EXHIBIT 10.4
------------
EXECUTION
================================================================================
CREDIT AGREEMENT
DATED AS OF DECEMBER 18, 1997
AMONG
SEALY MATTRESS COMPANY,
AS BORROWER,
SEALY CORPORATION,
AS GUARANTOR,
THE LENDERS LISTED HEREIN,
AS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS ARRANGER AND SYNDICATION AGENT,
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
AS ADMINISTRATIVE AGENT,
AND
BANKERS TRUST COMPANY,
AS DOCUMENTATION AGENT
================================================================================
SEALY MATTRESS COMPANY
CREDIT AGREEMENT
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1.
DEFINITIONS......................................... 2
1.1 Certain Defined Terms............................................................ 2
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.................................................................. 41
1.3 Other Definitional Provisions and Rules of Construction.......................... 42
1.4 Changes in GAAP.................................................................. 42
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........................ 42
2.1 Commitments; Making of Loans; the Register; Notes................................ 42
2.2 Interest on the Loans............................................................ 50
2.3 Fees............................................................................. 53
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments; General
Provisions Regarding Payments; Application of Proceeds of Collateral and Payments
Under Guaranties................................................................. 54
2.5 Use of Proceeds.................................................................. 65
2.6 Special Provisions Governing Eurodollar Rate Loans............................... 65
2.7 Increased Costs; Taxes; Capital Adequacy......................................... 68
2.8 Obligation of Lenders and Issuing Lenders to Mitigate............................ 72
2.9 Defaulting Lenders............................................................... 72
2.10 Removal or Replacement of a Lender............................................... 74
SECTION 3.
LETTERS OF CREDIT...................................... 75
3.1 Issuance of Letters of Credit and Lenders' Purchase of Participations Therein.... 75
3.2 Letter of Credit Fees............................................................ 79
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit............... 80
3.4 Obligations Absolute............................................................. 82
3.5 Indemnification; Nature of Issuing Lenders' Duties............................... 83
3.6 Increased Costs and Taxes Relating to Letters of Credit.......................... 84
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT......................... 85
(i)
Page
----
4.1 Conditions to Tranche A Term Loans and Recapitalization Revolving Loans.......... 85
4.2 Conditions to All Loans.......................................................... 95
4.3 Conditions to Letters of Credit.................................................. 96
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES................ 97
5.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries..................................................................... 97
5.2 Authorization of Borrowing, etc.................................................. 98
5.3 Financial Condition.............................................................. 99
5.4 No Material Adverse Change.......................................................100
5.5 Title to Properties; Liens; Real Property........................................100
5.6 Litigation; Adverse Facts........................................................101
5.7 Payment of Taxes.................................................................101
5.8 Performance of Agreements; Materially Adverse Agreements.........................101
5.9 Governmental Regulation..........................................................102
5.10 Securities Activities............................................................102
5.11 Employee Benefit Plans...........................................................102
5.12 Certain Fees.....................................................................103
5.13 Environmental Protection.........................................................103
5.14 Employee Matters.................................................................104
5.15 Solvency.........................................................................104
5.16 Matters Relating to Collateral...................................................104
5.17 Related Agreements...............................................................105
5.18 Disclosure.......................................................................106
5.19 Subordination of Seller Notes and Shareholder Subordinated Notes.................106
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS.....................106
6.1 Financial Statements and Other Reports...........................................106
6.2 Corporate Existence, etc.........................................................112
6.3 Payment of Taxes and Claims; Tax Consolidation...................................112
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds..................................................112
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable;
Lender Meeting...................................................................114
6.6 Compliance with Laws, etc........................................................115
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's
Actions Regarding Hazardous Materials Activities, Environmental
Claims and Violations of Environmental Laws......................................115
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral
Documents by Future Subsidiaries.................................................118
(ii)
Page
----
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
Property Collateral..............................................................119
6.10 Interest Rate Protection.........................................................121
6.11 Additional Foreign Subsidiary Collateral.........................................122
6.12 Post-Closing Deliveries..........................................................122
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS.......................122
7.1 Indebtedness.....................................................................123
7.2 Liens and Related Matters........................................................126
7.3 Investments; Joint Ventures......................................................128
7.4 Contingent Obligations...........................................................130
7.5 Restricted Junior Payments.......................................................131
7.6 Financial Covenants..............................................................132
7.7 Restriction on Fundamental Changes; Asset Sales and Recapitalizations............135
7.8 Consolidated Capital Expenditures................................................138
7.9 Sales and Lease-Backs............................................................140
7.10 Sale or Discount of Receivables..................................................140
7.11 Transactions with Shareholders and Affiliates....................................140
7.12 Disposal of Subsidiary Stock.....................................................141
7.13 Conduct of Business..............................................................141
7.14 Amendments or Waivers of Certain Agreements; Amendments of Documents Relating
to Subordinated Indebtedness; Designation of "Designated Senior Debt "..........141
7.15 Fiscal Year......................................................................142
SECTION 8.
EVENTS OF DEFAULT.................................143
8.1 Failure to Make Payments When Due................................................143
8.2 Default in Other Agreements......................................................143
8.3 Breach of Certain Covenants......................................................143
8.4 Breach of Warranty...............................................................143
8.5 Other Defaults Under Loan Documents..............................................144
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.............................144
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc...............................144
8.8 Judgments and Attachments........................................................145
8.9 Dissolution......................................................................145
8.10 Employee Benefit Plans...........................................................145
8.11 Change in Control................................................................145
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations........146
8.13 Failure to Consummate Recapitalization or Merger.................................146
(iii)
Page
----
SECTION 9.
AGENTS.........................................147
9.1 Appointment......................................................................147
9.2 Powers and Duties; General Immunity..............................................149
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.................................................................150
9.4 Right to Indemnity...............................................................151
9.5 Successor Administrative Agent and Swing Line Lender.............................151
9.6 Collateral Documents and Guaranty................................................152
SECTION 10.
MISCELLANEOUS.....................................153
10.1 Assignments and Participations in Loans and Letters of Credit....................153
10.2 Expenses.........................................................................156
10.3 Indemnity........................................................................157
10.4 Set-Off; Security Interest in Deposit Accounts...................................158
10.5 Ratable Sharing..................................................................158
10.6 Amendments and Waivers...........................................................159
10.7 Independence of Covenants........................................................161
10.8 Notices..........................................................................161
10.9 Survival of Representations, Warranties and Agreements...........................161
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative............................161
10.11 Marshalling; Payments Set Aside..................................................162
10.12 Severability.....................................................................162
10.13 Obligations Several; Independent Nature of Lenders' Rights.......................162
10.14 Headings.........................................................................162
10.15 Applicable Law...................................................................162
10.16 Successors and Assigns...........................................................163
10.17 Consent to Jurisdiction and Service of Process...................................163
10.18 Waiver of Jury Trial.............................................................164
10.19 Confidentiality..................................................................164
10.20 Counterparts; Effectiveness......................................................165
Signature pages S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TRANCHE A TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINIONS OF COUNSEL TO LOAN PARTIES
IX FORM OF OPINION OF O'MELVENY & ▇▇▇▇▇ LLP
X FORM OF ASSIGNMENT AGREEMENT
XI FORM OF CERTIFICATE RE NON-BANK STATUS
XII FORM OF FINANCIAL CONDITION CERTIFICATE
XIII FORM OF INTERCREDITOR AGREEMENT
XIV FORM OF COMPANY PLEDGE AGREEMENT
XV FORM OF COMPANY SECURITY AGREEMENT
XVI FORM OF COMPANY PATENT AND TRADEMARK SECURITY AGREEMENT
XVII FORM OF SUBSIDIARY GUARANTY
XVIII FORM OF SUBSIDIARY PLEDGE AGREEMENT
XIX FORM OF SUBSIDIARY SECURITY AGREEMENT
XX FORM OF SUBSIDIARY PATENT AND TRADEMARK SECURITY AGREEMENT
XXI FORM OF HOLDINGS GUARANTY
XXII FORM OF HOLDINGS PLEDGE AGREEMENT
XXIII FORM OF HOLDINGS SECURITY AGREEMENT
XXIV FORM OF MORTGAGE
XXV FORM OF COLLATERAL ACCESS AGREEMENT
XXVI FORM OF SUBORDINATION PROVISIONS
(v)
SCHEDULES
1.1(i) ADDBACKS TO EBITDA
1.1(ii) RECAPITALIZATION TRANSACTIONS
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1C CORPORATE AND CAPITAL STRUCTURE; OWNERSHIP
4.1I CLOSING DATE MORTGAGED PROPERTIES
4.1K CLOSING DATE ENVIRONMENTAL REPORTS
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.12 CERTAIN FEES
5.13 ENVIRONMENTAL MATTERS
6.12 POST-CLOSING DELIVERIES
7.1(v) EXISTING FOREIGN SUBSIDIARY INTERCOMPANY INDEBTEDNESS
7.1(xv) CERTAIN EXISTING INDEBTEDNESS
7.3(vii) CERTAIN EXISTING INVESTMENTS
7.3(xiii) EXISTING FOREIGN SUBSIDIARY CAPITAL CONTRIBUTIONS
7.3(xviii) CERTAIN PROPOSED INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.9 SALE-LEASEBACK TRANSACTIONS
(vi)
SEALY MATTRESS COMPANY
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 18, 1997 and entered into by
and among SEALY MATTRESS COMPANY, an Ohio corporation ("Company"), SEALY
CORPORATION, a Delaware corporation ("Holdings"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT
PARTNERS L.P. ("GSCP"), as arranger and syndication agent (in such capacity,
"▇▇▇▇▇ cation Agent"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK
("▇▇▇▇▇▇ Guaranty"), as administrative agent for Lenders (in such capacity,
"Administrative Agent"), and BANKERS TRUST COMPANY ("BTCo."), as
documentation agent (in such capacity, "Documentation Agent").
R E C I T A L S
- - - - - - - -
WHEREAS, ▇▇▇▇ and the Other Investors have formed Sandman Merger
Corporation, a Delaware corporation ("Merger Corp."), for the purpose of
engaging with Holdings and Company in a series of Recapitalization Transactions,
including the Merger (capitalized terms used herein having the meanings assigned
to those terms in subsection 1.1), whereby ▇▇▇▇ and the Other Investors will
acquire not less than 75% of the aggregate voting power of all outstanding
capital stock of Holdings;
WHEREAS, Company, a wholly owned subsidiary of Holdings, has requested
Lenders to extend, and Lenders have agreed to extend, certain credit facilities
in an aggregate principal amount of $220,000,000 to Company, the proceeds of
which will be used (i) in the aggregate principal amount of $130,400,000,
together with (a) the proceeds of $330,000,000 in aggregate principal amount of
borrowings under the AXEL Credit Agreement, (b) $128,700,000 in proceeds of the
Equity Contribution, (c) not less than $125,000,000 in cash proceeds of the
issuance and sale of the Senior Subordinated Notes, (d) not less than
$75,000,000 in cash proceeds of the issuance and sale of the Discount Notes, and
(e) the issuance of $25,000,000 in aggregate principal amount of Junior
Subordinated Seller Notes, to permit consummation of the Merger, to refinance
certain existing Indebtedness of Holdings, to repurchase certain existing
Indebtedness of Holdings pursuant to the Debt Tender Offer, and to pay related
fees and expenses, and (ii) to provide financing for working capital and other
general corporate purposes of Company and its Subsidiaries;
WHEREAS, pursuant to the Recapitalization Transactions, (i) Merger Corp.
will merge with and into Holdings, with Holdings being the surviving corporation
and the owner of 100%
1
of the outstanding capital stock of Company, and (ii) the capital stock of each
direct Subsidiary of Holdings (other than Company) immediately prior to the
Closing Date will be contributed to the capital of Company so that following
such contribution, Company shall be the only direct Subsidiary of Holdings;
WHEREAS, Company desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien on substantially all of its real, personal and
mixed property, including a pledge of all of the capital stock of each of its
Domestic Subsidiaries and 65% of the capital stock of each of its Foreign
Subsidiaries which is directly owned by Company; and
WHEREAS, Holdings and all Subsidiaries of Company other than the Excluded
Subsidiaries desire to guarantee the Obligations hereunder and under the other
Loan Documents and to secure their guaranties by granting to Administrative
Agent, on behalf of Lenders, a First Priority Lien on substantially all of their
respective real, personal and mixed property, including (i) a pledge of all of
the capital stock of Company and (ii) a pledge of all of the capital stock of
each Domestic Subsidiary and 65% of the capital stock of each Foreign Subsidiary
which is directly owned by a Subsidiary Guarantor:
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Holdings, Lenders and Agents
agree as follows:
SECTION 1.
DEFINITIONS
1.1 Certain Defined Terms.
---------------------
The following terms used in this Agreement shall have the following
meanings:
"Acquired LTM Revenue" has the meaning assigned to that term in
subsection 7.8.
"Acquisition Loan Commitments" means a portion of the Revolving Loan
Commitments initially equal to $50,000,000. Any reduction of the
Acquisition Loan Commitments shall reduce the Revolving Loan Commitments in
an equal amount.
"Acquisition Loans" means any Swing Line Loans or Revolving Loans
the proceeds of which are applied for the purposes set forth in subsection
2.5B(ii).
"Additional Mortgage" has the meaning assigned to that term in
subsection 6.9.
"Additional Mortgaged Property" has the meaning assigned to that
term in subsection 6.9.
2
"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 arithmetic average
--------
(rounded upward to the nearest 1/16 of one percent) of the offered
quotations, if any, to first class banks in the interbank Eurodollar market
by Reference Lenders for U.S. dollar deposits of amounts in same day funds
comparable to the respective principal amounts of the Eurodollar Rate Loans
of Reference Lenders for which the Adjusted Eurodollar Rate is then being
determined (which principal amount shall be deemed to be $1,000,000 in the
case of any Reference Lender not making, converting to or continuing such a
Eurodollar Rate Loan) with maturities comparable to such Interest Period as
of approximately 10:00 A.M. (New York time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the stated
-- -----
maximum rate of all reserve requirements (including 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); provided
--------
that if any Reference Lender fails to provide Administrative Agent with its
aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by
the other Reference Lender(s).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected 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.
"Agent" means, individually, each of Syndication Agent,
Administrative Agent and Documentation Agent, and for the purposes of
Section 9 only (except as expressly noted), Collateral Agent, and
"Agents" means Syndication Agent, Administrative Agent and Documentation
Agent, and for the purposes of Section 9 only (except as expressly noted),
Collateral Agent, collectively.
"Agreement" means this Credit Agreement dated as of December 18,
1997, as it may be amended, supplemented or otherwise modified from time to
time.
"Applicable Commitment Fee Percentage" means, (a) for the period
from the Closing Date up to (but excluding) the date of commencement of the
first Pricing Period,
3
1/2 of 1% per annum and (b) at any date of determination thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Leverage Ratio in effect as of such date of determination, any change in
the Applicable Commitment Fee Percentage to be effective on the date of any
corresponding change in the Applicable Leverage Ratio:
=========================================================
APPLICABLE
APPLICABLE COMMITMENT
LEVERAGE RATIO FEE PERCENTAGE
---------------------------------------------------------
greater than or equal to .500%
5.25:1.00
---------------------------------------------------------
less than 5.25:1.00 but greater .375%
than or equal to 4.25:1.00
---------------------------------------------------------
less than 4.25:1.00 .250%
=========================================================
"Applicable Leverage Ratio" means, with respect to any date of
determination, the Leverage Ratio set forth in the Pricing Certificate (as
defined below) in effect for the Pricing Period (as defined below) in which
such date of determination occurs. For purposes of this definition, (i)
"Pricing Certificate" means an Officer's Certificate of Company
certifying as to the Leverage Ratio as of the last day of any Fiscal
Quarter and setting forth the calculation of such Leverage Ratio in
reasonable detail, which Officer's Certificate may be delivered to
Administrative Agent at any time on or after the date of delivery by
Company of the Compliance Certificate (the "Related Compliance
Certificate") with respect to the period ending on the last day of such
Fiscal Quarter pursuant to subsection 6.1(iv), and (ii) "Pricing Period"
means each period commencing on the first Business Day after the delivery
to Administrative Agent of a Pricing Certificate and ending on the first
Business Day after the next Pricing Certificate is delivered to
Administrative Agent; provided that, anything contained in this definition
--------
to the contrary notwithstanding, (a) the first Pricing Period for purposes
of calculating the Applicable Leverage Ratio shall commence no earlier than
the date which is nine months after the Closing Date, and the Pricing
Certificate in respect of such first Pricing Period may be delivered at any
time on or after such nine-month anniversary date and shall relate to the
most recent financial statements delivered by Company to Administrative
Agent prior to such date pursuant to subsection 6.1(ii) or 6.1(iii), (b)
the Applicable Leverage Ratio for the period from the Closing Date to but
excluding the date of commencement of such first Pricing Period shall be
deemed to be 6.4:1.00 for purposes of making the relevant calculation
referred to above, and (c) in the event that, after the commencement of
such first Pricing Period, (X) Company fails to deliver a Pricing
Certificate to Administrative Agent setting forth the Leverage Ratio as of
the last day of any Fiscal Quarter on or before the last day on which
Company is required to deliver the Related Compliance Certificate (such
last day being the "Cutoff Date") and (Y) Administrative Agent determines
(each such determination being an "Agent
4
Determination") on or after the Cutoff Date (on the basis of the Related
Compliance Certificate or a Pricing Certificate delivered after the Cutoff
Date) that the Applicable Leverage Ratio that would have been in effect if
Company had delivered a Pricing Certificate on the Cutoff Date is greater
than the Leverage Ratio set forth in the most recent Pricing Certificate
actually delivered by Company, then (1) the Applicable Leverage Ratio in
effect for purposes of making the relevant calculation referred to above
for the period from the Cutoff Date to the date of delivery by Company of
the next Pricing Certificate (or, if earlier, the next date on which an
Agent Determination is made) shall be the Leverage Ratio determined
pursuant to the Agent Determination and (2) on the first Business Day after
Administrative Agent delivers written notice to Company of any Agent
Determination, Company shall pay to Administrative Agent, for distribution
(as appropriate) to Lenders, an aggregate amount equal to the additional
interest, letter of credit fees and commitment fees Company would have been
required to pay in respect of all applicable Loans, Letters of Credit or
Commitments in respect of which any interest or fees have been paid by
Company during the period from the Cutoff Date to the date such notice is
given by Administrative Agent to Company if the amount of such interest and
fees had been calculated using the Applicable Leverage Ratio based on such
Agent Determination.
"Applicable Base Rate Margin" means (a) for the period from the
Closing Date up to (but excluding) the date of commencement of the first
Pricing Period, 1.25% per annum, and (b) for any date thereafter, a rate
per annum equal to the percentage set forth below opposite the Applicable
Leverage Ratio in effect as of such date of determination, any change in
any such Applicable Base Rate Margin to be effective on the date of any
corresponding change in the Applicable Leverage Ratio.
=========================================================
APPLICABLE APPLICABLE
LEVERAGE RATIO BASE RATE MARGIN
=========================================================
greater than or equal to 1.25%
5.75:1.00
---------------------------------------------------------
less than 5.75:1.00 but 1.00%
greater than or equal to
5.25:1.00
---------------------------------------------------------
less than 5.25:1.00 but 0.75%
greater than or equal to
4.75:1.00
---------------------------------------------------------
less than 4.75:1.00 but 0.50%
greater than or equal to
4.25:1.00
---------------------------------------------------------
5
---------------------------------------------------------
less than 4.25:1.00 but 0.25%
greater than or equal to
3.75:1.00
---------------------------------------------------------
less than 3.75:1.00 0.00%
=========================================================
"Applicable Eurodollar Rate Margin" means (a) for the period from
the Closing Date up to (but excluding) the date of commencement of the
first Pricing Period, 2.25% per annum, and (b) for any date thereafter, a
rate per annum equal to the percentage set forth below opposite the
Applicable Leverage Ratio in effect as of such date of determination, any
change in any such Applicable Eurodollar Rate Margin to be effective on the
date of any corresponding change in the Applicable Leverage Ratio.
APPLICABLE APPLICABLE
LEVERAGE RATIO EURODOLLAR RATE
MARGIN
=========================================================
greater than or equal to 2.25%
5.75:1.00
---------------------------------------------------------
less than 5.75:1.00 but 2.00%
greater than or equal to
5.25:1.00
---------------------------------------------------------
less than 5.25:1.00 but 1.75%
greater than or equal to
4.75:1.00
---------------------------------------------------------
less than 4.75:1.00 but 1.50%
greater than or equal to
4.25:1.00
---------------------------------------------------------
less than 4.25:1.00 but 1.25%
greater than or equal to
3.75:1.00
---------------------------------------------------------
less than 3.75:1.00 but 1.00%
greater than or equal to
3.25:1.00
---------------------------------------------------------
less than 3.25:1.00 0.75%
=========================================================
"Asset Sale" means the sale by Holdings or any of its Subsidiaries
to any Person other than Holdings or any of its wholly owned Subsidiaries
of (i) any of the stock of any
6
of Holdings' Subsidiaries, (ii) substantially all of the assets of any
division or line of business of Holdings or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible) of Holdings or any
of its Subsidiaries (other than (a) inventory sold in the ordinary course
of business and (b) any such other assets to the extent that the aggregate
fair market value of such assets (at the time of sale thereof) sold in any
single transaction or related series of transactions is equal to $500,000
or less); provided, however, that Asset Sales shall not include (1) any
-------- -------
sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof, (2) any sale or exchange of specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 90 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged, (3) the leasing
(pursuant to operating leases in the ordinary course of business) or
licensing of real or personal property, including intellectual property, or
(4) disposals of obsolete, uneconomical, negligible, worn out or surplus
property in the ordinary course of business.
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit X annexed hereto.
---------
"AXEL(SM) Credit Agreement" means that certain AXEL Credit Agreement
dated as of even date herewith, by and among Company, Holdings, GSCP, as
arranger and syndication agent, ▇▇▇▇▇▇ Guaranty, as administrative agent,
and BTCo., as documentation agent, as such AXEL Credit Agreement may be
amended, supplemented, refinanced, renewed, extended or otherwise modified
from time to time to the extent permitted under subsection 7.14C.
"AXEL Credit Documents" means the AXEL Credit Agreement, the
promissory notes issued thereunder and each other document executed in
connection with the AXEL Credit Agreement.
"AXELs" means the senior secured term loans of Company under the
AXEL Credit Agreement in the original principal amount of $330,000,000.
"▇▇▇▇" means ▇▇▇▇ Capital, Inc. and/or one or more of its
Affiliates.
"▇▇▇▇ Advisory Services Agreement" means that certain Advisory
Services Agreement by and among Company, Holdings and ▇▇▇▇, in the form
delivered to Syndication Agent and Administrative Agent prior to the
Closing Date and as such agreement may thereafter be amended, supplemented
or otherwise modified from time to time to the extent permitted under
subsection 7.14A.
-------------------------
* AXEL is a registered service ▇▇▇▇ of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
7
"▇▇▇▇ Management Fees" means the fees (including one-time fees
payable in connection with acquisitions, divestitures and financings) and
expenses payable by Holdings to ▇▇▇▇ pursuant to the ▇▇▇▇ Advisory Services
Agreement.
"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 a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
higher of:
(i) the rate of interest announced publicly by ▇▇▇▇▇▇ Guaranty
in New York, New York, from time to time, as ▇▇▇▇▇▇ Guaranty's base
rate; and
(ii) 1/2 of 1% per annum above 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.
"BTCo." has the meaning assigned to that term in the introduction to
this Agreement.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of New York 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, would be required to be accounted for as a capital
lease on the balance sheet of that Person.
"Carryforward" has the meaning assigned to that term in subsection
7.8.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means: (i) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one
of the two highest
8
ratings obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"); (iii) commercial paper
maturity no more than one year from the date of creation thereof and at the
time of acquisition, having a rating of at least A-l from S&P or at least
P-1 from Moody's; (iv) certificates of deposit or bankers' acceptances (or,
with respect to foreign banks, similar instruments) maturing within one
year from the date of acquisition thereof issued by any bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia, Japan or any member of the European Economic
Community or any U.S. branch of a foreign bank having at the date of
acquisition thereof combined capital and surplus of not less than
$200,000,000; (v) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause
(iv) above; and (vi) investments in money market funds which invest
substantially all of their assets in securities of the types described in
clauses (i) through (v) above.
"Certificate of Merger" means the Certificate of Merger dated as of
December 18, 1997 by and between Merger Corp. and Holdings, in the form
delivered to Syndication Agent, Administrative Agent and Lenders prior to
or concurrently with their execution of this Agreement and as such
Certificate of Merger may be amended from time to time thereafter to the
extent permitted under subsection 7.14A.
"Certificate re Non-Bank Status" means a certificate substantially
in the form of Exhibit XI annexed hereto delivered by a Lender to
----------
Administrative Agent pursuant to subsection 2.7B(iii).
"Class" means, as applied to Lenders, each of the following classes
of Lenders: (i) Lenders having Tranche A Term Loan Exposure and (ii)
Lenders having Revolving Loan Exposure.
"Closing Date" means the date on or before February 16, 1998, on
which the initial Loans are made.
"Closing Date Mortgage" has the meaning assigned to that term in
subsection 4.1I.
"Closing Date Mortgaged Property" has the meaning assigned to that
term in subsection 4.1I.
"Collateral" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the
Obligations.
"Collateral Agent" means ▇▇▇▇▇▇ Guaranty acting in its capacity as
collateral agent under the applicable Collateral Documents on behalf of the
Lenders and the Persons party to the Intercreditor Agreement (other than
Holdings and its Subsidiaries),
9
and also means and includes any successor collateral agent appointed
pursuant to the Intercreditor Agreement.
"Collateral Access Agreement" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any
Collateral is located or any warehouseman or processor in possession of any
Inventory of any Loan Party, substantially in the form of Exhibit XXV
-----------
annexed hereto with such changes thereto as may be agreed to by
Administrative Agent in the reasonable exercise of its discretion.
"Collateral Documents" means the Holdings Security Agreement, the
Holdings Pledge Agreement, the Company Pledge Agreement, the Company
Security Agreement, the Company Patent and Trademark Security Agreement,
the Intercreditor Agreement, the Subsidiary Pledge Agreement, the
Subsidiary Security Agreement, the Subsidiary Patent and Trademark Security
Agreement, the Mortgages 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 Collateral Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property of that Loan Party as security
for the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by Company or any of its Subsidiaries in the ordinary course of
business of Company or such Subsidiary.
"Commitments" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"Company" has the meaning assigned to such term in the introduction
to this Agreement.
"Company Patent and Trademark Security Agreement" means the Company
Patent and Trademark Security Agreement executed and delivered by Company
and Collateral Agent on the Closing Date, substantially in the form of
Exhibit XVI annexed hereto, as such Company Patent and Trademark Security
-----------
Agreement may thereafter be amended, supplemented or otherwise modified
from time to time as permitted thereunder and hereunder.
"Company Pledge Agreement" means the Company Pledge Agreement
executed and delivered by Company and Collateral Agent on the Closing Date,
substantially in the form of Exhibit XIV annexed hereto, as such Company
-----------
Pledge Agreement may thereafter be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"Company Security Agreement" means the Company Security Agreement
executed and delivered by Company and Collateral Agent on the Closing Date,
10
substantially in the form of Exhibit XV annexed hereto, as such Company
----------
Security Agreement may thereafter be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit X annexed hereto delivered to Administrative Agent by
---------
Company pursuant to subsection 6.1(iv).
"Confidential Information Memorandum" means that certain
Confidential Information Memorandum prepared by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and ▇▇
▇▇▇▇▇▇ relating to the AXELs, the Tranche A Term Loans and Revolving Loans
dated November 1997.
"Conforming Leasehold Interest" means any Recorded Leasehold
Interest as to which the lessor has substantially agreed in writing for the
benefit of Administrative Agent (which writing has been delivered to
Administrative Agent), whether under the terms of the applicable lease,
under the terms of a Landlord Consent and Estoppel, or otherwise, to the
matters described in the definition of "Landlord Consent and Estoppel,"
which interest, if a subleasehold or sub-subleasehold interest, is not
subject to any contrary restrictions contained in a superior lease or
sublease.
"Consent Solicitation" means the solicitation by Holdings, from the
holders of outstanding Existing Subordinated Notes, of consents to certain
amendments to the Existing Subordinated Note Indenture in accordance with
the terms of the Debt Tender Offer Materials.
"Consolidated Adjusted EBITDA" means, for any period, the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) Consolidated
Interest Expense, together with any non-cash interest expense with respect
to the Junior Subordinated Seller Notes not included in Consolidated
Interest Expense, (iii) provisions for taxes based on income (including,
without duplication, foreign withholding taxes), (iv) total depreciation
expense, (v) total amortization expense, (vi) other non-cash items reducing
Consolidated Net Income less other non-cash items increasing Consolidated
----
Net Income, (vii) to the extent deducted in determining Consolidated Net
Income, those items described on Schedule 1.1(i) annexed hereto, and (viii)
---------------
the cumulative effect of accounting changes to the extent such changes
result in a reduction of Consolidated Net Income less the cumulative effect
----
of accounting changes to the extent such changes result in an increase in
Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Holdings and its Subsidiaries in conformity with
GAAP.
"Consolidated Capital Expenditures" means, for any period, 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
Holdings and its Subsidiaries) by Holdings and its Subsidiaries during that
period that, in conformity with GAAP, are included in "purchases of
property, plant or equipment" or comparable items reflected in the
consolidated
11
statement of cash flows of Holdings and its Subsidiaries; provided,
--------
however, that the following shall in any event be excluded from the
-------
definition of Consolidated Capital Expenditures: (a) any such expenditures
made with, or subsequently reimbursed out of, the proceeds of insurance,
condemnation awards (or payments in lieu thereof), indemnity payments or
payments in respect of judgments or settlements received from third parties
for purposes of replacing or repairing the assets in respect of which such
proceeds, awards or payments were received, so long as such expenditures
are commenced within 270 days of the later of the occurrence of the damage
to or loss of the assets being replaced or repaired and the receipt of such
proceeds, awards or payments in respect thereof and (b) any such
expenditures constituting the reinvestment of proceeds from the sales of
assets in equipment or other productive assets of Company and its
Subsidiaries, so long as such expenditures are commenced within 270 days of
the receipt of such proceeds; and provided further, however, that
-------- ------- -------
Consolidated Capital Expenditures shall not include any expenditures made
by Company or any of its Subsidiaries to acquire in a Permitted Acquisition
the business, property or fixed assets of any Person, or the stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Company or a Joint Venture to which
Company or any of its Subsidiaries is a party.
"Consolidated Cash Interest Expense" means, for any period,
Consolidated Interest Expense for such period excluding, however, any
--------- -------
interest expense not payable in Cash (including interest expense paid in
kind and amortization of discount, of deferred financing fees, of premiums
paid on Hedge Agreements and of debt issuance costs).
"Consolidated Current Assets" means, as at any date of
determination, the total assets of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash, Cash Equivalents and deferred income
taxes to the extent otherwise included in current assets.
