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Loan available hereunder or at such other of its branches, offices or affiliates
as it may from time to time elect and designate in a written notice to the
Borrower and the Administrative Agent. To the extent reasonably possible, a
Lender shall designate an alternative branch or funding office with respect to
its Eurodollar Loans to reduce any liability of the Borrowers to such Lender
under Section 10.3 hereof or to avoid the unavailability of Eurodollar Loans
under Section 10.2 hereof, so long as such designation is not otherwise
disadvantageous to the Lender.
Section 10.5. Discretion of Lender as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Lender shall be
entitled to fund and maintain its funding of all or any part of its Loans in any
manner it sees fit, it being understood, however, that for the purposes of this
Agreement all determinations hereunder with respect to Eurodollar Loans shall be
made as if each Lender had actually funded and maintained each Eurodollar Loan
through the
45
purchase of deposits in the interbank eurodollar market having a maturity
corresponding to such Loan's Interest Period, and bearing an interest rate equal
to LIBOR for such Interest Period.
Section 11. The Administrative Agent.
Section 11.1. Appointment and Authorization of Administrative Agent.
Each Lender hereby appoints ▇▇▇▇▇▇ Trust and Savings Bank as the Administrative
Agent under the Loan Documents and hereby authorizes the Administrative Agent to
take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. The Lenders expressly agree that the Administrative Agent is not
acting as a fiduciary of the Lenders in respect of the Loan Documents, the
Borrowers or otherwise, and nothing herein or in any of the other Loan Documents
shall result in any duties or obligations on the Administrative Agent or any of
the Lenders except as expressly set forth herein.
Section 11.2. Administrative Agent and its Affiliates. The
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise or refrain
from exercising such rights and power as though it were not the Administrative
Agent, and the Administrative Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with any Borrower or
any Affiliate of any Borrower as if it were not the Administrative Agent under
the Loan Documents. The term "Lender" as used herein and in all other Loan
Documents, unless the context otherwise clearly requires, includes the
Administrative Agent in its individual capacity as a Lender. References in
Section 1 hereof to the Administrative Agent's Loans, or to the amount owing to
the Administrative Agent for which an interest rate is being determined, refer
to the Administrative Agent in its individual capacity as a Lender.
Section 11.3. Action by Administrative Agent. If the Administrative
Agent receives from the Company or any Borrower a written notice of an Event of
Default pursuant to Section 8.5 hereof, the Administrative Agent shall promptly
give each of the Lenders written notice thereof. The obligations of the
Administrative Agent under the Loan Documents are only those expressly set forth
therein. Without limiting the generality of the foregoing, the Administrative
Agent shall not be required to take any action hereunder with respect to any
Default or Event of Default, except as expressly provided in Sections 9.2 and
9.5. Unless and until the Required Lenders give such direction, the
Administrative Agent may (but shall not be obligated to) take or refrain from
taking such actions as it deems appropriate and in the best interest of all the
Lenders. In no event, however, shall the Administrative Agent be required to
take any action in violation of applicable law or of any provision of any Loan
Document, and the Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder or under any other Loan Document unless it
first receives any further assurances of its indemnification from the Lenders
that it may require, including prepayment of any related expenses and any other
protection it requires against any and all costs, expense, and liability which
may be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent shall be entitled to assume that no Default or Event of
Default exists unless notified in writing to the contrary by a Lender or the
Company or a Borrower. In all cases in which the Loan Documents do not require
the Administrative Agent to take specific action, the Administrative Agent shall
be fully justified in using its discretion in failing to take or in taking any
action thereunder. Any instructions of the Required Lenders, or of any other
group of Lenders called for under the specific provisions of the Loan Documents,
shall be binding upon all the Lenders and the holders of the Obligations.
Section 11.4. Consultation with Experts. The Administrative Agent may
consult with legal counsel, independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts.
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Section 11.5. Liability of Administrative Agent; Credit Decision.
