E X E C U T I O N C O P Y
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CREDIT AGREEMENT
DATED AS OF NOVEMBER 14, 1997
AMONG
URS CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
and
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
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URS CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
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Section 1. DEFINITIONS................................................................................ 2
1.1 Certain Defined Terms...................................................................... 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement......... 33
1.3 Other Definitional Provisions and Rules of Construction.................................... 33
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS................................................. 33
2.1 Commitments; Making of Loans; Notes........................................................ 33
2.2 Interest on the Loans...................................................................... 37
2.3 Fees....................................................................................... 42
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments......................................... 43
2.5 Use of Proceeds............................................................................ 48
2.6 Special Provisions Governing Eurodollar Rate Loans......................................... 48
2.7 Increased Costs; Taxes; Capital Adequacy................................................... 51
2.8 Obligation of Lenders and Issuing Lenders to Mitigate...................................... 55
Section 3. LETTERS OF CREDIT.......................................................................... 56
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein..................................................................... 56
3.2 Letter of Credit Fees...................................................................... 59
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit......................... 60
3.4 Obligations Absolute....................................................................... 63
3.5 Indemnification; Nature of Issuing Lenders' Duties......................................... 64
3.6 Increased Costs and Taxes Relating to Letters of Credit.................................... 65
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT.................................................. 66
4.1 Conditions to Term Loans and Initial Revolving Loans....................................... 66
4.2 Conditions to All Loans.................................................................... 73
4.3 Conditions to Letters of Credit............................................................ 74
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES................................................... 75
5.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.............. 75
5.2 Authorization of Borrowing, etc............................................................ 77
5.3 Financial Condition........................................................................ 78
(i)
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5.4 No Material Adverse Change; No Restricted Junior Payments.................................. 79
5.5 Title to Properties; Liens; Real Property; Licenses, Trademarks; etc....................... 79
5.6 Litigation; Adverse Facts.................................................................. 80
5.7 Payment of Taxes........................................................................... 81
5.8 Performance of Agreements; Materially Adverse Agreements; Material Contracts............... 81
5.9 Governmental Regulation.................................................................... 81
5.10 Securities Activities...................................................................... 81
5.11 Employee Benefit Plans..................................................................... 82
5.12 Certain Fees............................................................................... 83
5.13 Environmental Protection................................................................... 83
5.14 Employee Matters........................................................................... 84
5.15 Solvency................................................................................... 84
5.16 Matters Relating to Collateral............................................................. 84
5.17 Merger Agreement........................................................................... 85
5.18 Disclosure................................................................................. 86
Section 6. COMPANY'S AFFIRMATIVE COVENANTS............................................................ 86
6.1 Financial Statements and Other Reports..................................................... 87
6.2 Corporate Existence, etc. ................................................................. 92
6.3 Payment of Taxes and Claims; Tax Consolidation............................................. 92
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds... 93
6.5 Inspection Rights.......................................................................... 93
6.6 Compliance with Laws, etc. ................................................................ 94
6.7 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
by Certain Subsidiaries and Future Subsidiaries............................................ 94
6.8 Interest Rate Protection................................................................... 95
Section 7. COMPANY'S NEGATIVE COVENANTS............................................................... 96
7.1 Indebtedness............................................................................... 96
7.2 Liens and Related Matters.................................................................. 98
7.3 Investments; Joint Ventures................................................................100
7.4 Contingent Obligations.....................................................................101
7.5 Restricted Junior Payments.................................................................102
7.6 Financial Covenants........................................................................103
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions...........................105
7.8 Sale or Discount of Receivables............................................................106
7.9 Transactions with Shareholders and Affiliates..............................................106
7.10 Conduct of Business........................................................................107
7.11 Amendments or Waivers of Merger Agreement; Amendments of Documents Relating
to Subordinated Indebtedness...............................................................107
7.12 Fiscal Year................................................................................107
(ii)
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Section 8. EVENTS OF DEFAULT..........................................................................107
8.1 Failure to Make Payments When Due..........................................................108
8.2 Default in Other Agreements................................................................108
8.3 Breach of Certain Covenants................................................................108
8.4 Breach of Warranty.........................................................................108
8.5 Other Defaults Under Loan Documents........................................................109
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. .....................................109
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. .......................................109
8.8 Judgments and Attachments..................................................................110
8.9 Dissolution................................................................................110
8.10 Employee Benefit Plans.....................................................................110
8.11 Material Adverse Effect....................................................................110
8.12 Change in Control..........................................................................110
8.13 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of Obligations.........111
8.14 Failure to Consummate Merger...............................................................111
Section 9. ADMINISTRATIVE AGENT.......................................................................112
9.1 Appointment................................................................................112
9.2 Powers and Duties; General Immunity........................................................114
9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness........116
9.4 Right to Indemnity.........................................................................116
9.5 Successor Administrative Agent.............................................................116
9.6 Collateral Documents and Guaranties........................................................117
Section 10. MISCELLANEOUS..............................................................................118
10.1 Assignments and Participations in Loans and Letters of Credit..............................118
10.2 Expenses...................................................................................121
10.3 Indemnity..................................................................................121
10.4 Set-Off....................................................................................123
10.5 Ratable Sharing............................................................................123
10.6 Amendments and Waivers.....................................................................124
10.7 Independence of Covenants..................................................................125
10.8 Notices....................................................................................125
10.9 Survival of Representations, Warranties and Agreements.....................................125
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative......................................126
10.11 Marshalling; Payments Set Aside............................................................126
10.12 Severability...............................................................................126
10.13 Obligations Several; Independent Nature of Lenders' Rights.................................126
10.14 Headings...................................................................................127
10.15 Applicable Law.............................................................................127
10.16 Successors and Assigns.....................................................................127
(iii)
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10.17 Waiver of Jury Trial.......................................................................127
10.18 Confidentiality............................................................................128
10.19 Counterparts; Effectiveness................................................................128
Signatures..................................................................................................S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF CLOSING DATE COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF ADMINISTRATIVE AGENT COUNSEL
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-U.S. BANK STATUS
XI FORM OF COMPANY PLEDGE AGREEMENT
XII FORM OF SUBSIDIARY GUARANTY
XIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIV FORM OF FINANCIAL CONDITION CERTIFICATE
(v)
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
Revolving Loan Term Loan
Commitment Commitment
▇▇▇▇▇ Fargo Bank,
National Association $40,000,000 $110,000,000
URS CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of November 14, 1997 and
entered into by and among URS CORPORATION, a Delaware corporation ("Company"),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "Lender" and collectively as "Lenders"),
and ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION ("▇▇▇▇▇ Fargo"), as agent for Lenders
(in such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Merger Sub (this and other capitalized terms used in
these recitals without definition being used as defined in subsection 1.1) has
been formed by Company for the purpose of acquiring all of the outstanding
shares of capital stock of ▇▇▇▇▇▇▇▇-▇▇▇▇▇;
WHEREAS, on the Closing Date, (i) Company will acquire all of
the outstanding shares of capital stock of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ pursuant to the Merger
Agreement and (ii) immediately upon the consummation of the Acquisition,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ will be merged with and into Merger Sub pursuant to the Merger
Agreement, with Merger Sub being the surviving corporation in such Merger;
WHEREAS, Lenders have agreed to extend certain credit
facilities to Company, a portion of the proceeds of which will be used to fund
the Acquisition Financing Requirements and the remainder of which will be used
to provide financing for working capital and other general corporate purposes of
Company and its Subsidiaries following the Merger;
WHEREAS, Company desires to secure all of the Obligations
hereunder and under the other Loan Documents by pledging to Administrative
Agent, on behalf of Lenders, 100% of the capital stock held by Company of each
of its Domestic Subsidiaries with revenues in excess of $250,000 and the lesser
of (i) 100% of the
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capital stock held by Company of certain of its Foreign Subsidiaries with
revenues in excess of $250,000 or (ii) 65% of the capital stock of any such
Foreign Subsidiary; and
WHEREAS, all of the Domestic Subsidiaries of Company with
revenues in excess of $250,000 have agreed to guarantee the Obligations
hereunder and under the other Loan Documents and to secure their guaranties by
pledging to Administrative Agent, on behalf of Lenders, 100% of the capital
stock held by such Domestic Subsidiaries of each of their respective Domestic
Subsidiaries with revenues in excess of $250,000 and the lesser of (i) 100% of
the capital stock held by such Domestic Subsidiaries of certain of their
respective Foreign Subsidiaries with revenues in excess of $250,000 or (ii) 65%
of the capital stock of any such Foreign Subsidiary:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders and
Administrative Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Account Receivable" means any right to payment for goods sold
or leased or for services rendered.
"Acquisition" means the purchase of all of the outstanding
shares of capital stock of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ contemplated by the Merger Agreement.
"Acquisition Consideration" means the Cash portion of the
aggregate consideration paid to the stockholders of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ in exchange
for all of the outstanding shares of capital stock of ▇▇▇▇▇▇▇▇-▇▇▇▇▇.
"Acquisition Financing Requirements" means the aggregate of
all amounts necessary (i) to pay the Acquisition Consideration, (ii) to pay
Transaction Costs, and (iii) to repay amounts outstanding under the Existing
Credit Agreements.
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by dividing (i) the offered quotation (rounded
upward to the nearest 1/16 of 1%) by first class banks in the London interbank
market to ▇▇▇▇▇ Fargo for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of ▇▇▇▇▇ Fargo
for which the Adjusted Eurodollar Rate is then
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being determined (which principal amount shall be deemed to be $1,000,000 in the
event ▇▇▇▇▇ Fargo is not making, converting to or continuing such a Eurodollar
Rate Loan) with maturities comparable to such Interest Period as of
approximately 9:00 A.M. (San Francisco time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable on such Interest Rate
Determination Date to any member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Administrative Agent" has the meaning assigned to that term
in the introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise. Any Person, other than a Lender, who owns beneficially
or of record Securities representing more than 5% of the total outstanding
Securities of Company shall be an Affiliate of Company.
"Aggregate Amounts Due" has the meaning assigned to that term
in subsection 10.5.
"Agreement" means this Credit Agreement dated as of November
14, 1997, as it may be amended, supplemented or otherwise modified from time to
time.
"Applicable Base Rate Margin" means, as at any date of
determination, the percentage per annum set forth below opposite the applicable
Leverage Ratio, as determined in accordance with subsection 2.2A:
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Leverage Ratio Applicable Base Rate Margin
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Greater than or equal to 3.00 to 1.00 0.875%
Less than 3.00 to 1.00 0.625%
but greater than or equal to
2.75 to 1.00
Less than 2.75 to 1.00 0.375%
but greater than or equal to
2.50 to 1.00
Less than 2.50 to 1.00
but greater than or equal to 0.250%
2.00 to 1.00
Less than 2.00 to 1.00
but greater than or equal to 0.125%
1.50 to 1.00
Less than 1.50 to 1.00 0.000%
"Applicable Commitment Fee Percentage" means, as at any date of determination, the
percentage per annum set forth below opposite the applicable Leverage Ratio, as determined in accordance
with subsection 2.3:
Leverage Ratio Applicable Commitment Fee Percentage
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Greater than or equal to 3.00 to 1.00 0.500%
Less than 3.00 to 1.00 0.375%
but greater than or equal to
2.75 to 1.00
Less than 2.75 to 1.00 0.375%
but greater than or equal to
2.50 to 1.00
Less than 2.50 to 1.00 0.375%
but greater than or equal to
2.00 to 1.00
Less than 2.00 to 1.00 0.250%
but greater than or equal to
1.50 to 1.00
Less than 1.50 to 1.00 0.250%
"Applicable Eurodollar Rate Margin" means, as at any date of determination, the
percentage per annum set forth below opposite the applicable Leverage Ratio, as determined in accordance
with subsection 2.2A:
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Leverage Ratio Applicable Eurodollar Rate Margin
-------------- ---------------------------------
Greater than or equal to 3.00 to 1.00 2.125%
Less than 3.00 to 1.00 1.875%
but greater than or equal to
2.75 to 1.00
Less than 2.75 to 1.00 1.625%
but greater than or equal to
2.50 to 1.00
Less than 2.50 to 1.00 1.500%
but greater than or equal to
2.00 to 1.00
Less than 2.00 to 1.00 1.375%
but greater than or equal to
1.50 to 1.00
Less than 1.50 to 1.00 1.250%
"Applied Amount" has the meaning assigned to that term in
subsection 2.4B(iv)(b).
"Asset Sale", as applied to any Person, means the sale by such
Person or any of its Subsidiaries to any other Person of (i) any of the stock of
any Subsidiary of such Person (other than any stock sold to licensed
professionals employed by such Person or its Subsidiaries in order to comply
with licensing laws or any stock sold to qualify directors if required by
applicable law), (ii) substantially all of the assets of any division or line of
business of such Person or any of its Subsidiaries (other than the assets of any
division or line of business to the extent that the aggregate value of such
assets is equal to $250,000 or less), or (iii) any other assets (whether
tangible or intangible) of such Person or any of its Subsidiaries (other than
any assets to the extent that the aggregate value of such assets sold in any
single transaction during any fiscal year or related series of transactions is
equal to $250,000 or less); provided that the term "Asset Sale" shall not
include (a) any sale of capital assets of any Person to the extent such sale
constitutes the sale of obsolete or worn out equipment if, after receipt by
Administrative Agent of written notice from Company that such Person intends to
reinvest or cause to be reinvested the Net Asset Sale Proceeds of such sale in
capital assets of a type similar to those sold, the Net Asset Sale Proceeds of
such sale are reinvested by Company or such Person within the 180 day period
immediately following such sale in capital assets of a type similar to those
sold, (b) the sale of Investments permitted under subsection 7.3, and (c) the
sale of shares of stock of any Subsidiary of Company that do not constitute
Pledged Collateral.
"Assignment Agreement" means an Assignment Agreement
substantially in the form of Exhibit IX annexed hereto.
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"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (i) the Prime
Rate or (ii) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
"Business Day" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of California or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States of America the obligations of which are backed by
the full faith and credit of the United States of America, in each case maturing
within one year after such date; (ii) marketable direct obligations issued by
any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100,000,000; and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses (i) and (ii) above, (b) has net assets of not
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less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's.
"Certificate re Non-Bank Status" means a certificate
substantially in the form of Exhibit X annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"Closing" means the effective time of the making of the initial
Loans and the consummation of the Acquisition.
"Closing Date" means the date, on or before January 31, 1998,
on which the initial Loans are made.
"Closing Date Compliance Certificate" means a certificate
substantially in the form of Exhibit VII annexed hereto delivered to
Administrative Agent and Lenders by Company pursuant to subsection 4.1E.
"Collateral" means, collectively, all capital stock and other
collateral in which Liens are purported to be granted pursuant to the Collateral
Documents as security for the Obligations.
"Collateral Documents" means the Company Pledge Agreement, the
Subsidiary Pledge Agreement, and all other instruments or documents delivered by
any Loan Party pursuant to this Agreement or any of the other Loan Documents in
order to grant to Administrative Agent, on behalf of Lenders, a Lien on the
capital stock of any Subsidiary of that Loan Party as security for the
Obligations.
"Commitments" means the commitments of Lenders to make Loans as
set forth in subsection 2.1A.
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Company Disclosure Letter" means the letter dated the Closing
Date delivered to Administrative Agent by Company containing information with
respect to Company and its Subsidiaries and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries.
"Company Pledge Agreement" means the Company Pledge Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XI annexed hereto, as such Company Pledge Agreement may thereafter be
amended, supplemented or otherwise modified from time to time.
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"Compliance Certificate" means a certificate substantially in
the form of Exhibit VI annexed hereto delivered to Administrative Agent and
Lenders by Company pursuant to subsection 6.1(iii).
"Consolidated Capital Expenditures" means, for any period, the
sum, without duplication, of (i) the aggregate of all expenditures (whether paid
in cash or other consideration or accrued as a liability and including that
portion of Capital Leases which is capitalized on the consolidated balance sheet
of Company and its Subsidiaries) by Company and its Subsidiaries during that
period for fixed assets and leasehold improvements of Company and its
Subsidiaries plus (ii) to the extent not covered by clause (i) of this
definition, the aggregate of all expenditures by Company and its Subsidiaries
during that period to purchase or develop computer software or systems (but only
to the extent such expenditures are capitalized on the consolidated balance
sheet of Company and its Subsidiaries in conformity with GAAP).
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period, excluding, however, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, including the aggregate principal amount of all
outstanding Revolving Loans, the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding and the current portion of the aggregate principal amount of
all outstanding Term Loans.
"Consolidated EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, (iii) provisions for taxes based on income, (iv) total
depreciation expense, (v) total amortization expense, and (vi) other non-cash
items reducing Consolidated Net Income less other non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a consolidated
basis for Company and its Subsidiaries in conformity with GAAP.
"Consolidated Excess Cash Flow" means, for any period, an
amount (if positive) equal to (i) Consolidated EBITDA for such period minus (ii)
the sum, without duplication, of (a) Consolidated Principal Payments for such
period, (b) Consolidated Capital Expenditures (net of any proceeds of any
related financings with respect to such expenditures) for such period, (c)
Consolidated Cash Interest Expense for such period, (d) the provision for
current taxes based on income of Company and its Subsidiaries on a consolidated
basis and payable in Cash during such period, (e) $1,000,000 and (f) the
aggregate amount of all expenditures by Company and its Subsidiaries during that
period
8
to acquire (by purchase or otherwise) the business, property or fixed assets of
any other Person, or the stock or other evidence of beneficial ownership of any
other Person that, as a result of such acquisition, becomes a Subsidiary of
Company; provided, however, that in the event that any such period includes any
period prior to consummation of the Merger, (1) "Consolidated EBITDA" for any
such period prior to consummation of the Merger shall mean Pre Merger
Consolidated EBITDA for such period; (2) "Consolidated Principal Payments" for
any such period prior to consummation of the Merger shall mean Pre Merger
Consolidated Principal Payments for such period (excluding repayments of
revolving loans); (3) "Consolidated Capital Expenditures" for any such period
prior to consummation of the Merger shall mean Pre Merger Consolidated Capital
Expenditures for such period (net of any proceeds of any related financings with
respect to such expenditures); (4) "Consolidated Cash Interest Expense" for any
such period prior to consummation of the Merger shall mean Pre Merger
Consolidated Cash Interest Expense for such period; and (5) the provision for
current taxes based on income of Company and its Subsidiaries for any such
period prior to consummation of the Merger shall mean (A) the provision for
current taxes based on income of URS and its Subsidiaries on a consolidated
basis and payable in Cash during such period plus (B) the provision for current
taxes based on income of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries on a consolidated
basis and payable in Cash during such period.
"Consolidated Fixed Charges" means, for any period, the sum
(without duplication) of the amounts for such period of (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income and payable in Cash,
and (iii) Consolidated Scheduled Principal Payments, all of the foregoing as
determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries during such period, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Interest Rate
Agreements to which Company or any of its Subsidiaries is a party, but
excluding, however, any amounts referred to in subsection 2.3 payable to
Administrative Agent and Lenders on or before the Closing Date.
"Consolidated Net Income" means, for any period, the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Company or a Joint Venture) in which any other
Person (other than Company or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions actually
paid to Company or any of its Subsidiaries by such Person during such period,
(ii) the income (or loss) of any Person accrued prior to the date it
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becomes a Subsidiary of Company or is merged into or consolidated with Company
or any of its Subsidiaries or that Person's assets are acquired by Company or
any of its Subsidiaries, (iii) the income of any Subsidiary of Company to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (iv) any
after-tax gains or losses attributable to Asset Sales by Company or any of its
Subsidiaries or returned surplus assets of any Pension Plan of Company or any of
its Subsidiaries, and (v) (to the extent not included in clauses (i) through
(iv) above) any net extraordinary gains or net non-cash extraordinary losses.
"Consolidated Principal Payments" means, for any period, the
aggregate amount of all voluntary and scheduled repayments of principal by
Company and its Subsidiaries on a consolidated basis during such period under
all Indebtedness of Company or any of its Subsidiaries (including the principal
component of Capital Leases).
"Consolidated Quick Assets" means, as at any date of
determination, all Cash, Cash Equivalents and Eligible Accounts Receivable of
Company and its Subsidiaries on a consolidated basis which may properly be
classified as current assets in conformity with GAAP.
"Consolidated Scheduled Principal Payments" means, for any
period, the aggregate amount of all scheduled repayments of principal by Company
and its Subsidiaries on a consolidated basis during such period under all
Indebtedness of Company or any of its Subsidiaries (including the principal
component of Capital Leases).