"Consolidated Current Liabilities" means, as at any date of
determination, the total liabilities of Holdings and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities
in conformity with GAAP, excluding the current portions of Funded Debt
---------
(including accrued but unpaid interest) and any Revolving Loans and
deferred income taxes to the extent otherwise included in current
liabilities.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for
such period of (a) Consolidated Adjusted EBITDA, (b) the Consolidated
Working Capital Adjustment and (c) payments made to Holdings or any of its
Subsidiaries as an adjustment to purchase price after the Closing Date
under the Recapitalization Agreement, minus (ii) the sum, without
-----
duplication, of the amounts for such period (to the extent not financed
with the proceeds of related financings) of (a) voluntary and scheduled
repayments of Consolidated Total Debt (excluding repayments of Revolving
Loans except to the extent the Revolving Loan Commitments are permanently
reduced in connection with such
12
repayments), (b) Consolidated Capital Expenditures (net of any proceeds of
any related financings with respect to such expenditures) plus (or minus,
---- -----
if negative) the Carryforward for such period to be carried forward to the
next period less the Carryforward (if any) for the preceding period carried
----
forward to the current period, (c) Consolidated Cash Interest Expense, (d)
payments made by Holdings and its Subsidiaries as an adjustment to purchase
price after the Closing Date under the Recapitalization Agreement, (e) any
cash payments made during such period with respect to items set forth on
Schedule 1.1(i) annexed hereto, and (f) the provision for current taxes
---------------
based on income of Holdings and its Subsidiaries and payable in cash with
respect to such period, including taxes payable in cash within 90 days
following the end of such period, (g) non-cash charges added in calculating
Consolidated Adjusted EBITDA in a prior period to the extent such non-cash
charges are paid in cash in the current period, and (h) to the extent not
otherwise deducted in determining Consolidated Excess Cash Flow, tender
payments, fees and expenses paid during such period in connection with the
exchange of the Senior Subordinated Notes and the Discount Notes, cash
payments made during such period with respect to non-current liabilities
and cash payments made during such period with respect to restructuring
reserves and expenditures with respect to Permitted Acquisitions.
"Consolidated Interest Expense" means, for any period, total cash
and non-cash interest expense (including that portion attributable to
Capital Leases in accordance with GAAP and capitalized interest) of
Holdings and its Subsidiaries on a consolidated basis in accordance with
GAAP with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, net costs under Interest Rate Agreements, commitment fees
accrued under subsection 2.3A and any administrative agent's fees payable
to Administrative Agent, but excluding, however, any amounts referred to in
--------- -------
subsection 2.3 payable to Agents and Lenders on or before the Closing Date
and any non-cash interest expense with respect to the Junior Subordinated
Seller Notes.
"Consolidated Net Income" means, for any period, the net income (or
loss) of Holdings 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 Holdings) in which any other Person
(other than Holdings or any of its Subsidiaries) has a joint interest,
except to the extent of the amount of dividends or other distributions
actually paid to Holdings or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the
date it becomes a Subsidiary of Holdings or is merged into or consolidated
with Holdings or any of its Subsidiaries or that Person's assets are
acquired by Holdings or any of its Subsidiaries, (iii) the income of any
Subsidiary of Holdings 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
13
after-tax gains or losses attributable to Asset Sales or returned surplus
assets of any Pension Plan, and (v) (to the extent not included in clauses
(i) through (iv) above) any net extraordinary gains or net extraordinary
losses.
"Consolidated Rental Payments" means, for any period, the aggregate
amount of all rents paid or payable by Holdings and its Subsidiaries on a
consolidated basis during that period under all Capital Leases and
Operating Leases to which Holdings or any of its Subsidiaries is a party as
lessee.
"Consolidated Total Debt" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Holdings
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP, excluding, however, the principal amount (including paid-in-kind
--------- -------
interest) of the Junior Subordinated Seller Notes.
"Consolidated Working Capital" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or
is less than) Consolidated Working Capital as of the end of such period.
"Contingent Obligation", 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 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 (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required regardless
of non-performance by any other party or parties to an agreement, and (c)
any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise) or
(Y) to maintain the solvency or any balance sheet item, level of income or
financial condition of another if, in the case of any agreement described
under subclauses (X) or (Y) of this sentence, the primary purpose or intent
thereof is as described in the preceding sentence. The amount of any
Contingent
14
Obligation shall be equal to (A) the amount of the obligation so guaranteed
or otherwise supported or, if less, the amount to which such Contingent
Obligation is specifically limited, or (B) if neither amount in clause (A)
is stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform) as determined
by such Person in good faith. Contingent Obligations shall not include
standard contractual indemnities entered into in the ordinary course of
business.
"Continuing Director" shall mean, as of any date of determination,
any member of the Board of Directors of Company who (i) was a member of
such Board of Directors on the Closing Date or (ii) was nominated for
election or elected to such Board of Directors with the affirmative vote of
▇▇▇▇ and the Other Investors.
"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, con tract, 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 to which Holdings or any of its
Subsidiaries is a party.
"Debt Tender Offer" means the offer by Holdings to repurchase up to
100% of its outstanding Existing Subordinated Notes pursuant to the Debt
Tender Offer Materials.
"Debt Tender Offer Materials" means the Offer to Purchase and
Consent Solicitation Statement dated November 18, 1997 relating to the Debt
Tender Offer and the accompanying Consent and Letter of Transmittal.
"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.
"Discount Note Indenture" means the indenture pursuant to which the
Discount Notes are issued, as such indenture may be amended from time to
time to the extent permitted under subsection 7.14B.
"Discount Notes" means the $128,000,000 in aggregate principal
amount of 10-7/8% Senior Subordinated Discount Notes due December 15, 2007
of Company issued pursuant to the Discount Note Indenture.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
15
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Domestic Subsidiary" means any Subsidiary of Company which is
organized under the laws of the United States or any state thereof.
"EITF 97-13 Expenditures" means expenses associated with
reengineering efforts in connection with Company's MIS projects.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; provided that (x)
--------
such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) 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
insurance companies, funds, investment companies and lease financing
companies; and (B) any Lender, any Affiliate of any Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that
is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor; provided that no Affiliate of
--------
Holdings shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is or was maintained or contributed
to by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Employment Agreement" means the Employment Agreement between
Company and ▇▇▇ ▇▇▇▇▇ providing for his exclusive employment by Company, in
the form provided to Syndication Agent and Administrative Agent pursuant to
subsection 4.1C on or prior to the Closing Date.
"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, judgments, Governmental
Authorizations, or any other requirements of governmental authorities
relating to (i) environmental matters, including
16
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 from environmental
hazards (including Hazardous Materials), in any manner applicable to
Holdings or any of its Subsidiaries or any Facility, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. (S) 9601 et seq.), the Hazardous Materials Transportation Act (49
-- ---
U.S.C. (S) 1801 et seq.), the Resource Conservation and Recovery Act (42
-- ---
U.S.C. (S) 6901 et seq.), the Federal Water Pollution Control Act (33
-- ---
U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et seq.),
-- --- -- ---
the Toxic Substances Control Act (15 U.S.C. (S) 2601 et seq.), the Federal
-- ---
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. (S)136 et seq.), the
-- ---
Occupational Safety and Health Act (29 U.S.C. (S) 651 et seq.), the Oil
-- ---
Pollution Act (33 U.S.C. (S) 2701 et seq.) and the Emergency Planning and
-- ---
Community Right-to-Know Act (42 U.S.C. (S) 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.
"Equity Contribution" means, collectively, (i) the contribution by
▇▇▇▇ and the Other Investors to Merger Corp. of cash in exchange for all of
the outstanding common stock of Merger Corp and (ii) the rollover equity
contribution by the Management Investors, in the aggregate amount of
$128,700,000.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within
the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is a member; (ii) any trade or business (whether or not
incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Internal Revenue
Code of which that Person is a member; and (iii) 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 Holdings or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Holdings
or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of Holdings or such
Subsidiary and with respect to liabilities arising after such period for
which Holdings 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 (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 (whether or not waived in
17
accordance with Section 412(d) of the Internal Revenue Code) or the failure
to make by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to
make any required contribution to a Multiemployer Plan; (iii) the provision
by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Holdings, 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
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, 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; (vi)
the imposition of liability on Holdings, 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 Holdings, 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 Holdings, 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
Holdings or any of its Subsidiaries 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 other than a
Multiemployer Plan or the assets thereof, or against Holdings or any of its
Subsidiaries in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan 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 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.
"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.
"Excess Proceeds Amount" shall initially be $0, which amount shall
be (i) increased (a) on the date of delivery in any Fiscal Year of an
---------
Officer's Certificate setting forth the calculation of Consolidated Excess
Cash Flow for the preceding Fiscal Year pursuant to subsection 2.4B(iii)(g)
(each such date being a "Excess Cash Payment
18
Date"), so long as any prepayment required pursuant to subsection
2.4B(iii)(f) has been made, by an amount equal to the amount of such
Consolidated Excess Cash Flow which is not so prepaid, and (b) on the date
of the receipt by Holdings of any Net Equity Proceeds or up to $25,000,000
of proceeds from the issuance of equity Securities of Holdings to ▇▇▇▇ and
the Other Investors after the Closing Date, so long as any prepayment
required pursuant to subsection 2.4B(iii)(e) has been made, by an amount
equal to such Net Equity Proceeds and such other proceeds which are not so
prepaid, and (ii) reduced (a) on each Excess Cash Payment Date where
-------
Consolidated Excess Cash Flow for the immediately preceding Fiscal Year is
a negative number, by such amount, (b) at the time any Consolidated Capital
Expenditure is made pursuant to subsection 7.8C, by the amount of such
expenditure, (c) at the time any intercompany loan is made pursuant to the
second proviso to subsection 7.1(v), by the principal amount of such loan,
and (d) at the time any Investment is made pursuant to subsection 7.3(xx),
by the amount of such Investment, it being understood that the Excess
Proceeds Amount may be reduced to an amount below $0 after giving effect to
the reductions enumerated in clause (ii)(a) above.
"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 applicable Issuing Lender in
the New York foreign exchange market for the purchase by such Issuing
Lender (by cable transfer) of such currency in 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.
"Excluded Subsidiaries" means, collectively, (i) all Foreign
Subsidiaries which are not Subsidiary Guarantors and (ii) Advanced Sleep
Products, a California corporation, Sealy Components--Pads, Inc., a
Delaware corporation, Sealy Mattress Company of San Diego, a California
corporation, Sealy Connecticut, Inc., a Connecticut corporation, and Sealy
Mattress Company of S.W. Virginia, a Virginia corporation; provided,
--------
however, that no Domestic Subsidiary shall be an Excluded Subsidiary if,
-------
after the Closing Date, it acquires assets with a fair market value in
excess of $1,000,000 in the aggregate.
"Existing Credit Agreement" means that certain Second Restated
Credit Agreement dated as of February 25, 1997, by and among Holdings, as
borrower, certain financial institutions, Banque Paribas, as documentation
agent, Nationsbank, N.A., as syndication agent, and Bank of America
Illinois, as administrative agent, as amended prior to the Closing Date.
"Existing Subordinated Note Indenture" means the indenture pursuant
to which the Existing Subordinated Notes were issued, as amended pursuant
to the Consent
19
Solicitation and as such indenture may be further amended from time to time
to the extent permitted under subsection 7.14B.
"Existing Subordinated Notes" means Holdings's $200,000,000 in
aggregate principal amount of 10-1/4% Senior Subordinated Notes due 2003.
"Facilities" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter
or heretofore owned, leased, operated or used by Holdings 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(xiii).
"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 (other than
Liens permitted pursuant to subsection 7.2A(iii) or 7.2A(iv)) and (ii) such
Lien is the only Lien (other than Permitted Encumbrances and Liens
permitted pursuant to subsection 7.2) to which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Holdings and its Subsidiaries
ending on the Sunday nearest to November 30th 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.
"Flood Hazard Property" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having
special flood or mud slide hazards.
"Foreign Borrowing Base Amount" means, at any time, the sum of (i)
85% of the book value of all accounts receivable of all Foreign
Subsidiaries of Holdings and (ii) 60% of the book value of all inventory of
all Foreign Subsidiaries of Holdings.
20
"Foreign Cash Equivalents" means certificates of deposit or bankers
acceptances of any bank organized under the laws of Canada, Japan or any
country that is a member of the European Economic Community whose short-
term commercial paper rating from S&P is at least A-2 or the equivalent
thereof or from ▇▇▇▇▇'▇ is at least P-2 or the equivalent thereof, in each
case with maturities of not more than one year from the date of
acquisition.
"Foreign Subsidiary" means a Subsidiary of Company other than a
Domestic Subsidiary.
"Foreign Subsidiary Working Capital Indebtedness" has the meaning
assigned to that term in subsection 7.1.
"Funded Debt", as applied to any Person, means all Indebtedness of
that Person which by its terms or by the terms of any instrument or
agreement relating thereto matures more than one year from, or is directly
renewable or extendable at the option of that Person to a date more than
one year from (including an option of that Person under a revolving credit
or similar agreement obligating the lender or lenders to extend credit over
a period of one year or more from), the date of the creation thereof.
"Funding and Payment Office" means (i) the office of Administrative
Agent and Swing Line Lender located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ or (ii) such other office of Administrative Agent and Swing Line
Lender as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent and Swing Line Lender 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 subsections 1.2 and 1.4, generally accepted accounting
principles set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entity as may be approved
by a significant segment of the accounting profession, in each case as the
same are applicable to the circumstances as of the date of determination.
"Guaranties" means the Holdings Guaranty and the Subsidiary
Guaranty.
"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.
"GSCP" has the meaning assigned to that term in the introduction to
this Agreement.
21
"Harvard Advisory Services Agreement" means that certain Management
Services Agreement by and between Holdings and Harvard Private Capital
Holdings, Inc., in the form delivered to Syndication Agent and
Administrative Agent prior to the Closing Date and as such agreement may
thereafter be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.14A.
"Harvard Management Fees" means the fees and expenses payable by
Holdings to Harvard Private Capital Holdings, Inc. pursuant to the Harvard
Advisory Services Agreement.
"Hazardous Materials" means (i) any chemical, material or substance
at any time defined in any statute or regulation as or included in the
definition in any statute or regulation 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 meaning and
regulatory effect 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) polychlorinated biphenyls, including
any oil or dielectric fluid containing polychlorinated biphenyls; (ix)
pesticides; and (x) any other chemical, material or substance which 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, present or future
activity, event or occurrence involving any Hazardous Materials, including
the use, manufacture, possession, storage, holding, migration, Release,
threatened Release, discharge, placement, generation, transportation,
processing, 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.
"Holdings" has the meaning assigned to that term in the recitals of
this Agreement.
22
"Holdings Common Stock" means, collectively, (i) the Class A Common
Stock of Holdings, par value $.01 per share, (ii) the Class B Common Stock
of Holdings, par value $.01 per share, (iii) the Class L Common Stock of
Holdings, par value $.01 per share, and (iv) the Class M Common Stock of
Holdings, par value $.01 per share.
"Holdings Guaranty" means the Holdings Guaranty executed and
delivered by Holdings on the Closing Date, substantially in the form of
Exhibit XXI annexed hereto, as such Holdings Guaranty may thereafter be
-----------
amended, supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Holdings Pledge Agreement" means the Holdings Pledge Agreement
executed and delivered by Holdings and Collateral Agent on the Closing
Date, substantially in the form of Exhibit XXII annexed hereto, as such
------------
Holdings Pledge Agreement may thereafter be amended, supplemented or
otherwise modified from time to time as permitted thereunder and hereunder.
"Holdings Security Agreement" means the Holdings Security Agreement
executed and delivered by Holdings and Collateral Agent on the Closing
Date, substantially in the form of Exhibit XXIII annexed hereto, as such
-------------
Holdings Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time as permitted thereunder and hereunder.
"Immaterial Subsidiaries" means, with respect to any Person, any
Subsidiary or Subsidiaries of such Person the assets of which constitute,
individually or in the aggregate, less than 5% of the total assets of such
Person and its Subsidiaries.
"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 and any accrued expenses or trade
payables), (a) which obligation in accordance with GAAP would be shown as a
liability on the balance sheet of such Person or (b) which purchase price
is evidenced by a note or similar written instrument, 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. The amount of any Indebtedness which is non-recourse to the
obligor thereunder or to any other obligor and for which recourse is
limited to an identified asset or assets shall be equal to the lesser of
(1) the stated amount of such obligation and (2) the fair market value of
such asset or assets. Obligations under Interest Rate Agreements and
Currency Agreements constitute (X) in the case of Hedge Agreements,
Contingent Obligations, and (Y) in all other cases, Investments, and in
neither case constitute Indebtedness.
23
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Independent Public Accountant" means any of the five largest public
accounting firms in the United States selected by Holdings.
"Initial Period" means the period commencing on and including the
Closing Date and ending on (but excluding) the earlier of (i) the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments and (ii) the date which is 30 days
after the Closing Date.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes which are used in the
conduct of the business of Holdings and its Subsidiaries as currently
conducted that are material to the condition (financial or otherwise),
business or operations of Holdings and its Subsidiaries, taken as a whole.
"Intercreditor Agreement" means that certain Intercreditor Agreement
executed and delivered by Administrative Agent, ▇▇▇▇▇▇ Guaranty, as
administrative agent for lenders under the AXEL Credit Agreement, and
Collateral Agent on the Closing Date, substantially in the form of Exhibit
-------
XIII annexed hereto, as such Intercreditor Agreement may thereafter be
----
amended, supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, each February 28, May 31, August 31 and November 30 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan; provided that in the case of each Interest
--------
Period of longer than three months, "Interest Payment Date" shall also
include 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 to which Holdings or any of its
Subsidiaries is a party.
"Interest Rate Determination Date" means, with respect to any
Interest Period, the second Business Day prior to the first day of such
Interest Period.
"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, and the regulations promulgated by the Internal Revenue
Service thereunder.
24
"Inventory" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are
then held by such Person for sale or lease, including raw materials and
work in process.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Holdings or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary
of Holdings), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Holdings from any
Person other than Holdings 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 Holdings or any of its Subsidiaries
to any other Person, including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business, 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.
"IP Collateral" means, collectively, the Collateral under the
Company Patent and Trademark Security Agreement and the Subsidiary Patent
and Trademark Security Agreement.
"Issuing Lender" means, with respect to any Letter of Credit, the
Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
--------
considered to be a Joint Venture to which such Person is a party.
"Junior Subordinated Seller Notes" means the Junior Subordinated
Seller Notes issued in the initial principal amount of $25,000,000 on the
Closing Date by Holdings in favor of ▇▇▇▇, and any additional amount of
such notes as are permitted to be issued hereunder, as such notes may be
amended from time to time to the extent permitted under subsection 7.14C.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the
lessor under the related lease, reasonably satisfactory in form and
substance to Administrative Agent, pursuant to which such lessor
substantially agrees, for the benefit of Administrative Agent, (i) that
without any further consent of such lessor or any further action on the
part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be
25
encumbered pursuant to a Mortgage and may be assigned to the purchaser at a
foreclosure sale or in a transfer in lieu of such a sale (and to a
subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such
lessor shall not terminate such lease as a result of a default by such Loan
Party thereunder without first giving Administrative Agent notice of such
default and at least 60 days (or, if such default cannot reasonably be
cured by Administrative Agent within such period, such longer period as may
reasonably be required) to cure such default, (iii) to the matters
contained in a Collateral Access Agreement, and (iv) to such other matters
relating to such Leasehold Property as Administrative Agent may reasonably
request; provided, however, that Administrative Agent may determine in its
-------- -------
reasonable discretion that any one or more of the agreements set forth in
clauses (i) through (iv) are not required to be included in a Landlord
Consent and Estoppel with respect to a particular Leasehold Property.
"Leasehold Property" means any leasehold interest of any Loan Party
as lessee under any lease of real property, other than any such leasehold
interest designated from time to time by Administrative Agent in its
reasonable discretion as not being required to be included in the
Collateral.
"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, and the term
"Lenders" shall include Swing Line Lender unless the context otherwise
requires; provided that the term "Lenders", when used in the context of a
--------
particular Commitment, shall mean Lenders having that Commitment.
"Letter of Credit" or "Letters of Credit" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter
may become available for drawing under all Letters of Credit then
outstanding plus (ii) the aggregate amount of all drawings under Letters of
----
Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B). 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" means the ratio of (i) Consolidated Total Debt as
of the last day of any Fiscal Quarter to (ii) Consolidated Adjusted EBITDA
for the four-Fiscal Quarter period then ended, in each case as set forth in
the most recent Compliance Certificate delivered by Company to
Administrative Agent pursuant to clause (iv) of subsection 6.1; provided,
--------
however, that with respect to any period during which a
-------
26
Permitted Acquisition occurs, for purposes of calculating the Leverage
Ratio under subsections 2.4B(iii)(a), (b), (e) and (f) and in the
definition of Applicable Leverage Ratio, Consolidated Adjusted EBITDA shall
be determined in accordance with the provisions of subsection 7.6D, except
that any cost savings that would otherwise be given effect in calculating
Consolidated Adjusted EBITDA as a result of such provisions shall not be
given effect until such cost savings are actually realized.
"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 Tranche A Term Loans,
Revolving Loans or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an Issuing Lender
relating to, the Letters of Credit), the Guaranties and the Collateral
Documents.
"Loan Party" means each of Holdings, Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan
Parties" means all such Persons, collectively.
"Management Investors" means certain management officers and
employees of Holdings and its Subsidiaries disclosed to Syndication Agent
and Administrative Agent.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries, taken as a whole,
or (ii) the impairment of the ability of any Loan Party to perform, or of
Administrative Agent, Collateral Agent or Lenders to enforce, the
Obligations; provided that consummation of the Recapitalization
--------
Transactions in accordance with the terms of the Recapitalization Agreement
shall not be deemed to have a Material Adverse Effect for purposes of
subsection 5.4.
"Material Contract" means any contract or arrangement to which
Holdings or any of its Subsidiaries is a party (other than the Loan
Documents) for which breach, nonperformance, cancellation or failure to
renew would reasonably be expected to have a Material Adverse Effect.
27
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or
of material importance to the operations of Holdings or any of its
Subsidiaries; provided, however, that, excepting any such Leasehold
-------- -------
Properties set forth on Schedule 4.1I annexed hereto, no Leasehold Property
-------------
with respect to which the aggregate amount of all rents payable during any
one Fiscal Year never exceeds $250,000 shall be a "Material Leasehold
Property".
"Merger" means the merger of Merger Corp. with and into Holdings in
accordance with the terms of the Recapitalization Agreement and the
Certificate of Merger, with Holdings being the surviving corporation in
such merger.
"Merger Corp." has the meaning assigned to that term in the recitals
of this Agreement.
"MIS Upgrade Expenditures" means expenditures relating to the
upgrade of Company's MIS systems to the extent these expenditures would
have been capitalized by Holdings and its Subsidiaries in accordance with
their accounting policies in effect on the Closing Date.
"▇▇▇▇▇▇ Guaranty" has the meaning assigned to that term in the
introduction to this Agreement.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered
by any Loan Party, substantially in the form of Exhibit XXIV annexed hereto
------------
or in such other form as may be approved by Administrative Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at
Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form reasonably
satisfactory to Administrative Agent, adding such Additional Mortgaged
Property to the Real Property Assets encumbered by such existing Mortgage,
in either case as such security instrument or amendment may be amended,
supplemented or otherwise modified from time to time. "Mortgages" means
all such instruments, including the Closing Date Mortgages and any
Additional Mortgages, collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NAIC" means the National Association of Insurance Commissioners.
28
"Net Asset Sale Proceeds" means, with respect to any Asset Sale,
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 costs incurred in connection with such Asset Sale, including (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 repaid as a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or
proceeds received by Holdings or any of its Subsidiaries (i) under any
business interruption or casualty insurance policy in respect of a covered
loss thereunder or (ii) as a result of the taking of any assets of Holdings
or any of its Subsidiaries by any Person pursuant to the power of eminent
domain, condemnation or otherwise, or pursuant to a sale of any such assets
to a purchaser with such power under threat of such a taking, in each case
net of any actual and documented costs incurred by Holdings or any of its
Subsidiaries in connection with the adjustment or settlement of any claims
of Holdings or such Subsidiary in respect thereof.
"New Business" means any assets or business acquired by Company or
any of its Subsidiaries in a Permitted Acquisition.
"New Business EBITDA" means Consolidated Adjusted EBITDA
attributable to any New Business for the twelve-month period most recently
preceding the date of such acquisition. Consolidated Adjusted EBITDA
shall, for purposes of this definition, (i) be calculated with respect to
such twelve-month period and the acquired Subsidiaries, assets or
businesses on a pro forma basis (including pro forma adjustments (x)
arising out of events which are directly attributable to a specific
transaction, are factually supportable and are expected to have a
continuing impact, in each case determined on a basis consistent with
Article 11 of Regulation S-X promulgated under the Securities Act, as
interpreted by the staff of the Securities and Exchange Commission as of
January 1, 1997, which would include cost savings resulting from head count
reduction, closure of facilities and similar restructuring charges, and (y)
similar cost savings resulting from actions taken by management of the New
Business during the six-month period immediately preceding such acquisition
that are supportable and quantifiable by the underlying accounting records
of such business, which pro forma adjustments shall be certified by the
principal financial officer or principal accounting officer of Company)
using the historical financial statements of all entities or assets so
acquired or to be acquired, which shall be reformulated (a) as if such
acquisition and any Indebtedness or other liabilities incurred in
connection with such acquisition had been consummated or incurred at the
beginning of such period (and assuming that such Indebtedness bears
interest during any portion of the applicable measurement period prior to
the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans
29
during such period), and (b) otherwise in conformity with certain
procedures to be agreed upon between Administrative Agent and Company, all
such calculations to be in form and substance reasonably satisfactory to
Administrative Agent, and (ii) be calculated with respect to such New
Business as if all references to Holdings and its Subsidiaries in the
definitions of Consolidated Adjusted EBITDA and its components were
references to such New Business for such period.
"New Sub Debt Indentures" means, collectively, the Senior
Subordinated Note Indenture and the Discount Note Indenture.
"Notes" means one or more of the Tranche A Term Notes, Revolving
Notes or Swing Line Note 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 Agents, Lenders or their respective
Affiliates 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.
"Officers" Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by
its principal financial officer or principal accounting officer or its
treasurer; provided that every Officers' Certificate with respect to the
--------
compliance with a condition precedent to the making of any Loans hereunder
shall include (i) a statement that the officer or officers making or giving
such Officers' Certificate have read such condition and any definitions or
other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not such
condition has been complied with, and (iii) a statement as to whether, in
the opinion of the signers, such condition has been complied with.
30
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"Other Investors" means Harvard Private Capital Holdings, Inc.,
BancBoston Investments, Inc., Chase Equity Associates, L.P. and CIBC WG
Argosy Merchant Fund 2, L.L.C..
"Other MIS Expenditures" means all expenditures, other than MIS
Upgrade Expenditures, EITF 97-13 Expenditures and Year 2000 Expenditures,
relating to Holdings' and its Subsidiaries' MIS systems.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"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 Acquisition" means the acquisition of assets or a business
effected in accordance with the provisions of subsection 7.7(xiv).
"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 5 days) are being contested in good faith by appropriate
proceedings, so long as (1) such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts, and (2) in the case of a Lien with
respect to any portion of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral
on account of such Lien;
31
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long
as no foreclosure, sale or similar proceedings have been commenced
with respect to any portion of the Collateral 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 in
accordance with any applicable terms of the Collateral Documents and
not interfering in any material respect with the ordinary conduct of
the business of Holdings or any of its Subsidiaries or resulting in a
material diminution in the value of any Collateral as security for the
Obligations;
(vi) easements, rights-of-way, restrictions, encroachments,
and other defects or irregularities in title, in each case which do
not and will not interfere in any material respect with the ordinary
conduct of the business of Holdings or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as
security for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under
any lease permitted by subsection 7.8, (b) restriction or encumbrance
that the interest or title of such lessor or sublessor may be subject
to, or (c) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to in the
preceding clause (b), so long as the holder of such restriction or
encumbrance agrees to recognize the rights of such lessee or sublessee
under such lease;
(viii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) any zoning or similar law or right reserved to or vested
in any governmental office or agency to control or regulate the use of
any real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating,
reciprocal easement or
32
similar agreements entered into in the ordinary course of business of
Holdings and its Subsidiaries;
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Holdings or any of its Subsidiaries in the
ordinary course of business and not interfering in any material
respect with the ordinary conduct of the business of Holdings or such
Subsidiary; and
(xiii) Liens existing on the Closing Date and described in the
Closing Date Mortgage Policies.
"Permitted Seller Note" means a promissory note containing
subordination provisions in substantially the form of, or no less favorable
to Lenders (in the reasonable judgment of Administrative Agent) than the
subordination provisions contained in, Exhibit XXVI annexed hereto,
------------
representing any Indebtedness of Company incurred in connection with any
Permitted Acquisition payable to the seller in connection therewith, as
such note may be amended, supplemented or otherwise modified from time to
time to the extent permitted under subsection 7.14B; provided that no
--------
Permitted Seller Note shall (i) be guarantied by any Subsidiary of Company
or secured by any property of Company or any of its Subsidiaries or
(ii) bear cash interest at a rate no greater than 15% per annum; and
provided further, that no Permitted Seller Note shall provide for any
-------- -------
prepayment or repayment of all or any portion of the principal thereof
prior to the date of the final scheduled installment of principal of any of
the Loans.
"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 Holdings Pledge Agreement, the Company Pledge Agreement and
the Subsidiary Pledge Agreement.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Pro Rata Share" means (i) with respect to all payments, computations
and other matters relating to the Tranche A Term Loan Commitment or the
Tranche A Term Loan of any Lender, the percentage obtained by dividing
--------
(x) the Tranche A Term Loan Exposure of that Lender by (y) the aggregate
--
Tranche A 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 therein purchased by any Lender or any
participations in
33
any Swing Line Loans purchased by any Lender, the percentage obtained by
dividing (x) the Revolving Loan Exposure of that Lender by (y) the
-------- --
aggregate Revolving Loan Exposure of all Lenders, and (iii) for all other
purposes with respect to each Lender, the percentage obtained by dividing
--------
(x) the sum of the Tranche A Term Loan Exposure of that Lender plus the
----
Revolving Loan Exposure of that Lender by (y) the aggregate Tranche A 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.
------------
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary in order to
create or perfect Liens on any IP Collateral.
"Real Property Asset" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"Recapitalization Agreement" means that certain Agreement and Plan
of Merger dated as of October 30, 1997, by and among Holdings, Merger Corp.
and ▇▇▇▇, in the form delivered to Syndication Agent, 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 7.14A.
"Recapitalization Financing Requirements" means the aggregate of all
amounts necessary to finance the Recapitalization Transactions.
"Recapitalization Revolving Loans" has the meaning assigned to that
term in subsection 2.5A.
"Recapitalization Transactions" means the series of transactions
described in Schedule 1.1(ii) annexed hereto, together with (i) the
----------------
contribution by Holdings to Company of the capital stock of each of the
Subsidiaries of Holdings indicated on such Schedule, (ii) the repurchase of
the Existing Subordinated Notes pursuant to the Debt Tender Offer and the
repayment of all amounts outstanding under the Existing Credit Agreement,
(iii) the amendment of the Existing Subordinated Note Indenture pursuant to
the Consent Solicitation, (iv) the Merger, and (v) the payment of
Transaction Costs and the other transactions contemplated by the
Recapitalization Agreement.
"Recorded Leasehold Interest" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been
recorded in all places necessary or desirable, in Administrative Agent's
reasonable judgment, to give constructive notice of such Leasehold Property
to third-party purchasers and encumbrancers of the affected real property.
For purposes of this definition, the term "Record Document" means, with
respect to any Leasehold Property, (a) the lease
34
evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or
(b) if such Leasehold Property was acquired or subleased from the holder of
a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise
in form reasonably satisfactory to Administrative Agent.
"Reference Lenders" means ▇▇▇▇▇▇ Guaranty and BTCo.
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in
subsection 3.3B.
"Related Agreements" means, collectively, the Recapitalization
Agreement, the Certificate of Merger, the Stockholders Agreement, the
Junior Subordinated Seller Notes, the New Sub Debt Indentures, the Discount
Notes, the Senior Subordinated Notes, the Existing Subordinated Note
Indenture, the Existing Subordinated Notes and the Debt Tender Offer
Materials.
"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 the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the migration of any Hazardous Materials through the air, soil,
surface water or groundwater.