Neither the Administrative Agent nor any of its directors, officers, agents or
employees shall be liable for any action taken or not taken by it in connection
with the Loan Documents: (i) with the consent or at the request of the Required
Lenders or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its directors,
officers, agents or employees shall be responsible for or have any duty to
ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Loan Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Credit Parties or any Subsidiary contained herein or in any
other Loan Document; (iii) the satisfaction of any condition specified in
Section 7 hereof, except receipt of items required to be delivered to the
Administrative Agent; or (iv) the validity, effectiveness, genuineness,
enforceability, perfection, value, worth or collectibility hereof or of any
other Loan Document or of any other documents or writing furnished in connection
with any Loan Document; and the Administrative Agent makes no representation of
any kind or character with respect to any such matter mentioned in this
sentence. The Administrative Agent may execute any of its duties under any of
the Loan Documents by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders, the Credit Parties, or any other Person
for the default or misconduct of any such agents or attorneys-in-fact selected
with reasonable care. The Administrative Agent shall not incur any liability by
acting in reliance upon any notice, consent, certificate, other document or
statement (whether written or oral) believed by it to be genuine or to be sent
by the proper party or parties. In particular and without limiting any of the
foregoing, the Administrative Agent shall have no responsibility for confirming
the accuracy of any compliance certificate or other document or instrument
received by it under the Loan Documents. The Administrative Agent may treat the
payee of any Note as the holder thereof until written notice of transfer shall
have been filed with the Administrative Agent signed by such payee in form
satisfactory to the Administrative Agent. Each Lender acknowledges that it has
independently and without reliance on the Administrative Agent or any other
Lender, and based upon such information, investigations and inquiries as it
deems appropriate, made its own credit analysis and decision to extend credit to
the Borrowers in the manner set forth in the Loan Documents. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Borrowers and their Subsidiaries, and the Administrative Agent shall have
no liability to any Lender with respect thereto.
Section 11.6. Indemnity. The Lenders shall ratably, in accordance with
their respective Percentages, indemnify and hold the Administrative Agent, and
its directors, officers, employees, agents, and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred by
it under any Loan Document or in connection with the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
promptly reimbursed for the same by the Borrowers and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. The obligations of the
Lenders under this Section shall survive termination of this Agreement. The
Administrative Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from such
Lender to the Administrative Agent hereunder (whether as fundings of
participations, indemnities or otherwise), but shall not be entitled to offset
against amounts owed to the Administrative Agent by any Lender arising outside
of this Agreement and the other Loan Documents.
Section 11.7. Resignation of Administrative Agent and Successor
Administrative Agent. The Administrative Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrowers. Upon any such
resignation of the Administrative Agent, the Required Lenders shall have the
right to appoint a successor Administrative Agent, which appointment shall be
with the Borrowers' consent if no Event of Default exists. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have
47
accepted such appointment, within 30 days after the retiring Administrative
Agent's giving of notice of resignation then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent, which
may be any Lender hereunder or any commercial bank organized under the laws of
the United States of America or of any State thereof and having a combined
capital and surplus of at least $200,000,000, which appointment shall be with
the Borrowers' consent if no Event of Default exists. Upon the acceptance of
its appointment as the Administrative Agent hereunder, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Administrative Agent under the Loan Documents,
and the retiring Administrative Agent shall be discharged from its duties and
obligations thereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 11 and all
protective provisions of the other Loan Documents shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent, but no successor Administrative Agent shall in any event be liable or
responsible for any actions of its predecessor. If the Administrative Agent
resigns and no successor is appointed, the rights and obligations of such
Administrative Agent shall be automatically assumed by the Required Lenders and
the Borrowers shall be directed to make all payments due each Lender hereunder
directly to such Lender.
Section 11.8. L/C Issuer. The L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith. The L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Section 11 with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
Applications pertaining to such Letters of Credit as fully as if the term
"Administrative Agent", as used in this Section 11, included the L/C Issuer with
respect to such acts or omissions and (ii) as additionally provided in this
Agreement with respect to such L/C Issuer.
Section 11.9. Hedging Liability and Funds Transfer and Deposit Account
Liability Arrangements. By virtue of a Lender's execution of this Agreement or
an assignment agreement pursuant to Section 13.12 hereof, as the case may be,
any Affiliate of such Lender with whom any Borrower or any Subsidiary has
entered into an agreement creating Hedging Liability or Funds Transfer and
Deposit Account Liability shall be deemed a Lender party hereto for purposes of
any reference in a Loan Document to the parties for whom the Administrative
Agent is acting, it being understood and agreed that the rights and benefits of
such Affiliate under the Loan Documents consist exclusively of such Affiliate's
right to share in payments and collections out of the Guaranties as more fully
set forth in Section 3.1 hereof. In connection with any such distribution of
payments and collections, the Administrative Agent shall be entitled to assume
no amounts are due to any Lender or its Affiliate with respect to Hedging
Liability or Funds Transfer and Deposit Account Liability unless such Lender has
notified the Agent in writing of the amount of any such liability owed to it or
its Affiliate prior to such distribution.
Section 11.10. Designation of Additional Agents. The Administrative
Agent shall have the continuing right, for purposes hereof, at any time and from
time to time to designate one or more of the Lenders (and/or its or their
Affiliates) as "syndication agents," "documentation agents," "arrangers," or
other designations for purposes hereto, but such designation shall have no
substantive effect, and such Lenders and their Affiliates shall have no
additional powers, duties or responsibilities as a result thereof.