"Consolidated Total Funded Debt" means, as at any date of
determination, the sum, on a consolidated basis, of (i) the aggregate principal
amount of all outstanding Term Loans, (ii) the maximum aggregate amount which is
or at any time thereafter may become available for drawing under all Letters of
Credit then outstanding, (iii) the aggregate amount of that portion of
obligations with respect to Capital Leases of Company or any of its Subsidiaries
that is properly classified as a liability on a balance sheet in conformity with
GAAP, (iv) all Indebtedness of Company or any of its Subsidiaries for borrowed
money evidenced by a note or similar written instrument, and (v) the average
aggregate principal amount of all Revolving Loans outstanding during the
12-month period immediately preceding the date of determination.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the
10
obligee of such obligation of another that such obligation of another will be
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected (in whole or in
part) against loss in respect thereof, (ii) with respect to any letter of credit
issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings, or (iii) under Hedge Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (1) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (2) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (1) or (2) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation in the form of a letter of credit or a guaranty of a
specified amount shall be equal to the face amount of the letter of credit or
the amount of the obligation so guaranteed or otherwise supported, as the case
may be, or, if less, the amount to which such Contingent Obligation is
specifically limited. The amount of any Contingent Obligation which is not in
the form of a guaranty of a specified amount shall be equal to the reasonably
anticipated maximum amount of such Contingent Obligation as determined by
Company in good faith.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement, futures contract, option contract, synthetic cap or
other similar agreement or arrangement.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
11
"Domestic Subsidiary" means any Subsidiary organized or
incorporated under the laws of a state of the United States of America.
"Eligible Accounts Receivable", as applied to any Person, means
all billed Accounts Receivable of such Person and its Subsidiaries.
"Eligible Assignee" means (i) (a) a commercial bank organized
under the laws of the United States of America or any state thereof and having a
combined capital and surplus of at least $100,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States of
America or any state thereof and having a combined capital and surplus of at
least $100,000,000; (c) a commercial bank organized under the laws of any other
country or a political subdivision thereof and having a combined capital and
surplus of at least $100,000,000; provided that (1) such bank is acting through
a branch or agency located in the United States of America or (2) such bank is
organized under the laws of a country that is a member of the Organization for
Economic Cooperation and Development or a political subdivision of such country;
and (d) any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act) which extends credit or buys loans as one
of its businesses including, but not limited to, insurance companies, mutual
funds and lease financing companies; and (ii) any Lender and any Affiliate of
any Lender; provided that no Affiliate of Company shall be an Eligible Assignee.
"Employee Benefit Plan", as applied to any Person, means any
"employee benefit plan" as defined in Section 3(3) of ERISA which is or was
maintained or contributed to by such Person, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice, notice
of violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"Environmental Laws" means any and all current or future
statutes, ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Company or any of its
Subsidiaries or any Facility, including the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous
12
Materials Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42 U.S.C.
ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. ss.136
et seq.), the Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.),
the Oil Pollution Act (33 U.S.C. ss. 2701 et seq) and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C. ss. 11001 et seq.), each as amended or
supplemented, any analogous present or future state or local statutes or laws,
and any regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor thereto.
"ERISA Affiliate," as applied to any Person, means (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of Company
or such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan of Company or any of its Subsidiaries (excluding those for
which the provision for 30-day notice to the PBGC has been waived by
regulation); (ii) the failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code with respect to any Pension Plan of Company or
any of its Subsidiaries (whether or not waived in accordance with Section 412(d)
of the Internal Revenue Code) or the failure by Company or any of its
Subsidiaries to make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or the failure by
Company or any of its Subsidiaries to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
of Company or any of its Subsidiaries pursuant to Section 4041(a)(2) of ERISA of
a notice of intent to terminate such plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its
Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan resulting in liability pursuant to
13
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan of Company or any of its Subsidiaries, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan of Company or any of its Subsidiaries; (vi) the imposition of
liability on Company, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan of Company or any of its Subsidiaries other than a Multiemployer
Plan or the assets thereof, or against Company, any of its Subsidiaries or any
of their respective ERISA Affiliates in connection with any Employee Benefit
Plan; (x) receipt from the Internal Revenue Service of notice of the failure of
any Pension Plan of Company or any of its Subsidiaries (or any other Employee
Benefit Plan of Company or any of its Subsidiaries intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or the failure of any trust forming part of
any Pension Plan of Company or any of its Subsidiaries to qualify for exemption
from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the
imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan of Company or
any of its Subsidiaries.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in
Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in
a currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the Issuing Lender in the New York
foreign exchange market for the purchase by the Issuing Lender (by cable
transfer) of such currency in
14
exchange for Dollars at 12:00 noon (New York time) one Business Day prior to
such date, expressed as a number of units of such currency per one Dollar.
"Existing Company Letters of Credit" means those letters of
credit issued for the account of Company and identified on Schedule 1.1 of the
Company Disclosure Letter.
"Existing Credit Agreements" means collectively (i) that
certain Credit Agreement dated as of January 10, 1996 between Company and ▇▇▇▇▇
Fargo and (ii) that certain Credit Agreement dated September 28, 1996 between
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and The CIT Group, Inc., in each case, as amended prior to the
Closing Date.
"Existing Senior Subordinated Note Indenture" means the
Indenture, dated as of March 16, 1989, between Thortec International, Inc. and
MTrust Corp, National Association, as amended by Amendment Number 1 and
Amendment Number 2, as such indenture may be further amended from time to time
to the extent permitted under subsection 7.11B.
"Existing Senior Subordinated Notes" means Company's 8 5/8%
Senior Subordinated Notes due 2004 in the original aggregate principal amount of
$36,814,500 and the remaining aggregate principal amount of $6,455,000 as of the
Closing Date.
"Existing Shareholder Notes" means the promissory notes
executed by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ in favor of certain of its stockholders in the
aggregate principal amount of approximately $5,000,000 as of December 31, 1996.
"Existing Subordinated Agreements" means, collectively, the
Existing Senior Subordinated Note Indenture and the Existing Subordinated Note
Indenture.
"Existing Subordinated Indebtedness" means, collectively, the
Existing Senior Subordinated Notes and the Existing Subordinated Notes.
"Existing Subordinated Note Indenture" means the Indenture,
dated as of February 15, 1987, originally between Company and First Interstate
Bank of California, as amended by Amendment Number 1, as such indenture may be
further amended from time to time to the extent permitted under subsection
7.11B.
"Existing Subordinated Notes" means Company's 6 1/2%
Convertible Subordinated Notes due 2012 in the original aggregate principal
amount of $57,500,000 and the remaining aggregate principal amount of $2,145,000
as of the Closing Date.
"Existing ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Letters of Credit" means those letters
of credit issued for the account of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and identified on Schedule
1.1 of the Company Disclosure Letter.
15
"Facilities" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by Company
or any of its Subsidiaries or any of their respective predecessors or
Affiliates.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Administrative Agent from three Federal funds
brokers of recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term in
subsection 6.1(xii).
"First Priority" means, with respect to any Lien purported to
be created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral and (ii) such Lien is
the only Lien to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Company and its
Subsidiaries ending on October 31 of each calendar year. For purposes of this
Agreement, any particular Fiscal Year shall be designated by reference to the
calendar year in which such Fiscal Year ends.
"Foreign Subsidiary" means any Subsidiary formed or organized
under the laws of a jurisdiction other than a state of the United States of
America.
"Funding and Payment Office" means (i) the office of
Administrative Agent located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ or (ii) such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent to Company and each Lender.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of
16
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession, in each
case as the same are applicable to the circumstances as of the date of
determination.
"Governmental Acts" has the meaning assigned to that term in
subsection 3.5A.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"Hazardous Materials" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any Persons in the vicinity of
any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current,
proposed or threatened activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding,
presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment,
abatement, removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action with respect
to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in interest rates or
currency values, respectively.
17
"Inactive Subsidiary" has the meaning assigned to that term in
subsection 5.1E.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance sheet
in conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, excluding, in the case of both clauses (a) and (b), accounts
receivable from Company and its Subsidiaries arising in the ordinary course of
business, and (v) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person. Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements, Contingent
Obligations, and (2) in all other cases, Investments, and in neither case
constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term
in subsection 10.3.
"Indemnitee" has the meaning assigned to that term in
subsection 10.3.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, the last Business Day of each January, April, July and October of each
year, commencing on the first such date to occur after the Closing Date;
provided, however, that in the event the Closing Date occurs on or after January
1, 1998, the first Interest Payment Date with respect to any Base Rate Loan
shall be April 30, 1998 and (ii) with respect to any Eurodollar Rate Loan, the
last day of each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of six or twelve months "Interest Payment Date"
shall also include each date that is three months, or an integral multiple
thereof, after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in
subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
18
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person, including all
indebtedness and accounts receivable from that other Person that, in the case of
accounts receivable from Persons other than Company and its Subsidiaries, are
not current assets or did not arise from sales to that other Person in the
ordinary course of business and, in the case of accounts receivable from Company
and its Subsidiaries, did not arise in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment.
"Issuing Lender" means, with respect to any Letter of Credit,
▇▇▇▇▇ Fargo.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"Lender" and "Lenders" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1.
"Letter of Credit" or "Letters of Credit" means (i) any letter
of credit or similar instrument issued or to be issued by the Issuing Lender for
the account of Company pursuant to subsection 3.1 for the purpose of supporting
(a) Indebtedness of Company or any of its Subsidiaries in respect of industrial
revenue or development bonds or financings, (b) workers' compensation
liabilities of Company or any of its Subsidiaries, (c) the obligations of third
party insurers of Company or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (d) obligations with
respect to Capital Leases or Operating Leases of Company or any of its
Subsidiaries, and (e) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule
19
or regulation or in accordance with custom and practice in the industry;
provided that Letters of Credit may not be issued for the purpose of supporting
any Indebtedness constituting "antecedent debt" (as that term is used in Section
547 of the Bankruptcy Code), and (ii) the Existing Company Letters of Credit.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Lender and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). For purposes of this definition, any amount
described in clause (i) or (ii) of the preceding sentence which is denominated
in a currency other than Dollars shall be valued based on the applicable
Exchange Rate for such currency as of the applicable date of determination.
"Leverage Ratio" has the meaning assigned to that term in
subsection 7.6C.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Term Loans or
Revolving Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of the Issuing Lender
relating to, the Letters of Credit) and the Collateral Documents.
"Loan Party" means each of Company and any Subsidiary
Guarantor, and "Loan Parties" means all such Persons, collectively.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Effect", as applied to any Person, means (i)
a material adverse effect upon the business, operations, properties, assets,
liabilities or condition (financial or otherwise) of such Person or such Person
and its Subsidiaries, taken as a whole, or (ii) the material impairment of the
ability of any Loan Party to perform, or of Administrative Agent or Lenders to
enforce, the Obligations.
20
"Material Subsidiary" means, as at any date of determination,
any Subsidiary with gross revenues of at least $10,000,000 during the Fiscal
Year immediately preceding the date of determination.
"Merger" means the merger of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ with and into
Merger Sub in accordance with the terms of the Merger Agreement, with Merger Sub
being the surviving corporation in such Merger.
"Merger Agreement" means that certain Agreement and Plan of
Merger by and among ▇▇▇▇▇▇▇▇-▇▇▇▇▇, Company and Merger Sub dated as of August
18, 1997, in the form delivered to Administrative Agent and Lenders prior to
their execution of this Agreement and as such agreement may be amended from time
to time thereafter to the extent permitted under subsection 7.11A.
"Merger Sub" means W-C Acquisition Corporation, a Delaware
corporation and a wholly-owned Subsidiary of Company.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale
by Company or any of its Subsidiaries, Cash payments (including any Cash
received by way of deferred payment pursuant to, or by monetization of, a note
receivable or otherwise, but only as and when so received) received from such
Asset Sale, net of any bona fide direct costs incurred in connection with such
Asset Sale, including, without limitation, (i) income taxes reasonably estimated
to be actually payable within two years of the date of such Asset Sale as a
result of any gain recognized in connection with such Asset Sale and (ii)
payment of the outstanding principal amount of, premium or penalty, if any, and
interest on any Indebtedness (other than the Loans) that is secured by a Lien on
the stock or assets in question and that is required to be repaid under the
terms thereof as a result of such Asset Sale.
"Net Pension Proceeds" has the meaning assigned to that term in
subsection 2.4B(iii)(b).
"Net Proceeds Amount" has the meaning assigned to that term in
subsection 2.4B(iii)(e).
"Net Securities Proceeds" has the meaning assigned to that
term in subsection 2.4B(iii)(c).
"Non-US Lender" has the meaning assigned to that term in
subsection 2.7B(iii)(a).
21
"Notes" means one or more of the Term Notes or Revolving Notes
or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit I annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the interest
rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice
substantially in the form of Exhibit III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"Obligations" means all obligations of every nature of each
Loan Party from time to time owed to Administrative Agent, Lenders or any of
them under the Loan Documents, whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or by its
chief financial officer; provided that every Officer's Certificate with respect
to the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the officer making or giving such
Officer's Certificate has read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signer, he or she has made or has caused to be made such
examination or investigation as is necessary to enable such signer to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signer, such condition
has been complied with.
"Operating Lease" as applied to any Person, means any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
22
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by subsection
6.3;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed
by law, in each case incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and
that (in the case of any such amounts overdue for a period in excess of
five days) are being contested in good faith by appropriate
proceedings, so long as such reserves or other appropriate provisions,
if any, as shall be required by GAAP shall have been made for any such
contested amounts;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety, bid and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money), so long as no
foreclosure, sale or similar proceedings have been commenced with
respect to any property of Company or any of its Subsidiaries on
account thereof;
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v) leases or subleases granted to third parties and not
interfering in any material respect with the ordinary conduct of the
business of Company or any of its Subsidiaries;
(vi) any (a) interest or title of a lessor or sublessor under
any lease, (b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or (c) subordination of the
interest of the lessee or sublessee under such lease to any restriction
or encumbrance referred to in the preceding
23
clause (b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee under such
lease; and
(vii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"Pledged Collateral" means, collectively, the "Pledged
Collateral" as defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreements.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"Pre Merger Consolidated Capital Expenditures" means, for any
period prior to consummation of the Merger, the sum of (i) the aggregate of all
expenditures (whether paid in cash or other consideration or accrued as a
liability and including that portion of Capital Leases which is capitalized on
the consolidated balance sheet of URS and its Subsidiaries or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and
its Subsidiaries) by URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries
during that period for fixed assets and leasehold improvements of URS,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries plus (ii) to the extent not
covered by clause (i) of this definition, the aggregate of all expenditures by
URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries during that period to
purchase or develop computer software or systems (but only to the extent such
expenditures are capitalized on the consolidated balance sheet of URS and its
Subsidiaries or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries in conformity with GAAP).
"Pre Merger Consolidated Cash Interest Expense" means, for any
period prior to consummation of the Merger, Pre Merger Consolidated Interest
Expense for such period, excluding, however, any interest expense not payable in
Cash (including amortization of discount and amortization of debt issuance
costs).
"Pre Merger Consolidated EBITDA" means, for any period prior to
consummation of the Merger, the sum of the amounts for such period of (i) Pre
Merger Consolidated Net Income, (ii) Pre Merger Consolidated Interest Expense,
(iii) provisions for taxes based on income for both URS and its Subsidiaries and
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, (iv) total depreciation expense for both
URS and its Subsidiaries and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, (v) total
amortization expense for both URS and
24
its Subsidiaries and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, (vi) all payments
representing dividends and redemption premium, if any, in respect of the
preferred stock of ▇▇▇▇▇▇▇▇-▇▇▇▇▇, to the extent that such payments reduced Pre
Merger Consolidated Net Income and (vii) other non-cash items reducing Pre
Merger Consolidated Net Income less other non-cash items increasing Pre Merger
Consolidated Net Income, all of the foregoing as determined in each case in
conformity with GAAP.
"Pre Merger Consolidated Fixed Charges" means, for any period
prior to consummation of the Merger, the sum (without duplication) of the
amounts for such period of (i) Pre Merger Consolidated Interest Expense, (ii)
provisions for taxes based on income and payable in Cash for URS and its
Subsidiaries and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, (iii) Pre Merger
Consolidated Scheduled Principal Payments and (iv) all payments representing
dividends and redemption premium, if any, in respect of the preferred stock of
▇▇▇▇▇▇▇▇-▇▇▇▇▇, to the extent that such payments reduced Pre Merger Consolidated
Net Income, all of the foregoing as determined in conformity with GAAP.
"Pre Merger Consolidated Interest Expense" means, for any
period prior to consummation of the Merger, total interest expense (including
that portion attributable to Capital Leases in accordance with GAAP and
capitalized interest) of URS and its Subsidiaries on a consolidated basis plus
total interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of URS and its Subsidiaries and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries
during such period, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements to which URS,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their respective Subsidiaries is a party, but
excluding, however, any amounts referred to in subsection 2.3 payable to
Administrative Agent and Lenders on or before the Closing Date.
"Pre Merger Consolidated Net Income" means, for any period
prior to consummation of the Merger, the net income (or loss) of URS and its
Subsidiaries on a consolidated basis for such period plus the net income (or
loss) of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries on a consolidated basis for such
period in each case taken as a single accounting period determined in conformity
with GAAP; provided that there shall be excluded (i) the income (or loss) of any
Person (other than a Subsidiary of URS or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or a Joint Venture) in
which any other Person (other than URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their
respective Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇
or any of their respective Subsidiaries by such Person during such period, (ii)
the income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of URS or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or is merged into or consolidated with URS,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their respective Subsidiaries or that Person's assets
are
25
acquired by URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their respective Subsidiaries, (iii)
the income of any Subsidiary of URS or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (iv) any after-tax gains
or losses attributable to Asset Sales by URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their
respective Subsidiaries or returned surplus assets of any Pension Plan of URS,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their respective Subsidiaries, and (v) (to the extent
not included in clauses (i) through (iv) above) any net extraordinary gains or
net non-cash extraordinary losses.
"Pre Merger Consolidated Principal Payments" means, for any
period prior to consummation of the Merger, the aggregate amount of all
voluntary and scheduled repayments of principal by URS and its Subsidiaries on a
consolidated basis during such period plus the aggregate amount of all voluntary
and scheduled repayments of principal by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries on
a consolidated basis during such period under all Indebtedness of URS,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their respective Subsidiaries (including the principal
component of Capital Leases).
"Pre Merger Consolidated Scheduled Principal Payments" means,
for any period prior to consummation of the Merger, the aggregate amount of all
scheduled repayments of principal by URS and its Subsidiaries on a consolidated
basis during such period plus the aggregate amount of all scheduled repayments
of principal by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries on a consolidated basis
during such period under all Indebtedness of URS, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of their
respective Subsidiaries (including the principal component of Capital Leases).
"Prime Rate" means the rate most recently announced by ▇▇▇▇▇
Fargo at its principal office in San Francisco from time to time as its "Prime
Rate." The Prime Rate is one of ▇▇▇▇▇ Fargo's base rates and serves as the basis
upon which effective rates of interest are calculated for those loans making
reference thereto, and is evidenced by the recording thereof after its
announcement in such internal publication or publications as ▇▇▇▇▇ Fargo may
designate. ▇▇▇▇▇ Fargo or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate. Any change in the
interest rate resulting from a change in such Prime Rate shall become effective
as of 12:01 A.M. (San Francisco time) of the Business Day on which each change
in Prime Rate is announced by ▇▇▇▇▇ Fargo.
"Pro Rata Share" means (i) with respect to all payments,
computations and other matters relating to the Term Loan Commitment or the Term
Loan of any Lender, the percentage obtained by dividing (a) the Term Loan
Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders,
(ii) with respect to all payments, computations and other matters relating to
the Revolving Loan Commitment or the Revolving Loans of any Lender or any
Letters of Credit issued or participations
26
therein purchased by any Lender, the percentage obtained by dividing (a) the
Revolving Loan Exposure of that Lender by (b) the aggregate Revolving Loan
Exposure of all Lenders, and (iii) for all other purposes with respect to each
Lender, the percentage obtained by dividing (a) the sum of the Term Loan
Exposure of that Lender plus the Revolving Loan Exposure of that Lender by (b)
the sum of the aggregate Term Loan Exposure of all Lenders plus the aggregate
Revolving Loan Exposure of all Lenders, in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection 10.1.
The initial Pro Rata Share of each Lender for purposes of each of clauses (i),
(ii), and (iii) of the preceding sentence is set forth opposite the name of that
Lender in Schedule 2.1 annexed hereto.
"Proceedings" has the meaning assigned to that term in
subsection 6.1(ix).
"Projections" means (i) the consolidated projected balance
sheets and consolidated projected statements of income and cash flows of Company
and its Subsidiaries, prepared by Company assuming the Acquisition and the
Merger have been consummated, for each Fiscal Quarter during the period from and
including the Closing Date to and including October 31, 1999, and (ii) the
consolidated projected balance sheets and consolidated projected statements of
income and cash flows of Company and its Subsidiaries, prepared by Company
assuming the Acquisition and the Merger have been consummated, for each of
Fiscal Years 1997 through 2002 delivered to Administrative Agent by Company
under cover of a letter dated October 1, 1997.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), including the movement of any Hazardous Materials through the air,
soil, surface water or groundwater.
"Requisite Lenders" means two or more Lenders having or holding
at least 51% of the sum of (i) the aggregate Term Loan Exposure of all Lenders
plus (ii) the aggregate Revolving Loan Exposure of all Lenders; provided,
however, that if as of any date of determination there is only one Lender, then
such Lender shall constitute Requisite Lenders.