"Requisite Class Lenders" means, at any time of determination
(i) for the Class of Lenders having Tranche A Term Loan Exposure, Lenders
having or holding at least 51% of the sum of the aggregate Tranche A Term
Loan Exposure of all Lenders, and (ii) for the Class of Lenders having
Revolving Loan Exposure, Lenders having or holding at least 51% of the sum
of the aggregate Revolving Loan Exposure of all Lenders.
"Requisite Lenders" means Lenders having or holding more than 50% of
the sum of the aggregate Tranche A Term Loan Exposure of all Lenders plus
----
the aggregate Revolving Loan Exposure of all Lenders.
"Responsible Officer" means any of the chairman of the board (if an
officer), the president, any senior or executive vice president, the
general counsel, its principal
35
financial officer or principal accounting officer, the secretary or the
treasurer of Holdings or, as applicable, any Subsidiary of Holdings.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Holdings or 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 Holdings or 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 Holdings or 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 the earlier of
(i) December 15, 2002 and (ii) the date of termination in whole of the
Revolving Loan Commitments pursuant to subsection 2.4B or Section 8.
"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 plus the
----
outstanding principal amount of any Acquisition Loans of that Lender and
(ii) after the termination of the Revolving Loan Commitments, the sum of
(a) the aggregate outstanding principal amount of the Revolving Loans of
that Lender plus (b) in the event that Lender is an Issuing Lender, the
----
aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender (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 plus (d) in the case of Swing Line Lender, the
----
aggregate outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Lenders) plus (e) the aggregate
----
amount of all participations purchased by that Lender in any outstanding
Swing Line Loans.
"Revolving Loans" means the Loans made by Lenders to Company
pursuant to subsection 2.1A(ii).
"Revolving Notes" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Revolving Loans of any Lenders,
substantially in the
36
form of Exhibit VIII annexed hereto, as they may be amended, supplemented
------------
or otherwise modified from time to time.
"Secured Parties" has the meaning assigned to that term in the
Intercreditor Agreement.
"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 indebted ness, 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.
"Senior Subordinated Note Indenture" means the indenture pursuant to
which the Senior Subordinated Notes are issued, as such indenture may be
amended from time to time to the extent permitted under subsection 7.14B.
"Senior Subordinated Notes" means the $125,000,000 in aggregate
principal amount of 9-7/8% Senior Subordinated Notes due December 15, 2007
of Company issued pursuant to the Senior Subordinated Note Indenture.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in
any way by Company or any of its Subsidiaries) containing subordination
provisions substantially in the form of, or no less favorable to Lenders
(in the reasonable judgment of Administrative Agent) than the subordination
provisions contained in Exhibit XXVI annexed hereto, as such note may be
------------
amended, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.14B.
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property
(sold as a going concern) of such Person is (y) greater than the total
amount of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the probable
liabilities on such Person's then existing debts as they become absolute
and matured considering all financing alternatives and potential asset
sales reasonably available to such Person; (ii) such Person's capital is
not unreasonably small in relation to its business or any contemplated or
undertaken transaction; and (iii) 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 (B) 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
37
contingent liability at any time shall be computed as the amount that, in
light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual
or matured liability.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Holdings or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Holdings or any of its Subsidiaries, (iii) the obligations of third party
insurers of Holdings or any of its Subsidiaries arising by virtue of the
laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Holdings or any of
its Subsidiaries, (v) performance, payment, deposit or surety obligations
of Holdings or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice
in the industry, and (vi) such other obligations of Company and its
Subsidiaries as are reasonably acceptable to Administrative Agent and the
Issuing Lender and otherwise permitted to exist pursuant to the terms of
this Agreement; provided that Standby Letters of Credit may not be issued
--------
for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of
the Bankruptcy Code).
"Stockholders Agreement" means that certain Stockholders Agreement
by and among Holdings, ▇▇▇▇, the Other Investors, ▇▇▇▇ and the Management
Investors, in the form delivered to Syndication Agent, 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 7.14A.
"Subordinated Indebtedness" means (i) the Indebtedness of Company
evidenced by the Senior Subordinated Notes and the Discount Notes, (ii) the
Indebtedness of Holdings evidenced by the Junior Subordinated Seller Notes
and any Existing Subordinated Notes not tendered pursuant to the Debt
Tender Offer, (iii) the Indebtedness of Company evidenced by any Permitted
Seller Notes and Shareholder Subordinated Notes, and (iv) any other
Indebtedness of Holdings, Company or any of their Subsidiaries subordinated
in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults,
remedies, subordination provisions and other material terms in form and
substance reasonably satisfactory to Administrative Agent and Requisite
Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
38
"Subsidiary Guarantor" means any Subsidiary of Holdings, other than
Company, that executes and delivers a counterpart of the Subsidiary
Guaranty on the Closing Date or from time to time thereafter pursuant to
subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty executed and
delivered by all Subsidiaries of Holdings (other than Company and the
Excluded Subsidiaries) on the Closing Date and to be executed and delivered
by additional Subsidiaries of Holdings from time to time thereafter in
accordance with subsection 6.8, substantially in the form of Exhibit XVII
------------
annexed hereto, as such Subsidiary Guaranty may hereafter be amended,
supplemented or otherwise modified from time to time as permitted
thereunder and hereunder.
"Subsidiary Patent and Trademark Security Agreement" means each
Subsidiary Patent and Trademark Security Agreement executed and delivered
by each existing Subsidiary Guarantor and Collateral Agent on the Closing
Date and executed and delivered by any additional Subsidiary Guarantor from
time to time thereafter in accordance with subsection 6.8, substantially in
the form of Exhibit XX annexed hereto, as such Subsidiary Patent and
----------
Trademark Security Agreement may be amended, supplemented or otherwise
modified from time to time as permitted thereunder and hereunder.
"Subsidiary Pledge Agreement" means the Subsidiary Pledge Agreement
executed and delivered by each existing Subsidiary Guarantor and Collateral
Agent on the Closing Date and executed and delivered by any additional
Subsidiary Guarantor from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XVIII annexed hereto,
-------------
as such Subsidiary Pledge Agreement may be amended, supplemented or
otherwise modified from time to time as permitted thereunder and hereunder.
"Subsidiary Security Agreement" means the Subsidiary Security
Agreement executed and delivered by each existing Subsidiary Guarantor and
Collateral Agent on the Closing Date or executed and delivered by any
additional Subsidiary Guarantor from time to time thereafter in accordance
with subsection 6.8, substantially in the form of Exhibit XIX annexed
-----------
hereto, as such Subsidiary Security Agreement may be amended, supplemented
or otherwise modified from time to time as permitted thereunder and
hereunder.
"Supplemental Collateral Agent" has the meaning assigned to that
term in subsection 9.1D.
"Swing Line Lender" means ▇▇▇▇▇▇ Guaranty, or any Person serving as
a successor Administrative Agent hereunder, in its capacity as Swing Line
Lender hereunder.
39
"Swing Line Loan Commitment" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection
2.1A(iii).
"Swing Line Loans" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iii).
"Swing Line Note" means any promissory note of Company issued
pursuant to subsection 2.1E to evidence the Swing Line Loans of Swing Line
Lender, substantially in the form of Exhibit IX annexed hereto, as it may
----------
be amended, supplemented or otherwise modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied,
collected, withheld or assessed; provided that "Tax on the overall net
--------
income" of a Person shall be construed as a reference to a tax imposed by
the jurisdiction in which that Person 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).
"Title Company" means, collectively, Chicago Title Insurance Company
and/or one or more other title insurance companies reasonably satisfactory
to Syndication Agent and Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit
but not yet so applied) plus (ii) the aggregate principal amount of all
----
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
----
"Tranche A Term Loan" means a Loan made by a Lender to Company as a
term loan pursuant to subsection 2.1A(i), and "Tranche A Term Loans"
means any such Loan or Loans, collectively.
"Tranche A Term Loan Commitment" means the commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and
"Tranche A Term Loan Commitments" means such commitments of all Lenders
in the aggregate.
40
"Tranche A Term Loan Exposure" means, with respect to any Lender as of
any date of determination (i) prior to the funding of the Tranche A Term
Loans, that Lender's Tranche A Term Loan Commitment and (ii) after the
funding of the Tranche A Term Loans, the outstanding principal amount of
the Tranche A Term Loan of that Lender.
"Tranche A Term Notes" means any promissory notes of Company issued
pursuant to subsection 2.1E to evidence the Tranche A Term Loans of any
Lenders, 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
Holdings and Company in connection with the transactions contemplated by
the Loan Documents, the AXEL Credit Documents and the Related Agreements.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"Year 2000 Expenditures" means expenditures related to addressing
Holdings' and its Subsidiaries' Year 2000 Manbase software systems issues.
"▇▇▇▇" means ▇▇▇▇/Chilmark Fund, L.P.
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
------------------------------------------------------------------------
Agreement.
---------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3. Notwithstanding the
foregoing, except as otherwise specifically provided herein, all computations
determining compliance with subsection 2.4 and Section 7, including the
definitions used therein, shall utilize accounting principles and policies in
effect at the time of the preparation of, and in conformity with those used to
prepare, the November 30, 1996 financial statements of Holdings and its
Subsidiaries delivered to the Lenders, but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development, in each case arising in
connection with any Permitted Acquisitions) and APB 17 and its interpretations
(including non-cash charges relating to intangibles and goodwill arising in
connection with any Permitted Acquisitions).
41
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 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.
D. Each reference to a "Fiscal Quarter period" of a specified number of
Fiscal Quarters shall be a reference to a period of consecutive Fiscal Quarters
of such number.
1.4 Changes in GAAP.
---------------
In the event that a change in GAAP or other accounting principles and
policies after the date hereof affects in any material respect the calculations
of the compliance by Holdings and its Subsidiaries with the covenants contained
herein, Lenders, Company and Holdings agree to negotiate in good faith to amend
the affected covenants (and related definitions) to compensate for the effect of
such changes so that the restrictions, limitations and performance standards
effectively imposed by such covenants, as so amended, are substantially
identical to the restrictions, limitations and performance standards imposed by
such covenants as in effect on the date hereof; provided that if Requisite
--------
Lenders, Company and Holdings fail to reach agreement with respect to such
amendment within a reasonable period of time following the date of effectiveness
of any such change, calculation of compliance by Holdings and its Subsidiaries
with the covenants contained herein shall be determined in accordance with GAAP
as in effect immediately prior to such change.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Making of Loans; the Register; Notes.
-------------------------------------------------
A. Commitments. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Holdings and Company
herein set forth, each Lender hereby severally agrees to make the Loans
described in subsections 2.1A(i) and 2.1A(ii) and Swing Line Lender hereby
agrees to make the Loans described in subsection 2.1A(iii).
42
(i) Tranche A 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 Tranche A Term Loan Commitments to be used for
the purposes identified in subsection 2.5A. The amount of each Lender's
Tranche A Term Loan Commitment is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate amount of the Tranche A Term
------------
Loan Commitments is $120,000,000; provided that the Tranche A Term Loan
Commitments of Lenders shall be adjusted to give effect to any assignments
of the Tranche A Term Loan Commitments pursuant to subsection 10.1B. Each
Lender's Tranche A Term Loan Commitment shall expire immediately and
without further action on February 16, 1998 if the Tranche A Term Loans are
not made on or before that date. Company may make only one borrowing under
the Tranche A 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 $100,000,000; 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; and provided, further that the amount of the Revolving Loan
-------- -------
Commitments shall be reduced from time to time by the amount of any
reductions thereto made pursuant to subsections 2.4B(ii) and 2.4B(iii).
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 February 16, 1998 if the Tranche A Term Loans are
not made on or before that date. Amounts borrowed under this subsection
2.1A(ii) which are not Acquisition Loans may be repaid and reborrowed to
but excluding the Revolving Loan Commitment Termination Date. All
Acquisition Loans borrowed under this subsection 2.1A(ii) and subsequently
repaid or prepaid may not be reborrowed (and the Revolving Loan Commitments
shall be reduced by the principal amount of any Acquisition Loans
borrowed).
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to
the following limitations in the amounts and during the periods indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect; and
43
(b) for 30 consecutive days during each consecutive twelve-
month period, the sum of (1) the aggregate outstanding principal
amount of all Revolving Loans plus (2) the aggregate outstanding
----
principal amount of all Swing Line Loans minus (3) the aggregate
-----
outstanding principal amount of all Acquisition Loans, shall not
exceed $25,000,000.
(iii) Swing Line Loans. Swing Line Lender hereby agrees, subject to
----------------
the limitations set forth below with respect to the maximum amount of Swing
Line Loans permitted to be outstanding from time to time, to make a portion
of the Revolving Loan Commitments available to Company from time to time
during the period from the Closing Date to but excluding the Revolving Loan
Commitment Termination Date by making Swing Line Loans to Company in an
aggregate amount not exceeding the amount of the Swing Line Loan Commitment
to be used for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing Line
Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
of the Letter of Credit Usage then in effect, may exceed Swing Line
Lender's Revolving Loan Commitment. The original amount of the Swing Line
Loan Commitment is $10,000,000; provided that any reduction of the
--------
Revolving Loan Commitments made pursuant to subsection 2.4B(ii) or
2.4B(iii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan Commitment
shall result in an automatic corresponding reduction of the Swing Line Loan
Commitment to the amount of the Revolving Loan Commitments, as so reduced,
without any further action on the part of Company, Administrative Agent or
Swing Line Lender. The Swing Line Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Swing Line Loans and all
other amounts owed hereunder with respect to the Swing Line Loans shall be
paid in full no later than that date; provided that the Swing Line Loan
--------
Commitment shall expire immediately and without further action on
February 16, 1998 if the Tranche A Term Loans are not made on or before
that date. Amounts borrowed under this subsection 2.1A(iii) may be repaid
and reborrowed to but excluding the Revolving Loan Commitment Termination
Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
the following limitations in the amounts and during the periods indicated:
(a) in no event shall the Total Utilization of Revolving Loan
Commit ments at any time exceed the Revolving Loan Commitments then in
effect; and
(b) for 30 consecutive days during each consecutive twelve-
month period, the sum of (1) the aggregate outstanding principal
amount of all Revolving Loans plus (2) the aggregate outstanding
----
principal amount of all Swing Line Loans minus (3) the aggregate
-----
outstanding principal amount of all Acquisition Loans, shall not
exceed $25,000,000.
44
With respect to any Swing Line Loans which have not been voluntarily
prepaid by Company pursuant to subsection 2.4B(i), Swing Line Lender may,
at any time in its sole and absolute discretion, deliver to Administrative
Agent (with a copy to Company), no later than 11:00 A.M. (New York City
time) on the first Business Day in advance of the proposed Funding Date, a
notice (which shall be deemed to be a Notice of Borrowing given by Company)
requesting Lenders to make Revolving Loans that are Base Rate Loans on such
Funding Date in an amount equal to the amount of such Swing Line Loans (the
"Refunded Swing Line Loans") outstanding on the date such notice is given
which Swing Line Lender requests Lenders to prepay. Anything contained in
this Agreement to the contrary notwithstanding, (i) the proceeds of such
Revolving Loans made by Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and not
to Company) and applied to repay a corresponding portion of the Refunded
Swing Line Loans and (ii) on the day such Revolving Loans are made, Swing
Line Lender's Pro Rata Share of the Refunded Swing Line Loans shall be
deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender, and such portion of the Swing Line Loans deemed to be so paid shall
no longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note, if any, of Swing Line Lender but shall instead
constitute part of Swing Line Lender's outstanding Revolving Loans and
shall be due under the Revolving Note, if any, of Swing Line Lender.
Company hereby authorizes Administrative Agent and Swing Line Lender to
charge Company's accounts with Administrative Agent and Swing Line Lender
(up to the amount available in each such account) in order to immediately
pay Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Lenders, including the
Revolving Loan deemed to be made by Swing Line Lender, are not sufficient
to repay in full the Refunded Swing Line Loans. If any portion of any such
amount paid (or deemed to be paid) to Swing Line Lender should be recovered
by or on behalf of Company from Swing Line Lender in bankruptcy, by
assignment for the benefit of creditors or otherwise, the loss of the
amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by subsection 10.5.
If for any reason (a) Revolving Loans are not made upon the request of
Swing Line Lender as provided in the immediately preceding paragraph in an
amount sufficient to repay any amounts owed to Swing Line Lender in respect
of any outstanding Swing Line Loans or (b) the Revolving Loan Commitments
are terminated at a time when any Swing Line Loans are outstanding, each
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share (calculated, in the case of the foregoing clause
(b), immediately prior to such termination of the Revolving Loan
Commitments) of the unpaid amount of such Swing Line Loans together with
accrued interest thereon. Upon one Business Day's notice from Swing Line
Lender, each Lender shall deliver to Swing Line Lender an amount equal to
its respective participation in same day funds at the Funding and Payment
Office. In order to further evidence such participation (and without
prejudice to the effectiveness of the participation provisions set forth
above), each Lender agrees to enter into a separate participation agreement
at the request of Swing Line
45
Lender in form and substance reasonably satisfactory to Swing Line Lender.
In the event any Lender fails to make available to Swing Line Lender the
amount of such Lender's participation as provided in this paragraph, Swing
Line Lender shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the rate customarily used by Swing
Line Lender for the correction of errors among banks for three Business
Days and thereafter at the Base Rate. In the event Swing Line Lender
receives a payment of any amount in which other Lenders have purchased
participations as provided in this paragraph, Swing Line Lender shall
promptly distribute to each such other Lender its Pro Rata Share of such
payment.
Anything contained herein to the contrary notwithstanding, each
Lender's obligation to make Revolving Loans for the purpose of repaying any
Refunded Swing Line Loans pursuant to the second preceding paragraph and
each Lender's obligation to purchase a participation in any unpaid Swing
Line Loans pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (a) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Swing Line Lender, Company or any other
Person for any reason whatsoever; (b) the occurrence or continuation of an
Event of Default or a Potential Event of Default; (c) any adverse change in
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Holdings or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; provided that such obligations of each
--------
Lender are subject to the condition that (X) Swing Line Lender believed in
good faith that all conditions under Section 4 to the making of the
applicable Refunded Swing Line Loans or other unpaid Swing Line Loans, as
the case may be, were satisfied at the time such Refunded Swing Line Loans
or unpaid Swing Line Loans were made or (Y) the satisfaction of any such
condition not satisfied had been waived in accordance with subsection 10.6
prior to or at the time such Refunded Swing Line Loans or other unpaid
Swing Line Loans were made.
B. Borrowing Mechanics. Tranche A Term Loans or Revolving Loans made on
any Funding Date (other than Revolving Loans made pursuant to a request by Swing
Line Lender pursuant to subsection 2.1A(iii) for the purpose of repaying any
Refunded Swing Line Loans or Revolving Loans made pursuant to subsection 3.3B
for the purpose of reimbursing any Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it) shall be in an aggregate minimum amount
of $500,000 and integral multiples of $100,000 in excess of that amount;
provided that Tranche A 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 $1,000,000 and integral multiples of $100,000 in
excess of that amount. Swing Line Loans made on any Funding Date shall be in an
aggregate minimum amount of $100,000 and integral multiples of $100,000 in
excess of that amount. Whenever Company desires that Lenders make Tranche A
Term Loans or Revolving Loans it shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of a
Eurodollar Rate Loan)
46
or at least one Business Day in advance of the proposed Funding Date (in the
case of a Base Rate Loan). Whenever Company desires that Swing Line Lender make
a Swing Line Loan, it shall deliver to Administrative Agent a Notice of
Borrowing no later than 12:00 Noon (New York City time) on the proposed Funding
Date. The Notice of Borrowing shall specify (i) the proposed Funding Date
(which shall be a Business Day), (ii) the amount and type of Loans requested,
(iii) in the case of Swing Line Loans, that such Loans shall be Base Rate Loans,
(iv) in the case of any Revolving Loans, whether such Loans shall be Base Rate
Loans or Eurodollar Rate Loans, and (v) in the case of any Loans requested to be
made as Eurodollar Rate Loans, the initial Interest Period requested therefor.
Tranche A 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 applicable Notice of Borrowing is no longer true and correct as of the
applicable Funding Date, and the acceptance by Company of the proceeds of any
Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice
of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Tranche A 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 or Swing Line
Lender, as the case may be, of the proposed borrowing. Each Lender shall make
the amount of its Loan available to Administrative Agent
47
not later than 1:00 P.M. (New York City time) on the applicable Funding Date,
and Swing Line Lender shall make the amount of its Swing Line Loan available to
Administrative Agent not later than 2:00 P.M. (New York City time) on the
applicable Funding Date, in each case in same day funds in Dollars, at the
Funding and Payment Office. Except as provided in subsection 2.1A(iii) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of Loans made on the 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 or Swing Line Lender, as the
case may be, 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
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. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from time
to time (the "Register"). The Register shall be available for inspection
by Company or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Administrative Agent shall record in the Register the Tranche A
Term Loan Commitment and Revolving Loan Commitment and the Tranche A Term
Loan and Revolving Loans from time to time of each Lender, the Swing Line
Loan Commitment and the Swing Line Loans from time to time of Swing Line
Lender, and each repayment
48
or prepayment in respect of the principal amount of the Tranche A Term Loan
or Revolving Loans of each Lender or the Swing Line Loans of Swing Line
Lender. Any such recordation shall be conclusive and binding on Company
and each Lender, absent manifest error; provided that failure to make any
--------
such recordation, or any error in such recordation, shall not affect any
Lender's Commitments or Company's Obligations in respect of any applicable
Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of any Tranche A Term Loan and
each Revolving Loan made by it and each payment in respect thereof. Any
such recordation shall be conclusive and binding on Company, absent
manifest error; provided that failure to make any such recordation, or any
--------
error in such recordation, shall not affect any Lender's Commitments or
Company's Obligations in respect of any applicable Loans; and provided,
--------
further that in the event of any inconsistency between the Register and any
-------
Lender's records, the recordations in the Register shall govern and be
conclusive and binding on such Lender, absent manifest error.
(iv) Company, Administrative Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or
Loan shall be effective, in each case unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been
accepted by Administrative Agent and recorded in the Register as provided
in subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates ▇▇▇▇▇▇ Guaranty to serve as
Company's agent solely for purposes of maintaining the Register as provided
in this subsection 2.1D, and Company hereby agrees that, to the extent
▇▇▇▇▇▇ Guaranty serves in such capacity, ▇▇▇▇▇▇ Guaranty and its officers,
directors, employees, agents and affiliates shall constitute Indemnitees
for all purposes under subsection 10.3.
E. Optional Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date or at any time thereafter, Company shall execute and deliver
to such Lender (and/or, if applicable and if so specified in such notice, to any
Person who is an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date, promptly
after Company's receipt of such notice) a promissory note or promissory notes to
evidence such Lender's Tranche A Term Loan, Revolving Loans or Swing Line Loans,
substantially in the form of Exhibit IV, Exhibit V or Exhibit VI annexed hereto,
---------- --------- ----------
respectively, with appropriate insertions.
49
2.2 Interest on the Loans.
---------------------
A. Rate of Interest. Subject to the provisions of subsections 2.6 and
2.7, each Tranche A 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. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable basis for determining
the rate of interest with respect to any Tranche A 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. The basis for
determining the interest rate with respect to any Tranche A Term Loan or any
Revolving Loan may be changed from time to time pursuant to subsection 2.2D. If
on any day a Tranche 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.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche A Term Loans and the Revolving Loans shall bear interest through
maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate plus
----
the Applicable Base Rate Margin; or
(b) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
----
(ii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate
plus the Applicable Base Rate Margin for Tranche A Term Loans.
----
B. Interest Periods. In connection with each Eurodollar Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one-, two-, three- or six-month period or, if
deposits in the interbank Eurodollar market are generally available for such
period (as determined by each Lender making, converting to or continuing such
Eurodollar Rate Loan), a two-week or 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;
50
(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 Tranche
A Term Loans shall extend beyond December 15, 2002, 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 Tranche
A Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Tranche A Term Loans unless
the sum of (a) the aggregate principal amount of Tranche A Term Loans that
are Base Rate Loans plus (b) the aggregate principal amount of Tranche A
----
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 Tranche A Term Loans on such date;
(vii) Company shall not select an Interest Period of longer than
one month prior to the end of the Initial Period;
(viii) there shall be no more than twelve (12) Interest Periods
outstanding at any time; and
(ix) in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
--------
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment
51
shall be payable on the next succeeding Interest Payment Date applicable to Base
Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option (i) to convert at any time all or any part of
its outstanding Tranche A Term Loans or Revolving Loans equal to $500,000 and
integral multiples of $100,000 in excess of that amount from Loans bearing
interest at a rate determined by reference to one basis to Loans bearing
interest at a rate determined by reference to an alternative basis 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 $1,000,000 and integral
multiples of $100,000 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; and
provided further, however, that Loans may not be continued as or converted to
-------- ------- -------
Eurodollar Rate Loans with an Interest Period longer than one month prior to the
end of the Initial Period.
Company shall deliver a Notice of Conversion/Continuation at any time after
the Closing Date to Administrative Agent no later than 12:00 Noon (New York City
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 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
52
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 there with.
E. Post-Maturity Interest. Any principal payments on the Loans not paid
when due and, to the extent permitted by applicable law, any interest payments
on the Loans or any fees or other amounts owed hereunder not paid when due, in
each case whether at stated maturity, by notice of prepayment, by acceleration
or otherwise, shall, if Requisite Lenders so elect in writing, thereafter bear
interest (including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate
which is 2% per annum in excess of the interest rate otherwise payable at
maturity 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 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 (but not any
outstanding Swing Line Loans) plus (ii) the Letter of Credit Usage multiplied by
---- -------------
the Applicable Commitment Fee Percentage, such commitment fees to be calculated
on the basis of a 360-day year and the actual number of days elapsed and to be
payable quarterly in arrears
53
on February 28, May 31, August 31 and November 30 of each year, commencing on
the first such date to occur after the Closing Date, and on the Revolving Loan
Commitment Termination Date.
B. Other Fees. Company agrees to pay to Syndication Agent and
Administrative Agent such fees in the amounts and at the times separately agreed
upon between Company, Syndication Agent and Administrative Agent.
2.4 Repayments, Prepayments and Reductions in Revolving Loan Commitments;
---------------------------------------------------------------------
General Provisions Regarding Payments; Application of Proceeds of
-----------------------------------------------------------------
Collateral and Payments Under Guaranties.
----------------------------------------
A. Scheduled Payments of Tranche A Term Loans. Company shall make
principal payments on the Tranche A Term Loans in installments on the dates and
in the amounts set forth below:
SCHEDULED REPAYMENT
DATE OF TRANCHE A TERM
LOANS
=============================================================
March 15, 1999 $ 2,500,000
-------------------------------------------------------------
June 15, 1999 $ 2,500,000
-------------------------------------------------------------
September 15, 1999 $ 2,500,000
-------------------------------------------------------------
December 15, 1999 $ 2,500,000
-------------------------------------------------------------
March 15, 2000 $ 6,750,000
-------------------------------------------------------------
June 15, 2000 $ 6,750,000
-------------------------------------------------------------
September 15, 2000 $ 6,750,000
-------------------------------------------------------------
December 15, 2000 $ 6,750,000
-------------------------------------------------------------
March 15, 2001 $ 9,500,000
-------------------------------------------------------------
June 15, 2001 $ 9,500,000
-------------------------------------------------------------
September 15, 2001 $ 9,500,000
-------------------------------------------------------------
December 15, 2001 $ 9,500,000
-------------------------------------------------------------
March 15, 2002 $11,250,000
-------------------------------------------------------------
June 15, 2002 $11,250,000
-------------------------------------------------------------
September 15, 2002 $11,250,000
-------------------------------------------------------------
December 15, 2002 $11,250,000
=============================================================
; provided that the scheduled installments of principal of the Tranche A Term
--------
Loans set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the
54
Tranche A Term Loans in accordance with subsection 2.4B(iv); and provided,
--------
further that the Tranche A Term Loans and all other amounts owed hereunder with
-------
respect to the Tranche A Term Loans shall be paid in full no later than December
15, 2002, and the final installment payable by Company in respect of the Tranche
A 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 Tranche A Term Loans.
B. Prepayments and Reductions in Revolving Loan Commitments.
(i) Voluntary Prepayments. Company may, upon written or telephonic
---------------------
notice to Administrative Agent on or prior to 12:00 Noon (New York City
time) on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time prepay any
Swing Line Loan on any Business Day in whole or in part in an aggregate
minimum amount of $100,000 and integral multiples of $100,000 in excess of
that amount. Company may, upon written or telephonic notice on the date of
prepayment, 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 12:00 Noon (New York City 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 any Tranche A
Term Loans or Revolving Loans on any Business Day in whole or in part in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 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 three 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 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 $5,000,000 and
integral multiples of $1,000,000 in excess of that amount; provided,
--------
however, that Company may not reduce the Revolving Loan Commitments
-------
pursuant to this subsection to an amount less than $25,000,000 until after
the Tranche A Term Loans shall have been repaid to the full extent thereof.
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
55
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 and Mandatory Reductions of Revolving
-----------------------------------------------------------
Loan Commitments. The Loans shall be prepaid and/or the Revolving Loan
----------------
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to be
applied as set forth below or as more specifically provided in subsection
2.4B(iv).
(a) Prepayments and Reductions From Net Asset Sale Proceeds. No
-------------------------------------------------------
later than the fifth Business Day following the date of receipt by
Company or any of its Subsidiaries of any Net Asset Sale Proceeds in
respect of any Asset Sale, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to such Net Asset Sale Proceeds; provided,
--------
however, that upon receipt by Company or any of its Subsidiaries of
-------
any such Net Asset Sale Proceeds, so long as no Event of Default shall
have occurred and be continuing and to the extent that the aggregate
amount of Net Asset Sale Proceeds and Net Insurance/Condemnation
Proceeds from the Closing Date through the date of determination does
not exceed $25,000,000, Company may deliver to Administrative Agent an
Officers' Certificate setting forth (1) that portion of such Net Asset
Sale Proceeds (such portion being the "Proposed Asset Sale
Reinvestment Proceeds") that Company or such Subsidiary intends to
reinvest (or enter into a contract to reinvest) in equipment or other
productive assets of the general type used in the business (including
capital stock of a corporation engaged in such business) of Company
and its Subsidiaries (such equipment and other assets being "Eligible
Assets") within 270 days of such date of receipt and (2) the proposed
use of such Proposed Asset Sale Reinvestment Proceeds and such other
information with respect to such reinvestment as Administrative Agent
may reasonably request, and Company shall, or shall cause one or more
of its Subsidiaries to, promptly and diligently apply such Proposed
Asset Sale Reinvestment Proceeds to such reinvestment purposes;
provided, however, that at Company's option, such Proposed Asset Sale
-------- -------
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans (without a reduction in Revolving Loan Commitments) to the full
extent thereof. In addition, Company shall, no later than 270 days
after receipt of such Proposed Asset Sale Reinvestment Proceeds that
have not theretofore been applied to the Obligations, make an
additional prepayment of the Loans (and/or the Revolving Loan
Commitments shall be reduced) in the full amount of all such Proposed
Asset Sale Reinvestment Proceeds that have not theretofore been so
reinvested in Eligible Assets; provided that Company shall not be
--------
required to make any prepayment of the Loans to the extent that the
sum of Net Asset Sale Proceeds plus Net Insurance/Condemnation
----
Proceeds from the Closing Date through the date of determination does
not exceed $5,000,000. Notwithstanding the foregoing, if at the time
of any required prepayment under this subsection the Leverage Ratio is
not more than 4.0 to 1.0, Company shall only be required to
56
prepay 75% of the amount which it would otherwise be required to
prepay hereunder; provided, however, that if Company is required to
-------- -------
apply any portion of Net Asset Sale Proceeds to prepay Indebtedness
evidenced by the AXELs under the AXEL Credit Agreement or the Senior
Subordinated Notes or the Discount Notes (under the terms of the New
Sub Debt Indentures), then notwithstanding anything contained in this
Agreement to the contrary (but subject to subsection 2.4B(iv)(d)
hereof), Company shall apply such Net Asset Sale Proceeds to the
prepayment of the Tranche A Term Loans and the AXELs pro rata
according to the respective outstanding principal amount, if any, of
each, then to the prepayment of Revolving Loans and/or the reduction
of Revolving Loan Commitments, in each case so as to eliminate or
minimize any obligation to prepay any such Indebtedness evidenced by
the Senior Subordinated Notes or the Discount Notes.