Section 12. The Guarantees.
Section 12.1. The Guarantees. To induce the Lenders to provide the
credits described herein and in consideration of benefits expected to accrue to
the Borrowers by reason of the Commitments and for other good and valuable
consideration, receipt of which is hereby
48
acknowledged, each Guarantor hereby unconditionally and irrevocably guarantees
jointly and severally to the Administrative Agent, the Lenders, and their
Affiliates, the due and punctual payment of all present and future Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability, including,
but not limited to, the due and punctual payment of principal of and interest on
the Notes, the Reimbursement Obligations, and the due and punctual payment of
all other Obligations now or hereafter owed by the Borrowers, or any of them,
under the Loan Documents as and when the same shall become due and payable,
whether at stated maturity, by acceleration, or otherwise, according to the
terms hereof and thereof. In case of failure by any Borrower punctually to pay
any Obligations, Hedging Liability, or Funds Transfer and Deposit Account
Liability guaranteed hereby, each Guarantor hereby unconditionally agrees to
make such payment or to cause such payment to be made punctually as and when the
same shall become due and payable, whether at stated maturity, by acceleration,
or otherwise, and as if such payment were made by the applicable Borrower.
Section 12.2. Guarantee Unconditional. The obligations of each
Guarantor under this Section 12 shall be unconditional and absolute and, without
limiting the generality of the foregoing, shall not be released, discharged, or
otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver, or release
in respect of any obligation of any Borrower or of any other Guarantor
under this Agreement or any other Loan Document or by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this Agreement
or any other Loan Document;
(c) any change in the corporate existence, structure, or ownership of,
or any insolvency, bankruptcy, reorganization, or other similar proceeding
affecting, any Borrower, any other Guarantor, or any of their respective
assets, or any resulting release or discharge of any obligation of any
Borrower or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off, or other rights which any
Borrower or any other Guarantor may have at any time against the
Administrative Agent, any Lender, or any other Person, whether or not
arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or demand or
any exercise of, or failure to exercise, any rights or remedies against any
Borrower, any other Guarantor, or any other Person or Property;
(f) any application of any sums by whomsoever paid or howsoever
realized to any obligation of any Borrower, regardless of what obligations
of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or against any
Borrower or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by any Borrower or any other Guarantor
of the principal of or interest on any Note or any Reimbursement Obligation
or any other amount payable under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by the
Administrative Agent, any Lender, or any other Person or any other
circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations of
the Borrowers under this Section 12.
49
Section 12.3. Discharge Only upon Payment in Full; Reinstatement in
Certain Circumstances. Each Guarantor's obligations under this Section 12 shall
remain in full force and effect until the Commitments are terminated, all
Letters of Credit have expired, and the principal of and interest on the Notes
and all other amounts payable by the Borrowers and the Guarantors under this
Agreement and all other Loan Documents and, if then outstanding and unpaid, all
Hedging Liability and Funds Transfer and Deposit Account Liability, shall have
been paid in full. If at any time any payment of the principal of or interest
on any Note or any Reimbursement Obligation or any other amount payable by any
Borrower or any Guarantor under the Loan Documents is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or of any Guarantor, or otherwise, each
Guarantor's obligations under this Section 12 with respect to such payment shall
be reinstated at such time as though such payment had become due but had not
been made at such time.
Section 12.4. Subrogation. Each Guarantor agrees it will not exercise
any rights which it may acquire by way of subrogation by any payment made
hereunder, or otherwise, until all the Obligations, Hedging Liability, and Funds
Transfer and Deposit Account Liability shall have been paid in full subsequent
to the termination of the Commitments and expiration of all Letters of Credit.
If any amount shall be paid to a Guarantor on account of such subrogation rights
at any time prior to the later of (x) the payment in full of the Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability and all
other amounts payable by the Borrowers hereunder and the other Loan Documents
and (y) the termination of the Commitments and expiration of all Letters of
Credit, such amount shall be held in trust for the benefit of the Administrative
Agent and the Lenders and shall forthwith be paid to the Administrative Agent
for the benefit of the Lenders or be credited and applied upon the Obligations,
Hedging Liability, and Funds Transfer and Deposit Account Liability, whether
matured or unmatured, in accordance with the terms of this Agreement.
Section 12.5. Waivers. Each Guarantor irrevocably waives acceptance
hereof, presentment, demand, protest, and any notice not provided for herein, as
well as any requirement that at any time any action be taken by the
Administrative Agent, any Lender, or any other Person against any Borrower,
another Guarantor, or any other Person.