27
"Responsible Officer" means, with respect to any Person, the
chief executive officer, the chief financial officer, the president, the general
counsel or any other employee who is a member of the Board of Directors of
Company.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"Revolving Loan Commitment" means the commitment of a Lender to
make Revolving Loans to Company pursuant to subsection 2.1A(ii), and "Revolving
Loan Commitments" means such commitments of all Lenders in the aggregate.
"Revolving Loan Commitment Termination Date" means October 31,
2002.
"Revolving Loan Exposure" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is the Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender (in each case
net of any participations purchased by other Lenders in such Letters of Credit
or any unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"Revolving Notes" means (i) the promissory notes of Company
issued pursuant to subsection 2.1D(b) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Revolving Loan Commitments and
Revolving Loans of any Lenders, in each case substantially in the form of
Exhibit V annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
28
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Solvent" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the property
of such Person is (1) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (2) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person; (b) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (c) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"Subordinated Indebtedness" means (i) the Existing Subordinated
Indebtedness and (ii) any other Indebtedness of Company subordinated in right of
payment to the Obligations pursuant to documentation containing maturities,
amortization schedules, covenants, defaults, remedies, subordination provisions
and other material terms in form and substance satisfactory to Administrative
Agent and Requisite Lenders.
"Subsequent Acquisition" has the meaning assigned to that term
in subsection 7.7(vi).
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company, association, or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
29
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided that in no event shall any Joint Venture be considered to be a
Subsidiary of any Person.
"Subsidiary Guarantor" means any Domestic Subsidiary of
Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and any Domestic Subsidiary of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ that
executes and delivers the Subsidiary Guaranty on the Closing Date or from time
to time thereafter pursuant to subsection 6.7.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed
and delivered by existing Subsidiaries of Company on the Closing Date and to be
executed and delivered by additional Subsidiaries of Company from time to time
thereafter in accordance with subsection 6.7, substantially in the form of
Exhibit XII annexed hereto, as such Subsidiary Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means the Subsidiary Pledge
Agreement executed and delivered by existing Subsidiary Guarantors on the
Closing Date and to be executed and delivered by additional Subsidiary
Guarantors from time to time thereafter in accordance with subsection 6.7,
substantially in the form of Exhibit XIII annexed hereto, as such Subsidiary
Pledge Agreement may hereafter be amended, supplemented or otherwise modified
from time to time.
"Supplemental Collateral Agent" has the meaning assigned to
that term in subsection 9.1B.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"Term Loan Commitment" means the commitment of a Lender to make
a Term Loan to Company pursuant to subsection 2.1A(i), and "Term Loan
Commitments" means such commitments of all Lenders in the aggregate.
"Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Term Loans, that
Lender's Term Loan
30
Commitment and (ii) after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.
"Term Loan Maturity Date" means October 31, 2004.
"Term Loans" mean the Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"Total Purchase Price" means, with respect to any Subsequent
Acquisition, (i) the sum, without duplication, of (a) the aggregate amount of
all consideration payable by or on behalf of Company or any of its Subsidiaries
in connection with such Subsequent Acquisition in Cash, property (including
Securities of Company), services, notes, bonds, debentures or other debt
instruments, (b) the aggregate principal amount of all Indebtedness assumed by
Company or any or its Subsidiaries in connection with such Subsequent
Acquisition, (c) the reasonable estimate of the amount of any Contingent
Obligation of Company or any of its Subsidiaries incurred in connection with
such Subsequent Acquisition, and (d) the aggregate amount of any Indebtedness
incurred by Company or any Subsidiary in connection with such Subsequent
Acquisition minus (ii) all Cash and Cash Equivalents acquired by Company or any
of its Subsidiaries as a result of such Subsequent Acquisition. For purposes of
this definition, any amount which is payable in a currency other than Dollars
shall be valued based on the applicable Exchange Rate for such currency as of
the date of such Subsequent Acquisition.
"Total Utilization of Revolving Loan Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the purpose of
reimbursing the Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the Letter of Credit Usage.
"Term Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1D(i)(a) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Term Loan Commitments or Term Loans of any
Lenders, in each case substantially in the form of Exhibit IV annexed hereto, as
they may be amended, supplemented or otherwise modified from time to time.
"Transaction Costs" means the fees, costs and expenses payable
by Company on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents and the Merger Agreement.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
31
"URS" means URS Corporation, a Delaware corporation, prior to
consummation of the Merger.
"▇▇▇▇▇ Fargo" has the meaning assigned to that term in the
introduction to this Agreement.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇" means, prior to the Merger, ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Group, Inc., a Delaware corporation, and, after the Merger, Merger Sub which
will change its name to ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Group, Inc.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Fiscal Quarter" means, prior to consummation of
the Merger, a fiscal quarter of any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Fiscal Year.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Fiscal Year" means, prior to consummation of
the Merger, the fiscal year of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries ending on
December 31 of each calendar year.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
and (xii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(iv)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
1.3 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference
32
thereto, but rather shall be deemed to refer to all other items or matters that
fall within the broadest possible scope of such general statement, term or
matter.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, each Lender hereby severally agrees to make the Loans described in
subsections 2.1A(i) and 2.1A(ii).
(i) Term Loans. Each Lender severally agrees to lend to Company
on the Closing Date an amount not exceeding its Pro Rata Share of the
aggregate amount of the Term Loan Commitments to be used for the
purposes identified in subsection 2.5A. The amount of each Lender's
Term Loan Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate amount of the Term Loan Commitments is
$110,000,000; provided that the Term Loan Commitments of Lenders shall
be adjusted to give effect to any assignments of the Term Loan
Commitments pursuant to subsection 10.1B. Each Lender's Term Loan
Commitment shall expire immediately and without further action on
January 31, 1998, if the Term Loans are not made on or before that
date. Company may make only one borrowing under the Term Loan
Commitments. Amounts borrowed under this subsection 2.1A(i) and
subsequently repaid or prepaid may not be reborrowed.
(ii) Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend
to Company from time to time during the period from the Closing Date to
but excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Revolving Loan Commitments to be used for the purposes
identified in subsection 2.5B. The original amount of each Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule
2.1 annexed hereto and the aggregate original amount of the Revolving
Loan Commitments is $40,000,000; provided that the Revolving Loan
Commitments of Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to subsection
10.1B. Each Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving Loans and
all other amounts owed hereunder with respect to the Revolving Loans
and the Revolving Loan Commitments shall be paid in full no later than
that date; provided that each Lender's Revolving Loan Commitment shall
expire immediately and without further action on January 31, 1998, if
the Term Loans are not made on or before
33
that date. Amounts borrowed under this subsection 2.1A(ii) may be
repaid and reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitments shall be
subject to the limitation that in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the Revolving Loan Commitments
then in effect.
B. Borrowing Mechanics. Term Loans or Revolving Loans made on any
Funding Date (other than Revolving Loans made pursuant to subsection 3.3B for
the purpose of reimbursing the Issuing Lender for the amount of a drawing under
a Letter of Credit) shall be in an aggregate minimum amount of $500,000 and
integral multiples of $10,000 in excess of that amount; provided that Term Loans
or Revolving Loans made on any Funding Date as Eurodollar Rate Loans with a
particular Interest Period shall be in an aggregate minimum amount of $5,000,000
and integral multiples of $1,000,000 in excess of that amount. Whenever Company
desires that Lenders make Term Loans or Revolving Loans it shall deliver to
Administrative Agent a Notice of Borrowing substantially in the form of Exhibit
I annexed hereto no later than 9:00 A.M. (San Francisco time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the proposed
Funding Date (in the case of a Base Rate Loan). The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business Day), (ii) the
amount and type of Loans requested, (iii) in the case of any Loans made on the
Closing Date, that such Loans shall be Base Rate Loans, (iv) in the case of
Revolving Loans not made on the Closing Date, whether such Loans shall be Base
Rate Loans or Eurodollar Rate Loans, and (v) in the case of any Loans requested
to be made as Eurodollar Rate Loans, the initial Interest Period requested
therefor. Term Loans and Revolving Loans may be continued as or converted into
Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection
2.2D. In lieu of delivering the above-described Notice of Borrowing, Company may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing under this subsection 2.1B; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding
of any Loans in the event that any of the matters to which Company is required
to certify in the
34
applicable Notice of Borrowing is no longer true and correct in all material
respects as of the applicable Funding Date, and the acceptance by Company of the
proceeds of any Loans shall constitute a re-certification by Company, as of the
applicable Funding Date, as to the matters to which Company is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable, and Company shall be bound to make a
borrowing in accordance therewith.
C. Disbursement of Funds. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Lender shall be
responsible for any default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder nor shall the Commitment of any
Lender to make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu thereof), Administrative Agent shall notify each Lender of the proposed
borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 9:00 A.M. (San Francisco time) on the
applicable Funding Date in same day funds in Dollars, at the Funding and Payment
Office. Except as provided in subsection 3.3B with respect to Revolving Loans
used to reimburse the Issuing Lender for the amount of a drawing under a Letter
of Credit issued by it, upon satisfaction or waiver of the conditions precedent
specified in subsection 4.1 (in the case of Loans made on the Closing Date) and
4.2 (in the case of all Loans), Administrative Agent shall make the proceeds of
such Loans available to Company on the applicable Funding Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to the account of
Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the
Base Rate. If such Lender does not pay such corresponding amount forthwith upon
35
Administrative Agent's demand therefor, Administrative Agent shall promptly
notify Company and Company shall immediately pay such corresponding amount to
Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Administrative Agent, at the
rate payable under this Agreement for Base Rate Loans. Nothing in this
subsection 2.1C shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.
D. Notes. Company shall execute and deliver on the Closing Date to each
Lender (or to Administrative Agent for that Lender) (a) a Term Note
substantially in the form of Exhibit IV annexed hereto to evidence that Lender's
Term Loan, in the principal amount of that Lender's Term Loan and with other
appropriate insertions, and (b) a Revolving Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions.
Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been accepted
by Administrative Agent as provided in subsection 10.1B(ii). Any request,
authority or consent of any person or entity who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall be
conclusive and binding on any subsequent holder, assignee or transferee of that
Note or of any Note or Notes issued in exchange therefor.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Eurodollar Rate. The applicable basis for determining the rate of
interest with respect to any Term Loan or any Revolving Loan shall be selected
by Company initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B, and the basis for determining the
interest rate with respect to any Term Loan or any Revolving Loan may be changed
from time to time pursuant to subsection 2.2D. If on any day a Term Loan or
Revolving Loan is outstanding with respect to which notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Term
Loans and the Revolving Loans shall bear interest through maturity as follows:
36
(i) if a Base Rate Loan, then (a) for the period from and
including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Year ended October 31, 1997, at the
sum of the Base Rate plus the Applicable Base Rate Margin as determined
by reference to the Leverage Ratio set forth in the Closing Date
Compliance Certificate delivered by Company pursuant to subsection 4.1E
and (b) thereafter, at the sum of the Base Rate plus the Applicable
Base Rate Margin; or
(ii) if a Eurodollar Rate Loan, then (a) for the period from
and including the Closing Date to and excluding the date on which
Administrative Agent receives a Compliance Certificate pursuant to
subsection 6.1(iii) for the Fiscal Year ended October 31, 1997, at the
sum of the Adjusted Eurodollar Rate plus the Applicable Eurodollar Rate
Margin as determined by reference to the Leverage Ratio set forth in
the Closing Date Compliance Certificate delivered by Company pursuant
to subsection 4.1E and (b) thereafter, at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Except as provided in paragraphs (i) and (ii) above, the
Applicable Base Rate Margin and the Applicable Eurodollar Rate Margin shall be
determined on the first day of the calendar month following the delivery of each
Compliance Certificate pursuant to subsection 6.1(iii), commencing with the
Compliance Certificate for the Fiscal Year ended October 31, 1997, by reference
to such Compliance Certificate (without regard to any subsequent corrections to
reflect year-end audit adjustments). The Applicable Base Rate Margin and the
Applicable Eurodollar Rate Margin shall apply to all Base Rate Loans for the
period from and including the date of determination to and excluding the first
day of the calendar month following the delivery of the next Compliance
Certificate and to all Eurodollar Rate Loans for any Interest Period commencing
during the period from and including the date of determination to and excluding
the first day of the calendar month following the delivery of the next
Compliance Certificate; provided, however, that if the Company fails to deliver
any Compliance Certificate in a timely manner pursuant to subsection 6.1(iii),
the highest percentage per annum set forth in the definition of Applicable Base
Rate Margin shall apply to all Base Rate Loans for the period from and including
the first day of the calendar month following the date on which such Compliance
Certificate was required to be delivered to and excluding the date on which
Administrative Agent receives such Compliance Certificate and to all Eurodollar
Rate Loans for any Interest Period commencing during the period from and
including the first day of the calendar month following the date on which such
Compliance Certificate was required to be delivered to and excluding the date on
which Administrative Agent receives such Compliance Certificate.
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
37
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's sole option, either a one, two, three, six or, if available to
all Lenders, twelve month period; provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in the case
of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a
Notice of Conversion/Continuation, each successive Interest Period
shall commence on the day on which the next preceding Interest Period
expires;
(iii) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Term
Loans shall extend beyond the Term Loan Maturity Date and no Interest
Period with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term
Loans shall extend beyond a date on which Company is required to make a
scheduled payment of principal of the Term Loans unless the sum of (a)
the aggregate principal amount of Term Loans that are Base Rate Loans
plus (b) the aggregate principal amount of Term Loans that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loans on such date;
(vii) there shall be no more than six Interest Periods
outstanding at any time;
38
(viii) in the event Company fails to specify an Interest Period
for any Eurodollar Rate Loan in the applicable Notice of Borrowing or
Notice of Conversion/Continuation, Company shall be deemed to have
selected an Interest Period of one month; and
(ix) during the period from and including the Closing Date to
and including December 15, 1997, no Interest Period shall extend beyond
a one month period.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid), upon any conversion of a Loan from
a Loan bearing interest at a rate determined by reference to one basis to a Loan
bearing interest at a rate determined by reference to an alternative basis and
at maturity (including final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Term Loans or Revolving Loans equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount from Loans bearing interest at
a rate determined by reference to one basis to Loans bearing interest at a rate
determined by reference to an alternative basis or (ii) upon the expiration of
any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any
portion of such Loan equal to $5,000,000 and integral multiples of $10,000 in
excess of that amount as a Eurodollar Rate Loan; provided, however, that a
Eurodollar Rate Loan may only be converted into a Base Rate Loan on the
expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 9:00 A.M. (San Francisco time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, the requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed
39
conversion/continuation under this subsection 2.2D, Administrative Agent shall
promptly transmit such notice by telefacsimile or telephone to each Lender.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of,
a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Administrative Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed (i)
in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as
the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of
a 360-day year, in each case for the actual number of days elapsed in the period
during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan, the date of conversion of such Eurodollar Rate
40
Loan to such Base Rate Loan, as the case may be, shall be included, and the date
of payment of such Loan or the expiration date of an Interest Period applicable
to such Loan or, with respect to a Base Rate Loan being converted to a
Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
2.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Lender in proportion to that Lender's Pro Rata Share,
commitment fees for the period from and including the Closing Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the sum of (i) the
aggregate principal amount of outstanding Revolving Loans plus (ii) the Letter
of Credit Usage multiplied by (a) for the period from and including the Closing
Date to and excluding the date on which Administrative Agent receives a
Compliance Certificate pursuant to subsection 6.1(iii) for the Fiscal Year ended
October 31, 1997, the Applicable Commitment Fee Percentage determined by
reference to the Leverage Ratio set forth in the Closing Date Compliance
Certificate delivered by Company pursuant to subsection 4.1E and (b) thereafter,
the Applicable Commitment Fee Percentage. Such commitment fees shall be
calculated on the basis of a 365-day or 366-day year, as the case may be, and
the actual number of days elapsed and shall be payable quarterly in arrears on
the last Business Day of January, April, July and October of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date.
Except as provided in the immediately preceding paragraph, the
Applicable Commitment Fee Percentage shall be determined on the first day of the
calendar month following the delivery of each Compliance Certificate pursuant to
subsection 6.1(iii), commencing with the Compliance Certificate for the Fiscal
Year ended October 31, 1997, by reference to such Compliance Certificate
(without regard to any subsequent corrections to reflect year-end audit
adjustments). The Applicable Commitment Fee Percentage shall apply for the
period from and including the date of determination to and excluding the first
day of the calendar month following the delivery of the next Compliance
Certificate; provided, however, that (1) if the Company fails to deliver any
Compliance Certificate in a timely manner pursuant to subsection 6.1(iii), or
(2) upon the occurrence and during the continuation of any Event of Default, the
highest percentage per annum set forth in the definition of Applicable
Commitment Fee Percentage shall apply for the period from and including the
first day of the calendar month following the date on which such Compliance
Certificate was required to be delivered to and excluding the date on which
Administrative Agent receives such Compliance Certificate or during the
continuation of such Event of Default, as the case may be.
41
B. Other Fees. Company agrees to pay to Administrative Agent the fees
described in the letter dated September 5, 1997 from Administrative Agent to
Company, as well as any other fees, in the amounts and at the times set forth in
such letter or separately agreed upon in writing between Company and
Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
General Provisions Regarding Payments.
A. Scheduled Payments of Term Loans. Company shall make principal
payments on the Term Loans in equal quarterly installments on the last day of
each Fiscal Quarter, commencing on April 30, 1998; provided that the scheduled
installments of principal of the Term Loans shall be reduced in connection with
any voluntary or mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and provided, further that the Term Loans and all other
amounts owed hereunder with respect to the Term Loans shall be paid in full no
later than the Term Loan Maturity Date and the final installment payable by
Company in respect of the Term Loans on such date shall be in an amount, if such
amount is different from that specified above, sufficient to repay all amounts
owing by Company under this Agreement with respect to the Term Loans.
B. Prepayments and Unscheduled Reductions in Revolving Loan
Commitments.
(i) Voluntary Prepayments. Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of Base
Rate Loans, and three Business Days' prior written or telephonic
notice, in the case of Eurodollar Rate Loans, in each case given to
Administrative Agent by 9:00 A.M. (San Francisco time) on the date
required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay,
without premium or penalty (except as provided in subsection 2.6D), any
Term Loans or Revolving Loans on any Business Day in whole or in part
in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified in
subsection 2.4B(iv).
(ii) Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than five Business Days' prior written or
telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will
promptly transmit by telefacsimile or telephone to each Lender), at any
time and from time to time terminate in whole
42
or permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which the
Revolving Loan Commitments exceed the Total Utilization of Revolving
Loan Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Revolving Loan
Commitments shall be in an aggregate minimum amount of $2,000,000 and
integral multiples of $500,000 in excess of that amount. Company's
notice to Administrative Agent shall designate the date (which shall be
a Business Day) of such termination or reduction and the amount of any
partial reduction, and such termination or reduction of the Revolving
Loan Commitments shall be effective on the date specified in Company's
notice and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) Mandatory Prepayments. The Loans shall be prepaid in the
amounts and under the circumstances set forth below, all such
prepayments to be applied as set forth below or as more specifically
provided in subsection 2.4B(iv):
(a) Prepayments From Net Asset Sale Proceeds. In the
event that Company or any of its Subsidiaries shall receive any
Net Asset Sale Proceeds in respect of any Asset Sale by Company
or any of its Subsidiaries, Company shall prepay the Loans in
an aggregate amount equal to 100% of such Net Asset Sale
Proceeds, (1) in the case of Asset Sales of Pledged Collateral,
on the date of receipt by Company or any of its Subsidiaries of
any such Net Asset Sale Proceeds and (2) in the case of all
other Asset Sales, no later than 45 days following the date of
receipt by Company or any of its Subsidiaries of any such Net
Asset Sale Proceeds.
(b) Prepayments Due to Reversion of Surplus Assets of
Pension Plans. On the date of return to Company or any of its
Subsidiaries of any surplus assets of any pension plan of
Company or any of its Subsidiaries, Company shall prepay the
Loans in an aggregate amount (such amount being the "Net
Pension Proceeds") equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred in
obtaining such return, including incremental taxes payable as a
result thereof.
(c) Prepayments Due to Issuance of Debt or Equity
Securities. On the date of receipt by Company of the Cash
proceeds (any such Cash proceeds, net of underwriting discounts
and commissions and other reasonable costs and expenses
associated therewith, including without limitation reasonable
legal fees and expenses, being "Net Securities Proceeds") from
the issuance of any debt or equity Securities of Company or any
of its Subsidiaries after the Closing Date (other than (1)
issuances of equity Securities of Company to directors and
employees of Company
43
and its Subsidiaries pursuant to a written employee benefit
plan maintained by Company or any of its Subsidiaries, approved
by Company's Board of Directors and issuances of equity
Securities of Company pursuant to the exercise of options or
warrants issued under any such plan, and (2) issuances of
Indebtedness permitted under subsection 7.1), Company shall
prepay the Loans in an aggregate amount equal to 100% of such
Net Securities Proceeds.
(d) Prepayments from Consolidated Excess Cash Flow.