(b) Prepayments and Reductions from Net Insurance/Condemnation
----------------------------------------------------------
Proceeds. No later than the tenth Business Day following the date of
--------
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds that are
required to be applied to prepay the Loans and/or reduce the Revolving
Loan Commitments pursuant to the provisions of subsection 6.4C,
Company shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to the
amount of such Net Insurance/Condemnation Proceeds minus (if (1) no
-----
Event of Default shall have occurred and be continuing and (2) Company
shall have delivered to Administrative Agent, on or before such tenth
Business Day, the Officers' Certificate described in subsection
6.4C(ii)), any Proposed Insurance Reinvestment Proceeds; provided,
--------
however, that at Company's option, such Proposed Insurance
-------
Reinvestment Proceeds may be applied to prepay outstanding Revolving
Loans (without a reduction in Revolving Loan Commitments) to the full
extent thereof. In addition, no later than 270 days after receipt of
any Proposed Insurance Reinvestment Proceeds, Company shall prepay the
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an amount equal to the amount of any such Proposed
Insurance Reinvestment Proceeds that have not theretofore been applied
to the costs of repairing, restoring or replacing the applicable
assets of Company or its Subsidiaries or reinvested in Eligible
Assets; provided that Company shall not be required to make any
--------
prepayment of the Loans to the extent that the sum of Net Asset Sale
Proceeds plus Net Insurance/Condemnation Proceeds from the Closing
----
Date through the date of determination does not exceed $5,000,000.
Notwithstanding the foregoing, if at the time of any required
prepayment under this subsection the Leverage Ratio is not more than
4.0 to 1.0, Company shall only be required to prepay 75% of the amount
which it would otherwise be required to prepay hereunder; provided,
--------
however, that if Company is required to apply any portion of Net
-------
Insurance/ Condemnation Proceeds to prepay Indebtedness evidenced by
the AXELs under the AXEL Credit Agreement or the Senior Subordinated
Notes or the Discount Notes (under the terms of the New Sub Debt
Indentures), then
57
notwithstanding anything contained in this Agreement to the contrary
(but subject to subsection 2.4B(iv)(d) hereof), Company shall apply
such Net Insurance/Condemnation Proceeds to the prepayment of the
Tranche A Term Loans and the AXELs pro rata according to the
respective outstanding principal amount, if any, of each, then to the
prepayment of Revolving Loans and/or the reduction of Revolving Loan
Commitments, in each case so as to eliminate or minimize any
obligation to prepay any such Indebtedness evidenced by the Senior
Subordinated Notes or the Discount Notes.
(c) Prepayments and Reductions Due to Reversion of Surplus Assets
-------------------------------------------------------------
of Pension Plans. On the date of reversion 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 and/or the
Revolving Loan Commitments shall be permanently reduced 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. If Company is required
to apply any portion of Net Pension Proceeds to prepay Indebtedness
evidenced by the AXELs under the AXEL Credit Agreement or the Senior
Subordinated Notes or the Discount Notes (under the terms of the New
Sub Debt Indentures), then notwithstanding anything contained in this
Agreement to the contrary (but subject to subsection 2.4B(iv)(d)
hereof), Company shall apply such Net Pension Proceeds to the
prepayment of the Tranche A Term Loans and the AXELs pro rata
according to the respective outstanding principal amount, if any, of
each, then to the prepayment of Revolving Loans and/or the reduction
of Revolving Loan Commitments, in each case so as to eliminate or
minimize any obligation to prepay any such Indebtedness evidenced by
the Senior Subordinated Notes or the Discount Notes.
(d) Prepayments and Reductions Due to Issuance of Debt. On the
--------------------------------------------------
date of receipt by Holdings, Company or any of their respective
Subsidiaries of the Cash proceeds of any Indebtedness, including debt
Securities of Holdings, Company or any of their respective
Subsidiaries (other than the Loans and any other Indebtedness
permitted under subsections 7.1(i) through (xvii) (such proceeds, net
of underwriting discounts and commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees and
expenses, being the "Net Indebtedness Proceeds")), Company shall
prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to such Net
Indebtedness Proceeds; provided, however, that payment or acceptance
-------- -------
of the amounts provided for in this subsection 2.4B(iii)(d) shall not
constitute a waiver of any Event of Default resulting from the
incurrence of such Indebtedness or otherwise prejudice any rights or
remedies of Agents or Lenders. If Company is required to apply any
portion of Net Indebtedness Proceeds to prepay Indebtedness evidenced
by the AXELs under the AXEL Credit Agreement or the Senior
Subordinated Notes or
58
the Discount Notes (under the terms of the New Sub Debt Indentures),
then notwithstanding anything contained in this Agreement to the
contrary (but subject to subsection 2.4B(iv)(d) hereof), Company shall
apply such Net Indebtedness Proceeds to the prepayment of the Tranche
A Term Loans and the AXELs pro rata according to the respective
outstanding principal amount, if any, of each, then to the prepayment
of Revolving Loans and/or the reduction of Revolving Loan Commitments,
in each case so as to eliminate or minimize any obligation to prepay
any such Indebtedness evidenced by the Senior Subordinated Notes or
the Discount Notes.
(e) Prepayments and Reductions Due to Issuance of Equity
----------------------------------------------------
Securities. On the date of receipt by Holdings or Company of Cash
----------
proceeds (any such proceeds, net of underwriting discounts and
commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses, being "Net
Equity Proceeds") from the issuance of any equity Securities of
Holdings or Company after the Closing Date (other than (A) capital
contributions by Holdings and Company, and (B) issuances of Holdings
Common Stock (x) to employees, officers, directors and consultants of
Holdings and its Subsidiaries to the extent such Holdings Common Stock
constitutes compensation to such individuals, (y) to ▇▇▇▇ or the Other
Investors to the extent the Cash proceeds thereof are not in excess of
$25,000,000, and (z) as payment of all or any portion of the purchase
price of a business or assets in a Permitted Acquisition), Company
shall prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to: (i) 50% (or, if
the Leverage Ratio is not more than 4.0 to 1.0 on the date such Net
Equity Proceeds are received, 25%) of such Net Equity Proceeds if such
Net Equity Proceeds are derived from a non-public sale of equity
Securities of Holdings or Company or (ii) 75% (or, if the Leverage
Ratio is not more than 4.0 to 1.0 on the date such Net Equity Proceeds
are received, 50%) of such Net Equity Proceeds if such Net Equity
Proceeds are derived from the sale of equity Securities of Holdings or
Company through a public offering. If Company is required to apply
any portion of Net Equity Proceeds to prepay Indebtedness evidenced by
the AXELs under the AXEL Credit Agreement or the Senior Subordinated
Notes or the Discount Notes (under the terms of the New Sub Debt
Indentures), then notwithstanding anything contained in this Agreement
to the contrary (but subject to subsection 2.4B(iv)(d) hereof),
Company shall apply such Net Equity Proceeds to the prepayment of the
Tranche A Term Loans and the AXELs pro rata according to the
respective outstanding principal amount, if any, of each, then to the
prepayment of Revolving Loans and/or the reduction of Revolving Loan
Commitments, in each case so as to eliminate or minimize any
obligation to prepay any such Indebtedness evidenced by the Senior
Subordinated Notes or the Discount Notes.
(f) Prepayments and Reductions from Consolidated Excess Cash
--------------------------------------------------------
Flow. In the event that there shall be Consolidated Excess Cash Flow
----
for any Fiscal
59
Year (commencing with Fiscal Year 1998), Company shall, no later than
90 days after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 75% (or, if the Leverage Ratio is not more
than 4.0 to 1.0 on the last day of any such Fiscal Year, 50%) of such
Consolidated Excess Cash Flow. If Company is required to apply any
portion of Consolidated Excess Cash Flow to prepay Indebtedness
evidenced by the AXELs under the AXEL Credit Agreement or the Senior
Subordinated Notes or the Discount Notes (under the terms of the New
Sub Debt Indentures), then notwithstanding anything contained in this
Agreement to the contrary (but subject to subsection 2.4B(iv)(d)
hereof), Company shall apply such Consolidated Excess Cash Flow first,
-----
to the prepayment of the Tranche A Term Loans and second, to the AXELs
------
pro rata according to the respective outstanding principal amount, if
any, of each, then to the prepayment of Revolving Loans and/or the
reduction of Revolving Loan Commitments, in each case so as to
eliminate or minimize any obligation to prepay any such Indebtedness
evidenced by the Senior Subordinated Notes or the Discount Notes.
(g) Calculations of Net Proceeds Amounts; Additional Prepayments
------------------------------------------------------------
and Reductions Based on Subsequent Calculations. Concurrently with
-----------------------------------------------
any prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(f), Company shall
deliver to Administrative Agent an Officers' Certificate demonstrating
the calculation of the amount (the "Net Proceeds Amount") of the
applicable Net Asset Sale Proceeds, Net Insurance/Condemnation
Proceeds, Net Pension Proceeds, Net Indebtedness Proceeds or Net
Equity Proceeds (as such terms are defined in subsections
2.4B(iii)(a), (b), (c), (d) and (e), respectively) or the applicable
Consolidated Excess Cash Flow, as the case may be, that gave rise to
such prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount was greater
than the amount set forth in such Officers' Certificate, Company shall
promptly make an additional prepayment of the Loans (and/or, if
applicable, the Revolving Loan Commitments shall be permanently
reduced) in an amount equal to the amount of such excess, and Company
shall concurrently therewith deliver to Administrative Agent an
Officers' Certificate demonstrating the derivation of the additional
Net Proceeds Amount resulting in such excess.
(h) Prepayments Due to Reductions or Restrictions of Revolving
----------------------------------------------------------
Loan Commitments. Company shall from time to time prepay first the
---------------- -----
Swing Line Loans and second 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.
60
(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 Swing Line
-----
Loans to the full extent thereof, second to repay outstanding
------
Revolving Loans (applied first to Acquisition Loans, then to other
Revolving Loans) to the full extent thereof, and third to repay
-----
outstanding Tranche A Term Loans to the full extent thereof. Any
voluntary prepayments of the Tranche A Term Loans pursuant to
subsection 2.4B(i) shall be applied to reduce the scheduled
installments of principal of the Tranche A Term Loans set forth in
subsection 2.4A on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof). Any voluntary prepayment of
Acquisition Loans pursuant to subsection 2.4B(i) shall reduce both the
Acquisition Loan Commitments and the Revolving Loan Commitments in the
amount of such prepayment. Any voluntary reduction of Revolving Loan
Commitments pursuant to subsection 2.4B(ii) shall be applied as
specified by Company in the applicable notice of reduction; provided
--------
that in the event Company fails to specify the manner in which any
such prepayment shall be applied, such prepayment shall be applied
first, to reduce the Acquisition Loan Commitments to the full extent
-----
thereof, and second, to reduce the remaining Revolving Loan
------
Commitments in the amount of such reduction, to the full extent
thereof. Notwithstanding anything to the contrary in this subsection,
so long as any AXELs are outstanding, any prepayment of the Tranche A
Term Loans pursuant to subsection 2.4B(i) shall be applied to the
repayment of the AXELs and the Tranche A Term Loans on a pro rata
basis according to the respective outstanding principal amounts
thereof.
(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 and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(f) shall be applied
first to prepay the Tranche A Term Loans to the full extent thereof
-----
(provided, however, that Company shall apply any such amounts which
--------- -------
are also required to be applied to repayment of the AXELs under the
AXEL Credit Agreement to the Tranche A Term Loans and the AXELs pro
rata according to the respective outstanding principal amounts
thereof, subject to the provisions of subsection 2.4B(iv)(d)), second,
------
to the extent of any remaining portion of the Applied Amount, to
prepay the Swing Line Loans to the full extent thereof and to
permanently reduce the Revolving Loan Commitments by the amount of
such prepayment, third, to the extent of any remaining portion of the
-----
Applied Amount, to prepay the Revolving Loans to the full extent
thereof and to further permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, and fourth, to the
------
extent of any
61
remaining portion of the Applied Amount, to further permanently reduce
the Revolving Loan Commitments to the full extent thereof.
(c) Application of Mandatory Prepayments of Tranche A Term Loans
------------------------------------------------------------
to the Scheduled Installments of Principal Thereof. Any mandatory
--------------------------------------------------
prepayments of the Tranche A Term Loans pursuant to subsection
2.4B(iii) shall be applied on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) to each scheduled
installment of principal of the Tranche A Term Loans set forth in
subsection 2.4A that is unpaid at the time of such prepayment.
(d) Waiver of Certain Mandatory Prepayments. Anything contained
---------------------------------------
herein to the contrary notwithstanding, so long as any Tranche A Term
Loans are outstanding, that portion of any Waivable Mandatory
Prepayment (as defined in the AXEL Credit Agreement) which would
otherwise be payable (in the absence of such an election) to those
Lenders that have elected to exercise the option under the AXEL Credit
Agreement to waive such prepayments shall be applied to prepay the
Tranche A Term Loans (which prepayment shall be applied to the
scheduled installments of principal of the Tranche A Term Loans in
accordance with subsection 2.4B(iv)(c)).
(e) Application of Mandatory Prepayments to Revolving Loans and
-----------------------------------------------------------
Revolving Loan Commitments. Any mandatory prepayments of the
--------------------------
Revolving Loans pursuant to subsection 2.4B(iv)(b) shall be applied
first to repay outstanding Acquisition Loans to the full extent
-----
thereof and to permanently reduce the Revolving Loan Commitments by
the amount of such prepayment, and second to repay other outstanding
------
Revolving Loans to the full extent thereof and to permanently reduce
the Revolving Loan Commitments by the amount of such prepayment. Any
reduction of the Revolving Loan Commitments pursuant to subsection
2.4B(iv)(b) (but not pursuant to the preceding sentence) shall be
applied first to reduce Acquisition Loan Commitments to the full
-----
extent thereof, and second to reduce the remaining Revolving Loan
------
Commitments to the full extent thereof.
(f) Application of Prepayments to Base Rate Loans and Eurodollar
------------------------------------------------------------
Rate Loans. Considering Tranche A 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
62
restriction or condition, and delivered to Administrative Agent not later
than 1:00 P.M. (New York City time) on the date due at the Funding and
Payment Office for the account of Lenders; funds received by Administrative
Agent after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Company hereby authorizes
Administrative Agent to charge its accounts with Administrative Agent in
order to cause timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
-------------------------------------------------
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
-------------------------
payments in respect of Tranche A 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.
63
D. Application of Proceeds of Collateral and Payments Under Guaranties.
(i) Application of Proceeds of Collateral. Except as provided in
-------------------------------------
subsections 2.4B(iii)(a) and 2.4B(iii)(b) with respect to prepayments from
Net Asset Sale Proceeds and Net Insurance/Condemnation Proceeds, all
proceeds received by Administrative Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including all expenses, liabilities
and advances made or incurred by Administrative Agent and its agents
and counsel in connection therewith, and all amounts for which
Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations then due and owing for
the ratable benefit of the holders thereof; and
(c) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever may be
lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
(ii) Application of Payments Under Guaranties. All payments received
----------------------------------------
by Administrative Agent under either Guaranty shall be applied promptly
from time to time by Administrative Agent in the following order of
priority:
(a) To the payment of the costs and expenses of any collection or
other realization under such the Guaranty, including all expenses,
liabilities and advances made or incurred by Administrative Agent and
its agents and counsel in connection therewith, all in accordance with
the terms of this Agreement and Guaranty;
(b) thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in such
Guaranty) for the ratable benefit of the holders thereof; and
64
(c) thereafter, to the extent of any excess such payments, to the payment
to Holdings or the applicable Subsidiary Guarantor or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
2.5 Use of Proceeds.
---------------
A. Tranche A Term Loans and Initial Revolving Loans. The Tranche A Term
Loans and up to $10,400,000 in aggregate principal amount of Revolving Loans
made on the Closing Date (the "Recapitalization Revolving Loans"), together
with the proceeds of up to $330,000,000 in aggregate principal amount of AXELs
made on the Closing Date under the AXEL Credit Agreement and the proceeds of the
debt and equity capitalization of Holdings and Company described in subsections
4.1D(i), (iii) and (iv), shall be applied by Holdings and Company to fund the
Recapitalization Financing Requirements.
B. Post Closing Date Revolving Loans and Swing Line Loans.
(i) Revolving Loans and Swing Line Loans made after the Closing Date
in an aggregate amount not to exceed $75,000,000 at any time outstanding
may be used by Company for working capital and general corporate purposes,
which may include the making of intercompany loans to any of Company's
wholly owned Subsidiaries, in accordance with subsection 7.1(iv) or 7.1(v),
for their own working capital and general corporate purposes and the making
of intercompany loans to Company's Joint Ventures to the extent such
Indebtedness is permitted hereunder, for their own working capital and
general corporate purposes.
(ii) Revolving Loans and Swing Line Loans made after the Closing Date
in an aggregate amount not to exceed $50,000,000 at any time outstanding
may be used by Company or its Subsidiaries to finance Permitted
Acquisitions and other expenditures which are included in the definition of
Consolidated Capital Expenditures.
C. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Holdings 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 10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent
65
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 interbank Eurodollar 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 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 interbank Eurodollar 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,
66
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, promptly 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 any interest paid
by that Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by that
Lender in connection with the liquidation or re-employment of such funds) which
that Lender may sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request for
borrowing, or a conversion to or continuation of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Conversion/Continuation or
a telephonic request for conversion or continuation, (ii) if any prepayment
(including any prepayment pursuant to subsection 2.4B(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. Subject to its obligations under
subsection 2.8, 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.
67
G. Eurodollar Rate Loans After Default. After the occurrence of and
during the continuation of 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 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 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 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 interbank Eurodollar 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 in its
sole discretion shall determine) as may
68
be necessary to compensate such Lender for any such increased cost or reduction
in amounts received or receivable hereunder. Such Lender shall deliver to
Company (with a copy to Administrative Agent) a written statement, setting forth
in reasonable detail the basis for calculating the additional amounts owed to
such Lender under this subsection 2.7A, which statement shall be conclusive and
binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
-----------------------------
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from 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 the other affected
69
parties of such deduction, withholding or payment and of the
remittance thereof to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
--------
Lender under clause (c) above except to the extent that any change after
the 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 increase in the rate of such deduction, withholding or
payment from that in effect at the date of this Agreement or at the date of
such Assignment Agreement, as the case may be, in respect of payments to
such Lender.
(iii) Evidence of Exemption from U.S. Withholding Tax.
-----------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to 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 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,
70
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 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 reduction. Such
Lender shall deliver to Company (with
71
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 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 Defaulting Lenders.
------------------
Anything contained herein to the contrary notwithstanding, in the event
that any Lender (a "Defaulting Lender") defaults (a "Funding Default") in
its obligation to fund any Revolving Loan (a "Defaulted Revolving Loan") in
accordance with subsection 2.1 as a result of the appointment of a receiver or
conservator with respect to such Lender at the direction or request of any
regulatory agency or authority, then (i) during any Default Period (as defined
below) with respect to such Defaulting Lender, such Defaulting Lender shall be
deemed not to be a "Lender" for purposes of voting on any matters (including
the granting of any consents or waivers) with respect to any of the Loan
Documents, (ii) to the extent permitted by applicable law, until such time as
the Default Excess (as defined below) with respect to such Defaulting Lender
shall have been reduced to zero, (a) any voluntary prepayment of the Revolving
Loans
72
pursuant to subsection 2.4B(i) shall, if Company so directs at the time of
making such voluntary prepayment, be applied to the Revolving Loans of other
Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the
Revolving Loan Exposure of such Defaulting Lender were zero, and (b) any
mandatory prepayment of the Revolving Loans pursuant to subsection 2.4B(iii)
shall, if Company so directs at the time of making such mandatory prepayment, be
applied to the Revolving Loans of other Lenders (but not to the Revolving Loans
of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted
Revolving Loans of such Defaulting Lender, it being understood and agreed that
Company shall be entitled to retain any portion of any mandatory prepayment of
the Revolving Loans that is not paid to such Defaulting Lender solely as a
result of the operation of the provisions of this clause (b), (iii) such
Defaulting Lender's Revolving Loan Commitment and outstanding Revolving Loans
and such Defaulting Lender's Pro Rata Share of the Letter of Credit Usage shall
be excluded for purposes of calculating the commitment fee payable to Lenders
pursuant to subsection 2.3A in respect of any day during any Default Period with
respect to such Defaulting Lender, and such Defaulting Lender shall not be
entitled to receive any commitment fee pursuant to subsection 2.3A with respect
to such Defaulting Lender's Revolving Loan Commitment in respect of any Default
Period with respect to such Defaulting Lender, and (iv) the Total Utilization of
Revolving Loan Commitments as at any date of determination shall be calculated
as if such Defaulting Lender had funded all Defaulted Revolving Loans of such
Defaulting Lender.
For purposes of this Agreement, (I) "Default Period" means, with respect
to any Defaulting Lender, the period commencing on the date of the applicable
Funding Default and ending on the earliest of the following dates: (A) the date
on which all Revolving Loan Commitments are cancelled or terminated and/or the
Obligations are declared or become immediately due and payable, (B) the date on
which (1) the Default Excess with respect to such Defaulting Lender shall have
been reduced to zero (whether by the funding by such Defaulting Lender of any
Defaulted Revolving Loans of such Defaulting Lender or by the non-pro rata
application of any voluntary or mandatory prepayments of the Revolving Loans in
accordance with the terms of this subsection 2.9 or by a combination thereof)
and (2) such Defaulting Lender shall have delivered to Company and
Administrative Agent a written reaffirmation of its intention to honor its
obligations under this Agreement with respect to its Revolving Loan Commitment,
and (C) the date on which Company, Administrative Agent and Requisite Lenders
waive all Funding Defaults of such Defaulting Lender in writing, and (II)
"Default Excess" means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Revolving Loans) over the aggregate outstanding principal
amount of Revolving Loans of such Defaulting Lender.
No Commitment of any Lender shall be increased or otherwise affected, and,
except as otherwise expressly provided in this subsection 2.9, performance by
Company of its obligations under this Agreement and the other Loan Documents
shall not be excused or otherwise modified, as a result of any Funding Default
or the operation of this subsection 2.9. The rights and remedies against a
Defaulting Lender under this subsection 2.9 are in addition to other rights
73
and remedies which Company may have against such Defaulting Lender with respect
to any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.10 Removal or Replacement of a Lender.
----------------------------------
A. Anything contained in this Agreement to the contrary notwithstanding,
in the event that:
(i) (a) any Lender (an "Increased-Cost Lender") shall give notice
to Company that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under subsection 2.7 or subsection 3.6, (b)
the circumstances which have caused such Lender to be an Affected Lender or
which entitle such Lender to receive such payments shall remain in effect,
and (c) such Lender shall fail to withdraw such notice within five Business
Days after Company's request for such withdrawal; or
(ii) (a) any Lender shall become a Defaulting Lender, (b) the
Default Period for such Defaulting Lender shall remain in effect, and (c)
such Defaulting Lender shall fail to cure the default as a result of which
it has become a Defaulting Lender within five Business Days after Company's
request that it cure such default; or
(iii) (a) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions of
this Agreement as contemplated by clauses (i) through (v) of the first
provision to subsection 10.6A, the consent of Requisite Lenders shall have
been obtained but the consent of one or more of such other Lenders (each a
"Non-Consenting Lender") whose consent is required shall not have been
obtained, and (b) the failure to obtain Non-Consenting Lenders' consents
does not result solely from the exercise of Non-Consenting Lenders' rights
(and the withholding of any required consents by Non-Consenting Lenders)
pursuant to the second provision to subsection 10.6A;
then, and in each such case, Company shall have the right, at its option, to
remove or replace the applicable Increased-Cost Lender, Defaulting Lender or
Non-Consenting Lender (the "Terminated Lender") to the extent permitted by
subsection 2.10B.
B. Company may, by giving written notice to Administrative Agent and any
Terminated Lender of its election to do so:
(i) elect to (a) terminate the Revolving Loan Commitment, if any,
of such Terminated Lender upon receipt by such Terminated Lender of such
notice and (b) prepay on the date of such termination any outstanding Loans
made by such Terminated Lender, together with accrued and unpaid interest
thereon and any other amounts payable to such Terminated Lender hereunder
pursuant to subsection 2.3, subsection 2.6, subsection 2.7 or subsection
3.6 or otherwise; provided that, in the event such Terminated Lender has
--------
any Loans outstanding at the time of such termination, the written
74
consent of Administrative Agent and Requisite Lenders (which consent shall
not be unreasonably withheld or delayed) shall be required in order for
Company to make the election set forth in this clause (i); or
(ii) elect to cause such Terminated Lender (and such Terminated Lender
hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Loan Commitment, if any, in full to one or more Eligible
Assignees (each a "Replacement Lender") in accordance with the provisions
of subsection 10.1B; provided that (a) on the date of such assignment,
--------
Company shall pay any amounts payable to such Terminated Lender pursuant to
subsection 2.3, subsection 2.6, subsection 2.7 or subsection 3.6 or
otherwise as if it were a prepayment and (b) in the event such Terminated
Lender is a Non-Consenting Lender, each Replacement Lender shall consent,
at the time of such assignment, to each matter in respect of which such
Terminated Lender was a Non-Consenting Lender;
provided that (X) Company may not make either of the elections set forth in
--------
clauses (i) or (ii) above with respect to any Non-Consenting Lender unless
Company also makes one of such elections with respect to each other Terminated
Lender which is a Non-Consenting Lender and (Y) Company may not make either of
such elections with respect to any Terminated Lender that is an Issuing Lender
unless, prior to the effectiveness of such election, Company shall have caused
each outstanding Letter of Credit issued by such Issuing Lender to be cancelled.
C. Upon the prepayment of all amounts owing to any Terminated Lender and
the termination of such Terminated Lender's Revolving Loan Commitment, if any,
pursuant to clause (i) of subsection 2.10B, (i) Schedule 2.1 shall be deemed
------------
modified to reflect any corresponding changes in the Revolving Loan Commitments
and (ii) such Terminated Lender shall no longer constitute a "Lender" for
purposes of this Agreement; provided that any rights of such Terminated Lender
--------
to indemnification under this Agreement (including under subsections 2.6D, 2.7,
3.6, 10.2 and 10.3) shall survive as to such Terminated Lender.
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) and that Swing Line Lender
make Swing Line Loans pursuant to subsection 2.1A(iii), 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 one or more Lenders issue Letters of Credit for the
account of Company for the purposes specified in the definitions of Commercial
Letters of Credit and Standby Letters of Credit; provided that all such
--------
Commercial Letters of Credit shall provide for sight drawings. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth,
75
any one or more Lenders may, but (except as provided in subsection 3.1B(ii))
shall not be obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; provided that Company shall not request that
--------
any Lender issue (and no Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $20,000,000;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) five Business Days prior to the Revolving Loan
Commitment Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided that the
--------
immediately preceding clause (b) shall not prevent any Issuing Lender from
agreeing that a Standby Letter of Credit will automatically be extended for
one or more successive periods not to exceed one year each unless such
Issuing Lender elects not to extend for any such additional period; and
provided, further that such Issuing Lender shall elect not to extend such
-------- -------
Standby 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 such Issuing Lender must elect whether or not
to allow such extension; provided, however, that notwithstanding clause (a)
-------- -------
but subject to the other restrictions of this subsection, Company may
request the issuance (on a date prior to five Business Days prior to the
Revolving Loan Commitment Termination Date) of a Standby Letter of Credit
having an expiration date later than five Business Days prior to the
Revolving Loan Commitment Termination Date if Company, at the time of such
request, makes arrangements in form and substance satisfactory to the
Issuing Lender thereof to cash collateralize such Letter of Credit,
provided that Issuing Lender shall be under no obligation to issue such a
--------
Letter of Credit if it shall reasonably determine that such cash
collateralization arrangements could reasonably be expected to be less
favorable to Issuing Lender than the reimbursement arrangements hereunder
with respect to other Letters of Credit; or
(iv) any Commercial Letter of Credit having an expiration date
(a) later than the earlier of (X) the date which is 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date which is 180
days from the date of issuance (on a date prior to 30 days prior to the
Revolving Loan Commitment Termination Date) of such Commercial Letter of
Credit or (b) that is otherwise unacceptable to the applicable Issuing
Lender in its reasonable discretion; provided, however, that
-------- -------
notwithstanding clause (X) but subject to the other restrictions of this
subsection, Company may request the issuance (on a date prior to 30 days
prior to the Revolving Loan Commitment Termination Date) of a Commercial
Letter of Credit having an expiration date later than the time set forth in
clause (X) if Company, at the time of such request, makes arrangements in
form and substance satisfactory to the Issuing Lender thereof to cash
collateralize such Letter of Credit, provided that Issuing Lender shall be
--------
under no
76
obligation to issue such a Letter of Credit if it shall reasonably
determine that such cash collateralization arrangements could reasonably be
expected to be less favorable to Issuing Lender than the reimbursement
arrangements hereunder with respect to other Letters of Credit.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Company desires the issuance of a
------------------
Letter of Credit, it shall deliver to Administrative Agent a Notice of
Issuance of Letter of Credit substantially in the form of Exhibit III
-----------
annexed hereto no later than 11:00 A.M. (New York City time) at least three
Business Days (in the case of Standby Letters of Credit) or five Business
Days (in the case of Commercial Letters of Credit), or in each case 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) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit,
(c) the face amount of the Letter of Credit, (d) 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, (e) the expiration date of the Letter of Credit, (f) the name and
address of the beneficiary, and (g) either the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions thereof,
including a precise description of any documents to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require the Issuing Lender to make
payment under the Letter of Credit; provided that the Issuing Lender, in
--------
its reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any such documents; 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 applicable Issuing Lender (and Administrative
Agent, if Administrative Agent is not such Issuing Lender) 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 longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit Company shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Company is required to certify in
the applicable Notice of Issuance of Letter of Credit.
(ii) Determination of Issuing Lender. Upon receipt by
-------------------------------
Administrative Agent of a Notice of Issuance of Letter of Credit pursuant
to subsection 3.1B(i) requesting the issuance of a Letter of Credit, in the
event Administrative Agent elects to issue such Letter of Credit,
Administrative Agent shall promptly so notify Company, and
77
Administrative Agent shall be the Issuing Lender with respect thereto. In
the event that Administrative Agent, in its sole discretion, elects not to
issue such Letter of Credit, Administrative Agent shall promptly so notify
Company, whereupon Company may request any other Lender to issue such
Letter of Credit by delivering to such Lender a copy of the applicable
Notice of Issuance of Letter of Credit. Any Lender so requested to issue
such Letter of Credit shall promptly notify Company and Administrative
Agent whether or not, in its sole discretion, it has elected to issue such
Letter of Credit, and any such Lender which so elects to issue such Letter
of Credit shall be the Issuing Lender with respect thereto. In the event
that all other Lenders shall have declined to issue such Letter of Credit,
notwithstanding the prior election of Administrative Agent not to issue
such Letter of Credit, Administrative Agent shall be obligated to issue
such Letter of Credit and shall be the Issuing Lender with respect thereto,
notwithstanding the fact that the Letter of Credit Usage with respect to
such Letter of Credit and with respect to all other Letters of Credit
issued by Administrative Agent, when aggregated with Administrative Agent's
outstanding Revolving Loans and Swing Line Loans, may exceed Administrative
Agent's Revolving Loan Commitment then in effect; provided that
--------
Administrative Agent shall not be obligated to issue any Letter of Credit
denominated in a foreign currency which in the judgment of Administrative
Agent is not readily and freely available.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
----------------------------
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of any Letter of
-----------------------
Credit the applicable Issuing Lender shall promptly notify Administrative
Agent and each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly after receipt of
such notice (or, if Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent 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.