Section 12.6. Limit on Recovery. Notwithstanding any other provision
hereof, the right of recovery against each Guarantor under this Section 12 shall
not exceed $1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 12 void or voidable under applicable law,
including, without limitation, fraudulent conveyance law.
Section 12.7. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Borrower under this Agreement or any other
Loan Document, or under any agreement establishing Hedging Liability or Funds
Transfer and Deposit Account Liability, is stayed upon the insolvency,
bankruptcy or reorganization of any Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement or the other Loan Documents,
or under any agreement establishing Hedging Liability or Funds Transfer and
Deposit Account Liability, shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Administrative Agent made at the request of
the Required Lenders.
Section 12.8. Benefit to Guarantors. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and
indirect benefit from the extensions of credit hereunder.
50
Section 12.9. Guarantor Covenants. Each Guarantor shall take such
action as the Borrowers are required by this Agreement to cause such Guarantor
to take, and shall refrain from taking such action as the Borrowers are required
by this Agreement to prohibit such Guarantor from taking.
Section 13. Miscellaneous.
Section 13.1. Withholding Taxes. (a) Payments Free of Withholding.
Except as otherwise required by law and subject to Section 13.1(b) hereof, each
payment by any Borrower under this Agreement or the other Loan Documents shall
be made without withholding for or on account of any present or future taxes
(other than overall net income taxes on the recipient) imposed by or within the
jurisdiction in which such Borrower is domiciled, any jurisdiction from which
such Borrower makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required,
the relevant Borrower shall make the withholding, pay the amount withheld to the
appropriate governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be necessary to
ensure that the net amount actually received by each Lender and the
Administrative Agent free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which that Lender or the
Administrative Agent (as the case may be) would have received had such
withholding not been made. If the Administrative Agent or any Lender pays any
amount in respect of any such taxes, penalties or interest, the Borrowers shall
reimburse the Administrative Agent or such Lender for that payment on demand in
the currency in which such payment was made. If any Borrower pays any such
taxes, penalties or interest, it shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Lender or Administrative Agent
on whose account such withholding was made (with a copy to the Administrative
Agent if not the recipient of the original) on or before the thirtieth day after
payment.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) shall
submit to the Borrowers and the Administrative Agent on or before the date the
initial Credit Event is made hereunder or, if later, the date such financial
institution becomes a Lender hereunder, two duly completed and signed copies of
(i) either Form W-8 BEN (relating to such Lender and entitling it to a complete
exemption from withholding under the Code on all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents and the Obligations) or
Form W-8 ECI (relating to all amounts to be received by such Lender, including
fees, pursuant to the Loan Documents and the Obligations) of the United States
Internal Revenue Service or (ii) solely if such Lender is claiming exemption
from United States withholding tax under Section 871(h) or 881(c) of the Code
with respect to payments of "portfolio interest", a Form W-8 BEN, or any
successor form prescribed by the Internal Revenue Service, and a certificate
representing that such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of any Borrower and is not a controlled foreign
corporation related to any Borrower (within the meaning of Section 864(d)(4) of
the Code). Thereafter and from time to time, each Lender shall submit to the
Borrowers and the Administrative Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as shall be
adopted from time to time by the relevant United States taxing authorities) and
such other certificates as may be (i) requested by any Borrower in a written
notice, directly or through the Administrative Agent, to such Lender and (ii)
required under then-current United States law or regulations to avoid or reduce
United States withholding taxes on payments in respect of all amounts to be
received by such Lender, including fees, pursuant to the Loan Documents or the
Obligations. Upon the request of any Borrower or the Administrative Agent, each
Lender that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrowers and the Administrative
Agent a certificate to the effect that it is such a United States person.
51
(c) Inability of Lender to Submit Forms. If any Lender determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrowers or the Administrative Agent any form or certificate that such
Lender is obligated to submit pursuant to subsection (b) of this Section 13.1 or
that such Lender is required to withdraw or cancel any such form or certificate
previously submitted or any such form or certificate otherwise becomes
ineffective or inaccurate, such Lender shall promptly notify the Borrowers and
Administrative Agent of such fact and the Lender shall to that extent not be
obligated to provide any such form or certificate and will be entitled to
withdraw or cancel any affected form or certificate, as applicable.
Section 13.2. No Waiver, Cumulative Remedies. No delay or failure on
the part of the Administrative Agent or any Lender or on the part of the holder
or holders of any of the Obligations in the exercise of any power or right under
any Loan Document shall operate as a waiver thereof or as an acquiescence in any
default, nor shall any single or partial exercise of any power or right preclude
any other or further exercise thereof or the exercise of any other power or
right. The rights and remedies hereunder of the Administrative Agent, the
Lenders and of the holder or holders of any of the Obligations are cumulative
to, and not exclusive of, any rights or remedies which any of them would
otherwise have.