Company shall, no later than 105 days after the end of each
Fiscal Year, prepay the Term Loans in an aggregate amount equal
to 50% of Consolidated Excess Cash Flow, if any, for such
Fiscal Year.
(e) Calculations of Net Proceeds Amounts; Additional
Prepayments Based on Subsequent Calculations. Concurrently with
any prepayment of the Loans pursuant to subsections
2.4B(iii)(a)-(d), Company shall deliver to Administrative Agent
an Officer's Certificate demonstrating the calculation of the
amount (the "Net Proceeds Amount") of the applicable Net Asset
Sale Proceeds, the applicable Net Pension Proceeds or Net
Securities Proceeds, or the applicable Consolidated Excess Cash
Flow, as the case may be, that gave rise to such prepayment. In
the event that Company shall subsequently determine that the
actual Net Proceeds Amount was greater than the amount set
forth in such Officer's Certificate, Company shall promptly
make an additional prepayment of the Loans in an amount equal
to the amount of such excess, and Company shall concurrently
therewith deliver to Administrative Agent an Officer's
Certificate demonstrating the derivation of the additional Net
Proceeds Amount resulting in such excess.
(f) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. Company shall from time to time
prepay the Revolving Loans to the extent necessary so that the
Total Utilization of Revolving Loan Commitments shall not at
any time exceed the Revolving Loan Commitments then in effect.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of
Loans and Order of Maturity. Any voluntary prepayments pursuant
to subsection 2.4B(i) shall be applied as specified by Company
in the applicable notice of prepayment; provided that in the
event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied
first, to repay outstanding Revolving Loans to the full extent
thereof and second, to repay outstanding Term Loans to the full
44
extent thereof. Any voluntary prepayments of the Term Loans
pursuant to subsection 2.4B(i) shall be applied to reduce the
scheduled installments of principal of the Term Loans set forth
in subsection 2.4A on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) that is
unpaid at the time of such prepayment.
(b) Application of Mandatory Prepayments by Type of
Loans. Any amount (the "Applied Amount") required to be applied
as a mandatory prepayment of the Loans pursuant to subsections
2.4B(iii)(a)-(d) shall be applied first, to prepay the Term
Loans to the full extent thereof and second, to the extent of
any remaining portion of the Applied Amount, to prepay the
Revolving Loans to the full extent thereof.
(c) Application of Mandatory Prepayments of Loans. Any
mandatory prepayments of the Term Loans pursuant to subsection
2.4B(iii) shall be applied to reduce the scheduled installments
of principal of the Term Loans set forth in subsection 2.4A in
inverse order of maturity.
(d) Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Term Loans and Revolving
Loans being prepaid separately, any prepayment thereof shall be
applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Company pursuant to subsection 2.6D.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 11:00 A.M. (San
Francisco time) on the date due at the Funding and Payment Office for
the account of Lenders; funds received by Administrative Agent after
that time on such due date shall be deemed to have been paid by Company
on the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent
in order to cause timely payment to be made to Administrative Agent of
all principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in
respect of any Loan on a date when interest
45
is due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and
interest payments in respect of Term Loans and Revolving Loans shall be
apportioned among all outstanding Loans to which such payments relate,
in each case proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request, its
Pro Rata Share of all such payments received by Administrative Agent
and the commitment fees of such Lender when received by Administrative
Agent pursuant to subsection 2.3. Notwithstanding the foregoing
provisions of this subsection 2.4C(iii), if, pursuant to the provisions
of subsection 2.6C, any Notice of Conversion/Continuation is withdrawn
as to any Affected Lender or if any Affected Lender makes Base Rate
Loans in lieu of its Pro Rata Share of any Eurodollar Rate Loans,
Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the
payment of interest hereunder or of the commitment fees hereunder, as
the case may be.
(v) Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other than by
granting participations therein), that Lender will make a notation
thereon of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon has
been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under such Note shall not limit
or otherwise affect the obligations of Company hereunder or under such
Note with respect to any Loan or any payments of principal or interest
on such Note.
2.5 Use of Proceeds.
A. Term Loans. The proceeds of the Term Loans shall be applied to fund
the Acquisition Financing Requirements.
B. Revolving Loans. The Revolving Loans shall be applied by Company for
working capital purposes, which may include the making of intercompany loans to
its Subsidiaries in accordance with subsection 7.3 for their own working capital
purposes, and for general corporate purposes not prohibited hereby, which may
include payments permitted under subsection 7.5.
46
C. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by Company or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar Rate
Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable
after 9:00 A.M. (San Francisco time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the
event that on any date any Lender shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto but shall be
made only after consultation with Company and Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate Loans (i) has become
unlawful as a result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to
47
comply therewith would not be unlawful) or (ii) has become impracticable, or
would cause such Lender material hardship, as a result of contingencies
occurring after the date of this Agreement which materially and adversely affect
the London interbank market or the position of such Lender in that market, then,
and in any such event, such Lender shall be an "Affected Lender" and it shall on
that day give notice (by telefacsimile or by telephone confirmed in writing) to
Company and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other Lender). Thereafter
(a) the obligation of the Affected Lender to make Loans as, or to convert Loans
to, Eurodollar Rate Loans shall be suspended until such notice shall be
withdrawn by the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the "Affected
Loans") shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when
required by law, and (d) the Affected Loans shall automatically convert into
Base Rate Loans on the date of such termination. Notwithstanding the foregoing,
to the extent a determination by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, Company shall have the
option, subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing or Notice of Conversion/Continuation as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected Lender to make
or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in
accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its Eurodollar Rate Loans and any reasonable loss, expense or liability
sustained by that Lender in connection with the liquidation or re-employment of
such funds) which that Lender may sustain: (i) if for any reason (other than a
default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or continuation,
(ii) if any prepayment (including, without limitation, any prepayment pursuant
to subsection
48
2.4B(i)) or other principal payment or any conversion of any of its Eurodollar
Rate Loans occurs on a date prior to the last day of an Interest Period
applicable to that Loan, (iii) if any prepayment of any of its Eurodollar Rate
Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the terms of this
Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation
of all amounts payable to a Lender under this subsection 2.6 and under
subsection 2.7A shall be made as though that Lender had actually funded each of
its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this subsection 2.6 and
under subsection 2.7A.
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Company may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any
Notice of Borrowing or Notice of Conversion/Continuation given by Company with
respect to a requested borrowing or conversion/continuation that has not yet
occurred shall be deemed to be rescinded by Company.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender shall reasonably
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by such Lender with any
guideline, request or directive issued or
49
made after the date hereof by any central bank or other governmental or
quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to
any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable lending
office) of principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto; then, in any such case, Company shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender reasonably
shall determine) as may be necessary to compensate such Lender for any such
increased cost or reduction in amounts received or receivable hereunder;
provided, however, that Company shall not be obligated to pay such Lender any
compensation attributable to any period prior to the date that is 90 days prior
to the date on which such Lender gave notice to Company of the circumstances
entitling such Lender to compensation. Such Lender shall promptly deliver to
Company (with a copy to Administrative Agent) a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Lender under this subsection 2.7A, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or
50
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed
by or within the United States of America or any political subdivision
in or of the United States of America or any other jurisdiction from or
to which a payment is made by or on behalf of Company or by any
federation or organization of which the United States of America or any
such jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative
Agent or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b) Company shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or
(if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of
Administrative Agent or such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment,
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Administrative Agent evidence satisfactory to
Administrative Agent of such deduction, withholding or payment
and of the remittance thereof to the relevant taxing or other
authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the
signature pages hereof) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or
payment as is mentioned therein shall result in an
51
increase in the rate of such deduction, withholding or payment from
that in effect at the date of this Agreement or at the date of such
Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of
any jurisdiction other than the United States of America or any
state or other political subdivision thereof (for purposes of
this subsection 2.7B(iii), a "Non-US Lender") shall deliver to
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the
signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in
the case of each other Lender), and at such other times as may
be necessary in the determination of Company or Administrative
Agent (each in the reasonable exercise of its discretion), (1)
two original copies of Internal Revenue Service Form 1001 or
4224 (or any successor forms), properly completed and duly
executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code
or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such
Lender of principal, interest, fees or other amounts payable
under any of the Loan Documents or (2) if such Lender is not a
"bank" or other Person described in Section 881(c)(3) of the
Internal Revenue Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (1) above,
a Certificate re Non-Bank Status substantially in the form of
Exhibit X annexed hereto together with two original copies of
Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, together
with any other certificate or statement of exemption required
under the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to any payments to such Lender of interest payable
under any of the Loan Documents.
(b) Each Lender required to deliver any forms,
certificates or other evidence with respect to United States
federal income tax withholding matters pursuant to subsection
2.7B(iii)(a) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other
evidence, whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall
promptly (1) deliver to Administrative Agent for transmission
to Company two new original copies of Internal Revenue Service
Form 1001 or 4224, or a
52
Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required in order
to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) notify Administrative Agent and Company of its
inability to deliver any such forms, certificates or other
evidence.
(c) Company shall not be required to pay any
additional amount to any Non-US Lender under clause (c) of
subsection 2.7B(ii) if such Lender shall have failed to satisfy
the requirements of clause (a) or (b)(1) of this subsection
2.7B(iii); provided that if such Lender shall have satisfied
the requirements of subsection 2.7B(iii)(a) on the Closing Date
(in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to
which it became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve Company
of its obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after the date
hereof of any law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the capital of such Lender or
any corporation controlling such Lender as a consequence of, or with reference
to, such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such
53
reduction; provided, however, that Company shall not be obligated to pay such
Lender any compensation attributable to any period prior to the date that is 90
days prior to the date on which such Lender gave notice to Company of the
circumstances entitling such Lender to compensation. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
2.8 Obligation of Lenders and Issuing Lenders to Mitigate.
Each Lender and the Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be paid to such
Lender or Issuing Lender pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters of Credit through such other lending or letter of credit
office or in accordance with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or Loans or Letters of
Credit or the interests of such Lender or Issuing Lender; provided that such
Lender or Issuing Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all incremental expenses incurred by such Lender or Issuing Lender as a
result of utilizing such other lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Company pursuant to this subsection 2.8 (setting forth in reasonable detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
2.9 Substitution of Lenders.
If Company receives a notice from any Lender requesting payment
pursuant to subsection 2.7 or 3.6, or the obligation of any Lender to make or
maintain Eurodollar Rate Loans has been suspended or terminated pursuant to
subsection 2.6C, so
54
long as (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing and (ii), in the case of a notice pursuant to
subsection 2.7 or 3.6, such Lender is unwilling to withdraw the notice delivered
to Company, upon 30 days prior written notice to such Lender and Administrative
Agent, Company may require such Lender to assign all of its Loans, Commitments
and other Obligations to another Lender or Eligible Assignee from whom Company
obtains a commitment to purchase at par the Loans, Commitments and other
Obligations of the Lender to be replaced and to assume all obligations of such
Lender pursuant to the provisions of subsection 10.1B; provided that prior to or
concurrently with such replacement (a) Company has paid to such Lender all
amounts, if any, under subsections 2.7 and 3.6 through such date of replacement,
(b) Company or the applicable assignee has paid to Administrative Agent the
processing fee required to be paid by subsection 10.1B, and (c) all of the
requirements for such assignment contained in subsection 10.1B have been
fulfilled.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(ii), Company may request, in
accordance with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan Commitment
Termination Date, that the Issuing Lender issue Letters of Credit for the
account of Company for the purposes specified in the definition of Letters of
Credit. Subject to the terms and conditions of this Agreement and in reliance
upon the representations and warranties of Company herein set forth, the Issuing
Lender shall issue such Letters of Credit in accordance with the provisions of
this subsection 3.1; provided that Company shall not request that the Issuing
Lender issue (and the Issuing Lender shall not issue):
(i) any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $10,000,000;
(iii) any Letter of Credit having an expiration date later than
the earlier of (a) the Revolving Loan Commitment Termination Date and
(b) the date which is one year from the date of issuance of such Letter
of Credit; provided that the immediately preceding clause (b) shall not
prevent the Issuing Lender from agreeing that a Letter of Credit will
automatically be extended for one or more successive periods not to
exceed one year each unless the Issuing Lender elects not to extend for
any such additional period; and provided, further that the
55
Issuing Lender shall elect not to extend such Letter of Credit if it
has knowledge that an Event of Default has occurred and is continuing
(and has not been waived in accordance with subsection 10.6) at the
time the Issuing Lender must elect whether or not to allow such
extension; or
(iv) any Letter of Credit denominated in a foreign currency
which in the judgment of Administrative Agent is not readily and freely
available.
On and after the Closing Date, the Existing Company Letters of
Credit shall be deemed for all purposes, including for purposes of the fees to
be collected pursuant to subsection 3.2, and reimbursement of costs and expenses
to the extent provided herein, to be Letters of Credit outstanding under this
Agreement and entitled to the benefits of this Agreement and the other Loan
Documents, and shall be governed by the applications and agreements pertaining
thereto and by this Agreement; provided, however, that, notwithstanding any
other provision of this Agreement, no fees with respect to the issuance of the
Existing Company Letters of Credit shall be due hereunder.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit substantially in the form of
Exhibit III annexed hereto no later than 10:00 A.M. (San Francisco
time) at least three Business Days, or such shorter period as may be
agreed to by the Issuing Lender in any particular instance, in advance
of the proposed date of issuance. The Notice of Issuance of Letter of
Credit shall specify (a) the proposed date of issuance (which shall be
a Business Day), (b) the face amount of the Letter of Credit, (c) in
the case of a Letter of Credit which Company requests to be denominated
in a currency other than Dollars, the currency in which Company
requests such Letter of Credit to be issued, (d) the expiration date of
the Letter of Credit, (e) the name and address of the beneficiary, and
(f) the verbatim text of the proposed Letter of Credit or the proposed
terms and conditions thereof; provided that the Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed
Letter of Credit; and provided, further that no Letter of Credit shall
require payment against a conforming draft to be made thereunder on the
same business day (under the laws of the jurisdiction in which the
office of the Issuing Lender to which such draft is required to be
presented is located) that such draft is presented if such presentation
is made after 10:00 A.M. (in the time zone of such office of the
Issuing Lender) on such business day.
Company shall notify the Administrative Agent prior to the
issuance of any Letter of Credit in the event that any of the matters
to which Company is required to certify in the applicable Notice of
Issuance of Letter of Credit is no
56
longer true and correct in all material respects as of the proposed
date of issuance of such Letter of Credit, and upon the issuance of any
Letter of Credit Company shall be deemed to have re-certified, as of
the date of such issuance, as to the matters to which Company is
required to certify in the applicable Notice of Issuance of Letter of
Credit.
(ii) Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the Issuing Lender shall issue the requested Letter of
Credit in accordance with the Issuing Lender's standard operating
procedures.
(iii) Notification to Lenders. Upon the issuance of any Letter
of Credit the Administrative Agent shall promptly notify each other
Lender of such issuance, which notice shall be accompanied by a copy of
such Letter of Credit and shall notify each Lender of the amount of
such Lender's respective participation in such Letter of Credit,
determined in accordance with subsection 3.1C.
C. Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Lender's Pro Rata Share of the maximum
amount which is or at any time may become available to be drawn thereunder.
3.2 Letter of Credit Fees.
Company agrees to pay the following amounts with respect to
Letters of Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee,
payable directly to the Issuing Lender for its own account, equal to
0.125% per annum of the amount available to be drawn under such Letter
of Credit and (b) a nonrefundable letter of credit fee, payable to
Administrative Agent for the account of Lenders, equal to the amount
available to be drawn under such Letter of Credit multiplied by (1) for
the period from and including the Closing Date to and excluding the
date on which Administrative Agent receives a Compliance Certificate
pursuant to subsection 6.1(iii) for the Fiscal Year ended October 31,
1997, the Applicable Eurodollar Rate Margin as determined by reference
to the Leverage Ratio set forth in the Closing Date Compliance
Certificate delivered by Company pursuant to subsection 4.1E and (2)
thereafter, the Applicable Eurodollar Rate Margin, each such fronting
fee or letter of credit fee to be payable quarterly in advance at
issuance and on the last Business Day of each
57
January, April, July and October of each year and computed on the basis
of a 360-day year; and
(ii) with respect to the issuance, amendment, negotiation or
transfer of each Letter of Credit and each payment of a drawing made
thereunder (without duplication of the fees payable under clause (i)
above), documentary and processing charges payable directly to the
Issuing Lender for its own account in accordance with the Issuing
Lender's standard schedule for such charges in effect at the time of
such issuance, amendment, transfer or payment, as the case may be.
For purposes of calculating any fees payable under this subsection 3.2, any
amount described in such clauses which is denominated in a currency other than
Dollars shall be valued based on the applicable Exchange Rate for such currency
as of the applicable date of determination. The Applicable Eurodollar Rate
Margin shall be determined on the first day of the calendar month following the
delivery of each Compliance Certificate pursuant to subsection 6.1(iii),
commencing with the Compliance Certificate for the Fiscal Year ended October 31,
1997, by reference to such Compliance Certificate (without regard to any
subsequent corrections to reflect year-end audit adjustments). The Applicable
Eurodollar Rate Margin shall apply to all Letters of Credit for the period from
and including the date of determination to and excluding the first day of the
calendar month following the delivery of the next Compliance Certificate;
provided, however, that (1) if the Company fails to deliver any Compliance
Certificate in a timely manner pursuant to subsection 6.1(iii), or (2) upon the
occurrence and during the continuation of any Event of Default, the highest
percentage per annum set forth in the definition of Applicable Eurodollar Rate
Margin shall apply for the period from and including the first day of the
calendar month following the date on which such Compliance Certificate was
required to be delivered to and excluding the date on which Administrative Agent
receives such Compliance Certificate or during the continuation of such Event of
Default, as the case may be. Promptly upon receipt by Administrative Agent of
any amount described in clause (i)(b) of this subsection 3.2, Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms
and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event the Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, the Issuing Lender shall immediately notify Company, and
Company shall reimburse the Issuing Lender on or before the Business Day
immediately
58
following the date on which such drawing is honored (the "Reimbursement Date")
in an amount in Dollars (which amount, in the case of a drawing under a Letter
of Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate) and in same day funds
equal to the amount of such honored drawing; provided that, anything contained
in this Agreement to the contrary notwithstanding, (i) unless Company shall have
notified the Issuing Lender prior to 10:00 A.M. (San Francisco time) on the date
such drawing is honored that Company intends to reimburse the Issuing Lender for
the amount of such honored drawing with funds other than the proceeds of
Revolving Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Lenders to make Revolving Loans
that are Base Rate Loans on the Reimbursement Date in an amount in Dollars
(which amount, in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated by reference
to the applicable Exchange Rate) equal to the amount of such honored drawing and
(ii) subject to satisfaction or waiver of the conditions specified in subsection
4.2B, Lenders shall, on the Reimbursement Date, make Revolving Loans that are
Base Rate Loans in the amount of such honored drawing, the proceeds of which
shall be applied directly by Administrative Agent to reimburse the Issuing
Lender for the amount of such honored drawing; and provided, further that if for
any reason proceeds of Revolving Loans are not received by the Issuing Lender on
the Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse the Issuing Lender, on demand, in an amount in same day
funds equal to the excess of the amount of such honored drawing over the
aggregate amount of such Revolving Loans, if any, which are so received. Nothing
in this subsection 3.3B shall be deemed to relieve any Lender from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may have against any
Lender resulting from the failure of such Lender to make such Revolving Loans
under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Amounts Paid Under Letters of
Credit.
(i) Payment by Lenders. In the event that Company shall fail
for any reason to reimburse the Issuing Lender as provided in
subsection 3.3B in an amount (calculated, in the case of a drawing
under a Letter of Credit denominated in a currency other than Dollars,
by reference to the applicable Exchange Rate) equal to the amount of
any drawing honored by the Issuing Lender under a Letter of Credit
issued by it, the Issuing Lender shall promptly notify each other
Lender of the unreimbursed amount of such honored drawing and of such
other Lender's respective participation therein based on such Lender's
Pro Rata Share. Each Lender shall make available to the Issuing Lender
an amount equal to its respective participation, in Dollars and in same
day funds, at the office of the Issuing Lender specified in such
notice, not later than 11:00 A.M. (San Francisco time) on the first
business day (under the laws of the jurisdiction in which such
59
office of the Issuing Lender is located) after the date notified by the
Issuing Lender. In the event that any Lender fails to make available to
the Issuing Lender on such business day the amount of such Lender's
participation in such Letter of Credit as provided in this subsection
3.3C, the Issuing Lender shall be entitled to recover such amount on
demand from the Lender together with interest thereon at the rate
customarily used by the Issuing Lender for the correction of errors
among banks for three Business Days and thereafter at the Base Rate.