(v) Reports to Lenders. Within 15 days after the end of each
------------------
calendar quarter ending after the Closing Date, so long as any Letter of
Credit shall have been outstanding during such calendar quarter, each
Issuing Lender shall deliver to each other Lender a report setting forth
for such calendar quarter the daily aggregate amount available to be drawn
under the Letters of Credit issued by such Issuing Lender that were
outstanding during such calendar quarter.
C. Lenders' Purchase of Participations in Letters of Credit. Immediately
upon the issuance of each Letter of Credit, each Lender having a Revolving Loan
Commitment 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
(with respect to the Revolving Loan Commitments) of the
78
maximum amount which is or at any time may become available to be drawn
thereunder. On the Revolving Loan Commitment Termination Date, the Issuing
Lender shall be deemed to, and hereby agrees to, irrevocably repurchase from
each Lender such Lender's participation in the Letters of Credit issued by such
Issuing Lender pursuant to the last proviso to subsection 3.1A(iii) or the last
proviso to subsection 3.1a(iv) to the extent any such Letter of Credit remains
outstanding and any amounts remain undrawn 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 Standby Letter of Credit, (a) a fronting
fee, payable directly to the applicable Issuing Lender for its own account,
equal to 1/8 of 1% per annum of the daily amount available to be drawn
under such Standby Letter of Credit and (b) a letter of credit fee, payable
to Administrative Agent for the account of Lenders having Revolving Loan
Exposure, equal to the product of (x) the Applicable Eurodollar Rate Margin
and (y) the daily amount available to be drawn under such Standby Letter of
Credit, each such fronting fee or letter of credit fee to be payable in
arrears on and to (but excluding) each February 28, May 31, August 31 and
November 30 of each year and computed on the basis of a 360-day year for
the actual number of days elapsed;
(ii) with respect to each Commercial Letter of Credit, (a) a
fronting fee, payable directly to the applicable Issuing Lender for its own
account, equal to 1/8 of 1% per annum of the daily amount available to be
drawn under such Commercial Letter of Credit and (b) a letter of credit
fee, payable to Administrative Agent for the account of Lenders having
Revolving Loan Exposure, equal to the product of (x) the Applicable
Eurodollar Rate Margin and (y) the daily amount available to be drawn under
such Commercial Letter of Credit, each such fronting fee or letter of
credit fee to be payable in arrears on and to (but excluding) each
February 28, May 31, August 31 and November 30 of each year and computed on
the basis of a 360-day year for the actual number of days elapsed; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clauses (i) and (ii) above),
documentary and processing charges payable directly to the applicable
Issuing Lender for its own account in accordance with such 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 clauses (i) and (ii) of this
subsection 3.2, (1) the daily amount available to be drawn under any Letter of
Credit shall be determined as of the close of business on any date of
determination and (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.
Promptly upon
79
receipt by Administrative Agent of any amount described in clause (i)(b) or
(ii)(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 an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (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 Administrative Agent and
such Issuing Lender prior to 11:00 A.M. (New York City time) on the date such
drawing is honored that Company intends to reimburse such 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 such 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 such Issuing Lender on the Reimbursement
Date in an amount equal to the amount of such honored drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same day funds equal
to the excess of the amount of such honored drawing 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.
80
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 any 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
such Issuing Lender under a Letter of Credit issued by it, such Issuing
Lender shall promptly notify each other Lender of the unreimbursed amount
of such honored drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share of the Revolving Loan
Commitments. Each Lender shall make available to such Issuing Lender an
amount equal to its respective participation, in Dollars and in same day
funds, at the office of such Issuing Lender specified in such notice, not
later than 12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing Lender is
located) after the date notified by such Issuing Lender. In the event that
any Lender fails to make available to such Issuing Lender on such business
day the amount of such Lender's participation in such Letter of Credit as
provided in this subsection 3.3C, such Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at the rate customarily used by such Issuing Lender for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate. Nothing in this subsection 3.3C shall be deemed to prejudice
the right of any Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to this
subsection 3.3C in the event that it is determined by the final judgment of
a court of competent jurisdiction that the payment with respect to a Letter
of Credit by such Issuing Lender in respect of which payment was made by
such Lender constituted gross negligence or willful misconduct on the part
of such Issuing Lender.
(ii) Distribution to Lenders of Reimbursements Received From
-------------------------------------------------------
Company. In the event any Issuing Lender shall have been reimbursed by
-------
other Lenders pursuant to subsection 3.3C(i) for all or any portion of any
drawing honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with respect to
such honored drawing such other Lender's Pro Rata Share of all payments
subsequently received by such 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 each
------------------------------
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such honored drawing from the date such drawing is honored
to but excluding the date such amount
81
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 Base Rate plus the Applicable Base Rate Margin
----
for Revolving Loans and (b) thereafter, 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 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 any 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) such Issuing Lender shall distribute to each other
Lender, out of the interest received by such Issuing Lender in respect of
the period from the date such drawing is honored to but excluding the date
on which such 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 such Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for all or any
portion of such honored drawing, such Issuing Lender shall distribute to
each other Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such honored drawing such other Lender's
Pro Rata Share of any interest received by such Issuing Lender in respect
of that portion of such honored drawing so reimbursed by other Lenders for
the period from the date on which such 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 each 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 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
82
of Credit (or any Persons for whom any such transferee may be acting), any
Issuing Lender or other Lender or any other Person or, in the case of a
Lender, against Company, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including
any underlying transaction between Holdings 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) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Holdings or any
of its Subsidiaries;
(v) any breach of this Agreement or any other Loan Document by any
party thereto;
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(vii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
--------
applicable Letter of Credit shall not have constituted bad faith, gross
negligence or willful misconduct of such Issuing Lender under the circumstances
in question (as determined by a final judgment of a court of competent
jurisdiction).
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 each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the bad faith, gross negligence or willful
misconduct of such Issuing Lender as determined by a final judgment of a court
of competent jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for payment made
under any Letter of Credit issued by it or (ii) the failure of such Issuing
Lender to honor a drawing under any such Letter of Credit as a result of any act
or omission, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority (all such acts or omissions herein
called "Governmental Acts").
83
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Lender shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
any such Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) so long as such Issuing Lender
complies with its responsibilities under subsection 3.3A, 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 such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of such Issuing Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this subsection 3.5,
Company shall retain any and all rights it may have against any Issuing Lender
for any liability arising out of the bad faith, gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
-------------------------------------------------------
Subject to the provisions of subsection 2.7B (which shall be controlling
with respect to the matters covered thereby), in the event that any Issuing
Lender or Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto) that any
law, treaty or governmental rule, regulation or order, or any change therein or
in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by any Issuing Lender or
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):
84
(i) subjects such Issuing Lender or Lender (or its applicable
lending or letter of credit office) to any additional Tax (other than any
Tax on the overall net income of such Issuing Lender or Lender) with
respect to the issuing or maintaining of any Letters of Credit or the
purchasing or maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such being imposed
on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Lender (or its applicable
lending or letter of credit office) regarding this Section 3 or any Letter
of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its applicable lending or letter of credit office) with respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts as may be necessary to compensate such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company a
written statement, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Issuing Lender or Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters of
Credit hereunder are subject to the satisfaction of the following conditions.
4.1 Conditions to Tranche A Term Loans and Recapitalization Revolving Loans.
-----------------------------------------------------------------------
The obligations of Lenders to make the Tranche A Term Loans and any
Revolving Loans to be made on the Closing Date 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 Lenders (or to
Administrative Agent for Lenders
85
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 Person, together with a good standing certificate
from the Secretary of State of its jurisdiction of incorporation and each
other state in which such Person is qualified as a foreign corporation to
do business (except, with respect to Loan Parties other than Company, any
such other state or states in which failure to be qualified could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect (provided that no such state shall be a state in which real
--------
property of the applicable Loan Party is located)) 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 each of such jurisdictions, each dated a recent date
prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Loan
Documents and Related Agreements to which it is a party, certified as of
the Closing Date by the corporate secretary or an assistant secretary of
such Person as being in full force and effect without modification or
amendment;
(iv) Signature and incumbency certificates of the officers of such
Person 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 Syndication Agent or Administrative
Agent may reasonably request.
B. No Material Adverse Effect. Since August 31, 1997, no Material
Adverse Effect (in the opinion of Syndication Agent and Administrative Agent)
shall have occurred.
C. Corporate and Capital Structure, Ownership, Management, Etc.
(i) Corporate Structure. The corporate organizational structure of
-------------------
Holdings and its Subsidiaries, after giving effect to the Recapitalization
Transactions, shall be as set forth on Schedule 4.1C annexed hereto.
-------------
(ii) Capital Structure and Ownership. The capital structure and
-------------------------------
ownership of Holdings and its Subsidiaries, after giving effect to the
Recapitalization Transactions,
86
shall be reasonably satisfactory to Syndication Agent and Administrative
Agent in all respects and as set forth on Schedule 4.1C annexed hereto.
-------------
(iii) Employment Agreement. Syndication Agent and Administrative
--------------------
Agent shall have received a duly executed copy of, and shall be reasonably
satisfied with the form and substance of, the Employment Agreement.
D. Proceeds of Debt and Equity Capitalization of Merger Corp., Holdings
and Company.
(i) Equity Capitalization. On or before the Closing Date, ▇▇▇▇,
---------------------
the Other Investors and the Management Investors shall have made the Equity
Contribution.
(ii) AXELs. On the Closing Date, Company shall have borrowed
-----
$330,000,000 in aggregate principal amount of AXELs under the AXEL Credit
Agreement.
(iii) Senior Subordinated Notes. On or before the Closing Date,
-------------------------
Company shall have issued and sold for Cash not less than $125,000,000 in
aggregate principal amount of Senior Subordinated Notes providing net Cash
proceeds to Company of not less than $125,000,000.
(iv) Discount Notes. On or before the Closing Date, Company shall
--------------
have issued and sold for Cash Discount Notes providing net Cash proceeds to
Company of not less than $75,000,000.
(v) Use of Proceeds. Company shall have provided evidence
---------------
reasonably satisfactory to Syndication Agent and Administrative Agent that
the proceeds of the debt and equity capitalization of Merger Corp. and
Company described in the immediately preceding clauses (i), (ii), (iii) and
(iv) have been irrevocably committed, prior to the application of the
proceeds of the Recapitalization Revolving Loans, to the payment of a
portion of the Recapitalization Financing Requirements.
E. Related Agreements; AXEL Credit Documents.
(i) The ▇▇▇▇ Advisory Services Agreement, the Harvard Advisory
Services Agreement and the Related Agreements shall each be reasonably
satisfactory in form and substance to Syndication Agent and Administrative
Agent.
(ii) Syndication Agent and Administrative Agent shall each have
received a fully executed or conformed copy of the ▇▇▇▇ Advisory Services
Agreement, the Harvard Advisory Services Agreement and each Related
Agreement and any documents executed in connection therewith, and the ▇▇▇▇
Advisory Services Agreement, the Harvard Advisory Services Agreement and
each Related Agreement shall be in full force and effect and no provision
thereof related to payments thereunder shall have been modified
87
or waived in any respect determined by Syndication Agent or Administrative
Agent to be material, in each case without the consent of Syndication Agent
and Administrative Agent.
(iii) Syndication Agent and Administrative Agent shall each have
received a fully executed or conformed copy of the AXEL Credit Documents,
including the AXEL Credit Agreement (and all exhibits and schedules
thereto), any promissory notes evidencing the AXELs and the Intercreditor
Agreement, each of which shall be in form and substance reasonably
satisfactory to Syndication Agent and Administrative Agent, and each such
agreement and promissory note shall be in full force and effect.
F. Matters Relating to Existing Indebtedness of Holdings and its
Subsidiaries.
(i) Termination of Existing Credit Agreement and Related Liens;
-----------------------------------------------------------
Existing Letters of Credit. On the Closing Date, Holdings and its
--------------------------
Subsidiaries shall have (a) repaid in full all Indebtedness outstanding
under the Existing Credit Agreement, (b) terminated any commitments to lend
or make other extensions of credit thereunder, (c) delivered to Syndication
Agent and Administrative Agent all documents or instruments necessary to
release all Liens securing Indebtedness or other obligations of Holdings
and its Subsidiaries thereunder, and (d) made arrangements reasonably
satisfactory to Syndication Agent and Administrative Agent with respect to
the cancellation of any letters of credit outstanding thereunder or the
issuance of Letters of Credit to support the obligations of Holdings and
its Subsidiaries with respect thereto.
(ii) Consent Solicitation. Pursuant to the Consent Solicitation,
--------------------
Holdings shall have obtained all such consents and amendments with respect
to the Existing Subordinated Note Indenture as may be required to permit
the consummation of the Recapitalization Transactions, the related
financings (including the incurrence of the Obligations hereunder) and the
other transactions contemplated by the Loan Documents.
(iii) Consummation of Debt Tender Offer. Holdings shall have
---------------------------------
repurchased all of the Existing Subordinated Notes tendered in the Debt
Tender Offer for cash consideration in an aggregate amount not to exceed
$220,000,000 plus any accrued and unpaid interest on such Existing
----
Subordinated Notes.
(iv) No Existing Indebtedness to Remain Outstanding. Syndication
----------------------------------------------
Agent and Administrative Agent shall have received an Officers' Certificate
of Company stating that, after giving effect to the transactions described
in this subsection 4.1F, the Loan Parties shall have no Indebtedness
outstanding to Persons other than the Loan Parties other than Indebtedness
under the Loan Documents, the Senior Subordinated Notes, the Discount Notes
and the Junior Subordinated Seller Notes, Indebtedness with respect to
Existing Subordinated Notes not tendered in the Debt Tender Offer, and
Indebtedness set forth on Schedule 7.1 annexed hereto.
------------
88
G. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Holdings and Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary in connection with the Recapitalization Transactions, the Merger and
the other transactions contemplated by the Loan Documents and the Related
Agreements, and the continued operation of the business conducted by Holdings
and its Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Recapitalization Transactions 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 reasonably be expected to have a Material Adverse Effect.
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 Recapitalization Transactions 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.
H. Consummation of Recapitalization Transactions and Merger.
(i) All conditions to the Recapitalization Transactions shall have
been satisfied pursuant to documentation, including, without limitation,
the Recapitalization Agreement and the Certificate of Merger, reasonably
satisfactory to Syndication Agent or the fulfillment of such conditions
shall have been waived with the consent of Syndication Agent, such consent
not to be unreasonably withheld;
(ii) The aggregate cash consideration paid to the holders of equity
interests in Holdings in respect of such equity interests in connection
with the Merger shall not exceed $415,100,000;
(iii) the Merger shall have become effective in accordance with the
terms of the Recapitalization Agreement, the Certificate of Merger and the
laws of the State of Delaware;
(iv) Holdings shall have issued not more than $25,000,000 in
aggregate principal amount of Junior Subordinated Seller Notes in exchange
for all preferred stock of Holdings outstanding immediately prior to the
Closing Date;
(v) Transaction Costs shall not exceed $32,000,000; and
(vi) Syndication Agent and Administrative Agent shall have received
an Officers' Certificate of Company and Holdings to the effect set forth in
clauses (i)-(v) above and stating that Company and Holdings will proceed to
consummate the Recapitalization Transactions immediately upon the making
of the initial Tranche A Term Loans.
89
I. Closing Date Mortgages; Closing Date Mortgage Policies; Etc. Agents
shall have received from Holdings, Company and each applicable Subsidiary
Guarantor:
(i) Closing Date Mortgages. Fully executed and notarized Mortgages
----------------------
(each a "Closing Date Mortgage" and, collectively, the "Closing Date
Mortgages"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 4.1I annexed hereto (each a "Closing Date Mortgaged Property"
-------------
and, collectively, the "Closing Date Mortgaged Properties");
(ii) Opinions of Local Counsel. An opinion of counsel (which
-------------------------
counsel shall be reasonably satisfactory to Syndication Agent and
Administrative Agent) in each state in which a Closing Date Mortgaged
Property is located with respect to the enforceability of the form(s) of
Closing Date Mortgages to be recorded in such state and such other matters
as Syndication Agent and Administrative Agent may reasonably request, in
each case in form and substance reasonably satisfactory to Syndication
Agent and Administrative Agent; provided, however, that Syndication Agent
-------- -------
and Administrative Agent may determine in their reasonable discretion that
an opinion of counsel in any one or more of such states shall not be
required hereunder;
(iii) Landlord Consents and Estoppels; Recorded Leasehold Interests.
-------------------------------------------------------------
In the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property, (a) a Landlord Consent and Estoppel with respect
thereto and (b) evidence that such Leasehold Property is a Recorded
Leasehold Interest;
(iv) Title Insurance. (a) ALTA mortgagee title insurance policies
---------------
or unconditional commitments therefor (the "Closing Date Mortgage
Policies") issued by the Title Company with respect to the Closing Date
Mortgaged Properties listed in Part A of Schedule 4.1I annexed hereto, in
-------------
amounts not less than the respective amounts designated therein with
respect to any particular Closing Date Mortgaged Properties, insuring fee
simple title to, or a valid leasehold interest in, each such Closing Date
Mortgaged Property vested in such Loan Party and assuring Administrative
Agent that the applicable Closing Date Mortgages create valid and
enforceable First Priority mortgage Liens on the respective Closing Date
Mortgaged Properties encumbered thereby, which Closing Date Mortgage
Policies (1) shall include an endorsement for mechanics' liens, for future
advances (in each case, if available) under this Agreement and for any
other matters reasonably requested by Syndication Agent or Administrative
Agent and (2) shall provide for affirmative insurance and such reinsurance
as Administrative Agent may reasonably request, all of the foregoing in
form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent; and (b) evidence reasonably satisfactory to
Syndication Agent and Administrative Agent that such Loan Party has
(i) delivered to the Title Company all certificates and affidavits required
by the Title Company in connection with the issuance of the Closing Date
Mortgage Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the
90
Closing Date Mortgage Policies and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Closing Date Mortgages in the appropriate real estate
records;
(v) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Closing Date Mortgage Policies or in the title reports delivered
pursuant to subsection 4.1I(iv); and
(vi) Matters Relating to Flood Hazard Properties. (a) Evidence, which
-------------------------------------------
may be in the form of a surveyor's note on a survey or a report from a
flood hazard search firm, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in which any such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Loan Party's written acknowledgement of receipt of written notification
from Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood Insurance
Program, and (c) in the event any such Flood Hazard Property is located in
a community that participates in the National Flood Insurance Program,
evidence that Company has obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System.
J. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 4.1I, each of Syndication Agent and
Administrative Agent shall have received evidence satisfactory to it that
Holdings, 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 or recording of
items described in clauses (iii), (iv) and (v) below) that may be necessary or,
in the reasonable opinion of Syndication Agent and 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 personal and mixed property Collateral.
Such actions shall include 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 (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all capital stock pledged pursuant to the Holdings Pledge Agreement,
Company Pledge Agreement and Subsidiary Pledge Agreement and (b) all
promissory notes or other instruments (duly endorsed, where appropriate, in
a manner satisfactory to Administrative Agent) evidencing any Collateral;
91
(iii) Lien Searches and UCC Termination Statements. Delivery to
--------------------------------------------
Syndication Agent and Administrative Agent of (a) the results of a recent
search, by a Person reasonably satisfactory to Syndication Agent and
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 personal or mixed 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).
(iv) UCC Financing Statements and Fixture Filings. Delivery to
--------------------------------------------
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the opinion of
Syndication Agent and Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
---------------------
cover sheets or other documents or instruments required to be recorded with
the PTO in order to create or perfect Liens in respect of any U.S. patents,
federally registered trademarks or copyrights, or applications for any of
the foregoing, included among the IP Collateral; and
(vi) Opinions of Local Counsel. Delivery to Syndication Agent and
-------------------------
Administrative Agent of an opinion of counsel under the laws of each
jurisdiction for which an opinion is delivered under subsection 4.1I(ii)
and in which any Loan Party or any personal or mixed property Collateral is
located with respect to the creation and perfection of the security
interests in favor of Administrative Agent in such Collateral and such
other matters governed by the laws of such jurisdiction regarding such
security interests as Syndication Agent and Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to Syndication Agent and Administra tive Agent.
K. Environmental Reports. Syndication Agent and Administrative Agent
shall have received (i) a Phase I environmental assessment for each of the
Facilities listed in Schedule 4.1K annexed hereto (collectively, the "Phase I
-------------
Report") which (a) substantially complies with the ASTM Standard Practice for
Environmental Site Assessments: Phase I Environmental Site Assessment Process, E
1527, and (b) was conducted no more than six months prior to the Closing Date by
ENSR or one or more environmental consulting firms reasonably satisfactory to
Administrative Agent and (ii) a summary prepared by ENVIRON Corporation (or
another firm reasonably satisfactory to Administrative Agent) of all such Phase
I Reports.
92
L. Financial Statements; Pro Forma Balance Sheet. On or before the
Closing Date, Lenders shall have received from Company (i) audited consolidated
financial statements of Holdings and its Subsidiaries for Fiscal Years 1995 and
1996 and unaudited consolidated financial statements of Holding and its
Subsidiaries for Fiscal Year 1994, consisting of consolidated balance sheets and
the related consolidated statements of income, stockholders' equity and cash
flows for such Fiscal Years, (ii) unaudited consolidated financial statements of
Holdings and its Subsidiaries for each fiscal month and Fiscal Quarter ended
subsequent to the date of the most recent financial statements delivered
pursuant to clause (i), consisting of consolidated balance sheets and the
related consolidated statements of income, stockholders' equity and cash flows
for such periods (except for statements of cash flows for each such monthly
period), all in reasonable detail and certified by the principal financial
officer or principal accounting officer of Holdings that they fairly present, in
all material respects, the financial condition of Holdings 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 the absence of footnotes, and (iii) pro forma
consolidated balance sheets of Holdings and its Subsidiaries as at the date of
the most recent consolidated balance sheet delivered pursuant to clause (ii),
prepared in accordance with GAAP and reflecting the consummation of the
Recapitalization Transactions and the Merger, the related financings and the
other transactions contemplated by the Loan Documents and the Related Agreements
as if such transactions had occurred on such date, which pro forma financial
statements shall be in form and substance reasonably satisfactory to Lenders.
M. Financial Projections. Lenders shall have received financial
projections reasonably satisfactory in form and substance to Syndication Agent
and Lenders for Holdings and its Subsidiaries for the period from the Closing
Date through November 2007.
N. Solvency Assurances. On the Closing Date, Syndication Agent,
Administrative Agent and Lenders shall have received (i) a letter from Valuation
Research Corporation, dated the Closing Date and addressed to Syndication Agent,
Administrative Agent and Lenders, in form and substance reasonably satisfactory
to Syndication Agent and Administrative Agent and with appropriate attachments,
and (ii) a Financial Condition Certificate dated the Closing Date, substantially
in the form of Exhibit XII annexed hereto (with such changes thereto as shall be
-----------
approved by Administrative Agent and Syndication Agent in the exercise of their
reasonable discretion) and with appropriate attachments, in each case
demonstrating that, after giving effect to the consummation of the
Recapitalization Transactions and the Merger, the related financings and the
other transactions contemplated by the Loan Documents and the Related
Agreements, Holdings and its Subsidiaries will be Solvent.
O. Evidence of Insurance. Syndication Agent and 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 and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under subsection 6.4.
93
P. Opinions of Counsel to Loan Parties. Lenders and their respective
counsel shall have received (i) originally executed copies of one or more
favorable written opinions of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel for Loan Parties, and of
▇▇▇▇▇▇, Halter & ▇▇▇▇▇▇▇▇ LLP, special Ohio counsel for Loan Parties, in form
and substance reasonably satisfactory to Administrative Agent and Syndication
Agent and its counsel, dated as of the Closing Date and setting forth
substantially the matters in the opinions designated in Exhibit VIII annexed
------------
hereto and as to such other matters as or Syndication Agent and acting on behalf
of Lenders may reasonably request and (ii) evidence satisfactory to Syndication
Agent that Company has requested such counsel to deliver such opinions to
Lenders.
Q. Opinions of Syndication Agent's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & ▇▇▇▇▇ LLP, counsel to Syndication Agent, dated as of the Closing
Date, substantially in the form of Exhibit IX annexed hereto and as to such
----------
other matters as Syndication Agent may reasonably request.
R. Opinions of Counsel Delivered Under Related Agreements.
Administrative Agent and Syndication Agent and its counsel shall have received
copies of each of the opinions of counsel delivered to the parties under the
Related Agreements, together with a letter from each such counsel (to the extent
not inconsistent with such counsel's established internal policies) authorizing
Lenders to rely upon such opinion to the same extent as though it were addressed
to Lenders.
S. Fees and Expenses. Company shall have paid to Syndication Agent and
Administrative Agent, for distribution (as appropriate) to Syndication Agent,
Administrative Agent and Lenders, the fees payable on the Closing Date referred
to in subsection 2.3 and all reasonable expenses for which invoices have been
presented on or before the Closing Date.
T. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Syndication Agent and Administrative Agent an Officers'
Certificate, in form and substance reasonably satisfactory to Syndication Agent
and Administrative Agent, to the effect that the representations and warranties
in Section 5 hereof are true, correct and complete in all material respects on
and as of the Closing Date to the same extent as though made on and as of that
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
Holdings and Company shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement provides shall be
performed or satisfied by them on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Syndication Agent, Administrative Agent
and Requisite Lenders.
U. 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, acting on behalf of Lenders, or Syndication Agent and its counsel shall
be reasonably satisfactory in form and substance to
94
Administrative Agent and Syndication Agent and such counsel, and Administrative
Agent, Syndication Agent and such counsel shall have received all such
counterpart originals or certified copies of such documents as Administrative
Agent or Syndication Agent may reasonably request.
Notwithstanding anything herein to the contrary, it is understood and
agreed that the documents and other items set forth on Schedule 6.12 annexed
-------------
hereto shall be delivered after the Closing Date in accordance with and to the
extent required under subsection 6.12.
Each Lender, by delivering its signature page to this Agreement and funding
its Tranche A Term Loan Commitment and Recapitalization Revolving Loan on the
Closing Date, shall be deemed to have acknowledged receipt of, and consented to
and approved (as long as substantially in the form delivered to Lenders
including any changed pages thereto delivered to Lenders), each Loan Document
and each other document required to be approved by Requisite Lenders or Lenders,
as applicable.
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 on or 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 principal financial officer, the principal accounting officer or
the treasurer of Company or by any authorized employee 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) 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;
95
(iv) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System; and
(v) There shall not be pending or, to the knowledge of Holdings or
Company, threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Holdings or any of its
Subsidiaries or any property of Holdings or any of its Subsidiaries that
has not been disclosed by Holdings or Company in writing pursuant to
subsection 5.6 or 6.1(x) 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 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 expected to have
a Material Adverse Effect or be inconsistent with the financial statements,
balance sheets or financial projections delivered in accordance with
subsection 4.1L or 4.1M; and no injunction or other restraining order shall
have been issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any action,
suit or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, the
transactions contemplated by this Agreement or the making of Loans
hereunder.
4.3 Conditions to Letters of Credit.
-------------------------------
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of 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
principal financial officer, the principal accounting officer or the
treasurer of Company or by any authorized employee 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 information as
the applicable 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.
96
SECTION 5.
HOLDINGS' AND COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make the
Loans, to induce Issuing Lenders to issue Letters of Credit and to induce other
Lenders to purchase participations therein, Holdings and Company represent and
warrant to each Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following statements
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 organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation as specified in Schedule 5.1 annexed hereto. 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 Related Agreements to which it is a party 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 will not have a Material Adverse Effect.
C. Conduct of Business. Holdings and its Subsidiaries are engaged only
in the businesses permitted to be engaged in pursuant to subsection 7.13.
D. Subsidiaries. All of the Subsidiaries of Holdings as of the Closing
Date are identified in Schedule 5.1 annexed hereto. The capital stock of each
------------
of Holdings' Subsidiaries any portion of the capital stock of which is pledged
under the Collateral Documents is duly authorized, validly issued, fully paid
and nonassessable and none of such capital stock constitutes Margin Stock. Each
of the Subsidiaries of Holdings is a corporation organized, validly existing and
in good standing under the laws of its respective jurisdiction of incorporation,
has 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 will not have a Material Adverse Effect. Schedule 5.1 annexed
------------
hereto (as so supplemented) correctly sets forth, as of the Closing Date, the
ownership interest of Holdings and each of its Subsidiaries in each of the
Subsidiaries of Holdings identified therein.
97
5.2 Authorization of Borrowing, etc.
--------------------------------
A. Authorization of Borrowing. The execution, delivery and performance
of the Loan Documents and the Related Agreements 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 Loan Parties
of the Loan Documents and the Related Agreements to which they are parties and
the consummation of the transactions contemplated by the Loan Documents and such
Related Agreements do not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Holdings
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Holdings or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of Holdings or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date and disclosed in
writing to Lenders.
C. Governmental Consents. The execution, delivery and performance by
Loan Parties of the Loan Documents to which they are parties and the
consummation of the transactions contemplated by the Loan Documents do not
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other govern mental authority or
regulatory body except to the extent obtained or made and except for those
filings made to perfect Liens under the Collateral Documents. The execution,
delivery and performance by Loan Parties of the Related Agreements to which they
are parties and the consummation of the transactions contemplated by the such
Related Agreements do not require any registration with, consent or approval of,
or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except (i) to the extent obtained or
made or (ii) where the failure to obtain or make any of the foregoing,
individually or in the aggregate, is not reasonably likely to have a Material
Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and Related Agreements
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.
98
E. Valid Issuance of Holdings Capital Stock, Senior Subordinated Notes,
Discount Notes, and Junior Subordinated Seller Notes.
(i) Holdings Common Stock. Holdings Common Stock issued on the
---------------------
Closing Date after giving effect to the Merger, when issued and delivered,
will be duly and validly issued, fully paid and nonassessable. The issuance
and sale of such Holdings Common Stock, upon such issuance and sale, will
either (a) have been registered or qualified under applicable federal and
state securities laws or (b) be exempt therefrom.
(ii) Senior Subordinated Notes and Discount Notes. Company has the
--------------------------------------------
corporate power and authority to issue the Senior Subordinated Notes and
the Discount Notes. The Senior Subordinated Notes and the Discount Notes,
when issued and paid for, will be the legally valid and binding obligations
of Company, enforceable against Company in accordance with their 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. The
subordination provisions of the Senior Subordinated Notes and the Discount
Notes will be enforceable against the holders thereof, and the Loans and
all other monetary Obligations hereunder are and will be within the
definition of "Senior Debt" included in such provisions. The Senior
Subordinated Notes and the Discount Notes, when issued and sold, will
either (a) have been registered or qualified under applicable federal and
state securities laws or (b) be exempt therefrom.
(iii) Junior Subordinated Seller Notes. Holdings has the corporate
--------------------------------
power and authority to issue the Junior Subordinated Seller Notes. The
Junior Subordinated Seller Notes, when issued and paid for, will be the
legally valid and binding obligations of Holdings, enforceable against
Holdings in accordance with their 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. The subordination provisions of the Junior
Subordinated Seller Notes will be enforceable against the holders thereof,
and the Loans and all other monetary Obligations hereunder are and will be
within the definition of "Senior Debt" included in such provisions. The
Junior Subordinated Seller Notes, when issued and sold, will either (a)
have been registered or qualified under applicable federal and state
securities laws or (b) be exempt therefrom.