Section 13.3. Non-Business Days. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due
on a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
Section 13.4. Documentary Taxes. The Borrowers jointly and severally
agree to pay on demand any documentary, stamp or similar taxes payable in
respect of this Agreement or any other Loan Document, including interest and
penalties, in the event any such taxes are assessed, irrespective of when such
assessment is made and whether or not any is then in use or available hereunder.
Section 13.5. Survival of Representations. All representations and
warranties made herein or in any other Loan Document or in certificates given
pursuant hereto or thereto shall survive the execution and delivery of this
Agreement and the other Loan Documents, and shall continue in full force and
effect with respect to the date as of which they were made as long as any credit
is in use or available hereunder.
Section 13.6. Survival of Indemnities. All indemnities and other
provisions relative to reimbursement to the Lenders of amounts sufficient to
protect the yield of the Lenders with respect to the Loans and Letters of
Credit, including, but not limited to, Sections 1.11, 10.3, and 13.15 hereof,
shall survive the termination of this Agreement and the other Loan Documents and
the payment of the Obligations.
Section 13.7. Sharing of Set-Off. Each Lender agrees with each other
Lender a party hereto that if such Lender shall receive and retain any payment,
whether by set-off or application of deposit balances or otherwise, on any of
the Loans or Reimbursement Obligations in excess of its ratable share of
payments on all such Obligations then outstanding to the Lenders, then such
Lender shall purchase for cash at face value, but without recourse, ratably from
each of the other Lenders such amount of the Loans or Reimbursement Obligations,
or participations therein, held by each such other Lenders (or interest therein)
as shall be necessary to cause such Lender to share such excess payment ratably
with all the other Lenders; provided, however, that if any such purchase is made
by any Lender, and if such excess payment or part thereof is thereafter
52
recovered from such purchasing Lender, the related purchases from the other
Lenders shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. For purposes
of this Section, amounts owed to or recovered by the L/C Issuer in connection
with Reimbursement Obligations in which Lenders have been required to fund their
participation shall be treated as amounts owed to or recovered by the L/C Issuer
as a Lender hereunder.
Section 13.8. Notices. Except as otherwise specified herein, all
notices hereunder and under the other Loan Documents shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party at its address or telecopier number set forth below, or such
other address or telecopier number as such party may hereafter specify by notice
to the Administrative Agent and the Borrowers given by courier, by United States
certified or registered mail, by telecopy or by other telecommunication device
capable of creating a written record of such notice and its receipt. Notices
under the Loan Documents to the Lenders and the Administrative Agent shall be
addressed to their respective addresses or telecopier numbers set forth on the
signature pages hereof, and to the Borrowers and other Credit Parties to:
Racing Champions, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (630) 790-3507 ext. 158
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Van Deuren, S.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section or on the signature pages hereof and a confirmation of
such telecopy has been received by the sender, (ii) if given by mail, five days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section or on the
signature pages hereof; provided that any notice given pursuant to Section 1
hereof shall be effective only upon receipt.
Section 13.9. Counterparts. This Agreement may be executed in any
number of counterparts, and by the different parties hereto on separate
counterpart signature pages, and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
Section 13.10. Successors and Assigns. This Agreement shall be binding
upon the Borrowers and the Guarantors and their successors and assigns, and
shall inure to the benefit of the Administrative Agent and each of the Lenders
and the benefit of their respective successors and assigns, including any
subsequent holder of any of the Obligations. The Borrowers and the Guarantors
may not assign any of their rights or obligations under any Loan Document
without the written consent of all of the Lenders.
Section 13.11. Participants. Each Lender shall have the right at its
own cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made and Reimbursement Obligations
and/or Commitment held by such Lender at any
53
time and from time to time to one or more other Persons; provided that no such
participation shall relieve any Lender of any of its obligations under this
Agreement, and, provided, further that no such participant shall have any rights
under this Agreement except as provided in this Section, and the Administrative
Agent shall have no obligation or responsibility to such participant. Any
agreement pursuant to which such participation is granted shall provide that
the granting Lender shall retain the sole right and responsibility to enforce
the obligations of the Borrowers under this Agreement and the other Loan
Documents including, without limitation, the right to approve any amendment,
modification or waiver of any provision of the Loan Documents, except that such
agreement may provide that such Lender will not agree to any modification,
amendment or waiver of the Loan Documents that would reduce the amount of or
postpone any fixed date for payment of any Obligation in which such participant
has an interest. Any party to which such a participation has been granted shall
have the benefits of Section 1.11 and Section 10.3 hereof. The Borrowers
authorize each Lender to disclose to any participant or prospective participant
under this Section any financial or other information pertaining to any Borrower
or any Subsidiary.