Nothing in this subsection 3.3C shall be deemed to prejudice the right
of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final
judgment of a court of competent jurisdiction that the payment with
respect to a Letter of Credit by the Issuing Lender in respect of which
payment was made by such Lender constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
Company. In the event the Issuing Lender shall have been reimbursed by
other Lenders pursuant to subsection 3.3C(i) for all or any portion of
any drawing honored by the Issuing Lender under a Letter of Credit
issued by it, the Issuing Lender shall distribute to each other Lender
which has paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing such other Lender's Pro Rata Share of
all payments subsequently received by the Issuing Lender from Company
in reimbursement of such honored drawing when such payments are
received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Lender may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to
the Issuing Lender, with respect to drawings honored under any Letters
of Credit issued by it, interest on the amount paid by the Issuing
Lender in respect of each such honored drawing from the date such
drawing is honored to but excluding the date such amount is reimbursed
by Company (including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for
the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with
respect to Revolving Loans that are Base Rate Loans and (b) thereafter,
if and to the extent not fully reimbursed, a rate which is 2% per annum
in excess of the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate Loans.
Interest payable pursuant to this subsection 3.3D(i) shall be computed
on the basis of a 365-day or 366-day year, as the case may be, for the
actual number of days elapsed in the period during which it accrues and
shall be payable on demand or, if no demand is made, on
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the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by the Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing honored under
a Letter of Credit issued by it, (a) the Issuing Lender shall
distribute to each other Lender, out of the interest received by the
Issuing Lender in respect of the period from the date such drawing is
honored to but excluding the date on which the Issuing Lender is
reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of Revolving Loans pursuant to
subsection 3.3B), the amount that such other Lender would have been
entitled to receive in respect of the letter of credit fee that would
have been payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under such
Letter of Credit, and (b) in the event the Issuing Lender shall have
been reimbursed by other Lenders pursuant to subsection 3.3C(i) for all
or any portion of such honored drawing, the Issuing Lender shall
distribute to each other Lender which has paid all amounts payable by
it under subsection 3.3C(i) with respect to such honored drawing such
other Lender's Pro Rata Share of any interest received by the Issuing
Lender in respect of that portion of such honored drawing so reimbursed
by other Lenders for the period from the date on which the Issuing
Lender was so reimbursed by other Lenders to but excluding the date on
which such portion of such honored drawing is reimbursed by Company.
Any such distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page hereof or at
such other address as such Lender may request.
3.4 Obligations Absolute.
The obligation of Company to reimburse the Issuing Lender for
drawings honored under the Letters of Credit issued by it and to repay any
Revolving Loans made by Lenders pursuant to subsection 3.3B and the obligations
of Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the Issuing Lender or
other Lender or any other Person or, in the case of a Lender, against
Company, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any
61
underlying transaction between Company or one of its Subsidiaries and
the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the Issuing Lender under any Letter of Credit
against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by
any party thereto;
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event
of Default shall have occurred and be continuing;
provided, in each case, that payment by the Issuing Lender under the applicable
Letter of Credit shall not have constituted gross negligence or willful
misconduct of the Issuing Lender under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless the Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which the Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by the Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of the Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by the Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of the Issuing Lender to honor a drawing
under any such Letter of Credit as a result of any act or omission, whether
62
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "Governmental
Acts").
B. Nature of Issuing Lenders' Duties. As between Company and the
Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by the Issuing Lender by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Issuing Lender, including, without limitation, any Governmental
Acts, and none of the above shall affect or impair, or prevent the vesting of,
any of the Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by the Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the Issuing Lender
under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of the Issuing Lender, as determined by a final judgment of a
court of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that the
Issuing Lender or any Lender shall reasonably determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation,
63
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of
a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by the Issuing Lender or any Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i) subjects the Issuing Lender or any Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of the Issuing Lender or
such Lender) with respect to the issuing or maintaining of any Letters
of Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether directly
or by such being imposed on or suffered by the Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement in respect of any Letters of Credit
issued by the Issuing Lender or participations therein purchased by any
Lender; or
(iii) imposes any other condition (other than with respect to a
Tax matter) on or affecting the Issuing Lender or any Lender (or its
applicable lending or letter of credit office) regarding this Section 3
or any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to the Issuing
Lender or any Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by the Issuing Lender or
any Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to the Issuing Lender or
any Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate the Issuing
Lender or any Lender for any such increased cost or reduction in amounts
received or receivable hereunder; provided, however, that Company shall not be
obligated to pay such Lender any compensation attributable to any period prior
to the date that is 90 days prior to the date on which such Lender gave notice
to Company of the circumstance entitling such Lender to compensation. The
Issuing Lender or any Lender shall deliver to Company a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to the Issuing Lender or any Lender under this subsection 3.6,
which statement shall be conclusive and binding upon all parties hereto absent
manifest error.
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Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT
4.1 Conditions to Term Loans and Initial Revolving Loans.
The obligations of Lenders to make the Term Loans and the
initial Revolving Loans are, in addition to the conditions precedent specified
in subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall,
and shall cause each other Loan Party to, deliver to Administrative Agent (with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel) the following with respect to Company or such Loan Party, as the
case may be, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of
Incorporation of such Loan Party, together with a good standing
certificate from the Secretary of State of its jurisdiction of
incorporation and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority of
such jurisdiction;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Loan Party's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Loan Party
approving and authorizing the execution, delivery and performance of
the Loan Documents and the Merger Agreement, if such Person is a party
thereto, certified as of the Closing Date by the corporate secretary or
an assistant secretary of such Loan Party as being in full force and
effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
such Loan Party executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents to which such
Person is a party; and
(vi) Such other documents as Administrative Agent may
reasonably request.
B. Other Subsidiary Documents. On or before the Closing Date, Company
shall cause each of its Foreign Subsidiaries the capital stock of which is
pledged hereunder to deliver to Administrative Agent (with sufficient originally
executed copies, where appropriate, for each Lender and its counsel) copies of
the charter documents of
65
such Subsidiary, certified as of the Closing Date by such Subsidiary's corporate
secretary or an assistant secretary.
C. Projections. On or prior to the Closing Date, Company shall deliver
to Administrative Agent (with sufficient copies for each Lender) the
Projections, which shall be in form and substance satisfactory to Administrative
Agent.
D. Projected Balance Sheet. On or prior to the Closing Date, Company
shall deliver to Administrative Agent (with sufficient copies for each Lender) a
projected consolidated balance sheet of Company and its Subsidiaries as at the
date of the consummation of the Merger, prepared in accordance with GAAP and
reflecting the consummation of the Acquisition and the Merger, the related
financings and the other transactions contemplated by the Loan Documents and the
Merger Agreement, which projected balance sheet shall be in form and substance
satisfactory to Administrative Agent.
E. Financial Performance.
(i) The ratio of (a) Consolidated Total Funded Debt as of the
Closing Date, after giving effect to the making of the Term Loans, to
(b) Pre Merger Consolidated EBITDA for the immediately preceding
12-month period shall not exceed 3.00 to 1.00.
(ii) Pre Merger Consolidated EBITDA for the immediately
preceding 12-month period shall not be less than $45,000,000.
On the Closing Date, Company shall deliver to Administrative Agent (with
sufficient originally executed copies for each Lender) the Closing Date
Compliance Certificate demonstrating in reasonable detail compliance with such
restrictions.
F. No Material Adverse Effect. Since October 31, 1996, no Material
Adverse Effect (in the sole opinion of Administrative Agent) with respect to
Company and its Subsidiaries, taken as a whole, shall have occurred. Since
December 31, 1996, no Material Adverse Effect (in the sole opinion of
Administrative Agent) with respect to ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries, taken
as a whole, shall have occurred.
G. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure
of Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries, after
giving effect to the Acquisition and the Merger, shall be as set forth
on Schedule 4.1G of the Company Disclosure Letter.
66
(ii) Capital Structure and Ownership. The capital structure and
ownership of Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries,
after giving effect to the Acquisition and the Merger, shall be as set
forth on Schedule 4.1G of the Company Disclosure Letter.
(iii) Merger Structure. The structure to be used to consummate
the Acquisition and the Merger shall be as set forth on Schedule 4.1G
of the Company Disclosure Letter.
(iv) Merger Agreement. The Merger Agreement shall be in full
force and effect and no provision thereof shall have been modified or
waived in any material respect without the consent of Administrative
Agent.
H. Termination of Existing Credit Agreements and Related Liens;
Existing ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Letters of Credit. As of the Closing, Company,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective Subsidiaries shall have (i) terminated any
commitments to lend or make other extensions of credit under the Existing Credit
Agreements, (ii) delivered to Administrative Agent all documents or instruments
necessary to release all Liens securing Indebtedness or other obligations of
Company and its Subsidiaries under the Existing Credit Agreements and (iii)
entered into a cash collateral arrangement with The CIT Group Inc., in form and
substance satisfactory to Administrative Agent, with respect to the Existing
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Letters of Credit.
I. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Acquisition and the Merger, the
other transactions contemplated by the Loan Documents and the Merger Agreement,
and the continued operation of the business conducted by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Acquisition and the Merger, and each of the foregoing shall
be in full force and effect, in each case other than those the failure to obtain
or maintain which, either individually or in the aggregate, would not be likely
to have a Material Adverse Effect on Company or ▇▇▇▇▇▇▇▇-▇▇▇▇▇. All applicable
waiting periods shall have expired without any action being taken or threatened
by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Acquisition or the Merger or the financing thereof. No
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.
J. Consummation of Merger.
(i) All conditions to the Acquisition and the Merger set forth
in Section 7 of the Merger Agreement shall have been satisfied or the
fulfillment of
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any such conditions shall have been waived, in the case of a condition
to the performance of the obligations of URS, with the consent of
Administrative Agent;
(ii) The Acquisition and the Merger shall become effective
concurrently with the making of the initial Loans in accordance with
the terms of the Merger Agreement, no provision of which shall have
been amended, supplemented, waived or otherwise modified in any respect
without the prior written consent of Administrative Agent, and the laws
of the State of Delaware;
(iii) Administrative Agent shall have received satisfactory
evidence of the filing of the documents with the Delaware Secretary of
State effecting the Merger on the Closing Date;
(iv) The Acquisition Consideration shall not exceed $50,000,000
and the total consideration for the preferred and common stock of
▇▇▇▇▇▇▇▇- ▇▇▇▇▇ to be acquired in connection with the Acquisition shall
not exceed $120,000,000; and
(v) Transaction Costs shall not exceed $10,000,000, and
Administrative Agent shall have received evidence to its satisfaction
to such effect.
K. Matters Relating to Existing Subordinated Indebtedness. On or prior
to the Closing Date, Company shall have delivered to Administrative Agent a
fully executed or conformed copy of the Existing Subordinated Agreements or an
Officer's Certificate stating that since January 10, 1996 there have been no
amendments to the Existing Subordinated Agreements.
L. Security Interests in Personal Property. On or prior to the Closing
Date, Administrative Agent shall have received evidence satisfactory to it that
Company and Subsidiary Guarantors shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings (other than the filing of items described in clause
(iii) below) that may be necessary or, in the opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire Collateral. Such actions shall include,
without limitation, the following:
(i) Schedules to Collateral Documents. Delivery to
Administrative Agent of accurate and complete schedules to all of the
applicable Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to
Administrative Agent of certificates and instruments (which
certificates and instruments shall be accompanied by irrevocable
undated stock powers, duly endorsed in blank and
68
otherwise satisfactory in form and substance to Administrative Agent)
representing all capital stock and intercompany debt, if required
pursuant to subsections 7.1(iv) and (v), pledged pursuant to the
Company Pledge Agreement and the Subsidiary Pledge Agreement;
(iii) Lien Searches and UCC Termination Statements. Delivery to
Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings
which may have been made with respect to any property of any Loan
Party, together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all
applicable Persons for filing in all applicable jurisdictions as may be
necessary to terminate any effective UCC financing statements or
fixture filings disclosed in such search (other than any such financing
statements or fixture filings in respect of Liens permitted to remain
outstanding pursuant to the terms of this Agreement); and
(iv) UCC Financing Statements. Delivery to Administrative Agent
of UCC financing statements duly executed by each applicable Loan Party
with respect to all Collateral of such Loan Party, for filing in all
jurisdictions as may be necessary or, in the opinion of Administrative
Agent, desirable to perfect the security interests created in such
Collateral pursuant to the Collateral Documents.
M. Solvency Assurances. On the Closing Date, Company shall deliver to
Administrative Agent (with sufficient copies for each Lender) a Financial
Condition Certificate dated the Closing Date, substantially in the form of
Exhibit XIV annexed hereto and with appropriate attachments, demonstrating that,
after giving effect to the consummation of the Acquisition and the Merger, the
related financings and the other transactions contemplated by the Loan Documents
and the Merger Agreement, Company will be Solvent.
N. Evidence of Insurance. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect.
O. Opinions of Counsel to Loan Parties. Administrative Agent shall have
received sufficient originally executed copies for each Lender and its counsel
of one or more favorable written opinions of ▇▇▇▇▇▇ Godward LLP, counsel for
Company, and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for certain of the Loan
Parties, addressed to Administrative Agent and Lenders and in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of the
Closing Date, as to such other matters as Administrative Agent may reasonably
request.
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P. Opinions of Administrative Agent's Counsel. Administrative Agent
shall have received sufficient originally executed copies for each Lender and
its counsel of one or more favorable written opinions of O'Melveny & ▇▇▇▇▇ LLP,
counsel to Administrative Agent, addressed to Administrative Agent and Lenders
and dated as of the Closing Date, substantially in the form of Exhibit VIII
annexed hereto and as to such other matters as Administrative Agent may
reasonably request.
Q. Opinions of Counsel Delivered Under Merger Agreement. Administrative
Agent shall have received sufficient copies for each Lender and its counsel of
each of the opinions of counsel delivered to the parties under the Merger
Agreement, together with a letter from each such counsel authorizing Lenders to
rely upon such opinion to the same extent as though it were addressed to
Lenders.
R. Fees. Company shall have paid to Administrative Agent the fees
payable on the Closing Date referred to herein.
S. Company Disclosure Letter. Company shall have delivered to
Administrative Agent the Company Disclosure Letter.
T. Officer's Certificate Regarding Subsidiary Guarantors. On the
Closing Date, Company shall deliver to Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Administrative Agent, listing
all Subsidiaries of Company and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ that had revenues of less than
$250,000 during the immediately preceding Fiscal Year or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Fiscal
Year, as the case may be.
U. Syndication. Company and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ shall have cooperated with
Administrative Agent in the syndication of the Commitments (such cooperation to
include, without limitation, participating in meetings with the Lenders and
assisting in the preparation of a Confidential Information Memorandum and other
materials to be used in connection with such syndication) and shall have
provided and caused their respective advisors to provide all information
reasonably deemed necessary by Administrative Agent to such syndication. Company
and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ shall also have coordinated any other financings by Company
and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ with Administrative Agent's primary syndication efforts
relating to the Commitments.
V. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, (i) to the effect that the
representations and warranties in Section 5 are true, correct and complete in
all material respects on and as of the Closing to the same extent as though made
on and as of the Closing Date (or, to the extent such representations and
warranties specifically relate to an earlier date, that such representations and
warranties were true, correct and complete in all material respects on and as of
such earlier date) and that Company shall have performed in all material
respects all agreements and satisfied all conditions which this
70
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and (ii) to the effect set forth in clauses (i)-(iv) of
subsection 4.1G, subsection 4.1I, and clauses (i)-(v) of subsection 4.1J and
stating that Company will proceed to consummate the Acquisition and the Merger
concurrently with the making of the initial Loans.
W. Completion of Proceedings. All corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent and its counsel shall be reasonably satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
4.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer of Company or by any executive officer
of Company designated by any of the above-described officers on behalf of
Company in a writing delivered to Administrative Agent.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent as
though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date,
in which case such representations and warranties shall have been true,
correct and complete in all material respects on and as of such earlier
date;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before
that Funding Date;
71
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date
shall not violate any law including, without limitation, Regulation G,
Regulation T, Regulation U or Regulation X of the Board of Governors of
the Federal Reserve System; and
(vi) (a) There shall not be pending or, to the actual knowledge
of a Responsible Officer of Company, threatened, any action, suit,
proceeding, governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries that has not been disclosed by Company in
writing pursuant to subsection 5.6 or 6.1(ix) prior to the making of
the last preceding Loans (or, in the case of the initial Loans, prior
to the execution of this Agreement), and (b) there shall have occurred
no development not so disclosed in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed, that, in either
event, in the reasonable opinion of Administrative Agent or of
Requisite Lenders, would be likely to result in a Material Adverse
Effect on Company; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect
to any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder.
4.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not
the Issuing Lender is obligated to issue such Letter of Credit) is subject to
the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or
72
information as the Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce the Issuing Lender to issue Letters of Credit and to
induce other Lenders to purchase participations therein, Company represents and
warrants to each Lender, on the Closing Date, on each Funding Date and on the
date of issuance of each Letter of Credit, that the following statements (other
than the statements set forth in subsection 5.16 on the date of this Agreement)
are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation. Each Loan Party has all requisite corporate power
and authority to own and operate its properties, to carry on its business as now
conducted and as proposed to be conducted, to enter into the Loan Documents and
the Merger Agreement if it is a party thereto and to carry out the transactions
contemplated thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except in
jurisdictions where the failure to be so qualified or in good standing has not
had and would not be likely to result in a Material Adverse Effect on such Loan
Party.
C. Conduct of Business. Company and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.10.
D. Subsidiaries. As of the Closing, all of the Subsidiaries of Company,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and all of the Subsidiaries of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ are identified on
Schedule 5.1D of the Company Disclosure Letter. The capital stock of each entity
identified on Schedule 5.1D of the Company Disclosure Letter is duly authorized,
validly issued, fully paid and nonassessable and none of such capital stock
constitutes Margin Stock. Except as set forth on Schedule 5.1D of the Company
Disclosure Letter, each of the Subsidiaries of Company is a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation, has
73
all requisite corporate power and authority to own and operate its properties
and to carry on its business as now conducted and as proposed to be conducted,
and is qualified to do business and in good standing in every jurisdiction where
its assets are located and wherever necessary to carry out its business and
operations, in each case except where failure to be so qualified or in good
standing or a lack of such corporate power and authority has not had and would
not be likely to result in a Material Adverse Effect on Company. Except as set
forth on Schedule 5.1D of the Company Disclosure Letter, Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇
or a Subsidiary of Company or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ has executed an agreement with
respect to the capital stock of each non-wholly owned Subsidiary of Company or
▇▇▇▇▇▇▇▇-▇▇▇▇▇ that gives Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or a Subsidiary of Company or
▇▇▇▇▇▇▇▇- ▇▇▇▇▇ the right to purchase any shares of capital stock of such
non-wholly owned Subsidiary held by any Person other than Company,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or a Subsidiary of Company or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ in the event of any
proposed transfer thereof unless the failure to execute such an agreement would
not be likely to result in a Material Adverse Effect on Company.
E. Inactive Subsidiaries. None of the Subsidiaries of Company
identified on Schedule 5.1E of the Company Disclosure Letter under the heading
"Inactive Subsidiaries" ("Inactive Subsidiaries"), as said Schedule 5.1E may be
supplemented from time to time pursuant to the provisions of subsection 6.1(xv),
is conducting business, owns any property or is generating any revenue.
F. Capitalization. As of the Closing, Schedule 5.1F of the Company
Disclosure Letter correctly sets forth the ownership interest of Company and
each of its Subsidiaries in each of the Subsidiaries of Company identified
therein and of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and each of its Subsidiaries in each of the
Subsidiaries of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ identified therein. Schedule 5.1F of the Company
Disclosure Letter correctly sets forth, as of the Closing, the total number of
shares of authorized capital stock of Company and each of its Subsidiaries and
of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and each of its Subsidiaries, and the total number of
outstanding shares of such capital stock. As of the Closing, no other class of
capital stock of Company or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ is outstanding. The capital stock of
Company and ▇▇▇▇▇▇▇▇-▇▇▇▇▇ is duly authorized, validly issued, fully paid and
nonassessable.
G. Options and Other Rights. As of the Closing, except as set forth on
Schedule 5.1G of the Company Disclosure Letter, there are no outstanding
subscriptions, warrants, calls, options, rights (including unsatisfied
preemptive rights), commitments or agreements to which Company or any of its
Subsidiaries or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries is bound that permit
or entitle any Person to purchase or otherwise to receive from or to be issued
any shares of capital stock of Company or any of its Subsidiaries or
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries or any security or obligation of any
kind convertible into any class of capital stock of Company or any of its
Subsidiaries or ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries. Neither Company,
▇▇▇▇▇▇▇▇-▇▇▇▇▇ nor any of their respective Subsidiaries is subject to any
obligation
74
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its capital stock.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the Merger Agreement have been duly authorized by all
necessary corporate action on the part of each Loan Party that is a party
thereto.
B. No Conflict. The execution, delivery and performance by each Loan
Party of the Merger Agreement if it is a party thereto and the Loan Documents to
which it is a party and the consummation of the transactions contemplated by the
Loan Documents and the Merger Agreement do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of Incorporation
or Bylaws of Company or any of its Subsidiaries or any order, judgment or decree
of any court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Company or any of its Subsidiaries in any manner that would be likely to result
in a Material Adverse Effect on such Loan Party; (iii) result in or require the
creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Subsidiaries (other than any Liens created under any of
the Loan Documents in favor of Administrative Agent on behalf of Lenders) in any
manner that would be likely to result in a Material Adverse Effect on such Loan
Party; or (iv) require any approval of stockholders or any approval or consent
of any Person under any Contractual Obligation of Company or any of its
Subsidiaries in any manner that would be likely to result in a Material Adverse
Effect on such Loan Party, except for such approvals or consents which will be
obtained on or before the Closing and disclosed in writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by
each Loan Party of the Merger Agreement if it is a party thereto and the Loan
Documents to which it is a party and the consummation of the transactions
contemplated by the Loan Documents and the Merger Agreement do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body.