5.3 Financial Condition.
-------------------
Company has heretofore delivered to Lenders, at Lenders' request, the
following financial statements and information: (i) the audited consolidated
balance sheets of Holdings and its Subsidiaries for each of Fiscal Years 1996
and 1995, the unaudited consolidated balance sheet of Holdings and its
Subsidiaries for Fiscal Year 1994 and the related consolidated statements of
income, stockholders' equity and cash flows of Holdings and its Subsidiaries for
each such Fiscal Year and (ii) the unaudited consolidated and consolidating
balance sheets of Holdings and its Subsidiaries for each fiscal month and Fiscal
Quarter ended subsequent to the date of the most
99
recent financial statements referred to in clause (i) and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for each such period (except for statements of
cash flows for each such monthly period). All such statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial
position (on a consolidated basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated basis) of the entities described therein for each
of the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments and
the absence of footnotes. On the Closing Date, Holdings and Company do 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 Holdings or any of its Subsidiaries.
5.4 No Material Adverse Change.
--------------------------
Since August 31, 1997, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
5.5 Title to Properties; Liens; Real Property.
-----------------------------------------
A. Title to Properties; Liens. Holdings 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), (iii) valid licenses in (in the case of licensed
intangible properties), or (iv) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the most
recent financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case subject
to Permitted Encumbrances and Liens permitted under subsection 7.2 and 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 otherwise permitted by this Agreement, all such properties and assets
are free and clear of Liens.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
------------
contains a true, accurate and complete list of (i) all Real Property Assets
owned in fee simple by any Loan Party and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Property Asset of any
Loan Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date, except as specified in Schedule
--------
5.5 annexed hereto, each agreement referenced in clause (ii) of the immediately
---
preceding sentence is in full force and effect and Holdings and Company do not
have knowledge of any default that has occurred and is continuing thereunder
(except where the consequences, direct or indirect, of such default or defaults,
if any, would not reasonably be expected to have a Material Adverse Effect), and
each such agreement constitutes the legally valid and binding obligation of each
applicable Loan
100
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
5.6 Litigation; Adverse Facts.
-------------------------
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Holdings or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Holdings or Company, threatened against or
affecting Holdings or any of its Subsidiaries or any property of Holdings or any
of its Subsidiaries and that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect. Neither Holdings
nor any of its Subsidiaries (i) is in violation of any applicable laws
(including Environmental Laws) that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect, 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 reasonably be expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
----------------
Except to the extent permitted by subsection 6.3, all federal, state and
other material tax returns and reports of Holdings 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 Holdings and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable. Holdings and Company know of
no proposed material tax assessment against Holdings or any of its Subsidiaries
which is not being actively contested by Holdings or such Subsidiary in good
faith and by appropriate proceedings; provided that such reserves or other
--------
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.
--------------------------------------------------------
A. Neither Holdings nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
B. Neither Holdings nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually
101
or in the aggregate, compliance with which could reasonably be expected to
result in a Material Adverse Effect.
5.9 Governmental Regulation.
-----------------------
Neither Holdings nor any of its Subsidiaries is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 Securities Activities.
---------------------
A. Neither Holdings nor any of its Subsidiaries is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more than 25%
of the value of the assets (either of Holdings only or of Holdings 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. Holdings and each of its Subsidiaries are in compliance in all
material respects with all applicable provisions and requirements of ERISA and
the regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan. Each 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 which
has or would reasonably be expected to result in a liability to Holdings or any
of its Subsidiaries in excess of $7,500,000.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code, the aggregate liabilities with respect to health or welfare
benefits (through the purchase of insurance or otherwise) provided or promised
for any retired or former employee of Holdings or any of its Subsidiaries do not
exceed $10,000,000.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans, does not exceed
$10,000,000.
102
E. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of Holdings,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated with such potential liability for a complete withdrawal from all
Multiemployer Plans, based on information available pursuant to Section 4221(e)
of ERISA, does not exceed $10,000,000.
5.12 Certain Fees.
------------
Except as set forth on Schedule 5.12 annexed hereto, no broker's or
-------------
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Holdings and Company hereby
indemnifies Lenders against, and agrees that it will hold Lenders harmless from,
any claim, demand or liability for any such broker's or finder's fees alleged to
have been incurred in connection herewith or therewith and any expenses
(including reasonable fees, expenses and disbursements of counsel) arising in
connection with any such claim, demand or liability.
5.13 Environmental Protection.
------------------------
Except as set forth on Schedule 5.13 annexed hereto:
-------------
(i) Neither Holdings 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, in the case of (a), (b) or (c),
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(ii) Neither Holdings nor any of its Subsidiaries has received any
letter or written request for information from any governmental agency
under Section 104 of the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. (S) 9604) or any comparable
state law;
(iii) To Holdings' and Company's knowledge, there are no and have
been no conditions, occurrences, or Hazardous Materials Activities which
could reasonably be expected to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect;
(iv) Holdings maintains an environmental management system designed
to maintain compliance with Environmental Laws and correct any incidents of
non-compliance;
103
(v) Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws would not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect; and
(vi) No event or condition has occurred or is occurring with respect
to Holdings or any of its Subsidiaries relating to any Environmental Law,
any Release of Hazardous Materials, or any Hazardous Materials Activity
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect.
5.14 Employee Matters.
----------------
There is no strike or work stoppage in existence or threatened involving
Holdings or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect.
5.15 Solvency.
--------
Each Loan Party is and, 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 date hereof pursuant to subsections 4.1I, 4.1J,
6.8 and 6.9 and (ii) the delivery to Collateral Agent of any Pledged Collateral
not delivered to Collateral 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 Collateral 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 Collateral 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 Collateral 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 Collateral Agent pursuant to
any of the Collateral Documents or (ii) the exercise by Collateral 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.
104
C. Absence of Third-Party Filings. Except such as may have been filed in
favor of Collateral Agent as contemplated by subsection 5.16A, (i) no effective
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office, except with respect to Permitted Encumbrances and Liens permitted under
subsection 7.2A, and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
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 or Collateral 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 Related Agreements.
------------------
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Seller's Warranties. Except to the extent otherwise set forth herein
or in the schedules hereto, each of the representations and warranties given by
Holdings and ▇▇▇▇ to Merger Corp. in the Recapitalization Agreement is true and
correct 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
as of the Closing Date (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
Recapitalization Agreement, in each case except to the extent that the cause of
any failure of any such representation or warranty to be true and correct,
either individually or in the aggregate with the causes of the failures of any
other such representations and warranties to be true and correct, would not
reasonably be expected to have a Material Adverse Effect.
C. Warranties of Merger Corp. Subject to the qualifications set forth
therein, each of the representations and warranties given by Merger Corp. to
Holdings and ▇▇▇▇ in the Recapitalization Agreement is true and correct as of
the date hereof and will be true and correct as of the Closing Date, in each
case except to the extent that the cause of any failure of any such
representation or warranty to be true and correct, either individually or in the
aggregate with the causes of the failures of any other such representations and
warranties to be true and correct, would not reasonably be expected to have a
Material Adverse Effect.
D. Survival. Notwithstanding anything in the Recapitalization Agreement
to the contrary, the representations and warranties of Holdings and Company set
forth in subsections 5.17B and 5.17C shall, solely for purposes of this
Agreement, survive the Closing Date for the benefit of Lenders.
105
5.18 Disclosure.
----------
All representations and warranties of Holdings or any of its Subsidiaries
and all information contained in the Confidential Information Memorandum or in
any Loan Document or Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement, taken as a whole, are true and correct in all material respects and
do not omit to state a material fact (known to Holdings or Company, in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein (taken as a whole) 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 Holdings and 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 Holdings or Company (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect 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.
5.19 Subordination of Seller Notes and Shareholder Subordinated Notes.
----------------------------------------------------------------
The subordination provisions of any Permitted Seller Notes and Shareholder
Subordinated Notes are enforceable against the holders thereof, and the Loans
and other Obligations hereunder are and will be within the definition of
"Senior Indebtedness" or "Senior Debt", as applicable, included in such
provisions.
SECTION 6.
HOLDINGS' AND COMPANY'S AFFIRMATIVE COVENANTS
Holdings and Company covenant and agree 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 (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Holdings and Company shall perform, and shall cause each of their Subsidiaries
to perform, all covenants in this Section 6.
6.1 Financial Statements and Other Reports.
--------------------------------------
Holdings will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to
106
Administrative Agent, with sufficient copies for each Lender (and Administrative
Agent will, after receipt thereof, deliver to each Lender):
(i) Monthly Financials: as soon as available and in any event
------------------
within 30 days after the end of each month ending after the date which is
six months after the Closing Date, the consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such month and the related
consolidated statements of income, stockholders' equity and cash flows of
Holdings and its Subsidiaries for such month and for the period from the
beginning of the then current Fiscal Year to the end of such month, setting
forth in each case in comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the corresponding
figures from the Financial Plan for the current Fiscal Year, to the extent
prepared on a monthly basis, all in reasonable detail and certified by the
principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings 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 the
absence of footnotes;
(ii) Quarterly Financials: as soon as available and in any event
--------------------
within 50 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders'
equity and cash flows of Holdings 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
comparative form the corresponding figures for the corresponding periods of
the previous Fiscal Year and the corresponding figures from the Financial
Plan for the current Fiscal Year, all in reasonable detail and certified by
the principal financial officer or principal accounting officer of Holdings
that they fairly present, in all material respects, the financial condition
of Holdings 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 the
absence of footnotes, and (b) a narrative report describing the operations
of Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal
Quarter; provided, however, that Company may deliver to Administrative
-------- -------
Agent in lieu of such narrative report copies of the unaudited quarterly
report filed by Holdings with the Securities and Exchange Commission on
Form 10-Q in respect of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and in any event
-------------------
within 95 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Holdings and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, stockholders'
equity and cash flows of Holdings and its Subsidiaries for such Fiscal
Year, setting forth in each case in comparative form the corresponding
figures for the previous Fiscal Year and the corresponding figures from the
Financial Plan for the
107
Fiscal Year covered by such financial statements, all in reasonable detail
and certified by the principal financial officer or principal accounting
officer of Holdings that they fairly present, in all material respects, the
financial condition of Holdings and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, (b) a narrative report describing the operations of
Holdings and its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, provided, however, that Company may
-------- -------
deliver to Administrative Agent in lieu of such narrative report copies of
the report filed by Holdings with the Securities and Exchange Commission on
Form 10-K in respect of such Fiscal Year, and (c) in the case of such
consolidated financial statements, a report thereon of an Independent
Public Accountant, which report shall be unqualified, shall express no
doubts about the ability of Holdings 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 Holdings 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;
(iv) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of Holdings and its Subsidiaries pursuant
to subdivisions (i), (ii) and (iii) above, (a) an Officers' Certificate of
Holdings stating that the signers have reviewed the terms of this Agreement
and have made, or caused to be made under their super vision, a review in
reasonable detail of the transactions and condition of Holdings 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 Officers' 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
Holdings has taken, is taking and proposes to take with respect thereto;
and (b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods with
the restrictions contained in Section 7, in each case to the extent
compliance with such restrictions is required to be tested at the end of
the applicable accounting period;
(v) Reconciliation Statements; MIS Accounting Changes: (a) if,
-------------------------------------------------
as a result of any change in accounting principles and policies from those
used in the preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of Holdings and its
Subsidiaries delivered pursuant to subdivisions (i), (ii), (iii) or (xiii)
of this subsection 6.1 will differ in any material respect from the
consolidated financial statements that would have been delivered pursuant
to such subdivisions had no such change in accounting principles and
policies been made, then (1) together with the first delivery of financial
statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, consolidated financial
108
statements of Holdings 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 (2) together with each delivery of financial
statements pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, a written statement of the principal
accounting officer or principal financial officer of Holdings setting forth
the differences (including 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; and (b) if Company changes
its method of accounting for Year 2000 Expenditures, MIS Upgrade
Expenditures, EITF 97-13 Expenditures or Other MIS Expenditures, then,
together with each Compliance Certificate delivered pursuant to subdivision
(iv) of this subsection 6.1 following such change, a schedule setting forth
in reasonable detail (1) the adjustments to the calculation of Consolidated
Adjusted EBITDA and Consolidated Capital Expenditures due to such
accounting change and (2) the effect of such accounting changes on the
calculation of compliance with the covenants in subsections 7.6C and 7.8;
(vi) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements of Holdings and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of this
Agreement and the other Loan Documents as they relate to accounting
matters, (b) stating whether, in connection with their audit examination,
any condition or event that constitutes an Event of Default or Potential
Event of Default of a financial nature has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
--------
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv) above is not
correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports
submitted to Holdings by independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of Holdings and its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
------------------------------
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made
109
available generally by Holdings to analysts or its security holders or by
any Subsidiary of Holdings to analysts or its security holders other than
Holdings or another Subsidiary of Holdings, (b) all regular and periodic
reports and all registration statements (other than on Form S-8 or a
similar form) and prospectuses, if any, filed by Holdings or any of its
Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private regulatory authority,
and (c) all press releases and other written, publicly announced notices by
Holdings or any of its Subsidiaries concerning material developments in
the business of Holdings or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any Responsible Officer
-----------------------
of Holdings or Company obtaining knowledge (a) of any condition or event
that constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than to
Administrative Agent) or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (b) that any Person has
given any notice to Holdings or any of its Subsidiaries or taken any other
action with respect to a claimed default or event or condition of the type
referred to in subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Holdings or 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 Holdings or Company
were required to file such reports under the Exchange Act, or (d) of the
occurrence of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an Officers'
Certificate specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action
Holdings or Company has taken, is taking and proposes to take with respect
thereto;
(x) Litigation or Other Proceedings: promptly upon any Responsible
-------------------------------
Officer of Holdings or Company obtaining knowledge of (a) the institution
of, or non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting Holdings or any of its Subsidiaries or any
property of Holdings or any of its Subsidiaries (collectively,
``Proceedings'') not previously disclosed in writing by Holdings or Company
to Lenders or (b) any material development in any Proceeding that, in any
case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; 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;
110
written notice thereof together with such other information as may be
reasonably available to Holdings or Company to enable Lenders and their
counsel to evaluate such matters;
(xi) 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 Holdings, 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;
(xii) ERISA Notices: with reasonable promptness, copies of (a) each
-------------
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Holdings, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension
Plan, as Administrative Agent shall reasonably request; (b) all notices
received by Holdings, any of its 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 as Administrative Agent shall
reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
---------------
later than 30 days after the beginning of each Fiscal Year, a consolidated
plan and financial forecast for such Fiscal Year and the next succeeding
Fiscal Year (the ``Financial Plan'' for such Fiscal Years), including (a) a
forecasted consolidated balance sheet and forecasted consolidated
statements of income and cash flows of Holdings and its Subsidiaries for
each such Fiscal Year, together with a pro forma Compliance Certificate for
--- -----
the first such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, and (b) such other information regarding such
projections as Administrative Agent may reasonably request;
(xiv) Insurance: as soon as practicable and in any event by the last
---------
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material changes made to insurance
coverage maintained as of the Closing Date or the date of the most recent
such report by Holdings and its Subsidiaries;
(xv) New Subsidiaries: promptly upon any Person becoming a Subsidiary
----------------
of Holdings, a written notice setting forth with respect to such Person (a)
the date on which such Person became a Subsidiary of Holdings and (b) the
ownership and debt and equity capitalization of such Subsidiary;
(xvi) Material Contracts: promptly, and in any event within ten
------------------
Business Days after any Material Contract of Holdings or any of its
Subsidiaries is terminated or amended in a manner that is materially
adverse to Holdings or such Subsidiary, as the case may be, or any new
Material Contract is entered into, a written statement describing
111
such event with copies of such material amendments or new contracts, and an
explanation of any actions being taken with respect thereto; and
(xvii) Other Information: with reasonable promptness, such other
-----------------
information and data with respect to Holdings or any of its Subsidiaries as
from time to time may be reasonably requested by Administrative Agent.
6.2 Corporate Existence, etc.
-------------------------
Except as permitted under subsection 7.7, Holdings 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 Holdings nor any of its Subsidiaries
-------- -------
shall be required to preserve any such right or franchise if the Board of
Directors of Holdings or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Holdings or
such Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to Holdings, such Subsidiary or Lenders.
6.3 Payment of Taxes and Claims; Tax Consolidation.
----------------------------------------------
A. Holdings will, and will cause each of its Subsidiaries to, pay all
federal, state and other material 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 claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a Lien
upon any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
--------
need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (1) such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor and (2) 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. Holdings 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 Holdings 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 and damage by casualty excepted, all
material properties used or useful in the business of Company and its
Subsidiaries (including all Intellectual Property) and from
112
time to time will make or cause to be made all repairs, renewals and
replacements thereof which are useful, customary or appropriate for companies in
similar businesses.
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. Without limiting the
generality of the foregoing, Company will maintain or cause to be maintained (i)
flood insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value property insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are in
accordance with normal industry practice. Each such policy of insurance related
to property damage, casualty or business interruption shall (a) name
Administrative Agent for the benefit of Lenders as an additional insured
thereunder as its interests may appear and (b) in the case of each business
interruption and casualty insurance policy, contain a loss payable clause or
endorsement, reasonably satisfactory in form and substance to Administrative
Agent, that names Administrative Agent for the benefit of Lenders as the loss
payee thereunder for any covered loss in excess of $1,000,000 and provides for
at least 30 days prior written notice to Administrative Agent of any
modification or cancellation of such policy.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or
-------------------------------
any of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default shall have occurred and be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds
for working capital purposes, and (b) if an Event of Default shall have
occurred and be continuing, Company shall within ten Business Days of the
receipt thereof apply an amount equal to such Net Insurance/Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Within ten Business
----------------------------------------
Days of receipt by Company or any of its Subsidiaries of any Net
Insurance/Condemnation Proceeds other than from business interruption
insurance, (a) so long as no Event of Default shall have occurred and be
continuing and so long as the aggregate amount of Net Asset Sale Proceeds
and Net Insurance/Condemnation Proceeds received from the Closing Date to
the date of determination does not exceed $25,000,000, Company may deliver
to Administrative Agent an Officers' Certificate setting forth (1) that
portion of
113
such Net Insurance/Condemnation Proceeds (the "Proposed Insurance
Reinvestment Proceeds") that Company or such Subsidiary intends to use (or
enter into a contract to use) within 270 days of such date of receipt to
pay or reimburse the costs of repairing, restoring or replacing the assets
in respect of which such Net Insurance/Condemnation Proceeds were received
or to reinvest in Eligible Assets and (2) the proposed use of the Proposed
Insurance Reinvestment Proceeds and such other information with respect to
such proposed use as Administrative Agent may reasonably request, and
Company shall, or shall cause one or more of its Subsidiaries to, promptly
and diligently apply such Proposed Insurance Reinvestment Proceeds to pay
or reimburse the costs of repairing, restoring or replacing the assets in
respect of which such Proposed Insurance Reinvestment Proceeds were
received or to reinvestment in Eligible Assets or, to the extent the
aggregate amount of Net Asset Proceeds and Net Insurance/Condemnation
Proceeds received from the Closing Date to the date of determination exceed
$5,000,000 and are not so applied, to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in subsection
2.4B(iii)(b), and (b) if an Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net Insurance/
Condemnation Proceeds to prepay the Loans (and/or the Revolving Loan
Commitments shall be reduced) as provided in subsection 2.4B(iii)(b).
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
--------------------------------------------------------------
Agent. Within ten Business Days of receipt by Administrative Agent of any
-----
Net Insurance/Condemnation Proceeds as loss payee, (a) if and to the extent
Company or Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them directly) to
prepay the Loans and/or reduce the Revolving Loan Commitments,
Administrative Agent shall, and Company hereby authorizes Administrative
Agent to, apply such Net Insurance/Condemnation Proceeds to prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced) as provided
in subsection 2.4B(iii)(b), and (b) to the extent the foregoing clause (a)
does not apply, Administrative Agent shall deliver such Net
Insurance/Condemnation Proceeds to Company, and Company shall, or shall
cause one or more of its Subsidiaries to, promptly apply such Net
Insurance/Condemnation Proceeds to the costs of repairing, restoring, or
replacing the assets in respect of which such Net Insurance/Condemnation
Proceeds were received or to reinvestment in Eligible Assets.
6.5 Inspection Rights; Audits of Inventory and Accounts Receivable; Lender
----------------------------------------------------------------------
Meeting.
-------
A. Inspection Rights. Holdings 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 Holdings 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 Holdings or Company may, if they so choose, 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; provided, however, that each Lender shall coordinate with
-------- -------
114
Administrative Agent the frequency and timing of such visits and inspections so
as to reasonably minimize the burden imposed on Holdings and its Subsidiaries.
B. Audits of Inventory and Accounts Receivable. Holdings shall, and
shall cause each of its Subsidiaries to, permit any authorized representatives
designated by Administrative Agent to conduct one audit of all Inventory and
accounts receivable of Loan Parties during each twelve-month period after the
Closing Date, each such audit to be in scope and substance reasonably
satisfactory to Syndication Agent and Administrative Agent, all upon reasonable
notice and at such reasonable times during normal business hours as may
reasonably be requested.
C. Lender Meeting. Company will, upon the request of Syndication Agent,
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent and Lenders once during each Fiscal Year to be held at
Company's corporate offices (or at such other location as may be agreed to by
Holdings and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.
6.6 Compliance with Laws, etc.
--------------------------
Holdings 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), except where
noncompliance would not reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
6.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
---------------------------------------------------------------------------
Regarding Hazardous Materials Activities, Environmental Claims and
------------------------------------------------------------------
Violations of Environmental Laws.
--------------------------------
A. Environmental Review and Investigation. Holdings and Company agree
that Administrative Agent may, (i) at any time a fact, event or condition arises
that, in Administrative Agent's reasonable discretion, Administrative Agent
determines could give rise to environmental liabilities that would materially
adversely affect any material Facility, retain, at Company's expense, an
independent professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous Materials at such
Facility prepared by or for Company and (ii) in the event (a) Administrative
Agent reasonably believes that Company or Holdings has breached any
representation, warranty or covenant contained in subsection 5.6, 5.13, 6.6 or
6.7 or that there has been a material violation of Environmental Laws at any
Facility or by Holdings or any of its Subsidiaries at any other location conduct
its own investigation of such breach or violation or (b) an Event of Default has
occurred and is continuing, conduct its own investigation of any Facility;
provided that, in the case of any Facility no longer owned, leased, operated or
--------
used by Holdings or any of its Subsidiaries, Company and Holdings shall only be
obligated to use their reasonable best efforts to obtain permission for
Administrative Agent's professional consultant to conduct an investigation of
such Facility. For purposes of conducting an investigation pursuant to clause
(ii) of the preceding sentence, Company and Holdings hereby grant to
Administrative Agent and its agents,
115
employees, consultants and contractors the right to enter into or onto any
Facilities currently owned, leased, operated or used by Holdings or any of its
Subsidiaries and to perform such tests on such property (including taking
samples of soil, groundwater and suspected asbestos-containing materials) as are
reasonably necessary in connection therewith (to the extent, at any Facility
leased by Holdings or any of its Subsidiaries, such actions are permitted by the
owner of such Facility). Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Holdings and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing operations at such Facility or
to cause any damage or loss to any property at such Facility. Holdings, Company
and Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of Administrative Agent pursuant to this
subsection 6.7A will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions, to monitor and
police the Loans and to protect Lenders' security interests, if any, created by
the Loan Documents. Administrative Agent agrees to deliver a copy of any such
report to Company with the understanding that Company and Holdings acknowledge
and agree that (x) they will indemnify and hold harmless Administrative Agent
and each Lender from any costs, losses or liabilities relating to Holdings' or
Company's use of or reliance on such report, (y) neither Administrative Agent
nor any Lender makes any representation or warranty with respect to such report,
and (z) by delivering such report to Company, neither Administrative Agent nor
any Lender is requiring or recommending the implementation of any suggestions or
recommendations contained in such report.
B. Environmental Disclosure. Company will deliver to Administrative
Agent, with sufficient copies for each Lender (and Administrative Agent will,
after receipt thereof, deliver to each Lender):
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Holdings or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to environmental matters at any Facility that could reasonably
be expected to have a Material Adverse Effect.
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly upon
--------------------------------------------------
the occurrence thereof, written notice describing in reasonable detail (a)
any Release required to be reported to any federal, state or local
governmental or regulatory agency under any applicable Environmental Laws
unless such Release could not reasonably be expected to result in a
Material Adverse Effect, (b) any remedial action taken by Company, Holdings
or any other Person in response to (1) any Hazardous Materials Activities
the existence of which would reasonably be expected to result in one or
more Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims of which Holdings
or any of its Subsidiaries has notice that, individually or in the
aggregate, would reasonably be expected to result in a Material Adverse
Effect, and (c) Company's or Holdings' discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility
that would
116
reasonably be expected to cause such Facility or any part thereof to be
subject to any material restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
------------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
--------------
thereof by Holdings or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, would reasonably be expected to give rise
to a Material Adverse Effect, (b) any Release required to be reported to
any federal, state or local governmental or regulatory agency unless such
Release could not reasonably be expected to result in a Material Adverse
Effect, and (c) any request for information from any governmental agency
that suggests such agency is investigating whether Holdings or any of its
Subsidiaries may be potentially responsible for any Hazardous Materials
Activity unless such Hazardous Materials Activity could not reasonably be
expected to have a Material Adverse Effect.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
--------------------------------------------------------------
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Holdings or any of its
Subsidiaries that could reasonably be expected to (1) expose Holdings or
any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Holdings or any of its
Subsidiaries to maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their respective
operations and (b) any proposed action to be taken by Holdings or any of
its Subsidiaries to modify current operations in a manner that would
reasonably be expected to subject Holdings or any of its Subsidiaries to
any material additional obligations or requirements under any Environmental
Laws where such obligations or reimbursements would reasonably be expected
to have a Material Adverse Effect.
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Holdings' and Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
Holdings shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response actions
necessary to remove, remediate, clean up or ▇▇▇▇▇ any Hazardous Materials
Activity on, under or about any Facility that is in violation of any
Environmental Laws or that presents a material risk of giving rise to an
Environmental Claim that would, in either case, reasonably be expected to
have a Material Adverse Effect. In the event Holdings or any of its
Subsidiaries undertakes any
117
such action with respect to any Hazardous Materials, Holdings or such
Subsidiary shall conduct and complete such action in material compliance
with all applicable Environmental Laws and in accordance an all material
respects with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent that,
Holdings' or such Subsidiary's liability with respect to such Hazardous
Materials Activity is being contested in good faith by Holdings or such
Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
--------------------------------------------------------------
Environmental Laws. Holdings shall promptly take, and shall cause each of
------------------
its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by Holdings or its
Subsidiaries where such violation would reasonably be expected to have a
Material Adverse Effect and (ii) make an appropriate response to any
Environmental Claim against Holdings or any of its Subsidiaries (of which
Holdings or any of its Subsidiaries has notice) where such Environmental
Claim would reasonably be expected to have a Material Adverse Effect, and
discharge any obligations it may have to any Person thereunder.
6.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
---------------------------------------------------------------------------
by Future Subsidiaries.
----------------------
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Domestic Subsidiary which is an Excluded
Subsidiary as of the Closing Date ceases to be an Excluded Subsidiary or any
Person becomes a Domestic Subsidiary of Company after the date hereof, Company
will promptly notify Administrative Agent of that fact and cause such Subsidiary
to execute and deliver to Collateral Agent counterparts of the Subsidiary
Guaranty, Subsidiary Pledge Agreement, Subsidiary Security Agreement and
Subsidiary Patent and Trademark Security Agreement and to take all such further
actions and execute all such further documents and instruments (including
actions, documents and instruments comparable to those described in subsection
4.1J) as may be reasonably necessary or, in the reasonable opinion of
Administrative Agent, desirable to create in favor of Collateral Agent, for the
benefit of Lenders, a valid and perfected First Priority Lien on all of the
personal and mixed property 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 such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business 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
each of such jurisdictions, 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
118
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) to the extent requested by Administrative Agent, a favorable
opinion of counsel to such Subsidiary, in form and substance reasonably
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, (d) such other
matters (including 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 reasonably satisfactory in form
and substance to Administrative Agent and its counsel.
6.9 Conforming Leasehold Interests; Matters Relating to Additional Real
-------------------------------------------------------------------
Property Collateral.
-------------------
A. Conforming Leasehold Interests. If Holdings or any of its
Subsidiaries acquires any Material Leasehold Property, Holdings shall, use
commercially reasonable efforts to, or shall cause such Subsidiary to use
commercially reasonable efforts to, cause such Leasehold Property to be a
Conforming Leasehold Interest.
B. Additional Mortgages, Etc. From and after the Closing Date, in the
event that (i) Holdings or any Subsidiary Guarantor acquires any fee interest in
real property or any Material Leasehold Property or (ii) at the time any Person
becomes a Subsidiary Guarantor, such Person owns or holds any fee interest in
real property or any Material Leasehold Property, in either case excluding any
such Real Property Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (ii) above) then-existing senior
lienholder, where Holdings and its Subsidiaries are unable, after exercising
commercially reasonable efforts, to obtain such lessor's or senior lienholder's
consent (any such non-excluded Real Property Asset described in the foregoing
clause (i) or (ii) being an "Additional Mortgaged Property"), Holdings or such
Subsidiary Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged Property or
becomes a Subsidiary Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage (an
-------------------
"Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
(ii) Opinions of Counsel. (a) A favorable opinion of counsel to such
-------------------
Loan Party, in form and substance satisfactory to Administrative Agent and
its counsel, as to the due authorization, execution and delivery by such
Loan Party of such Additional Mortgage and such other matters as
Administrative Agent may reasonably request, and (b) if required by
Administrative Agent, an opinion of counsel (which counsel shall be
119
reasonably satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the enforceability
of such Additional Mortgage and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral related to such Additional Mortgaged
Property) as Administrative Agent may reasonably request, in each case in
form and substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
----------------------------------------------------------
the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Consent and Estoppel and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) Title Insurance. (a) If required by Administrative Agent, an
---------------
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount reasonably
satisfactory to Administrative Agent, insuring fee simple title to, or a
valid leasehold interest in, such Additional Mortgaged Property vested in
such Loan Party and assuring Administrative Agent that such Additional
Mortgage creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property, subject only to a standard survey
exception, which Additional Mortgage Policy (1) shall include an
endorsement for mechanics' liens, for future advances (in each case, if
available) under this Agreement and for any other matters reasonably
requested by Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to Administrative Agent; and (b) evidence satisfactory to Administrative
Agent that such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Additional Mortgage Policy and (ii) paid to the
Title Company or to the appropriate governmental authorities all expenses
and premiums of the Title Company in connection with the issuance of the
Additional Mortgage Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with
recording the Additional Mortgage in the appropriate real estate records;
provided, however, that Administrative Agent shall allow for such
reasonable revisions to the applicable Mortgage and shall otherwise take
such steps as are reasonable and customary to minimize recording, mortgage
recording, stamp, documentary and intangible taxes, at Company's cost;
(v) Title Report. If no Additional Mortgage Policy is required
------------
with respect to such Additional Mortgaged Property, a title report issued
by the Title Company with respect thereto, last updated not more than 30
days prior to the date such Additional Mortgage is to be recorded and
reasonably satisfactory in form and substance to Administrative Agent;
120
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
------------------------------------------------
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
-------------------------------------------
which may be in the form of a surveyor's note on a survey or a report from
a flood hazard search firm, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the community in
which such Flood Hazard Property is located is participating in the
National Flood Insurance Program, (b) if such Additional Mortgaged Property
is a Flood Hazard Property, such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1) that such
Additional Mortgaged Property is a Flood Hazard Property and (2) as to
whether the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the event
such Additional Mortgaged Property is a Flood Hazard Property that is
located in a community that participates in the National Flood Insurance
Program, evidence that Holdings or Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System; and
(viii) Environmental Audit. If required by Administrative Agent,
-------------------
reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent and prepared by environmental
consultants reasonably satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Holdings or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
C. Real Estate Appraisals. Holdings shall, and shall cause each of its
Subsidiaries to, permit an independent real estate appraiser satisfactory to
Administrative Agent, upon reasonable notice, to visit and inspect any
Additional Mortgaged Property for the purpose of preparing an appraisal of such
Additional Mortgaged Property satisfying the requirements of any applicable laws
and regulations (in each case to the extent required under such laws and
regulations as determined by Administrative Agent in its discretion).