Section 13.12. Assignments. (a) Each Lender shall have the right at
any time, with the prior consent of the Administrative Agent and, so long as no
Event of Default then exists, RCI, on behalf of the Borrowers (which consent of
RCI, on behalf of the Borrowers shall not be unreasonably withheld), to sell,
assign, transfer or negotiate all or any part of its rights and obligations
under the Loan Documents (including, without limitation, the indebtedness
evidenced by the Note then held by such assigning Lender, together with an
equivalent percentage of its obligation to make Loans and participate in Letters
of Credit) to one or more commercial banks or other financial institutions or
investors, provided that, unless otherwise agreed to by the Administrative
Agent, such assignment shall be of a fixed percentage (and not by its terms of
varying percentage) of the assigning Lender's rights and obligations under the
Loan Documents; provided, however, that in order to make any such assignment (i)
unless the assigning Lender is assigning all of its Commitments, outstanding
Loans and interests in Letters of Credit Obligations, the assigning Lender shall
retain at least $5,000,000 of its unused Commitment, outstanding Loans and
interests in Letters of Credit, (ii) the assignee Lender shall have a
Commitment, outstanding Loans and interests in Letters of Credit of at least
$5,000,000, (iii) each such assignment shall be evidenced by a written agreement
(substantially in the form attached hereto as Exhibit G or in such other form
acceptable to the Administrative Agent) executed by such assigning Lender, such
assignee Lender or Lenders, the Administrative Agent and, if required as
provided above, RCI, on behalf of the Borrowers, which agreement shall specify
in each instance the portion of the Obligations which are to be assigned to the
assignee Lender and the portion of the Commitment of the assigning Lender to be
assumed by the assignee Lender, and (iv) the assigning Lender shall pay to the
Administrative Agent a processing fee of $3,500 and any out-of-pocket attorneys'
fees and expenses incurred by the Administrative Agent in connection with any
such assignment agreement. Any such assignee shall become a Lender for all
purposes hereunder to the extent of the rights and obligations under the Loan
Documents it assumes and the assigning Lender shall be released from its
obligations, and will have released its rights, under the Loan Documents to the
extent of such assignment. The address for notices to such assignee Lender
shall be as specified in the assignment agreement executed by it. Promptly upon
the effectiveness of any such assignment agreement, the Borrowers shall execute
and deliver replacement Notes to the assignee Lender and the assigning Lender in
the respective amounts of their Commitments (or assigned principal amounts, as
applicable) after giving effect to the reduction occasioned by such assignment
(such Notes to constitute "Notes" for all purposes of the Loan Documents), and
the assignee Lender shall thereafter surrender to RCI, on behalf of the
Borrowers, its old Note. The Borrowers authorize each Lender to disclose to any
purchaser or prospective purchaser of an interest in the Loans and interest in
Letters of Credit owed to it or its Commitment under this Section any financial
or other information pertaining to any Borrower or any Subsidiary.
54
(b) Any Lender may at any time pledge or grant a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or grant to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or grant of a security interest;
provided that no such pledge or grant of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such pledgee or
secured party for such Lender as a party hereto; provided further, however, the
right of any such pledgee or grantee (other than any Federal Reserve Bank) to
further transfer all or any portion of the rights pledged or granted to it,
whether by means of foreclosure or otherwise, shall be at all times subject to
the terms of this Agreement.
Section 13.13. Amendments. Any provision of this Agreement or the
other Loan Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by (a) the Borrowers, (b) the Required
Lenders, and (c) if the rights or duties of the Administrative Agent are
affected thereby, the Administrative Agent; provided that:
(i) no amendment or waiver pursuant to this Section 13.13 shall (A)
increase the Commitment of any Lender without the consent of such Lender or
(B) reduce the amount of or postpone the date for any scheduled payment of
any principal of or interest on any Loan or of any Reimbursement Obligation
or of any fee payable hereunder without the consent of the Lender to which
such payment is owing or which has committed to make such Loan or Letter of
Credit (or participate therein) hereunder; and
(ii) no amendment or waiver pursuant to this Section 13.13 shall,
unless signed by each Lender, increase the aggregate Commitments of the
Lenders, change the definitions of Termination Date or Required Lenders,
change the provisions of this Section 13.13, release any Guarantor, or
affect the number of Lenders required to take any action hereunder or under
any other Loan Document.