D. Binding Obligation. Each of the Loan Documents and the Merger
Agreement has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
75
5.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders'
request, (i) the audited consolidated balance sheet of Company and its
Subsidiaries as at October 31, 1996 and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its Subsidiaries for
the Fiscal Year then ended and (ii) the unaudited consolidated balance sheet of
Company and its Subsidiaries as at January 31, 1997, April 30, 1997 and July 31,
1997 and the related unaudited consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for the periods then
ended. All such statements were prepared in conformity with GAAP and fairly
present, in all material respects, the financial position (on a consolidated
basis) of the entities described in such financial statements as at the
respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. Company does not
(and will not following the funding of the initial Loans) have any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the foregoing
financial statements or the notes thereto and which in any such case is material
in relation to the business, operations, properties, assets or condition
(financial or otherwise) of Company or any of its Subsidiaries.
Company has heretofore delivered to Lenders, at Lenders'
request, (i) the audited consolidated balance sheet of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries as at December 31, 1996 and the related consolidated statements of
income, stockholders' equity and cash flows of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its
Subsidiaries for the ▇▇▇▇▇▇▇▇- ▇▇▇▇▇ Fiscal Year then ended and (ii) the
unaudited consolidated balance sheet of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries as
at June 30, 1997 and the related unaudited consolidated statements of income,
stockholders' equity and cash flows of ▇▇▇▇▇▇▇▇- ▇▇▇▇▇ and its Subsidiaries for
the six months then ended. All such statements were prepared in conformity with
GAAP and fairly present, in all material respects, the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective dates thereof and the results of operations and cash flows (on a
consolidated basis) of the entities described therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements, to
changes resulting from audit and normal year-end adjustments. ▇▇▇▇▇▇▇▇-▇▇▇▇▇
does not (and will not following the funding of the initial Loans) have any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto and which in any such case
is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its
Subsidiaries.
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5.4 No Material Adverse Change; No Restricted Junior Payments.
Since October 31, 1996, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect on Company. Neither Company nor any of its Subsidiaries has
directly or indirectly declared, ordered, paid or made, or set apart any sum or
property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5.
5.5 Title to Properties; Liens; Real Property; Licenses, Trademarks; etc.
A. Title to Properties; Liens. Company and its Subsidiaries and
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and its Subsidiaries have (i) good, sufficient and legal title to
(in the case of fee interests in real property), (ii) valid leasehold interests
in (in the case of leasehold interests in real or personal property), or (iii)
good title to (in the case of all other personal property), all of their
respective properties and assets reflected in the financial statements referred
to in subsection 5.3 or in the most recent financial statements delivered
pursuant to subsection 6.1, in each case except for assets disposed of since the
date of such financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. Except as permitted by this Agreement,
all such properties and assets are free and clear of Liens.
B. Real Property. As of the Closing, Schedule 5.5B of the Company
Disclosure Letter contains a true, accurate and complete list of (i) all fee
interests in real property of Company or any of its Subsidiaries or of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries and (ii) all leases, subleases or
assignments of leases affecting any real property of Company or any of its
Subsidiaries or of ▇▇▇▇▇▇▇▇-▇▇▇▇▇ or any of its Subsidiaries under which the
annual lease payments are at least $500,000. Except as specified on Schedule
5.5B of the Company Disclosure Letter, each agreement listed in clause (ii) of
the immediately preceding sentence is in full force and effect and no
Responsible Officer of Company has actual knowledge of any default that has
occurred and is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each entity party thereto, enforceable
against such entity in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles,
except where the failure of any such agreement to be in full force and effect or
enforceable would not be likely to result in a Material Adverse Effect on
Company.
C. Licenses, Trademarks, etc. Company and each of its Subsidiaries have
all patents, licenses, trademarks, trademark rights, trade names, trade name
rights, copyrights, permits and franchises which are required in order for it to
conduct its business and to operate its properties as now or proposed to be
conducted without known conflict with the rights of others, other than as set
forth on Schedule 5.6 of the Company Disclosure Letter, except to the extent
that the failure by Company or such
77
Subsidiary to have any such right would not be likely to result in a Material
Adverse Effect on Company. As of the Closing, Schedule 5.5C of the Company
Disclosure Letter contains a complete and correct list of all patents,
copyrights, trade marks, licenses, service marks, trade names and other similar
rights owned or used by Company or any of its Subsidiaries or by ▇▇▇▇▇▇▇▇-▇▇▇▇▇
or any of its Subsidiaries, showing for each item the owner thereof and each
public body with which such ownership is registered, other than those the
failure by Company or such Subsidiary to own or have the right to use would not
be likely to result in a Material Adverse Effect on Company.
5.6 Litigation; Adverse Facts.
Except as set forth on Schedule 5.6 of the Company Disclosure
Letter, there are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of any Responsible Officer of Company,
threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries and that, individually or in the
aggregate, would be likely to result in a Material Adverse Effect on Company. As
of the Closing Date to the knowledge of any Responsible Officer of Company no
such actions, suits, proceedings, arbitrations or governmental investigations
set forth on Schedule 5.6 of the Company Disclosure Letter would be likely to
result in a Material Adverse Effect. Neither Company nor any of its Subsidiaries
(i) is in violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, would be likely to result in a Material
Adverse Effect on Company, or (ii) is subject to or in default with respect to
any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, would be likely to result in a Material
Adverse Effect on Company.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3 or to the
extent that failure to perform would not be likely to result in a Material
Adverse Effect on Company, all tax returns and reports of Company and its
Subsidiaries required to be filed by any of them have been timely filed, and all
taxes shown on such tax returns to be due and payable and all assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Company knows of no proposed
tax assessment against Company or any of its Subsidiaries which is not being
actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other
78
appropriate provisions, if any, as shall be required in conformity with GAAP
shall have been made or provided therefor.
5.8 Performance of Agreements; Materially Adverse Agreements; Material
Contracts.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not be likely to result in a Material
Adverse Effect on Company.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, would be likely
to result in a Material Adverse Effect on Company.
5.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 Securities Activities.
A. Neither Company nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than
25% of the value of the assets (either of Company only or of Company and its
Subsidiaries on a consolidated basis) subject to the provisions of subsection
7.2 or 7.7 or subject to any restriction contained in any agreement or
instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
5.11 Employee Benefit Plans.
A. Company, each of its Subsidiaries and each of their respective ERISA
Affiliates are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each
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Employee Benefit Plan of Company and its Subsidiaries, and have performed all
their obligations under each such Employee Benefit Plan, except where such
failure to comply or failure to perform would not be likely to result in a
Material Adverse Effect on Company. Each such Employee Benefit Plan which is
intended to qualify under Section 401(a) of the Internal Revenue Code is so
qualified.
B. No ERISA Event has occurred or is reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as set forth on Schedule 5.11 of the Company Disclosure
Letter, no such Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates.
D. As of the most recent valuation date for any Pension Plan of Company
and its Subsidiaries, the amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all such
Pension Plans (excluding for purposes of such computation any such Pension Plans
with respect to which assets exceed benefit liabilities), does not exceed
$500,000.
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Company, its
Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all such
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $500,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby, other
than those payable in connection with the Acquisition, and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
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5.13 Environmental Protection.
Except as set forth on Schedule 5.13 of the Company Disclosure
Letter:
(i) neither Company nor any of its Subsidiaries nor any of
their respective Facilities or operations are subject to any
outstanding written order, consent decree or settlement agreement with
any Person relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity that, individually or in
the aggregate, would be likely to result in a Material Adverse Effect
on Company;
(ii) neither Company nor any of its Subsidiaries has received
on its own behalf any letter or request for information under Section
104 of the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss. 9604) or any comparable state law;
(iii) there are and, to the knowledge of each Responsible
Officer of Company, have been no conditions, occurrences, or Hazardous
Materials Activities which could reasonably be expected to form the
basis of an Environmental Claim against Company or any of its
Subsidiaries that, individually or in the aggregate, would be likely to
result in a Material Adverse Effect on Company;
(iv) neither Company nor any of its Subsidiaries nor, to the
knowledge of each Responsible Officer of Company, any predecessor of
Company or any of its Subsidiaries has filed on its own behalf any
notice under any Environmental Law indicating past or present treatment
of Hazardous Materials at any Facility, and none of Company's or any of
its Subsidiaries' operations involves (other than in a solely advisory
capacity) the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270
or any state equivalent; and
(v) compliance by Company and its Subsidiaries with all current
or reasonably foreseeable future requirements pursuant to or under
Environmental Laws will not, individually or in the aggregate, be
likely to result in a Material Adverse Effect on Company.
Notwithstanding anything in this subsection 5.13 to the
contrary, no event or condition is occurring with respect to Company or any of
its Subsidiaries or, to the knowledge of any Responsible Officer of Company, has
occurred with respect to Company or any of its Subsidiaries relating to any
Environmental Law, any Release of Hazardous Materials, or any Hazardous
Materials Activity, including any matter disclosed on Schedule 5.13 of the
Company Disclosure Letter, which individually or in
81
the aggregate has had or would be likely to result in a Material Adverse Effect
on Company.
5.14 Employee Matters.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that would be likely to result in a
Material Adverse Effect on Company.
5.15 Solvency.
Each Loan Party, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be Solvent.
5.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. The execution and
delivery of the Collateral Documents by Loan Parties, together with (i) the
actions taken on or prior to the Closing pursuant to subsections 4.1L and 6.7
and (ii) the delivery to Administrative Agent of any Pledged Collateral not
delivered to Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Administrative Agent for the
benefit of Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any Collateral), a
valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
82
C. Absence of Third-Party Filings. Except such as may have been filed
in favor of Administrative Agent as contemplated by subsection 5.16A, no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
D. Margin Regulations. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All information supplied to
Administrative Agent by or on behalf of any Loan Party with respect to any of
the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 Merger Agreement.
A. Delivery of Merger Agreement. Company has delivered to Lenders
complete and correct copies of the Merger Agreement and of all exhibits and
schedules thereto.
▇. ▇▇▇▇▇▇▇▇-▇▇▇▇▇'▇ Warranties. Except to the extent otherwise set
forth herein or in the schedules hereto, each of the representations and
warranties given by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ to Company in the Merger Agreement as updated
by the letter dated August 26, 1997 from ▇▇▇▇▇▇▇▇-▇▇▇▇▇ to URS, the letter dated
September 26, 1997 from ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to URS and any other
letter or certificate delivered by ▇▇▇▇▇▇▇▇-▇▇▇▇▇ on the Closing Date pursuant
to the Merger Agreement is true and correct in all material respects as of the
date hereof (or as of any earlier date to which such representation and warranty
specifically relates) and will be true and correct in all material respects as
of the Closing (or as of such earlier date, as the case may be), in each case
subject to the qualifications set forth in the schedules to the Merger
Agreement.
C. Warranties of Company. Subject to the qualifications set forth
therein, each of the representations and warranties given by Company to
▇▇▇▇▇▇▇▇-▇▇▇▇▇ in the Merger Agreement is true and correct in all material
respects as of the date hereof and will be true and correct in all material
respects as of the Closing.
D. Survival. Notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of Company set forth in subsections
5.17B and 5.17C shall, solely for purposes of this Agreement, survive the
Closing for the benefit of Lenders.
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5.18 Disclosure.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document or the Merger Agreement or in any
other document, certificate or written statement furnished to Lenders by or on
behalf of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement, including, without limitation, the
Company Disclosure Letter, contains any untrue statement of a material fact or
omits to state a material fact (known to Company, in the case of any document
not furnished by it) necessary in order to make the statements contained herein
or therein not misleading in light of the circumstances in which the same were
made. Any projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by
Company to be reasonable at the time made, it being recognized by Lenders that
such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by any such projections may
differ from the projected results. There are no facts known (or which should
upon the reasonable exercise of diligence be known) to Company (other than
matters of a general economic nature) that, individually or in the aggregate,
would be likely to result in a Material Adverse Effect on Company and that have
not been disclosed herein or in such other documents, certificates and
statements furnished to Lenders for use in connection with the transactions
contemplated hereby.
Section 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. Company will deliver to Administrative Agent
and Lenders:
(i) Company Quarterly Financials: (a) as soon as available and
in any event within 55 days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated balance sheet of
Company and its Subsidiaries as at the end of such Fiscal Quarter and
the related consolidated statements of income, stockholders' equity and
cash flows of Company and its Subsidiaries for such Fiscal Quarter and
for the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter, setting forth in each case in
84
comparative form the corresponding figures for the corresponding
periods of the previous Fiscal Year, all in reasonable detail and
certified by the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of Company
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (b)
as soon as available and in any event within 90 days after the end of
each Fiscal Quarter, a summary of such consolidated statements setting
forth in comparative form the corresponding figures from the Financial
Plan for the current Fiscal Year and a narrative report describing the
operations of Company and its Subsidiaries in each case in the form
prepared for presentation to the Board of Directors for such Fiscal
Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter;
(ii) Company Year-End Financials: as soon as available and in
any event within 100 days after the end of each Fiscal Year, (a) the
consolidated balance sheet of Company and its Subsidiaries as at the
end of such Fiscal Year and the related consolidated statements of
income, stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal
Year, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for
the periods indicated, (b) a summary of such consolidated statements
setting forth in comparative form the corresponding figures from the
Financial Plan for the current Fiscal Year and, a narrative report
describing the operations of Company and its Subsidiaries in each case
in the form prepared for presentation to the Board of Directors for
such Fiscal Year, (c) an office performance summary for the Fiscal Year
then ended and (d) in the case of such consolidated financial
statements, a report thereon of Coopers & ▇▇▇▇▇▇▇ LLP or other
independent certified public accountants of recognized national
standing selected by Company, which report shall be unqualified, shall
express no doubts about the ability of Company and its Subsidiaries to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise disclosed in
such financial statements) and that the examination by such accountants
in connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards, together with
an executed Auditor's Letter regarding such financial statements;
85
(iii) Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its Subsidiaries
pursuant to subdivisions (i) and (ii) above, (a) an Officer's
Certificate of Company stating that the signers have reviewed the terms
of this Agreement and have made, or caused to be made under their
supervision, a review in reasonable detail of the transactions and
condition of Company and its Subsidiaries during the accounting period
covered by such financial statements and that such review has not
disclosed the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence as at the
date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if
any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action Company has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restrictions
contained in subsections 7.1(xi) and (xii), 7.3(vii), (viii), (ix),
(xii), (xiii) and (xiv), 7.4(ix), 7.6, 7.7(v) and (vi) and 7.8 in each
case to the extent compliance with such restrictions is required to be
tested at the end of the applicable accounting period;
(iv) Reconciliation Statements: if, as a result of any change
in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements delivered
pursuant to subdivisions (i), (ii) or (xii) of this subsection 6.1 will
differ in any material respect from the consolidated financial
statements that would have been delivered pursuant to such subdivisions
had no such change in accounting principles and policies been made,
then (a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), or (xii) of this subsection 6.1
following such change, consolidated financial statements of Company and
its Subsidiaries for (y) the current Fiscal Year to the effective date
of such change and (z) the two full Fiscal Years immediately preceding
the Fiscal Year in which such change is made, in each case prepared on
a pro forma basis as if such change had been in effect during such
periods, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), or (xii) of this subsection 6.1
following such change, a written statement of the chief accounting
officer or chief financial officer of Company setting forth the
differences (including, without limitation, any differences that would
affect any calculations relating to the financial covenants set forth
in subsection 7.6) which would have resulted if such financial
statements had been prepared without giving effect to such change;
(v) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (ii) above, a written statement by the
independent certified public accountants giving the report thereon
stating that their audit examination has
86
included a review of the terms of this Agreement and the other Loan
Documents as they relate to accounting matters and that, based on their
audit examination, nothing has come to their attention that causes them
to believe that the information relating to subsection 7.6 contained in
the certificates delivered therewith pursuant to subdivision (iii)
above is not correct or that the matters set forth in the Compliance
Certificates delivered therewith pursuant to clause (b) of subdivision
(iii) above for the applicable Fiscal Year are not stated in accordance
with the terms of this Agreement;
(vi) Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(vii) SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company to its
security holders other than Company or another Subsidiary of Company,
(b) all regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments
in the business of Company or any of its Subsidiaries;
(viii) Events of Default, etc.: promptly upon any Responsible
Officer of Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a
claimed Event of Default or Potential Event of Default, (b) that any
Person has given any notice to Company or any of its Subsidiaries or
taken any other action with respect to a claimed default or event or
condition of the type referred to in subsection 8.2, (c) of any
condition or event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange Commission on
Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect on Company, an Officer's Certificate specifying the
87
nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;
(ix) Litigation or Other Proceedings: (a) promptly upon any
Responsible Officer of Company obtaining knowledge of (x) the
institution of, or non-frivolous threat of, any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting Company
or any of its Subsidiaries or any property of Company or any of its
Subsidiaries (collectively, "Proceedings") not previously disclosed in
writing by Company to Lenders or (y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, would be likely to result in
a Material Adverse Effect on Company; or
(2) seeks to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of,
the transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their counsel to
evaluate such matters; and (b) promptly upon its becoming available, a
copy of the list of Proceedings delivered by Company to its independent
certified public accountants in connection with the report prepared by
them on the consolidated financial statements of Company and its
Subsidiaries for each Fiscal Year, and promptly after request by
Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and
its counsel to evaluate any of such Proceedings;
(x) ERISA Events: promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written
notice specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any
action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto;
(xi) ERISA Notices: with reasonable promptness, copies of (a)
each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with
respect to each Pension Plan of Company or any of its Subsidiaries; (b)
all notices received by Company, any of its
88
Subsidiaries or any of their respective ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event; and (c) copies of
such other documents or governmental reports or filings relating to any
Employee Benefit Plan of Company or any of its Subsidiaries as
Administrative Agent shall reasonably request;
(xii) Financial Plans: as soon as practicable and in any event
no later than 60 days following the end of each Fiscal Year, a
consolidated plan and financial forecast for the current Fiscal Year
(the "Financial Plan" for such Fiscal Year), including, without
limitation, (a) forecasted consolidated balance sheets and forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each such Fiscal Year, together with a projected
Compliance Certificate for each such Fiscal Year and an explanation of
the assumptions on which such forecasts are based, (b) forecasted
consolidated statements of income and cash flows of Company and its
Subsidiaries for each Fiscal Quarter of the first such Fiscal Year,
together with an explanation of the assumptions on which such forecasts
are based, and (c) such other information and projections as any Lender
may reasonably request;
(xiii) Insurance: as soon as practicable and in any event by
the last day of each Fiscal Year, a report in form and substance
reasonably satisfactory to Administrative Agent outlining any change
since the proceeding Fiscal Year in any material insurance coverage
maintained by Company and its Subsidiaries;
(xiv) Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company;
(xv) New Subsidiaries or Change in Status of Subsidiaries:
annually, all of the data required to be set forth on Schedules 5.1D
and 5.1E of the Company Disclosure Letter with respect to all
Subsidiaries of Company;
(xvi) Subordinated Debt Notices: promptly upon receipt by
Company or any of its Subsidiaries of any notice under any of the
Existing Subordinated Agreements, and promptly upon the giving of
notice by Company or any of its Subsidiaries under any of the Existing
Subordinated Agreements, in each case relating to any default or
payment or prepayment of principal of, premium, if any, redemption,
purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to such
Existing Subordinated Indebtedness, a copy of such notice; and
(xvii) Other Information: with reasonable promptness, such
other information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
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6.2 Corporate Existence, etc.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises material
to its business; provided, however that neither Company nor any of its
Subsidiaries shall be required to preserve any such right or franchise if the
Board of Directors of Company or such Subsidiary shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
Company or such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Company, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto, except where the failure to pay such
taxes, assessments and governmental charges would not be likely to result in a
Material Adverse Effect on Company; provided that no such charge or claim need
be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (i) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (ii) in the case of a charge or claim
which has or may become a Lien against any of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral to satisfy such charge or claim.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries).
6.4 Maintenance of Properties; Insurance; Application of Net Insurance/
Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including,
without limitation, all Intellectual Property) and from time to time will make
or cause to be made all appropriate repairs, renewals and replacements thereof.
90
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self- insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry.
6.5 Inspection Rights.
Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of Company or of any of its Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and their affairs, finances and accounts with its
and their officers and independent public accountants (provided that Company
may, if it so chooses, be present at or participate in any such discussion), all
upon reasonable notice and at such reasonable times during normal business hours
and as often as may reasonably be requested.
6.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries
to comply, with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including all Environmental Laws),
noncompliance with which would be likely to cause, individually or in the
aggregate, a Material Adverse Effect.