6.10 Interest Rate Protection.
------------------------
At all times after the date which is 60 days after the Closing Date,
Company shall maintain in effect one or more Interest Rate Agreements with
respect to the Loans, each such Interest Rate Agreement to be for a term and in
form and substance reasonably satisfactory to Syndication Agent, which Interest
Rate Agreements shall effectively limit the Unadjusted Eurodollar Rate Component
(as hereinafter defined) of the interest costs to Company with respect to an
aggregate notional principal amount of not less than 50% of the aggregate
principal amount of the Tranche A Term Loans outstanding from time to time
(based on the assumption that such notional principal amount was a Eurodollar
Rate Loan with an Interest Period of three months) to a rate equal to not more
than 8.0% per annum. For purposes of this subsection 6.10, the term
"Unadjusted Eurodollar Rate Component" means that component of the interest
121
costs to Company in respect of a Eurodollar Rate Loan that is based upon the
rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate.
6.11 Additional Foreign Subsidiary Collateral.
----------------------------------------
If, following a change in the relevant provisions of the Internal Revenue
Code, counsel for Company acceptable to Administrative Agent does not within 30
days after a request from Administrative Agent or Requisite Lenders deliver
evidence, in form and substance satisfactory to Administrative Agent with
respect to any Foreign Subsidiary which has not already had all of its capital
stock pledged pursuant to the Collateral Documents, that (i) a pledge of 66-2/3%
or more of the total combined voting power of all classes of capital stock of
such Foreign Subsidiary entitled to vote, and of any promissory note issued by
such Foreign Subsidiary to Holdings or any of its Domestic Subsidiaries, and
(ii) the entering into by such Foreign Subsidiary of a guaranty in substantially
the form of the Subsidiary Guaranty, in any such case would cause the
undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, then: in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock or any promissory
notes so issued by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Collateral Documents, shall be pledged to Collateral Agent
pursuant to the Collateral Documents (or another pledge agreement in
substantially similar form, if necessary), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver the Subsidiary Guaranty and other Collateral Documents
(or other guaranty and security agreements in substantially similar form, if
necessary), granting Collateral Agent a security interest in all of such Foreign
Subsidiary's real, mixed and personal property and securing the Obligations, in
each case to the extent that such pledge of capital stock and notes and entry
into such guaranty and related documents is permitted by the laws of the
applicable foreign jurisdictions.
6.12 Post-Closing Deliveries.
-----------------------
Company shall cause any actions set forth on Schedule 6.12 annexed hereto
-------------
to be taken within the time period(s) specified on such Schedule 6.12 and in
-------------
form and substance reasonably satisfactory to Administrative Agent and
Syndication Agent.
SECTION 7.
HOLDINGS' AND COMPANY'S NEGATIVE COVENANTS
Holdings and Company covenant and agree 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 (other than inchoate indemnification obligations
with respect to claims, losses or liabilities which have not yet arisen and are
not yet due and payable) and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written
122
consent, Holdings and Company shall perform, and shall cause each of their
Subsidiaries to perform, all covenants in this Section 7.
7.1 Indebtedness.
------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain liable with
respect to (a) Indebtedness in respect of Capital Leases and (b)
Indebtedness secured by Liens permitted under subsection 7.2A(iv), provided
--------
that the aggregate amount of Indebtedness described in clauses (a) and (b),
together with the amount of any purchase money Indebtedness and Capital
Lease obligations of the type permitted under subsection 7.1(xiii), shall
not exceed $20,000,000 at any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any wholly owned Domestic Subsidiary, and any wholly owned
Domestic Subsidiary may become and remain liable with respect to
Indebtedness to Company or any other wholly owned Domestic Subsidiary;
provided that (a) all such intercompany Indebtedness shall be evidenced by
--------
promissory notes, (b) all such intercompany Indebtedness owed by Company to
any such Subsidiary shall be subordinated in right of payment to the
payment in full of the Obligations pursuant to the terms of the applicable
promissory notes or an intercompany subordination agreement, and (c) any
payment by any such Subsidiary of Company under any guaranty of the
Obligations shall result in a pro tanto reduction of the amount of any
--- -----
intercompany Indebtedness owed by such Subsidiary to Company or to any of
such Subsidiary Guarantors for whose benefit such payment is made;
(v) (a) Company and any wholly owned Subsidiary of Company may
become and remain liable with respect to Indebtedness to any wholly owned
Foreign Subsidiary, and (b) any wholly owned Foreign Subsidiary (x) may
remain liable with respect to Indebtedness to Company or to any of the
Subsidiary Guarantors set forth on Schedule 7.1(v) annexed hereto in
---------------
amounts not to exceed the respective amounts set forth on such Schedule and
(y) may become and remain liable with respect to additional Indebtedness to
Company or any Subsidiary Guarantor so long as the aggregate outstanding
amount of such Indebtedness under this clause (y), plus the aggregate
----
amount of Investments of the type permitted under subsection 7.3(xiii),
does not exceed (1) $15,000,000 at any
123
time from the Closing Date through Fiscal Year 1998, (2) $25,000,000 at any
time during Fiscal Year 1999, or (3) $30,000,000 at any time during Fiscal
Year 2000 and thereafter; provided that (1) all intercompany Indebtedness
--------
described in clause (b) shall be evidenced by promissory notes, and (2) all
intercompany Indebtedness described in clause (a) owed by Company or any
Subsidiary Guarantor to any wholly owned Foreign Subsidiary shall be
subordinated in right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or an intercompany
subordination agreement; provided further, however, that Company or any
-------- ------- -------
Subsidiary Guarantor may make additional intercompany loans in excess of
such amounts to any wholly owned Foreign Subsidiary so long as the
conditions in clause (1) of the preceding proviso are met and the Excess
Proceeds Amount immediately prior to the making of such loan equals or
exceeds the principal amount of such loan;
(vi) Holdings and its Subsidiaries may become and remain liable
with respect to Indebtedness evidenced by the AXEL Credit Documents;
(vii) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes and the Discount
Notes;
(viii) Holdings may become and remain liable with respect to
Indebtedness evidenced by the Junior Subordinated Seller Notes issued by
Holdings on the Closing Date and any additional Junior Subordinated Seller
Notes issued in lieu of the payment of cash interest thereon in accordance
with the terms thereof;
(ix) Company may become and remain liable with respect to Permitted
Seller Notes issued as consideration in Permitted Acquisitions; provided
--------
that the aggregate principal amount of Permitted Seller Notes shall not
exceed $5,000,000 at any time outstanding;
(x) Holdings may remain liable with respect to any portion of the
Existing Subordinated Notes not tendered pursuant to the Debt Tender Offer;
(xi) Holdings may become and remain liable with respect to
Shareholder Subordinated Notes issued in lieu of cash payments permitted
under subsection 7.5(x) to repurchase capital stock of Holdings held by
terminated employees and officers, provided that the aggregate principal
--------
amount of Shareholder Subordinated Notes shall not exceed $3,000,000 at any
time outstanding;
(xii) Foreign Subsidiaries of Holdings may become and remain liable
with respect to Indebtedness under lines of credit extended after the
Closing Date to any such Foreign Subsidiary by Persons other than Holdings
or any or its Subsidiaries, the proceeds of which Indebtedness are used for
such Foreign Subsidiary's working capital purposes, provided that the
--------
aggregate principal amount of all such Indebtedness outstanding at any time
for all such Foreign Subsidiaries (such Indebtedness being the "Foreign
Subsidiary Working Capital Indebtedness") shall not exceed the Foreign
124
Borrowing Base Amount in effect at such time minus the amount of any
-----
outstanding Contingent Obligations of the type permitted under subsection
7.4(viii);
(xiii) Subject to the applicable restrictions of subsections 7.1(iii)
and 7.1(xvi), Company or any Subsidiary of Company acquired pursuant to a
Permitted Acquisition may become or remain liable with respect to
Indebtedness of a Subsidiary of Company existing at the time of acquisition
by Company or a Subsidiary of a Subsidiary or assets pursuant to a
Permitted Acquisition, provided that (a) such Indebtedness was not incurred
--------
in connection with or in anticipation of such Permitted Acquisition, (b)
such Indebtedness does not constitute debt for borrowed money (other than
debt for borrowed money incurred in connection with industrial revenue or
industrial development bond financings), it being understood and agreed
that Capital Lease obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (xiii), and
(c) at the time of such Permitted Acquisition such Indebtedness does not
exceed 10% of the total value of the assets of the Subsidiary so acquired,
or of the assets so acquired, as the case may be; provided, however, that
-------- -------
(a) the aggregate amount of any such Capital Lease obligations and purchase
money Indebtedness, together with the aggregate amount of other
Indebtedness of the type permitted under subsection 7.1(iii), in each case
at any time outstanding, shall not exceed the maximum amount set forth in
such subsection, and (ii) the aggregate amount of any such Indebtedness
other than Capital Lease obligations and purchase money Indebtedness,
together with other Indebtedness of the type permitted under subsection
7.1(xvi), in each case at any time outstanding, shall not exceed the
maximum amount set forth in such subsection;
(xiv) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness consisting of the financing in the ordinary course
of business of insurance premiums with respect to coverage required to be
maintained under subsection 6.4;
(xv) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness described in Schedule 7.1(xv) annexed hereto;
----------------
(xvi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness not otherwise permitted under this subsection;
provided that the aggregate principal amount of such Indebtedness, together
--------
with (a) the maximum aggregate liability, contingent or otherwise, with
respect to Contingent Obligations incurred pursuant to subsection 7.4(viii)
and (b) the amount of any Indebtedness of the type permitted under
subsection 7.1(xiii) (other than Capital Lease obligations and purchase
money Indebtedness), shall not exceed $20,000,000 at any time outstanding;
and
(xvii) Subsidiaries of Company may become and remain liable with
respect to Indebtedness consisting of a converted equity Investment by
Company or another Subsidiary of Company in such Subsidiaries, provided
--------
that the underlying equity Investment was permitted hereunder at the time
of such conversion.
125
7.2 Liens and Related Matters.
-------------------------
A. Prohibition on Liens. Holdings 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 Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens created pursuant to the Collateral Documents in favor of
the Collateral Agent for the benefit of the Lenders and/or the lenders
under the AXEL Credit Agreement securing Loan Parties' obligations under
this Agreement, the AXEL Credit Agreement and/or under Interest Rate
Agreements with any such Lenders and/or lenders or their respective
affiliates; provided that such Liens for the benefit of the lenders under
--------
the AXEL Credit Agreement shall at all times secure the Obligations;
(iii) Liens arising in connection with Capital Leases permitted under
subsection 7.1(iii)(a); provided that no such Lien shall extend to or cover
--------
any Collateral or assets other than the assets subject to such Capital
Leases;
(iv) Liens securing Indebtedness permitted by subsection 7.1(iii)(b)
incurred (a) to finance the acquisition, construction or improvement of any
real property or tangible personal property assets acquired or held by
Company or any of its Subsidiaries in the ordinary course of business;
provided that (1) such Liens shall be created within 180 days after the
--------
acquisition, construction or improvement of such assets, and (2) the
principal amount of Indebtedness secured by any such Liens shall at no time
exceed 100%, and the proceeds of such Indebtedness shall be used to provide
not less than 75%, of the original purchase price of such asset or the
amount expended to construct or improve such asset, as the case may be; or
(b) to renew, extend or refinance any Indebtedness described in clause
(a); provided that the amount of any such Indebtedness does not exceed the
--------
amount of Indebtedness so renewed, extended or refinanced which is unpaid
and outstanding immediately prior to such renewal, extension or
refinancing; and provided further, that in the case of clause (a) or (b),
-------- -------
(1) such Liens attach solely to the assets financed with such Indebtedness,
(2) no recourse may be had under the Indebtedness secured by such Lien
against any Person other than the borrower of such Indebtedness for the
payment of principal, interest, fees, costs or premium on such Indebtedness
or for any claim based thereon, and (3) the financial covenants under any
Indebtedness secured by such Liens are, in each case, no more restrictive
than those set forth in this Agreement;
126
(v) Liens on real property or personal property assets of Foreign
Subsidiaries of Holdings securing Indebtedness of such Foreign Subsidiaries
(other than Indebtedness of the type permitted to be incurred pursuant to
subsection 7.1(v)) permitted under this Agreement; and
(vi) Other Liens securing Indebtedness in an aggregate amount not to
exceed $5,000,000 at any time outstanding.
B. Equitable Lien in Favor of Lenders. If Holdings 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 Holdings nor any
of its Subsidiaries shall enter into any agreement (other than the New Sub Debt
Indentures, the Junior Subordinated Seller Notes or any other agreement
prohibiting only the creation of Liens securing Subordinated Indebtedness)
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 Holdings or Other
Subsidiaries. Except as provided herein, Holdings 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 Holdings or any
other Subsidiary of Holdings, (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Holdings or any other Subsidiary of Holdings, (iii) make loans or
advances to Holdings or any other Subsidiary of Holdings, or (iv) transfer any
of its property or assets to Holdings or any other Subsidiary of Holdings,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Agreement and the other Credit Documents, (c) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of Company or any of its Subsidiaries, (d) customary
provisions restricting assignment of any licensing agreement entered into by
Company or any of its Subsidiaries in the ordinary course of business, (e) the
New Sub Debt Indentures and the AXEL Credit Documents, (f) customary provisions
restricting the transfer of assets subject to Liens permitted under subsections
7.2A(iii) and 7.2A(iv), and (g) any document or instrument evidencing Foreign
Subsidiary Working Capital Indebtedness permitted under subsection 7.1(xii) so
long as such encumbrance or restriction only applies to the Foreign Subsidiary
of Holdings incurring such Indebtedness.
127
7.3 Investments; Joint Ventures.
---------------------------
Holdings 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) Holdings and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Foreign Subsidiaries of Holdings may make and own Investments
in Foreign Cash Equivalents;
(iii) Holdings may continue to own the Investments owned by it as of
the Closing Date in Company, and Company and its Subsidiaries may continue
to own the Investments owned by them as of the Closing Date in any
Subsidiaries of Company and make additional Investments in such
Subsidiaries that are Subsidiary Guarantors;
(iv) Holdings and its Subsidiaries may own Investments in their
respective Subsidiaries to the extent that such Investments reflect an
increase in the value of such Subsidiaries;
(v) Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsections 7.1(iv) and 7.1(v);
(vi) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 7.8;
(vii) Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.3(vii) annexed
-----------------
hereto;
(viii) Company and its Subsidiaries may make loans and advances to
employees, officers, executives or consultants to Company and its
Subsidiaries in the ordinary course of business of Company and its
Subsidiaries as presently conducted for the purpose of purchasing capital
stock of Holdings so long as no cash is paid by Holdings or any of its
Subsidiaries in connection with the acquisition of such capital stock;
(ix) Company and its Subsidiaries may acquire and hold receivables
owing to it, if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms
(including the dating of receivables) of Company or any such Subsidiary;
(x) Company and its Subsidiaries may acquire and own Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
128
(xi) Company and its Subsidiaries may make and own Investments
consisting of deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases;
(xii) Holdings may make equity contributions to the capital of
Company;
(xiii) Company and its Domestic Subsidiaries may make and own
Investments consisting of cash capital contributions (in addition to cash
contributions made prior to the Closing Date and set forth on Schedule
--------
7.3(xiii) annexed hereto) to Foreign Subsidiaries of Company, or the
---------
capitalization or forgiveness of any Indebtedness owed to them by a Foreign
Subsidiary and outstanding under subsection 7.1(v); provided that the sum
--------
of (x) aggregate amount of such contributions, capitalization and
forgiveness made after the Closing Date, plus (y) the aggregate outstanding
----
principal amount of Indebtedness of the type permitted under subsection
7.1(v), shall not exceed the amounts set forth in subsection 7.1(v) at the
times set forth therein;
(xiv) Company and its Subsidiaries may make and own Investments in
Subsidiaries acquired pursuant to Permitted Acquisitions under subsection
7.7(xiv);
(xv) Company and its Subsidiaries may make and own Investments
consisting of notes received in connection with any Asset Sale limited to
20% of the total sale price of the assets sold in such Asset Sale; provided
--------
that the aggregate principal amount of such notes at any time outstanding
shall not exceed $5,000,000;
(xvi) Company and its Subsidiaries may make and own Investments in
any Person which (a) (1) result in the creation of an account arising in
the ordinary course of Company's or such Subsidiary's business or (2)
result from the restructure, reorganization or similar composition of trade
account obligations which arose in the ordinary course of business and
which are owing to Company or such Subsidiary from financially distressed
debtors, and (b) are, in each case, subject to the Lien in favor of
Collateral Agent under the Collateral Documents;
(xvii) Holdings and its Subsidiaries may make and own Investments
permitted under subsection 7.7(xi), 7.7(xii) and 7.7(xiii);
(xviii) Company and its Subsidiaries may make and own the Investments
described in Schedule 7.3(xviii) annexed hereto; provided that the
------------------- --------
aggregate amount of such Investments shall not exceed $5,000,000;
(xix) Company and its Subsidiaries may make and own Investments in
wholly owned Domestic Subsidiaries of Company consisting of intercompany
Indebtedness of such Subsidiaries converted to equity Investments, provided
--------
that the underlying intercompany Indebtedness was permitted hereunder at
the time of such conversion;
129
(xx) Company and its Subsidiaries may make and own Investments not
otherwise permitted under this subsection 7.3 so long as immediately prior
to the making of each such Investment the Excess Proceeds Amount exceeds
the amount of such Investment being made; and
(xxi) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $10,000,000.
7.4 Contingent Obligations.
----------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty,
and Holdings may become and remain liable with respect to Contingent
Obligations in respect of the Holdings Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of Letters of Credit;
(iii) Company may become and remain liable with respect to Contingent
Obligations under Hedge Agreements required under subsection 6.10;
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of (a) customary
indemnification and purchase price adjustment obligations incurred in
connection with Asset Sales or other sales of assets, (b) endorsements of
instruments for deposit or collection in the ordinary course of business,
and (c) standard contractual indemnities entered into in the ordinary
course of business;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under guarantees in the ordinary course
of business of the obligations of suppliers, customers, franchisees and
licensees of Holdings and its Subsidiaries;
(vi) Holdings and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
------------
hereto;
(vii) Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations arising under their subordinated guaranties of
the Senior Subordinated Notes and the Discount Notes as set forth in the
New Sub Debt Indentures;
(viii) Subject to the limitations set forth in subsection 7.1(xii),
Company and its Subsidiaries may become and remain liable with respect to
Contingent Obligations
130
consisting of guaranties by Company of Foreign Subsidiary Working Capital
Indebtedness (including letters of credit issued for the account of Company
and its Subsidiaries and in favor of lenders in respect of any such Foreign
Subsidiary Working Capital Indebtedness);
(ix) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of guarantees of obligations
of any Subsidiary of Company under any worker's compensation self-insurance
program of such Subsidiary administered in accordance with applicable law
relating to worker's compensation;
(x) Holdings and its Subsidiaries may become and remain liable with
respect to Contingent Obligations consisting of (a) guarantees by Holdings
and its Subsidiaries of Indebtedness, leases and other contractual
obligations permitted to be incurred by Company or its wholly owned
Domestic Subsidiaries and (b) guarantees by Foreign Subsidiaries of
Holdings of Indebtedness, leases and other contractual obligations
permitted to be incurred by other wholly owned Foreign Subsidiaries of
Holdings; and
(xi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations not otherwise permitted under this
subsection; provided that the maximum aggregate liability, contingent or
--------
otherwise, of Company and its Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal amount of
Indebtedness of Company and its Subsidiaries incurred pursuant to
subsection 7.1(ix), shall at no time exceed $20,000,000.
7.5 Restricted Junior Payments.
--------------------------
Holdings and Company shall not, and shall not permit any of their
respective Subsidiaries to, directly or indirectly, declare, order, pay, make or
set apart any sum for any Restricted Junior Payment; provided that (i) any
--------
Subsidiary of Company can pay dividends to Company or any wholly owned
Subsidiary of Company, (ii) Company may make dividends to Holdings necessary to
consummate the Recapitalization Transactions on the Closing Date, (iii) Holdings
and Company may make any Restricted Junior Payments in accordance with the terms
of, and only to the extent required by, the Recapitalization Agreement, (iv)
Company may make (x) regularly scheduled payments of interest in respect of the
Senior Subordinated Notes and the Discount Notes in accordance with the terms
of, and only to the extent required by, and subject to the subordination
provisions contained in, the Senior Subordinated Notes or the Discount Notes,
respectively, and the applicable New Sub Debt Indenture, and (y) so long as (1)
no Event of Default or Potential Event of Default shall have occurred and be
continuing or shall be caused thereby, (2) Holdings and Company shall be in
compliance, on a pro forma basis giving effect thereto, with the covenants set
forth in subsection 7.6 hereof and (3) the ratio of Consolidated Adjusted EBITDA
to Consolidated Cash Interest Expense (after giving effect thereto) shall equal
or exceed 3.5:1.00 (and Company shall have delivered to Administrative Agent an
Officer's Certificate (together with supporting information therefor), in form
and substance reasonably satisfactory to Administrative Agent, certifying to the
effect of clauses (1), (2) and (3)), regularly scheduled payments of interest
accruing after delivery of such certificate in
131
respect of the Junior Subordinated Seller Notes in accordance with the terms of,
and only to the extent required by, and subject to the subordination provisions
contained in, the Junior Subordinated Seller Notes, (v) Company may make
Restricted Junior Payments to Holdings to the extent required for Holdings to
make, and Holdings may make, regularly scheduled payments of interest in respect
of the Shareholder Subordinated Notes in accordance with the terms of, and only
to the extent required by, and subject to the subordination provisions contained
in, such Shareholder Subordinated Notes, as applicable, (vi) Company may make
scheduled interest payments in respect of Permitted Seller Notes permitted under
subsection 7.1(ix) in accordance with the terms of such Permitted Seller Notes;
(vii) so long as no Event of Default or Potential Event of Default has occurred
and is continuing or would be caused thereby, Company may make Restricted Junior
Payments of amounts to the extent required for Holdings to, and Holdings may,
repurchase, redeem, defease or otherwise prepay or retire any Existing
Subordinated Notes not tendered pursuant to the Debt Tender Offer on terms (set
forth in the Existing Subordinated Note Indenture or otherwise) no less
favorable in any material respect to Holdings, Company and Lenders than the
terms of the Debt Tender Offer, (viii) Company may make Restricted Junior
Payments to Holdings, and Holdings may make Restricted Junior Payments, (a) in
an aggregate amount not to exceed $1,500,000 in any Fiscal Year, to the extent
necessary to permit Holdings to pay general administrative costs and expenses
and (b) to the extent necessary to permit Holdings to discharge the consolidated
tax liabilities of Holdings and its Subsidiaries, (ix) so long as no Potential
Event of Default or Event of Default shall have occurred and be continuing,
Company may make Restricted Junior Payments to Holdings, and Holdings may make
Restricted Junior Payments, (a) to permit the payment of the ▇▇▇▇ Management
Fees under the ▇▇▇▇ Advisory Services Agreement and (b) to permit the payment of
the Harvard Management Fees under the Harvard Advisory Services Agreement, and
(x) Company may make Restricted Junior Payments to Holdings to the extent
required for Holdings to make, and Holdings may make, Restricted Junior Payments
in an aggregate amount not to exceed $12,500,000 in any Fiscal Year to the
extent necessary to make repurchases of capital stock (and options or warrants
to purchase such capital stock) of Holdings from employees (a) upon termination
(including by reason of death, disability or retirement) of such employees or
(b) pursuant to a contractual obligation of Holdings or any of its Subsidiaries,
provided that such amount shall be reduced by the aggregate amount of all
--------
principal and interest payments made on any Shareholder Subordinated Notes
permitted under subsection 7.1(xi) in such Fiscal Year; and, provided further,
-------- -------
that any Restricted Junior Payments by Company to Holdings permitted under this
subsection shall be applied by Holdings for the purposes specified in this
subsection.
7.6 Financial Covenants.
-------------------
A. Minimum Interest Coverage Ratio. Holdings and Company shall not
permit the ratio of (i) Consolidated Adjusted EBITDA to (ii) Consolidated
Interest Expense (excluding therefrom, for purposes of this subsection 7.6A
---------
only, the amount of any amortization of deferred financing costs, interest on
deferred compensation or payments made to obtain Interest Rate Agreements which
would otherwise be included in Consolidated Interest Expense) for any four-
Fiscal Quarter period ending during any of the periods set forth below to be
less than the correlative ratio indicated:
132
===============================================
Minimum
Interest
Coverage
Period Ratio
===============================================
Closing Date - 8/15/00 1.5:1
-----------------------------------------------
8/16/00 - 5/15/01 1.6:1
-----------------------------------------------
5/16/01 - 2/15/02 1.7:1
-----------------------------------------------
2/16/02 - 11/15/02 1.8:1
-----------------------------------------------
11/16/02 and thereafter 1.9:1
===============================================
B. Maximum Leverage Ratio. Holdings and Company shall not permit the
Leverage Ratio of the last day of any Fiscal Quarter ending during any of the
periods set forth below to exceed the correlative ratio indicated:
===============================================
Maximum
Period Leverage Ratio
===============================================
Closing Date - 11/15/98 7.4:1
-----------------------------------------------
11/16/98 - 2/15/99 7.3:1
-----------------------------------------------
2/16/99 - 8/15/99 7.0:1
-----------------------------------------------
8/16/99 - 11/15/99 6.9:1
-----------------------------------------------
11/16/99 - 2/15/00 6.8:1
-----------------------------------------------
2/16/00 - 5/15/00 6.7:1
-----------------------------------------------
5/16/00 - 8/15/00 6.6:1
-----------------------------------------------
8/16/00 - 11/15/00 6.5:1
-----------------------------------------------
11/16/00 - 5/15/01 6.1:1
-----------------------------------------------
5/16/01 - 8/15/01 6.0:1
-----------------------------------------------
8/16/01 - 11/15/01 5.9:1
-----------------------------------------------
11/16/01 - 2/15/02 5.6:1
-----------------------------------------------
2/16/02 - 8/15/02 5.5:1
-----------------------------------------------
8/16/02 - 11/15/02 5.4:1
-----------------------------------------------
11/16/02 and thereafter 5.1:1
===============================================
133
C. Minimum Consolidated Adjusted EBITDA. Holdings and Company shall not permit
Consolidated Adjusted EBITDA for any four-Fiscal Quarter period ending during
any period set forth below to be less than the correlative amount indicated:
================================================
Minimum
Consolidated Adjusted
Period EBITDA
================================================
Closing Date - 2/15/99 $ 92,500,000
------------------------------------------------
2/16/99 - 5/15/99 $ 95,000,000
------------------------------------------------
5/16/99 - 8/15/99 $ 97,000,000
------------------------------------------------
8/16/99 - 2/15/00 $ 97,500,000
------------------------------------------------
2/16/00 - 5/15/00 $ 99,500,000
------------------------------------------------
5/16/00 - 8/15/00 $101,000,000
------------------------------------------------
8/16/00 - 11/15/00 $104,000,000
------------------------------------------------
11/16/00 - 2/15/01 $105,000,000
------------------------------------------------
2/16/01 - 5/15/01 $107,500,000
------------------------------------------------
5/16/01 - 8/15/01 $109,000,000
------------------------------------------------
8/16/01 - 11/15/01 $111,500,000
------------------------------------------------
11/16/01 - 2/15/02 $113,000,000
------------------------------------------------
2/16/02 - 5/15/02 $115,000,000
------------------------------------------------
5/16/02 - 8/15/02 $116,000,000
------------------------------------------------
8/16/02 - 11/15/02 $118,000,000
------------------------------------------------
11/16/02 and thereafter $120,000,000
================================================
D. Certain Calculations. With respect to any period during which a Permitted
Acquisition occurs, for purposes of determining compliance with the financial
covenants set forth in this subsection 7.6, Consolidated Adjusted EBITDA and
Consolidated Interest Expense shall be calculated with respect to such periods
and such New Business on a pro forma basis (including pro forma adjustments
arising out of events which are directly attributable to a specific transaction,
are factually supportable and are expected to have a continuing impact, in each
case determined on a basis consistent with Article 11 of Regulation S-X
promulgated under the Securities Act and as interpreted by the staff of the
Securities and Exchange Commission as of January 1, 1997, which would include
cost savings resulting from head count reduction, closure of facilities and
similar restructuring charges whether (x) resulting from decisions made
134
by Company or (y) implemented by the management of the New Business within the
six-month period immediately preceding the closing of such Permitted Acquisition
(provided that the cost savings described in clause (y) are supportable and
quantifiable by the underlying accounting records of such business), which pro
forma adjustments shall be certified by the principal financial officer or
principal accounting officer of Company) using the historical financial
statements of the New Business so acquired or to be acquired and the
consolidated financial statements of Holdings and its Subsidiaries which shall
be reformulated (i) as if such Permitted Acquisition, and any acquisitions which
have been consummated during such period, and any Indebtedness or other
liabilities incurred in connection with any such acquisition had been
consummated or incurred at the beginning of such period (and assuming that such
Indebtedness bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted average of the interest
rates applicable to outstanding Loans during such period), and (ii) otherwise in
conformity with certain procedures to be agreed upon between Administrative
Agent and Company, all such calculations to be in form and substance reasonably
satisfactory to Administrative Agent.