Section 13.14. Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
Section 13.15. Costs and Expenses; Indemnification. (a) The Borrowers
jointly and severally agree to pay all costs and expenses of the Administrative
Agent in connection with the preparation, negotiation, syndication, and
administration of the Loan Documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, in
connection with the preparation and execution of the Loan Documents, and any
amendment, waiver or consent related thereto, whether or not the transactions
contemplated herein are consummated. The Borrowers further agree to indemnify
the Administrative Agent, each Lender, and their respective directors, officers,
employees, agents, financial advisors, and consultants against all losses,
claims, damages, penalties, judgments, liabilities and expenses (including,
without limitation, all expenses of litigation or preparation therefor, whether
or not the indemnified Person is a party thereto, or any settlement arrangement
arising from or relating to any such litigation) which any of them may pay or
incur arising out of or relating to any Loan Document or any of the transactions
contemplated thereby or the direct or indirect application or proposed
application of the proceeds of any Loan or Letter of Credit, other than those
which arise from the gross negligence or willful misconduct of the party
claiming indemnification. The Borrowers, upon demand by the Administrative
Agent or a Lender at any time, shall reimburse the Administrative Agent or such
Lender for any reasonable legal or other expenses incurred in connection with
investigating or defending against any of the foregoing (including any
settlement costs relating to the foregoing) except if the same is directly due
to the gross negligence or willful misconduct of the party to be indemnified.
The obligations of the Borrowers under this Section shall survive the
termination of this Agreement.
55
(b) Each Borrower unconditionally agrees to forever indemnify, defend
and hold harmless, and covenants not to ▇▇▇ for any claim for contribution
against, the Administrative Agent and the Lenders for any damages, costs, loss
or expense, including without limitation, response, remedial or removal costs,
arising out of any of the following: (i) any presence, release, threatened
release or disposal of any hazardous or toxic substance or petroleum by any
Borrower or any Subsidiary or otherwise occurring on or with respect to its
Property (whether owned or leased), (ii) the operation or violation of any
Environmental Law by any Borrower or any Subsidiary or otherwise occurring on or
with respect to its Property (whether owned or leased), (iii) any claim for
personal injury or property damage in connection with any Borrower or any
Subsidiary or otherwise occurring on or with respect to its Property (whether
owned or leased), and (iv) the inaccuracy or breach of any environmental
representation, warranty or covenant by any Borrower or any Subsidiary made
herein or in any other Loan Document evidencing or securing any Obligations or
setting forth terms and conditions applicable thereto or otherwise relating
thereto, except for damages arising from the willful misconduct or gross
negligence of the party claiming indemnification. This indemnification shall
survive the payment and satisfaction of all Obligations and the termination of
this Agreement, and shall remain in force beyond the expiration of any
applicable statute of limitations and payment or satisfaction in full of any
single claim under this indemnification. This indemnification shall be binding
upon the successors and assigns of each Borrower and shall inure to the benefit
of Administrative Agent and the Lenders directors, officers, employees, agents,
and collateral trustees, and their successors and assigns.
Section 13.16. Set-off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender and each subsequent
holder of any Obligation is hereby authorized by each Borrower and each
Guarantor at any time or from time to time, without notice to such Borrower or
such Guarantor or to any other Person, any such notice being hereby expressly
waived, to set-off and to appropriate and to apply any and all deposits (general
or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts, and in whatever currency denominated) and any other indebtedness at
any time held or owing by that Lender or that subsequent holder to or for the
credit or the account of such Borrower or such Guarantor, whether or not
matured, against and on account of the Obligations of such Borrower or such
Guarantor to that Lender or that subsequent holder under the Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with the Loan Documents, irrespective of whether or not (a)
that Lender or that subsequent holder shall have made any demand hereunder or
(b) the principal of or the interest on the Loans or Notes and other amounts due
hereunder shall have become due and payable pursuant to Section 9 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
Section 13.17. Currency. Each reference in this Agreement to U.S.
Dollars or to an Alternative Currency (the "relevant currency") is of the
essence. To the fullest extent permitted by law, the obligation of any Credit
Party in respect of any amount due in the relevant currency under this Agreement
shall, notwithstanding any payment in any other currency (whether pursuant to a
judgment or otherwise), be discharged only to the extent of the amount in the
relevant currency that the Person entitled to receive such payment may, in
accordance with normal banking procedures, purchase with the sum paid in such
other currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such Person receives such payment. If
the amount of the relevant currency so purchased is less than the sum originally
due to such Person in the relevant currency, the Credit Parties agree, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Person against such loss, and if the amount of the specified currency so
purchased exceeds the sum of (a) the amount originally due to the relevant
Person in the specified currency plus (b) any amounts shared with other Lenders
as a result of allocations of such excess as a disproportionate payment
56
to such Person under Section 13.16 hereof, such Person agrees to remit such
excess to the relevant Credit Party.