6.7 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Certain Subsidiaries and Future Subsidiaries.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Domestic Subsidiary of Company (including any
Inactive Subsidiary) existing on the Closing Date that has not previously
executed a Subsidiary Guaranty, or any Person that becomes a Domestic Subsidiary
of Company after the date hereof hereafter, has gross revenues for any Fiscal
Year exceeding $250,000, Company will promptly notify Administrative Agent of
that fact and cause such Subsidiary to execute and deliver to Administrative
Agent a Subsidiary Guaranty, and a Subsidiary Pledge Agreement and to take all
such further actions and execute all such further documents and instruments
(including, without limitation, actions, documents and instruments comparable to
those described in subsection 4.1L) as may be necessary or, in the opinion of
Administrative Agent, desirable to create in favor of Administrative Agent, for
the benefit of Lenders, a valid and perfected First Priority
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Lien on all of the assets of such Subsidiary described in the applicable forms
of Collateral Documents.
B. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of the Certificate or Articles of Incorporation of each
Subsidiary described in subsection 6.7A, together with a good standing
certificate from the Secretary of State of the jurisdiction of its incorporation
and, to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of such jurisdiction, each to be dated a recent
date prior to their delivery to Administrative Agent, (ii) a copy of such
Subsidiary's Bylaws, certified by its corporate secretary or an assistant
secretary as of a recent date prior to their delivery to Administrative Agent,
(iii) a certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the fact that the attached resolutions of the Board of
Directors of such Subsidiary approving and authorizing the execution, delivery
and performance of such Loan Documents are in full force and effect and have not
been modified or amended and (b) the incumbency and signatures of the officers
of such Subsidiary executing such Loan Documents, and (iv) a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to
Administrative Agent and its counsel, as to (a) the due organization and good
standing of such Subsidiary, (b) the due authorization, execution and delivery
by such Subsidiary of such Loan Documents, (c) the enforceability of such Loan
Documents against such Subsidiary and (d) such other matters (including without
limitation matters relating to the creation and perfection of Liens in any
Collateral pursuant to such Loan Documents) as Administrative Agent may
reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
C. Foreign Personal Property Collateral. In the event that any Foreign
Subsidiary of Company has gross revenues for any Fiscal Year greater than or
equal to 5% of the gross revenues of Company and its Subsidiaries, taken as a
whole, for such Fiscal Year, then Company will promptly notify Administrative
Agent of that fact and Company will take, and will cause its Domestic
Subsidiaries and such Foreign Subsidiary to take, all such further actions and
execute all such further Collateral Documents and/or all such further documents
and instruments (including, without limitation, actions, documents and
instruments comparable to those described in subsection 4.1L) as may be
necessary or, in the opinion of Administrative Agent, desirable to create,
pursuant to the laws of the jurisdiction in which such Foreign Subsidiary is
organized or in which such Foreign Subsidiary's principal place of business is
located, in favor of Administrative Agent, for the benefit of Lenders, a valid
and perfected First Priority Lien on all the capital stock of such Foreign
Subsidiary to the extent set forth in the applicable forms of Collateral
Documents; provided, however, that no action shall be required to be taken with
respect to the capital stock of any Foreign Subsidiary pursuant to this
subsection in the event that Company and Administrative Agent agree in good
faith that the pledge of such stock would result in a
92
significant tax liability to Company or any of its Subsidiaries or is restricted
by the laws of the jurisdiction under which such Foreign Subsidiary is
organized.
D. Post Closing Actions Regarding Foreign Personal Property Collateral.
On or prior to January 31, 1998, Company will take, and will cause the affected
Subsidiary Guarantors and Foreign Subsidiaries of Company to take, such further
actions as may be reasonably necessary in Bermuda, Canada, Hong Kong, Mexico,
New Zealand, Philippines, Spain, Switzerland and the United Kingdom in order to
perfect the Lien on the capital stock of each Foreign Subsidiary organized under
the laws of such jurisdictions granted on the Closing Date pursuant to the
Subsidiary Pledge Agreement (which, in the case of the Philippines is limited to
the value of such Subsidiary).
6.8 Interest Rate Protection.
At all times during the period from and including the date
which is 90 days after the Closing Date to and excluding the fourth anniversary
of the Closing Date, Company shall maintain in effect one or more Interest Rate
Agreements with respect to the Term Loans, in an aggregate notional principal
amount of not less than 50% of the aggregate principal amount of all outstanding
Term Loans, each such Interest Rate Agreement to be in form and substance
reasonably satisfactory to Administrative Agent.
Section 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries
or any Joint Venture in which Company or any of its Subsidiaries has any
interest to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company, its Subsidiaries and such Joint Ventures may
become and remain liable with respect to Contingent Obligations
permitted by subsection 7.4 and, upon any matured obligations actually
arising pursuant thereto, the Indebtedness corresponding to the
Contingent Obligations so extinguished;
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(iii) Company, its Subsidiaries (other than Inactive
Subsidiaries) and such Joint Ventures may become and remain liable with
respect to Indebtedness in respect of Capital Leases in the ordinary
course of business and Indebtedness secured by Liens permitted by
subsection 7.2A(v);
(iv) Company may become and remain liable with respect to
Indebtedness to any Subsidiary Guarantor, and any wholly-owned
Subsidiary Guarantor may become and remain liable with respect to
Indebtedness to Company or any Subsidiary Guarantor, provided that (a)
in the event such loan is evidenced by a promissory note it shall be
pledged to Administrative Agent on behalf of Lenders pursuant to the
Company Pledge Agreement or the Subsidiary Pledge Agreement, as the
case may be, (b) all intercompany Indebtedness owed by Company to any
Subsidiary Guarantor and by any wholly-owned Subsidiary Guarantor to
Company shall be subordinated in right of payment to the payment in
full of the Obligations, and (c) any payment by any wholly-owned
Subsidiary Guarantor under any guaranty of the Obligations shall result
in a pro tanto reduction of the amount of any intercompany Indebtedness
owed by such wholly-owned Subsidiary Guarantor to Company or to any
wholly-owned Subsidiary Guarantor for whose benefit such payment is
made;
(v) any Subsidiary of Company (other than a wholly-owned
Subsidiary Guarantor or an Inactive Subsidiary) may become and remain
liable with respect to Indebtedness to Company or any Subsidiary
Guarantor to the extent such corresponding Investment by Company or any
such Subsidiary Guarantor is permitted under subsection 7.3(vii),
provided that (a) in the event such loan is evidenced by a promissory
note it shall be pledged to Administrative Agent on behalf of Lenders
pursuant to the Company Pledge Agreement or the Subsidiary Pledge
Agreement, as the case may be, (b) all intercompany Indebtedness owed
by any Subsidiary Guarantor to Company shall be subordinated in right
of payment to the payment in full of the Obligations, and (c) any
payment by any Subsidiary Guarantor under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
intercompany Indebtedness owed by such Subsidiary Guarantor to Company
or to any wholly-owned Subsidiary Guarantor for whose benefit such
payment is made;
(vi) any Foreign Subsidiary of Company may become and remain
liable with respect to Indebtedness to any other Foreign Subsidiary of
Company;
(vii) Company may remain liable with respect to Indebtedness
evidenced by the Existing Subordinated Indebtedness in an aggregate
principal amount not to exceed $8,600,000 (including the amount of any
such Indebtedness listed on Schedule 7.1 of the Company Disclosure
Letter);
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(viii) such Joint Ventures may become and remain liable with
respect to Indebtedness, provided that such Indebtedness is nonrecourse
to Company, its Subsidiaries and their respective assets;
(ix) such Joint Ventures may become and remain liable with
respect to Indebtedness to Company or any Subsidiary of Company (other
than an Inactive Subsidiary) to the extent such corresponding
Investment by Company or any such Subsidiary is permitted under
subsection 7.3(viii);
(x) Indebtedness (including the amount of any committed lines
of credit) listed on Schedule 7.1 of the Company Disclosure Letter;
(xi) Domestic Subsidiaries of Company may become and remain
liable with respect to Indebtedness to Persons other than Company or
any of its Subsidiaries in an aggregate principal amount (not including
the amount of any such Indebtedness and committed lines of credit
listed on Schedule 7.1 of the Company Disclosure Letter) not to exceed
$5,000,000 at any time outstanding; and
(xii) Foreign Subsidiaries of Company may become and remain
liable with respect to Indebtedness to Persons other than Company or
any of its Subsidiaries in an aggregate principal amount (including the
amount of any such Indebtedness and committed lines of credit listed on
Schedule 7.1 of the Company Disclosure Letter), provided that the sum
of the aggregate amount of all such Indebtedness and the aggregate face
value of all accounts receivable subject to a sale agreement entered
into by any Foreign Subsidiary pursuant to subsection 7.8 does not
exceed $20,000,000 at any time.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC or under any similar recording or notice statute, except:
(i) Permitted Encumbrances on any property, asset, income or
profits of Company or any of its Subsidiaries;
95
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described on Schedule 7.2 of the Company Disclosure
Letter;
(iv) Liens on property or assets acquired by Company or any of
its Subsidiaries after the date of this Agreement or on property or
assets of any Person which becomes a Subsidiary of Company after the
date of this Agreement, provided that (a) such Liens exist at the time
such property or assets or the stock of such Person is acquired and (b)
such Liens were not created in contemplation of such acquisition;
(v) Liens created to secure the purchase price of property or
assets, provided that (a) any such Lien shall attach only to the
property or assets so purchased, (b) the Indebtedness secured by any
such Lien shall not exceed 100% of the purchase price of the property
or assets purchased, and (c) any such Lien shall be created within
twelve months following the acquisition of such property or assets;
(vi) Liens on property or assets of any Joint Venture created
to secure Indebtedness permitted under subsection 7.1(viii);
(vii) Liens on property or assets of any Foreign Subsidiary of
Company created to secure Indebtedness permitted under subsection
7.1(xii);
(viii) Liens incurred in connection with the extension, renewal
or refinancing of the Indebtedness secured by the Liens described in
clauses (iii) and (v) above; and
(ix) other Liens in an aggregate amount not to exceed $250,000
at any time.
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither Company
nor any of its
96
Subsidiaries shall enter into any agreement prohibiting the creation or
assumption of any Lien upon any of its properties or assets, whether now owned
or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or
advances to Company or any other Subsidiary of Company, or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.
7.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or own any Investment in any Person, including
any Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments
in Cash Equivalents;
(ii) Company and any Subsidiary Guarantor may make intercompany
loans to the extent permitted under subsection 7.1(iv);
(iii) Company and its Subsidiaries (other than Inactive
Subsidiaries) may make Consolidated Capital Expenditures;
(iv) Company and Merger Sub may consummate the Acquisition and
the Merger;
(v) Company and its Subsidiaries may continue to own the
Investments owned by them and described on Schedule 7.3 of the Company
Disclosure Letter;
(vi) Company and its Subsidiaries (other than Inactive
Subsidiaries) may make and own Investments in wholly-owned Subsidiary
Guarantors;
(vii) Company and Subsidiary Guarantors may make and own
Investments in addition to those permitted under subsection 7.3(ix) in
Subsidiaries (other than wholly-owned Subsidiary Guarantors) in an
aggregate amount (including the amount of any such Investments listed
on Schedule 7.3 of the Company Disclosure Letter, other than
Investments in Inactive Subsidiaries) not to exceed $40,000,000 at any
time;
97
(viii) Company and its Subsidiaries (other than Inactive
Subsidiaries) may make and own Investments in Joint Ventures in an
aggregate amount not to exceed $2,000,000 at any time;
(ix) Company may make and own Investments in ▇▇▇▇▇▇▇▇▇▇ Group
Ltd. in an aggregate amount not to exceed $10,000,000 at any time;
(x) ▇▇▇▇▇▇▇▇▇▇ Group Ltd. may make and own Investments in
accordance with the terms of that certain investment policy delivered
to Administrative Agent on the Closing Date and any investment policy
approved by Requisite Lenders in writing from time to time;
(xi) any Foreign Subsidiary of Company may make and own
Investments in any other Foreign Subsidiary of Company;
(xii) Company and its Subsidiaries may make and own Investments
in addition to those otherwise permitted under this subsection 7.3,
provided that (a) any such Investment does not exceed 25% of the total
capitalization of any entity in which such Investment is made and (b)
the aggregate amount of all such Investments does not exceed
$10,000,000 at any time;
(xiii) Company and its Subsidiaries may make and own
Investments in addition to those otherwise permitted under this
subsection 7.3, provided that (a) the sum of the aggregate amount of
all such Investments and the aggregate Total Purchase Price of all
Subsequent Acquisitions made pursuant to subsection 7.7(vi) does not
exceed $10,000,000 in any Fiscal Year or $30,000,000 in the aggregate
during the term of this Agreement and (b) Company shall have delivered
a Compliance Certificate to Administrative Agent demonstrating that,
after giving effect to such proposed Investment, the Leverage Ratio is
less than 2.25 to 1.00; and
(xiv) Company and its Subsidiaries may make and own Investments
in addition to those otherwise permitted under this subsection 7.3 in
an aggregate amount not to exceed $2,000,000 at any time.
7.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries
or any Joint Venture in which Company or any of its Subsidiaries has an interest
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary
Guaranty;
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(ii) Company may become and remain liable with respect to
Contingent Obligations in respect of the Letters of Credit;
(iii) Company may become and remain liable with respect to
Contingent Obligations under Currency Agreements constituting Hedge
Agreements;
(iv) Company may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements constituting
Hedge Agreements in the ordinary course of business in an amount not to
exceed the aggregate amount of the related Indebtedness;
(v) Company, its Subsidiaries (other than Inactive
Subsidiaries) and such Joint Ventures may become and remain liable with
respect to Contingent Obligations in respect of performance and bid
bonds in the ordinary course of business;
(vi) Company may become and remain liable with respect to
Contingent Obligations in respect of any Indebtedness of any of its
Domestic Subsidiaries (other than Inactive Subsidiaries) permitted by
subsection 7.1;
(vii) Company may become and remain liable with respect to any
Contingent Obligations under guaranties in the ordinary course of
business of the performance by its Subsidiaries of their obligations
under agreements entered into by such Subsidiaries with their customers
in the ordinary course of business provided such Subsidiary is
permitted to enter into such agreement;
(viii) such Joint Ventures may become and remain liable with
respect to Contingent Obligations, provided that such Contingent
Obligations are nonrecourse to Company, its Subsidiaries and their
respective assets; and
(ix) Company, its Subsidiaries (other than Inactive
Subsidiaries) and such Joint Ventures may become and remain liable with
respect to other Contingent Obligations, provided that the maximum
aggregate liability, contingent or otherwise, of Company, its
Subsidiaries and such Joint Ventures in respect of all such Contingent
Obligations shall at no time exceed $10,000,000.
7.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Junior Payment; provided that (i) Company may make regularly
scheduled payments of interest and regularly scheduled sinking fund payments in
respect of any Existing Subordinated Indebtedness, in each case, in accordance
with the terms of, and only to the extent required by, and subject to the
subordination provisions contained in, the indenture or
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other agreement pursuant to which such Existing Subordinated Indebtedness was
issued, as such indenture or other agreement may be amended from time to time to
the extent permitted under subsection 7.11, (ii) Company may repurchase shares
of its outstanding capital stock for cash consideration in an aggregate amount
not to exceed $15,000,000 and (iii) Company may repay the Existing Shareholder
Notes.
7.6 Financial Covenants.
A. Minimum Quick Ratio. Company shall not permit the ratio of (i)
Consolidated Quick Assets to (ii) Consolidated Current Liabilities as of the
last day of any Fiscal Quarter to be less than the correlative ratio indicated:
Minimum
Period Quick Ratio
------ -----------
Closing through 04/30/98 1.15:1.00
05/01/98 through 07/31/98 1.18:1.00
thereafter 1.20:1.00
B. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
ratio of (i) Consolidated EBITDA for any four-Fiscal Quarter period ending
during any of the periods set forth below minus Consolidated Capital
Expenditures (net of any proceeds of any related financings with respect to such
expenditures) for such four-Fiscal Quarter period to (ii) Consolidated Fixed
Charges for such four-Fiscal Quarter period to be less than the correlative
ratio indicated; provided, however, that in the event that any such period
includes any period prior to consummation of the Merger, (a) "Consolidated
EBITDA" for any such period prior to consummation of the Merger shall mean Pre
Merger Consolidated EBITDA for such period; (b) "Consolidated Capital
Expenditures" for any such period prior to consummation of the Merger shall mean
the Pre Merger Consolidated Capital Expenditures for such period; and (c)
"Consolidated Fixed Charges" for any such period prior to consummation of the
Merger shall mean Pre Merger Consolidated Fixed Charges for such period:
Minimum Fixed
Period Charge Coverage Ratio
------ ---------------------
Closing through 10/31/00 1.05:1.00
thereafter 1.10:1.00
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C. Maximum Leverage Ratio. As of the last day of any Fiscal Quarter
ending during any of the periods set forth below, Company shall not permit the
ratio of (i) Consolidated Total Funded Debt as of such day to (ii) Consolidated
EBITDA for the four-Fiscal Quarter period ending on such day (the "Leverage
Ratio") to exceed the correlative ratio indicated; provided, however, that in
the event that any such period includes any period prior to consummation of the
Merger, "Consolidated EBITDA" for any such period prior to consummation of the
Merger shall mean Pre Merger Consolidated EBITDA for such period:
Period Maximum Leverage Ratio
------ ----------------------
Closing through 04/30/98 3.00:1.00
05/01/98 through 07/31/98 2.85:1.00
08/01/98 through 04/30/99 2.75:1.00
05/01/99 through 07/31/99 2.65:1.00
08/01/99 through 04/30/00 2.50:1.00
05/01/00 through 07/31/00 2.35:1.00
08/01/00 through 04/30/01 2.25:1.00
05/01/01 through 07/31/01 2.15:1.00
08/01/01 through 04/30/02 2.00:1.00
05/01/02 through 07/31/02 1.88:1.00
08/01/02 through 04/30/03 1.75:1.00
05/01/03 through 07/31/03 1.65:1.00
thereafter 1.50:1.00
D. Minimum Consolidated EBITDA. Company shall not permit Consolidated
EBITDA for any four-Fiscal Quarter period ending during any of the periods set
forth below to be less than the correlative amount indicated; provided, however,
that in the event that any such period includes any period prior to consummation
of the Merger, "Consolidated EBITDA" for any such period prior to consummation
of the Merger shall mean Pre Merger Consolidated EBITDA for such period:
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Minimum Consolidated
Period EBITDA
------ ------
Closing through 04/30/98 $ 45,000,000
05/01/98 through 07/31/98 49,000,000
08/01/98 through 04/30/99 53,000,000
05/01/99 through 07/31/99 54,000,000
08/01/99 through 04/30/00 55,000,000
05/01/00 through 07/31/00 57,000,000
08/01/00 through 04/30/01 59,000,000
05/01/01 through 07/31/01 60,000,000
08/01/01 through 04/30/02 61,000,000
05/01/02 through 07/31/02 63,000,000
08/01/02 through 04/30/03 65,000,000
05/01/03 through 07/31/03 67,000,000
thereafter 68,000,000
7.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Company shall not, and shall not permit any of its Subsidiaries
to, alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) Company and Merger Sub may consummate the Acquisition and
the Merger;
(ii) any Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated,
wound up or dissolved, or all or any part of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed
of, in one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary Guarantor, provided that, in the case of such a
merger, Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(iii) Company and its Subsidiaries may dispose of obsolete,
worn out or surplus property in the ordinary course of business;
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(iv) Company and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset Sales, provided
that the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof;
(v) Company and its Subsidiaries may make Asset Sales of assets
having a fair market value of not in excess of $10,000,000 during any
Fiscal Year, provided that (a) the consideration received for such
assets shall be in an amount at least equal to the fair market value
thereof; and (b) the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a); and
(vi) subject to subsection 6.7, Company and its Subsidiaries
may acquire by purchase or otherwise (each, a "Subsequent Acquisition")
all or substantially all the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person (other
than ▇▇▇▇▇▇▇▇-▇▇▇▇▇) or any division or line of business of any Person
(other than ▇▇▇▇▇▇▇▇-▇▇▇▇▇), provided that (a) the sum of the aggregate
Total Purchase Price of all Subsequent Acquisitions and the aggregate
amount of all Investments made pursuant to subsection 7.3(xiii) does
not exceed $10,000,000 in any Fiscal Year or $30,000,000 in the
aggregate during the term of this Agreement and (b) Company shall have
delivered a Compliance Certificate to Administrative Agent
demonstrating that, after giving effect to such proposed Subsequent
Acquisition, the Leverage Ratio is less than 2.25 to 1.00.
7.8 Sale or Discount of Receivables.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, sell with recourse, discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
except that (i) any Foreign Subsidiary of Company may sell with recourse,
discount or otherwise sell for less than the face value thereof its accounts
receivable, provided that the sum of the aggregate face value of all such
accounts receivable subject to a sale agreement and the aggregate amount of all
Indebtedness permitted under subsection 7.1(xii) does not exceed $20,000,000 at
any time and (ii) Company and its Subsidiaries may discount or otherwise sell
for less than the face value thereof any of their respective notes or accounts
receivable that are in arrears and, in the reasonable judgment of Company or
such Subsidiary, are likely to remain unpaid.
7.9 Transactions with Shareholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with
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any Affiliate of Company or of any such holder, on terms that are less favorable
to Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (i) any transaction
between Company and any of its wholly-owned Subsidiaries or between any of its
wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to members of
the Boards of Directors of Company and its Subsidiaries or (iii) existing
related party transactions described in Company's Annual Report on Form 10-K for
the 1996 Fiscal Year.
7.10 Conduct of Business.
From and after the Closing Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and their respective
Subsidiaries on the Closing Date and similar or related businesses and (ii) such
other lines of business as may be consented to by Requisite Lenders.
7.11 Amendments or Waivers of Merger Agreement; Amendments of Documents
Relating to Subordinated Indebtedness.
A. Amendments or Waivers of Merger Agreement. Neither Company nor any
of its Subsidiaries will agree to any material amendment to, or waive any of its
material rights under, the Merger Agreement after the Closing Date without in
each case obtaining the prior written consent of Administrative Agent to such
amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of any Existing Subordinated Indebtedness or the
Existing Subordinated Agreements, or make any payment consistent with an
amendment thereof or change thereto.
7.12 Fiscal Year
Company shall not change its Fiscal Year-end from October 31.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur:
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8.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; failure by Company
to pay when due any amount payable to the Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or failure by Company to pay any interest on
any Loan or any fee or any other amount due under this Agreement within five
days after the date due; or
8.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when
due any principal of or interest on or any other amount payable in
respect of any Subordinated Indebtedness or one or more items of any
other Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of
$3,000,000 or more or with an aggregate principal amount of $3,000,000
or more, in each case beyond the end of any grace period provided
therefor; or (ii) breach or default by Company or any of its
Subsidiaries with respect to any other material term of (a) any
Subordinated Indebtedness or one or more items of any other
Indebtedness or Contingent Obligations in the individual or aggregate
principal amounts referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness or Contingent Obligation(s), if the effect of
such breach or default is to cause, or to permit the holder or holders
of that Indebtedness or Contingent Obligation(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness or
Contingent Obligation(s) to become or be declared due and payable prior
to its stated maturity or the stated maturity of any underlying
obligation, as the case may be (upon the giving or receiving of notice,
lapse of time, both, or otherwise); or
8.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Company or any of its Subsidiaries
in writing pursuant hereto or thereto or in connection herewith or therewith
shall be false in any material respect on the date as of which made; or
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8.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of this
Section 8, and such default shall not have been remedied or waived within 30
days after the earlier of (i) a Responsible Officer of Company becoming aware of
such default or (ii) receipt by Company and such Loan Party of notice from
Administrative Agent or any Lender of such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal or state
law; or (ii) an involuntary case shall be commenced against Company or
any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Company
or any of its Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other
custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution
or similar process shall have been issued against any substantial part
of the property of Company or any of its Subsidiaries, and any such
event described in this clause (ii) shall continue for 60 days unless
dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under
the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, or shall consent
to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such
law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of
its property; or Company or any of its Subsidiaries shall make any
assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit
in writing its inability, to pay its debts as such debts become due; or
the Board of Directors of Company or any of
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its Subsidiaries (or any committee thereof) shall adopt any resolution
or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $2,000,000
or (ii) in the aggregate at any time an amount in excess of $2,000,000 shall be
entered or filed against Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 Dissolution.
Any order, judgment or decree shall be entered against Company
or any of its Material Subsidiaries decreeing the dissolution or split up of
Company or that Material Subsidiary and such order shall remain undischarged or
unstayed for a period in excess of 30 days; or
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually
or in the aggregate results in or might reasonably be expected to result in
liability of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $2,500,000 during the term of this Agreement; or there
shall exist an amount of unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans of
Company and its Subsidiaries (excluding for purposes of such computation any
such Pension Plans with respect to which assets exceed benefit liabilities),
which exceeds $2,500,000; or
8.11 Material Adverse Effect.
Any event or change shall occur that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect on Company; or
8.12 Change in Control.
Any Person or any two or more Persons acting in concert shall
have acquired after the date hereof beneficial ownership (within the meaning of
Rule 13d- 3 of the Securities and Exchange Commission under the Exchange Act),
directly or indirectly, of Securities of Company (or other Securities
convertible into such Securities) representing 30% or more of the combined
voting power of all Securities of Company
107
entitled to vote in the election of directors, other than Securities having such
power only by reason of the happening of a contingency; or
8.13 Invalidity of Subsidiary Guaranty; Failure of Security; Repudiation of
Obligations.
At any time after the execution and delivery thereof, (i) any
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered thereby, in each case for any reason other than the
failure of Administrative Agent or any Lender to take any action within its
control, or (iii) any Loan Party shall contest the validity or enforceability of
any Loan Document in writing or deny in writing that it has any further
liability, including without limitation with respect to future advances by
Lenders, under any Loan Document to which it is a party; or
8.14 Failure to Consummate Merger.
The Acquisition or the Merger shall not be consummated in
accordance with the Merger Agreement concurrently with the making of the initial
Loans, or the Acquisition or the Merger shall be unwound, reversed or otherwise
rescinded in whole or in part for any reason;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan and the
obligation of the Issuing Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written request
or with the written consent of Requisite Lenders, by written notice to Company,
declare all or any portion of the amounts described in clauses (a) through (c)
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan and the obligation of the
Issuing Lender to issue any Letter of Credit
108
hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders under subsection 3.3C(i).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
Section 9. ADMINISTRATIVE AGENT
9.1 Appointment.
A. Appointment of Administrative Agent. ▇▇▇▇▇ Fargo is hereby appointed
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes Administrative Agent to act as its agent in accordance
with the terms of this Agreement and the other Loan Documents. Administrative
Agent agrees to act upon the express conditions contained in this Agreement and
the other Loan Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Administrative Agent and Lenders and Company shall
have no rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties under this Agreement, Administrative Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obliga tion towards or relationship of agency or
trust with or for Company or any of its Subsidiaries.
109
B. Appointment of Supplemental Collateral Administrative Agents. It is
the purpose of this Agreement and the other Loan Documents that there shall be
no violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee in
such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Administrative Agent deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Loan Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution reasonably acceptable to Company
as a separate trustee, co-trustee, collateral agent or collateral co-agent (any
such additional individual or institution being referred to herein individually
as a "Supplemental Collateral Agent" and collectively as "Supplemental
Collateral Agents"). Company shall not be obligated to pay any fees to such
Supplemental Collateral Agent.
In the event that Administrative Agent appoints a Supplemental
Collateral Administrative Agent with respect to any Collateral, (i) each and
every right, power, privilege or duty expressed or intended by this Agreement or
any of the other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Administrative Agent to the extent, and
only to the extent, necessary to enable such Supplemental Collateral
Administrative Agent to exercise such rights, powers and privileges with respect
to such Collateral and to perform such duties with respect to such Collateral,
and every covenant and obligation contained in the Loan Documents and necessary
to the exercise or performance thereof by such Supplemental Collateral
Administrative Agent shall run to and be enforceable by either Administrative
Agent or such Supplemental Collateral Administrative Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Administrative Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Administrative Agent, as the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Administrative Agent so
appointed by Administrative Agent for more fully and certainly vesting in and
confirming to him or it such rights, powers, privileges and duties, Company
shall, or shall cause such Loan Party to, execute, acknowledge and deliver any
and all such instruments promptly upon request by Administrative Agent. In case
any Supplemental Collateral Administrative Agent, or a successor thereto, shall
die, become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such Supplemental Collateral Administrative Agent, to
the extent permitted by law, shall vest in and be exercised by
110
Administrative Agent until the appointment of a new Supplemental Collateral
Administrative Agent.
9.2 Powers and Duties; General Immunity.
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. Administrative Agent shall have only those duties
and responsibilities that are expressly specified in this Agreement and the
other Loan Documents. Administrative Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or employees.
Administrative Agent shall not have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon
Administrative Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Administrative Agent shall
not be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Administrative Agent to Lenders or by
or on behalf of Company to Administrative Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall Administrative Agent be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement to
the contrary notwithstanding, Administrative Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or the Letter of
Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any of its
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by Administrative Agent under or in connection with any
of the Loan Documents except to the extent caused by Administrative Agent's
gross negligence or willful misconduct. Administrative Agent shall be entitled
to refrain from any act or the
111
taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until Administrative Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give
such instructions under subsection 10.6) and, upon receipt of such instructions
from Requisite Lenders (or such other Lenders, as the case may be),
Administrative Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of the foregoing,
(i) Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for Company and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of Requisite Lenders (or such
other Lenders as may be required to give such instructions under subsection
10.6).
D. Administrative Agent Entitled to Act as Lender. The agency hereby
created shall in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, Administrative Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans
and the Letters of Credit, Administrative Agent shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Administrative Agent in its individual capacity.
Administrative Agent and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of banking, trust, financial advisory or other
business with Company or any of its Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company for services in connection with this Agreement and otherwise without
having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.
Administrative Agent shall not have any duty or
112
responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of Lenders or to provide any
Lender with any credit or other information with respect thereto, whether coming
into its possession before the making of the Loans or at any time or times
thereafter, and Administrative Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify Administrative Agent, to the extent that Administrative
Agent shall not have been reimbursed by Company, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Loan
Documents or otherwise in its capacity as Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Administrative Agent's gross negligence
or willful misconduct. If any indemnity furnished to Administrative Agent for
any purpose shall, in the opinion of Administrative Agent, be insufficient or
become impaired, Administrative Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
9.5 Successor Administrative Agent.
Administrative Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Company, and Administrative Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to Company and Administrative Agent and signed
by Requisite Lenders. Upon any such notice of resignation or any such removal,
Requisite Lenders shall have the right, upon five Business Days' notice to
Company, to appoint a successor Administrative Agent with the consent of Company
(which consent shall not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. After any retiring or removed Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
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9.6 Collateral Documents and Guaranties.
Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each Collateral Document
as secured party and to be the agent for and representative of Lenders under
each Subsidiary Guaranty, and each Lender agrees to be bound by the terms of
each Collateral Document and each Subsidiary Guaranty; provided that
Administrative Agent shall not (i) enter into or consent to any material
amendment, modification, termination or waiver of any provision contained in any
Collateral Document or any Subsidiary Guaranty or (ii) release any Collateral
(except as otherwise expressly permitted or required pursuant to the terms of
this Agreement or the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to subsection 10.6,
all Lenders); provided further, however, that, without further written consent
or authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor if all of the capital stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of Company) pursuant to
a sale or other disposition permitted hereunder or to which Requisite Lenders
have otherwise consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, Administrative Agent and each Lender hereby
agree that (1) no Lender shall have any right individually to realize upon any
of the Collateral under any Collateral Document or to enforce any Subsidiary
Guaranty, it being understood and agreed that all powers, rights and remedies
under the Collateral Documents and the Subsidiary Guaranties may be exercised
solely by Administrative Agent for the benefit of Lenders in accordance with the
terms thereof, and (2) in the event of a foreclosure by Administrative Agent on
any of the Collateral pursuant to a public or private sale, Administrative Agent
or any Lender may be the purchaser of any or all of such Collateral at any such
sale and Administrative Agent, as agent for and representative of Lenders (but
not any Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale, to
use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by Administrative Agent at such sale.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. Subject to subsection 10.1B, each Lender shall have the
right at any time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its Commitments or
any Loan or Loans made by it or its Letters of Credit or participations therein
or any other interest herein or in any
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other Obligations owed to it; provided that no such sale, assignment, transfer
or participation shall, without the consent of Company, require Company to file
a registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided, further that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an Assignment
Agreement effecting such sale, assignment or transfer shall have been accepted
by Administrative Agent and consented to by Company and Administrative Agent as
provided in subsection 10.1B(ii); provided, further that no such sale,
assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment, transfer
or participation. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any granting of participations in, all or
any part of its Commitments or the Loans, the Letters of Credit or
participations therein, or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit or participation therein, or other Obligation may (a)
be assigned in any amount to another Lender, or to an Affiliate of the
assigning Lender or another Lender, with the giving of notice to
Company and Administrative Agent or (b) be assigned in an aggregate
amount of not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the
assigning Lender) to any other Eligible Assignee with the consent of
Company and Administrative Agent (which consent of Company and
Administrative Agent shall not be unreasonably withheld or delayed). To
the extent of any such assignment in accordance with either clause (a)
or (b) above, the assigning Lender shall be relieved of its obligations
with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and deliver
to Administrative Agent, for its acceptance, an Assignment Agreement,
together with a processing fee of $3,500 and such forms, certificates
or other evidence, if any, with respect to United States federal income
tax withholding matters as the assignee under such Assignment Agreement
may be required to deliver to Administrative Agent pursuant to
subsection 2.7B(iii)(a). Upon such execution, delivery and acceptance,
from and after the effective date specified in such Assignment
Agreement, (1) the assignee thereunder shall be a party hereto and, to
the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (2) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it
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pursuant to such Assignment Agreement, relinquish its rights (other
than any rights which survive the termination of this Agreement under
subsection 10.9B) and be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all or
the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto;
provided that, anything contained in any of the Loan Documents to the
contrary notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall continue
to have all rights and obligations of the Issuing Lender with respect
to such Letters of Credit until the cancellation or expiration of such
Letters of Credit and the reimbursement of any amounts drawn
thereunder). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance
of the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon new Notes shall be issued to the assignee
and to the assigning Lender, substantially in the form of Exhibit IV or
Exhibit V annexed hereto, as the case may be, with appropriate
insertions, to reflect the new Commitments and/or outstanding Term
Loans of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent. Upon its receipt of an
Assignment Agreement executed by an assigning Lender and an assignee
representing that it is an Eligible Assignee, together with the
processing fee referred to in subsection 10.1B(i) and any forms,
certificates or other evidence with respect to United States federal
income tax withholding matters that such assignee may be required to
deliver to Administrative Agent pursuant to subsection 2.7B(iii)(a),
Administrative Agent shall, if Administrative Agent and Company have
consented to the assignment evidenced thereby (in each case to the
extent such consent is required pursuant to subsection 10.1B(i)), (a)
accept such Assignment Agreement by executing a counterpart thereof as
provided therein (which acceptance shall evidence any required consent
of Administrative Agent to such assignment), and (b) give prompt notice
thereof to Company. Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it as provided in
this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of any
portion of the principal amount of or interest on any Loan allocated to such
participation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all amounts
payable by Company hereunder (including without limitation amounts
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payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be
determined as if such Lender had not sold such participation.
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.18.
F. Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an Eligible Assignee
described in clause (i) of the definition thereof; (ii) that it has experience
and expertise in the making of loans such as the Loans; and (iii) that it will
make its Loans for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this subsection 10.1, the
disposition of such Loans or any interests therein shall at all times remain
within its exclusive control). Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto and the transactions
contemplated thereby; (ii) all the costs of furnishing all opinions by counsel
for Company required hereunder and of Company's performance of and compliance
with all agreements and conditions on its part to be performed or complied with
under this Agreement and the other Loan Documents, including, without
limitation, with respect to confirming compliance with environmental, insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Administrative Agent (including allocated costs of
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internal counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
to any Collateral Document, including without limitation filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, and
reasonable fees, expenses and disbursements of counsel to Administrative Agent
and of counsel providing any opinions required hereunder; (v) all the actual and
reasonable costs and expenses incurred by Administrative Agent in connection
with the syndication of the Commitments; and (vi) after the occurrence of an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by Administrative Agent and Lenders in enforcing any Obligations of or
in collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including, without
limitation, in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Subsidiary
Guaranties) or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel)
indemnify, pay and hold harmless Administrative Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Administrative Agent
and Lenders (collectively called the "Indemnitees"), from and against any and
all Indemnified Liabilities (as hereinafter defined); provided that Company
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions, judgments, suits, claims (including
Environmental Claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on
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any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Loan Documents or
the Merger Agreement or the transactions contemplated hereby or thereby
(including Lenders' agreement to make the Loans hereunder or the use or intended
use of the proceeds thereof or the issuance of Letters of Credit hereunder or
the use or intended use of any thereof, or any enforcement of any of the Loan
Documents (including any sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Subsidiary Guaranties), (ii) the
statements contained in the commitment letter delivered by any Lender to Company
with respect thereto, or (iii) any Environmental Claim or any Hazardous
Materials Activity relating to or arising from, directly or indirectly, any past
or present activity, operation, land ownership, or practice of Company or any of
its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 10.3 may be unenforceable in
whole or in part because they are violative of any law or public policy, Company
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them. Promptly after receipt by an
Indemnitee of notice of the commencement of any action, such Indemnitee shall
use reasonable efforts to notify Company of the commencement of such action.
10.4 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 is hereby authorized by Company
at any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement, the Letters of Credit and
participations therein and the other Loan Documents, including, but not limited
to, all claims of any nature or description arising out of or connected with
this Agreement, the Letters of Credit and participations therein or any other
Loan Document, irrespective of whether or not (i) that Lender shall have made
any demand hereunder or (ii) the principal of or the interest on the Loans or
any amounts in respect of the Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 8 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
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10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder. Each Lender hereby agrees that, solely for purposes of this
subsection 10.5, a participant shall be considered to be a Lender.
10.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, and no consent to any departure by
Company therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the amount of any
of the Commitments or reduces the principal amount of any of the Loans; changes
in any manner the definition of "Pro Rata Share" or the definition of "Requisite
Lenders"; changes in any manner any provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of all Lenders; postpones
the date or reduces the amount of any scheduled payment (but not prepayment) of
principal of any of the Loans; postpones the date on which any interest or any
fees are
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payable; decreases the interest rate borne by any of the Loans (other than any
waiver of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees payable hereunder;
increases the maximum duration of Interest Periods permitted hereunder; reduces
the amount or postpones the due date of any amount payable in respect of, or
extends the required expiration date of, any Letter of Credit; changes in any
manner the obligations of Lenders relating to the purchase of participations in
Letters of Credit; releases any Lien granted in favor of Administrative Agent
with respect to all or substantially all of the Collateral; releases all or
substantially all of the Subsidiary Guarantors from their obligations under the
Subsidiary Guaranties, in each case other than in accordance with the terms of
the Loan Documents; or changes in any manner the provisions contained in
subsection 8.1 or this subsection 10.6 shall be effective only if evidenced by a
writing signed by or on behalf of all Lenders. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
Section 4 shall be effective only if evidenced by a writing signed by or on
behalf of Administrative Agent and Requisite Lenders, (ii) no amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the Lender which is the holder of
that Note and (iii) no amendment, modification, termination or waiver of any
provision of Section 9 or of any other provision of this Agreement which, by its
terms, expressly requires the approval or concurrence of Administrative Agent
shall be effective without the written concurrence of Administrative Agent.
Administrative Agent may, but shall have no obligation to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company in any case shall entitle Company to any other or further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this subsection 10.6
shall be binding upon each Lender at the time outstanding, each future Lender
and, if signed by Company, on Company.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 Notices.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in writing
and may be personally served or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service,
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upon receipt of telefacsimile or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed; provided that
notices to Administrative Agent shall not be effective until received. For the
purposes hereof, the address of each party hereto shall be as set forth under
such party's name on the signature pages hereof or (i) as to Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amounts drawn
thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Administrative Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any
other Loan Document shall impair such power, right or privilege or be construed
to be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Company or any other party or
against or in payment of any or all of the Obligations. To the extent that
Company makes a payment or payments to Administrative Agent or Lenders (or to
Administrative Agent for the benefit of Lenders), or Administrative Agent or
Lenders enforce any security interests or exercise their rights of setoff, and
such payment or payments or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, any other state or federal law, common
law
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or any equitable cause, then, to the extent of such recovery, the obligation or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor or related thereto, shall be revived and continued in full
force and effect as if such payment or payments had not been made or such
enforcement or setoff had not occurred.
10.12 Severability.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA (INCLUDING WITHOUT
LIMITATION SECTION 1646.5 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA), WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of
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assignment are subject to subsection 10.1). Neither Company's rights or
obligations hereunder nor any interest therein may be assigned or delegated by
Company without the prior written consent of all Lenders.
10.17 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION
10.17 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.18 Confidentiality.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement, including, without limitation,
pursuant to any inspection under subsection 6.5, in accordance with such
Lender's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices, it being
understood and agreed by Company that in any event a Lender may make disclosures
to Affiliates of such Lender or disclosures reasonably required by any bona fide
assignee, transferee or participant in connection with the contemplated
assignment or transfer by such Lender of any Loans or any participations therein
or disclosures required or requested by any governmental agency or
representative thereof or pursuant to legal process; provided that, unless
specifically
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prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
10.19 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY:
URS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President and Chief Financial
Officer
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President and Chief
Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
LENDERS:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
individually and as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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Notice Address:
▇▇▇▇▇ FARGO BANK, N.A., as Agent
Commercial Bank Loan Center
Agency Dept., 2840
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Manager
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payment Instructions:
▇▇▇▇▇ FARGO BANK, N.A.
San Francisco, CA
ABA #1210-00248
For Acct.: 4518-105598
Ref: URS Corporation
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