Section 13.18. Entire Agreement. The Loan Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior agreements, whether written or oral, with respect thereto
are superseded hereby.
Section 13.19. Governing Law. This Agreement and the other Loan
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of Illinois;
provided, however, that nothing herein or in any other Loan Document shall
prevent any Credit Party from contesting or raising defenses to any confession
of judgment obtained pursuant to 735 ILCS 5/2-1301(c).
Section 13.20. Severability of Provisions. Any provision of any Loan
Document which is unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction. All rights,
remedies and powers provided in this Agreement and the other Loan Documents may
be exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provisions of law, and all the provisions of this Agreement
and other Loan Documents are intended to be subject to all applicable mandatory
provisions of law which may be controlling and to be limited to the extent
necessary so that they will not render this Agreement or the other Loan
Documents invalid or unenforceable.
Section 13.21. Excess Interest. Notwithstanding any provision to the
contrary contained herein or in any other Loan Document, no such provision shall
require the payment or permit the collection of any amount of interest in excess
of the maximum amount of interest permitted by applicable law to be charged for
the use or detention, or the forbearance in the collection, of all or any
portion of the Loans or other obligations outstanding under this Agreement or
any other Loan Document ("Excess Interest"). If any Excess Interest is provided
for, or is adjudicated to be provided for, herein or in any other Loan Document,
then in such event (a) the provisions of this Section shall govern and control,
(b) neither any Borrower nor any Guarantor or endorser shall be obligated to pay
any Excess Interest, (c) any Excess Interest that the Administrative Agent or
any Lender may have received hereunder shall, at the option of the
Administrative Agent, be (i) applied as a credit against the then outstanding
principal amount of Obligations hereunder and accrued and unpaid interest
thereon (not to exceed the maximum amount permitted by applicable law), (ii)
refunded to RCI, on behalf of the Borrowers, or (iii) any combination of the
foregoing, (d) the interest rate payable hereunder or under any other Loan
Document shall be automatically subject to reduction to the maximum lawful
contract rate allowed under applicable usury laws (the "Maximum Rate"), and this
Agreement and the other Loan Documents shall be deemed to have been, and shall
be, reformed and modified to reflect such reduction in the relevant interest
rate, and (e) neither any Borrower nor any Guarantor or endorser shall have any
action against the Administrative Agent or any Lender for any damages whatsoever
arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on any of
Borrowers' Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable rate
becomes less than the Maximum Rate, the rate of interest payable on the
Borrowers' Obligations shall remain at the Maximum Rate until the Lenders have
received the amount of interest which such Lenders would have received during
such period on the Borrowers' Obligations had the rate of interest not been
limited to the Maximum Rate during such period.
Section 13.22. Lender's Obligations Several. The obligations of the
Lenders hereunder are several and not joint. Nothing contained in this
Agreement and no action taken by the Lenders
57
pursuant hereto shall be deemed to constitute the Lenders a partnership,
association, joint venture or other entity.
Section 13.23. Submission to Jurisdiction; Waiver of Jury Trial. The
Borrowers and the Guarantors hereby submit to the nonexclusive jurisdiction of
the United States District Court for the Northern District of Illinois and of
any Illinois State court sitting in the City of Chicago for purposes of all
legal proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. The Borrowers and
the Guarantors irrevocably waive, to the fullest extent permitted by law, any
objection which they may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum. The
Borrowers, the Guarantors, the Administrative Agent, and the Lenders hereby
irrevocably waive any and all right to trial by jury in any legal proceeding
arising out of or relating to any Loan Document or the transactions contemplated
thereby.
[Signature Pages to Follow]
58
This Agreement is entered into between us for the uses and purposes
hereinabove set forth as of the date first above written.
"Borrowers"
Racing Champions, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Title Chief Financial Officer
------------------------------
Racing Champions South, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title Chief Financial Officer
------------------------------
Racing Champions Worldwide Limited
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------
Title Director
-----------------
"Guarantors"
Racing Champions Ertl Corporation
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title Chief Financial Officer
------------------------------
Green's Racing Souvenirs, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title Chief Financial Officer
------------------------------
RCNA Holdings, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title Chief Financial Officer
------------------------------
▇▇ ▇▇▇▇, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title Chief Financial Officer
------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title Chief Financial Officer
------------------------------
RCE Holdings, LLC
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title Manager
--------------
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"Lenders"
▇▇▇▇▇▇ Trust and Savings Bank, in its
individual capacity as a Lender, as L/C
Issuer, and as Administrative Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Title Vice President
--------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
60
The Northern Trust Company
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Title Vice President
--------------------
Address:
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
61
U.S. Bank National Association
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Title Senior Vice President
-----------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------
Title: Vice President
---------------------
Address:
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
63