7.7 Restriction on Fundamental Changes; Asset Sales and Recapitalizations.
---------------------------------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to, alter
the corporate, capital or legal structure of Holdings 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) any Subsidiary of Company may be merged with or into Company or
any wholly owned Subsidiary Guarantor, or be liquidated, wound up or
dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any wholly owned
Subsidiary Guarantor; provided that, in the case of such a merger involving
--------
Company, Company shall be the continuing or surviving corporation, and in
the case of any other such merger, such wholly owned Subsidiary Guarantor
shall be the continuing or surviving corporation;
(ii) any Foreign Subsidiary of Company may be merged with or into any
wholly owned Foreign Subsidiary, 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 any wholly owned Foreign Subsidiary; provided
--------
that (i) in the case of such a merger, such wholly owned Foreign Subsidiary
shall be the continuing or surviving corporation and (ii) in each case, the
stock of such wholly owned Foreign Subsidiary is pledged pursuant to, and
to the extent required under, the Collateral Documents;
135
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 7.8;
(iv) Company and its Subsidiaries may dispose of obsolete,
uneconomical, negligible, worn out or surplus property (including
Intellectual Property) in the ordinary course of business;
(v) 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;
(vi) subject to subsection 7.12, Company and its Subsidiaries may
make Asset Sales of assets having a fair market value not in excess of
$20,000,000; provided that (x) the consideration received for such assets
--------
shall be in an amount at least equal to the fair market value thereof; (y)
not less than 80% of the consideration received shall be cash; and (z) the
proceeds of such Asset Sales shall be applied as required by subsection
2.4B(iii)(a);
(vii) Company and its Subsidiaries may sell or discount, in each case
without recourse, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection thereof;
provided that the aggregate amount of such accounts receivable sold
--------
pursuant to this clause (vii) shall not exceed in any Fiscal Year 10% of
the accounts receivable of Company and its Subsidiaries recorded for the
preceding Fiscal Year;
(viii) Company and its Subsidiaries may sell or exchange specific
items of equipment, so long as the purpose of each such sale or exchange is
to acquire (and results within 90 days of such sale or exchange in the
acquisition of) replacement items of equipment which are the functional
equivalent of the item of equipment so sold or exchanged;
(ix) Company and its Subsidiaries may, in the ordinary course of
business, license as licensee or licensor patents, trademarks, copyrights
and know-how to or from third Persons, so long as any such license by
Company or any of its Subsidiaries in its capacity as licensor is permitted
to be assigned pursuant to the Collateral Documents (to the extent that a
security interest in such patents, trademarks, copyrights and know-how is
granted thereunder) and does not otherwise prohibit the granting of a Lien
by Company or any of its Subsidiaries pursuant to the Collateral Documents
in the Intellectual Property covered by such license;
(x) Company and its Subsidiaries may sell or otherwise transfer
inventory to their respective Subsidiaries for resale by such Subsidiaries,
and Subsidiaries of Company may sell or otherwise transfer inventory to
Company for resale by Company so long as the security interest granted to
the Collateral Agent pursuant to the Collateral Documents
136
in the inventory so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such transfer);
(xi) Company may contribute cash to one or more wholly owned
Domestic Subsidiaries formed after the Closing Date, so long as the
aggregate amount of such cash so contributed to each such Domestic
Subsidiary does not exceed $1,000,000;
(xii) Company and its Domestic Subsidiaries may transfer assets
(other than inventory) to wholly owned Foreign Subsidiaries so long as (x)
the aggregate fair market value of all such assets (other than intellectual
property) so transferred (determined in good faith by the Board of
Directors or senior management of Company) to all such Foreign Subsidiaries
on and after the Closing Date does not exceed $2,000,000 and (y) the
aggregate fair market value of all Intellectual Property so transferred
(determined in good faith by the Board of Directors or senior management of
Company) to all such Foreign Subsidiaries on and after the Closing Date
does not exceed $1,000,000;
(xiii) any Domestic Subsidiary of Company may transfer assets (other
than accounts receivable and inventory) to Company or to any other wholly
owned Domestic Subsidiary of Company so long as the security interests
granted to Collateral Agent of Lenders pursuant to the Collateral Documents
in the assets so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior to
such transfer); and
(xiv) Company or any Subsidiary of Company may make acquisitions of
assets and businesses (including acquisitions of the capital stock or other
equity interests of another Person), provided that:
--------
(a) immediately prior to and after giving effect to any such
acquisition, Company and its Subsidiaries shall be in compliance with
the provisions of subsection 7.13 hereof;
(b) if such acquisition is structured as a stock acquisition,
then either (A) the Person so acquired becomes a wholly owned
Subsidiary of Company or (B) such Person is merged with and into
Company or a wholly owned Subsidiary of Company (with Company or such
wholly owned Subsidiary being the surviving corporation in such
merger), and in any case, all of the provisions of subsection 6.8 have
been complied with in respect of such Person;
(c) the only consideration paid in connection with such
Permitted Acquisition shall consist of cash, Holdings Common Stock or
Permitted Seller Notes;
(d) (1) Company shall be in compliance, on a pro forma basis
giving effect to the proposed acquisition, with the covenants set
forth in subsection 7.6 hereof, (2) the ratio (calculated on a pro
forma basis giving effect to the proposed
137
acquisition) of (x) the principal amount of any Revolving Loans
borrowed to finance such acquisition to (y) the New Business EBITDA of
the acquired business shall not exceed 3.5 to 1.0, (3) the ratio
(calculated on a pro forma basis giving effect to the proposed
acquisition) of (x) the principal amount of all Indebtedness incurred
by Holdings and its Subsidiaries to finance such acquisition plus all
----
Indebtedness of such New Business existing at the time of such
acquisition for which Holdings or any of its Subsidiaries shall be
liable immediately following such acquisition, to (y) the New Business
EBITDA of the acquired business shall not exceed 5.5 to 1.0, and (4)
no Event of Default or Potential Event of Default shall have occurred
and be continuing at the time of such acquisition or shall be caused
thereby; and Company shall have delivered to Administrative Agent an
Officer's Certificate (together with supporting information therefor),
in form and substance reasonably satisfactory to Administrative Agent,
certifying as to the foregoing; and
(e) any assets acquired pursuant to such acquisition shall be
subject to a First Priority Lien in favor of Collateral Agent on
behalf of Lenders pursuant to the Collateral Documents;
(xv) Holdings and its Subsidiaries may consummate the
Recapitalization Transactions:
(xvi) Holdings may issue Holdings Common Stock to the extent
otherwise not prohibited under the provisions hereof.
7.8 Consolidated Capital Expenditures.
---------------------------------
A. Holdings and Company shall not, and shall not permit their respective
Subsidiaries to, make or incur Consolidated Capital Expenditures, in any Fiscal
Year indicated below, in an aggregate amount in excess of the corresponding
amount (as adjusted in accordance with the provisos hereto, the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
--------
Fiscal Year shall be increased by an amount equal to the lesser of (x) the
excess, if any, of the Maximum Consolidated Capital Expenditures Amount for the
previous Fiscal Year (prior to adjustment in accordance with this proviso) over
the actual amount of Consolidated Capital Expenditures for such previous Fiscal
Year and (y) 50% of the Maximum Consolidated Capital Expenditures Amount (prior
to adjustment in accordance with this proviso) for such previous Fiscal Year
(the amount of such increase described in this proviso being the "Carryforward"
from such preceding Fiscal Year):
138
=====================================================
Maximum Consolidated
Fiscal Year Capital Expenditures
=====================================================
1998 $25,500,000
-----------------------------------------------------
1999 $19,000,000
-----------------------------------------------------
2000 $18,500,000
-----------------------------------------------------
2001 $20,500,000
-----------------------------------------------------
2002 and thereafter $23,000,000
=====================================================
; and provided further, that the Maximum Consolidated Capital Expenditures
-------- -------
Amount for each Fiscal Year shall be increased upon the consummation of the
acquisition of a New Business as follows:
(i) for the Fiscal Year during which such acquisition is consummated,
the Maximum Consolidated Capital Expenditures Amount shall be increased by
an amount equal to the product of (a) a fraction obtained by dividing the
number of days remaining in such Fiscal Year (following such acquisition)
by 365, multiplied by (b) 2.0% of the actual historical revenues of the New
-------------
Business for the most recently ended twelve-month period (the "Acquired
LTM Revenue") prior to such acquisition; and
(ii) for each Fiscal Year thereafter, the Maximum Consolidated Capital
Expenditures Amount shall be increased by an amount equal to 2.0% of the
Acquired LTM Revenue of such New Business.
Notwithstanding anything to the contrary contained herein, to the extent
any EITF 97-13 Expenditures, Year 2000 Expenditures or Other MIS Expenditures
are added back to Consolidated Adjusted EBITDA by virtue of Schedule 1.1(i),
---------------
such amounts added in calculating Consolidated Adjusted EBITDA shall be added to
Consolidated Capital Expenditures for purposes of determining compliance with
this subsection 7.8A.
B. Company and its Subsidiaries may make additional Consolidated Capital
Expenditures consisting of MIS Upgrade Expenditures at any time during Fiscal
Years 1998 through 2001 in an aggregate amount for all such Fiscal Years not to
exceed $12,000,000, and in an aggregate amount for any such Fiscal Year not to
exceed 75% of such amount (it being understood that MIS Upgrade Expenditures may
exceed the amounts set forth in this subsection 7.8B so long as Consolidated
Capital Expenditures, including any such excess, do not exceed the limitations
set forth in subsection 7.8A).
C. Notwithstanding anything in this subsection to the contrary, so long
as no Event of Default or Potential Event of Default shall have occurred and be
continuing or shall be caused thereby, Company and its Subsidiaries may make
Consolidated Capital Expenditures at any time in an aggregate amount equal to
the Excess Proceeds Amount at such time (which Consolidated
139
Capital Expenditures shall not be included in any determination of Consolidated
Capital Expenditures under subsection 7.8A).
7.9 Sales and Lease-Backs.
---------------------
Except for the transactions described on Schedule 7.9 annexed hereto,
------------
Holdings shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, (i) which Holdings or any of its Subsidiaries has sold or transferred
or is to sell or transfer to any other Person (other than Holdings or any of its
Subsidiaries) or (ii) which Holdings or any of its Subsidiaries intends to use
for substantially the same purpose as any other property which has been or is to
be sold or transferred by Holdings or any of its Subsidiaries to any Person
(other than Holdings or any of its Subsidiaries) in connection with such lease.
Notwithstanding anything herein to the contrary, only 85% of the Net Asset Sale
Proceeds of the sale-leaseback transaction described on Schedule 7.9 shall be
------------
applied as required by subsection 2.4B(iii)(a).
7.10 Sale or Discount of Receivables.
-------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided, however, that Company and its Subsidiaries may, in the exercise of
-------- -------
their reasonable business judgment in connection with efforts to collect amounts
owed thereunder, discount or sell (to the extent permitted under subsection
7.7(vii)) for less than the face value thereof any accounts receivable.
7.11 Transactions with Shareholders and Affiliates.
---------------------------------------------
Holdings shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
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
Holdings or with any Affiliate of Holdings or of any such holder, on terms that
are less favorable to Holdings 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 Holdings and any of its wholly owned Subsidiaries or between
any of its wholly owned Subsidiaries, (ii) any payment from Company to Holdings
expressly permitted under subsection 7.5, (iii) the payment of Management Fees
to ▇▇▇▇ under the ▇▇▇▇ Advisory Services Agreement, (iv) the payment of Harvard
Management Fees under the Harvard Advisory Services Agreement, (v) any
employment agreement entered into by Holdings or any of its Subsidiaries in the
ordinary course of business, (vi) any issuance of capital stock of Holdings in
connection with employment arrangements, stock options and stock ownership plans
of Holdings or any of its Subsidiaries entered into in the ordinary course of
business, (vii) any of the Recapitalization Transactions,
140
or (viii) reasonable and customary fees paid to members of the Boards of
Directors of Holdings and its Subsidiaries.
7.12 Disposal of Subsidiary Stock.
----------------------------
Except for any sale of 100% of the capital stock or other equity Securities
of any of its Subsidiaries in compliance with the provisions of subsection
7.7(vi), Holdings shall not:
(i) directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity Securities of any
of its Subsidiaries, except to qualify directors if required by applicable
law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except to Company, another Subsidiary of Holdings (subject to
the restrictions on such disposition otherwise imposed hereinunder), or to
qualify directors if required by applicable law.
7.13 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 its Subsidiaries on the Closing Date and similar or
related or supportive businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders. Holdings shall engage in no business and
have no assets (including Intellectual Property) other than (i) owning the stock
of Company, (ii) the issuance of and activities related to the maintenance and
servicing of the Junior Subordinated Seller Notes and Shareholder Subordinated
Notes as permitted hereunder, (iii) the entering into, and the performance of
its obligations under, the Holdings Guaranty, the Holdings Pledge Agreement, the
Holdings Security Agreement, the Related Agreements to which it is a party, the
▇▇▇▇ Advisory Services Agreement and the AXEL Credit Documents, (iv) the receipt
of Cash dividends or Cash distributions from Company in accordance with the
provisions hereof, and (v) activities associated with expenses paid with any
dividends paid to Holdings which are permitted under subsection 7.5.
Notwithstanding the foregoing, Holdings may engage in activities incidental to
(a) the maintenance of its corporate existence in compliance with applicable
law, (b) legal, tax and accounting matters in connection with any of the
foregoing activities and (c) entering into, and performing its obligations
under, this Agreement and the Loan Documents to which it is a party.
7.14 Amendments or Waivers of Certain Agreements; Amendments of Documents
--------------------------------------------------------------------
Relating to Subordinated Indebtedness; "Designated Senior Debt".
---------------------------------------------------------------
A. Amendments or Waivers of Certain Agreements. None of Holdings,
Company nor any of their respective Subsidiaries will agree to any amendment to,
or waive any of its rights under, the ▇▇▇▇ Advisory Services Agreement, the
Harvard Advisory Services Agreement or any Related Agreement (other than any
Related Agreement evidencing or governing any
141
Subordinated Indebtedness) after the Closing Date if any such amendment or
waiver would, individually or in the aggregate, reasonably be expected to be
materially adverse to Lenders without in each case obtaining the prior written
consent of Requisite Lenders to such amendment or waiver.
B. Amendments of Documents Relating to Subordinated Indebtedness.
Holdings and Company shall not, and shall not permit any of their respective
Subsidiaries to, amend or otherwise change the terms of any Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Subordinated Indebtedness, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any event of
default or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions of such Subordinated Indebtedness (or of any
guaranty thereof), or change any collateral therefor (other than to release such
collateral), or if the effect of such amendment or change, together with all
other amendments or changes made, is to increase materially the obligations of
the obligor thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be materially adverse to Holdings, Company or Lenders.
C. Amendments of AXEL Credit Documents. Holdings and Company shall not,
and shall not permit any of their respective Subsidiaries to, amend or otherwise
change the terms of any of the AXEL Credit Documents, or make any payment
consistent with an amendment thereof or a change thereto, that would have the
effect of (i) changing (to earlier dates) any dates upon which payments of
principal or interest are due on the AXELs, (ii) reducing the percentage
specified in the definition of "Requisite Lenders" in the AXEL Credit
Agreement, or (iii) changing the prepayment provisions of the AXEL Credit
Agreement in a manner that disproportionately disadvantages the Lenders
relative to the lenders under the AXEL Credit Agreement or confers additional
rights on the lenders under the AXEL Credit Agreement which would be adverse to
Lenders, without the prior written consent of Requisite Lenders under this
Agreement.
D. Designation of "Designated Senior Debt". Holdings and Company shall
not designate any Indebtedness as "Designated Senior Debt" (as defined in the
New Sub Debt Indentures or the Junior Subordinated Seller Notes) for purposes of
the New Sub Debt Indentures or the Junior Subordinated Seller Notes without the
prior written consent of Requisite Lenders.
7.15 Fiscal Year
-----------
Holdings and Company shall not change their Fiscal Year-end from the Sunday
nearest to November 30.
142
SECTION 8.
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur:
8.1 Failure to Make Payments When Due.
---------------------------------
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an 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 three days after
the date due; or
8.2 Default in Other Agreements.
---------------------------
(i) Failure of Holdings or any of its Subsidiaries to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an individual principal amount of $5,000,000
or more or with an aggregate principal amount of $10,000,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings or any of its Subsidiaries with respect to any other
material term of (a) one or more items of 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 Holdings or Company to perform or comply with any term or
condition contained in subsection 2.5 or 6.2 or Section 7 of this Agreement;
provided, however, that such failure with respect to the covenants contained in
-------- -------
subsections 7.1, 7.2, 7.3 and 7.4 shall not constitute an Event of Default for
ten days after such failure so long as Company is diligently pursuing the cure
of such failure; or
8.4 Breach of Warranty.
------------------
Any representation, warranty, certification or other statement made by
Holdings or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Holdings or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
143
8.5 Other Defaults Under Loan Documents.
-----------------------------------
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or any of the other Loan Documents, other than
any such term referred to in any other subsection of this Section 8, and such
default shall not have been remedied or waived within 30 days after the earlier
of (i) an officer of Holdings, Company or such Loan Party becoming aware of such
default or (ii) receipt by Holdings, 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 Holdings or any of its Subsidiaries (other than
Immaterial Subsidiaries) in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (ii) an
involuntary case shall be commenced against Holdings or any of its Subsidiaries
(other than Immaterial Subsidiaries) under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Holdings or any of its Subsidiaries
(other than Immaterial 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 Holdings or
any of its Subsidiaries (other than Immaterial Subsidiaries) for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Holdings or any of its Subsidiaries (other than Immaterial
Subsidiaries), and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
---------------------------------------------------
(i) Holdings or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Holdings or any of its Subsidiaries (other than Immaterial Subsidiaries) shall
make any assignment for the benefit of creditors; or (ii) Holdings or any of its
Subsidiaries (other than Immaterial Subsidiaries) shall be unable, or shall fail
generally, or shall admit in writing its inability, to pay its debts as such
debts become due; or the Board of Directors of Holdings or any of 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
144
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 $5,000,000 or (ii)
in the aggregate at any time an amount in excess of $10,000,000 (in either case
not adequately covered by insurance as to which a solvent and unaffiliated
insurance company has acknowledged coverage) shall be entered or filed against
Holdings or 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 Holdings or any of
its Subsidiaries decreeing the dissolution or split up of Holdings or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
8.10 Employee Benefit Plans.
----------------------
There shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
Holdings or any of its Subsidiaries in excess of $7,500,000 during the term of
this Agreement; or
8.11 Change in Control.
-----------------
(i) Holdings shall cease to own 100% of the capital stock of Company; or
(ii) ▇▇▇▇ and the Other Investors shall cease to have a presently exercisable
right to vote at least 51% of all issued and outstanding equity Securities of
Holdings entitled (without regard to the occurrence of any contingency) to vote
for the election of members of the Board of Directors of Holdings; or (iii) ▇▇▇▇
and the Other Investors shall cease to beneficially own at least 51% of the
economic value of Holdings; or (iv) a majority of the members of the Board of
Directors of Company shall not be Continuing Directors; or (v) ▇▇▇▇ shall (a)
cease to have a presently exercisable right to vote more of the issued and
outstanding equity Securities of Holdings entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
of Directors of Holdings than any one of the Other Investors, or (b) cease to
beneficially own a greater percentage of the economic value of Holdings than the
percentage beneficially owned by any one of the Other Investors; or (vi) the
ratio of (a) either (x) the percentage of the issued and outstanding equity
Securities of Holdings or (y) the percentage of the economic value of Holdings,
in each case held by ▇▇▇▇ at any time, to (b) either (x) the percentage of the
issued and outstanding equity Securities of Holdings or (y) the percentage of
the economic value of Holdings, in each case held by ▇▇▇▇ on the Closing Date
after giving effect to the Recapitalization Transactions, shall at any time be
less than .50:1.0; or (vii) a "Change of Control" under either of the New Sub
Debt Indentures shall occur; or
145
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
-------------------------------------------------------------------------
At any time after the execution and delivery thereof, (i) any Guaranty for
any reason, other than the satisfaction in full of all Obligations (other than
inchoate indemnification obligations with respect to claims, losses or
liabilities which have not yet arisen and are not yet due and payable), 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 (other than inchoate indemnification
obligations with respect to claims, losses or liabilities which have not yet
arisen and are not yet due and payable) 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 having a fair market value, individually or in the aggregate,
exceeding $2,000,000, 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 with respect to future advances by Lenders, under any Loan Document to
which it is a party; or
8.13 Failure to Consummate Recapitalization or Merger.
------------------------------------------------
The Recapitalization Transactions or the Merger shall not be consummated in
accordance with this Agreement and the applicable Related Agreements on the
Closing Date, or the Recapitalization Transactions 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 Holdings and Company, and the obligation of each Lender to make any
Loan, the obligation of Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall thereupon
terminate, and (ii) upon the occurrence and during the continuation of any other
Event of Default, Administrative Agent shall, upon the written request 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, the obligation of Administrative
Agent to issue any Letter of Credit and the right of any Lender to issue any
Letter of Credit hereunder shall thereupon terminate; provided that the
--------
foregoing shall not affect
146
in any way the obligations of Lenders under subsection 3.3C(i) or the
obligations of Lenders to purchase participations in any unpaid Swing Line Loans
as provided in subsection 2.1A(iii).
Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Collateral Agent pursuant to the terms of the
Intercreditor 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 Holdings or Company, and such provisions
shall not at any time be construed so as to grant Holdings or 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.
AGENTS
9.1 Appointment.
-----------
A. Appointment of Agents. GSCP is hereby appointed Syndication Agent
hereunder, and each Lender hereby authorizes Syndication Agent to act as its
agent in accordance with the terms of this Agreement and the other Loan
Documents. ▇▇▇▇▇▇ Guaranty 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. BTCo. is hereby appointed Documentation
Agent hereunder. Each Lender hereby authorizes and confirms the appointment by
Administrative Agent of ▇▇▇▇▇▇ Guaranty as Collateral Agent under the
Intercreditor Agreement and each Lender hereby authorizes Collateral Agent to
act as its agent in accordance with the terms of the Intercreditor Agreement and
the other Loan Documents. Each Agent hereby agrees to act upon the express
conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 9 are solely for the benefit of
Agents and Lenders and Company shall have no rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties under
this Agreement, each Agent
147
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Holdings or any of its Subsidiaries. Each of Syndication Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the date on
which Syndication Agent notifies Company that it has concluded its primary
syndication of the Loans and Commitments, all obligations of GSCP, in its
capacity as Syndication Agent hereunder, shall terminate. BTCo., in its
capacity as Documentation Agent, shall have no obligations hereunder.
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction 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 as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "Supplemental Collateral
Agent" and collectively as "Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental Collateral
Agent with respect to any Collateral, (i) each and every right, power, privilege
or duty expressed or intended by this Agreement or any of the other Loan
Documents to be exercised by or vested in or conveyed to Administrative Agent
with respect to such Collateral shall be exercisable by and vest in such
Supplemental Collateral Agent to the extent, and only to the extent, necessary
to enable such Supplemental Collateral Agent to exercise such rights, powers and
privileges with respect to such Collateral and to perform such duties with
respect to such Collateral, and every covenant and obligation contained in the
Loan Documents and necessary to the exercise or performance thereof by such
Supplemental Collateral Agent shall run to and be enforceable by either
Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Holdings, Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Holdings or Company shall,
or shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental
148
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative Agent until the appointment of a new Supplemental Collateral
Agent.
9.2 Powers and Duties; General Immunity.
-----------------------------------
▇. ▇▇▇▇▇▇; Duties Specified. Each Lender irrevocably authorizes each
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 such Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Each Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan Documents. Each Agent
may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. No Agent shall have, by reason of this
Agreement or any of the other Loan Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon any Agent any obligations in respect of this Agreement or any of the
other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or 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 any of Agent to Lenders or by or on behalf of
Holdings or Company to any Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Holdings or Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or 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. None of Agents nor any of their respective
officers, partners, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any Agent under or in connection with any of
the Loan Documents except to the extent caused by such Agent's gross negligence
or willful misconduct. Each Agent shall be entitled to refrain from any act or
the 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 such Agent, in the case of any Agent other than the Collateral 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) or, in the case of the Collateral Agent, in
149
accordance with the Intercreditor Agreement, and, upon receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be)
or in accordance with the Intercreditor Agreement, as the case may be, such
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) each
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 Holdings and its Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents, in the case of any Agent other
than the Collateral Agent, in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) or, in the case of the Collateral Agent, in accordance
with the Intercreditor Agreement.
D. 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, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity. Any 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 Holdings, Company or any of their
Affiliates as if it were not performing the duties specified herein, and may
accept fees and other consideration from Holdings and 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 Credit
-------------------------------------------------------------------------
worthiness.
----------
Each Lender represents and warrants that it has made its own independent
investigation of the financial condition and affairs of Holdings 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 Holdings and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
150
9.4 Right to Indemnity.
------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company or Holdings, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including counsel fees and disbursements) or disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
such Agent in exercising its powers, rights and remedies or performing its
duties hereunder or under the other Loan Documents or otherwise in its capacity
as such Agent in any way relating to or arising out of this Agreement or the
other Loan Documents; provided that no Lender shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct. If any indemnity furnished to any Agent for
any purpose shall, in the opinion of such Agent, be insufficient or become
impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided that in no event shall this sentence require any Lender to
--------
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided, further, that this sentence shall not be
--------
deemed to require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement described in the proviso to the immediately preceding sentence.
9.5 Successor Administrative Agent and Swing Line Lender.
----------------------------------------------------
A. Successor Administrative Agent. Administrative Agent may resign at
any time by giving 30 days' prior written notice thereof to Lenders and Company,
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). 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.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of ▇▇▇▇▇▇ Guaranty or its successor as Swing Line Lender,
and any successor Administrative Agent appointed pursuant to subsection 9.5A
shall, upon its acceptance of such appointment, become the successor Swing Line
Lender for all purposes hereunder. In such event (i) Company shall
151
prepay any outstanding Swing Line Loans made by the retiring or removed Agent in
its capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender any Swing
Line Note held by it to Company for cancellation, and (iii) if so requested by
the successor Administrative Agent and Swing Line Lender in accordance with
subsection 2.1E, Company shall issue a new Swing Line Note to the successor
Administrative Agent and Swing Line Lender substantially in the form of Exhibit
-------
IX annexed hereto, in the principal amount of the Swing Line Loan Commitment
--
then in effect and with other appropriate insertions.
9.6 Collateral Documents and Guaranty.
---------------------------------
Each Lender hereby further authorizes Administrative Agent, on behalf of
and for the benefit of Lenders, to enter into the Intercreditor Agreement, and
each Lender agrees to be bound by the terms of the Intercreditor Agreement;
provided that Administrative Agent shall not enter into or consent to any
--------
material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6). Each
Lender hereby further authorizes Collateral Agent (and under the terms of the
Intercreditor Agreement Collateral Agent is authorized), 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 the Lenders under the Guaranties,
and each Lender agrees to be bound by the terms of each Collateral Document and
each Guaranty; provided that Collateral Agent shall not enter into or consent to
--------
any material amendment, modification, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under subsection 10.6) ; provided
--------
further, however, that, without further written consent or authorization from
------- -------
Lenders, Collateral 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 as permitted
or required under the Intercreditor Agreement or the Collateral Documents or to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under subsection 10.6) have otherwise consented or (b) release any
Subsidiary Guarantor from the Subsidiary Guaranty if all of the capital stock of
such Subsidiary Guarantor is sold to any Person pursuant to a sale or other
disposition permitted hereunder or as permitted under the Intercreditor
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under subsection 10.6) have otherwise consented;
provided, however, that nothing in this subsection shall require consent to
-------- -------
release from the Subsidiary Guaranty any Person which, immediately after such
sale, shall be a Domestic Subsidiary of Holdings which is obligated to and will
enter into the Subsidiary Guaranty. Anything contained in any of the Loan
Documents to the contrary notwithstanding, Company, Administrative Agent,
Collateral Agent and each Lender hereby agree that (X) no Lender shall have any
right individually to realize upon any of the Collateral under any Collateral
Document or to enforce the Subsidiary Guaranty, it being understood and agreed
that all powers, rights and remedies under the Collateral Documents and the
Guaranties may be exercised solely by Collateral Agent for the benefit of
Secured Parties in accordance with the terms thereof, and (Y) in the event of a
foreclosure by Collateral Agent on any of the Collateral pursuant to a public or
private sale, Collateral Agent or any Secured Party may be
152
the purchaser of any or all of such Collateral at any such sale and Collateral
Agent, as agent for and representative of Secured Parties (but not any Secured
Party or Secured Parties 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 Collateral 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 other Obligations owed to it; provided
--------
that no such sale, assignment, transfer or participation shall, without the
consent of Company, require Company to file a registration statement with the
Securities and Exchange Commission or apply to qualify such sale, assignment,
transfer or participation under the securities laws of any state; provided,
--------
further that no such sale, assignment or transfer described in clause (i) above
-------
shall be effective unless and until an Assignment Agreement effecting such sale,
assignment or transfer shall have been accepted by Administrative Agent and
recorded in the Register as provided in subsection 10.1B(ii); provided, further
-------- -------
that no such sale, assignment, transfer or participation of any Letter of Credit
or any participation therein may be made separately from a sale, assignment,
transfer or participation of a corresponding interest in the Revolving Loan
Commitment and the Revolving Loans of the Lender effecting such sale,
assignment, transfer or participation; and provided, further that, anything
-------- -------
contained herein to the contrary notwithstanding, the Swing Line Loan Commitment
and the Swing Line Loans of Swing Line Lender may not be sold, assigned or
transferred as described in clause (i) above to any Person other than a
successor Administrative Agent and Swing Line Lender to the extent contemplated
by subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer of, or any
granting of participations in, all or any part of its Commitments or the Loans,
the Letters of Credit or participations therein, or the other Obligations owed
to such Lender.
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
153
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); provided that, unless otherwise agreed
--------
to in writing by Company and Administrative Agent, the assigning Lender
shall have, immediately after giving effect to such assignment, not less
than an aggregate amount of $5,000,000 in Commitments, Loans and Letter of
Credit; and provided further, however, that (x) upon the occurrence and
-------- ------- -------
during the continuance of an Event of Default, or (y) in the case of
assignments by GSCP or ▇▇▇▇▇▇ Guaranty, or (z) in the case of an assignment
of a funded Tranche A Term Loan, an assignment in accordance with this
clause (b) may be made without the consent of Company or Administrative
Agent, upon the giving of notice to Company and Administrative Agent. To
the extent of any such assignment in accordance with either clause (a) or
(b) above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned. The
parties to each such assignment shall execute and deliver to Administrative
Agent, for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing and recordation fee of $500 in the
case of assignments pursuant to clause (a) above and assignments by GSCP or
▇▇▇▇▇▇ Guaranty, and $2000 in the case of all other assignments 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,
acceptance and recordation, from and after the effective date specified in
such Assignment Agreement, (y) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment Agreement, shall have the rights
and obligations of a Lender hereunder and (z) the assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (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 an Issuing Lender with respect to such
Letters of Credit until the cancellation or expiration of such Letters of
Credit and the reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the Commitment of such
assignee and any remaining Commitment of such assigning Lender and, if any
such assignment occurs after the issuance of any Notes hereunder, the
assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes, if any,
to Administrative Agent for cancellation, and thereupon new Notes shall, if
so requested by the assignee and/or the assigning Lenders in accordance
with Subsection 2.1E, be issued to the assignee and/or to the assigning
154
Lender, substantially in the form of Exhibit IV, Exhibit V or Exhibit VI
---------- --------- ----------
annexed hereto, as the case may be, with appropriate insertions, to reflect
the new Commitments and/or outstanding Tranche A Term Loan, as the case may
be, of the assignee and/or the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in Register.
-----------------------------------------------------------
Upon its receipt of an Assignment Agreement executed by an assigning Lender
and an assignee representing that it is an Eligible Assignee, together with
the processing and recordation 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 has 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), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to Company.
Administrative Agent shall maintain a copy of each Assignment Agreement
delivered to and accepted by it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation or (ii) a reduction of the principal amount
of or the rate of interest or fees payable on any Loan allocated to such
participation, and all amounts payable by Company hereunder (including amounts
payable to such Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be
determined as if such Lender had not sold such participation. Company and each
Lender hereby acknowledge and agree that, solely for purposes of subsections
10.4 and 10.5, (a) any participation will give rise to a direct obligation of
Company to the participant and (b) the participant shall be considered to be a
"Lender".
D. Assignments to Federal Reserve Banks and Fund Trustees. In addition
to the assignments and participations permitted under the foregoing provisions
of this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender, and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and with the consent of Company and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its Notes or Loans to its trustee in support of its obligations
to such trustee; 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 or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
155
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 10.19.
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 (A) 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 are 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
(requested by or for the benefit of Company), waivers or other modifications
thereto; (ii) all the costs of furnishing all opinions by counsel for Company
(including any opinions requested by Lenders as to any legal matters arising
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 with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Syndication Agent and counsel to
Administrative Agent (in each case including allocated costs of internal
counsel) in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments (requested by
or for the benefit of Company), waivers or other modifications thereto and any
other documents or matters requested by Company; (iv) all the reasonable costs
and reasonable expenses of creating and perfecting Liens in favor of Collateral
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums, and reasonable fees, expenses and disbursements of
counsel to Syndication Agent, counsel to Administrative Agent and counsel to
Collateral Agent and of counsel providing any opinions that Syndication Agent,
Administrative Agent, Collateral Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto; (v)
all the reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any auditors, accountants or appraisers and any
environmental or other consultants, advisors and agents employed or retained by
Administrative Agent or Syndication Agent and their respective counsel) of
obtaining and reviewing any appraisals provided for under subsection 6.9C, any
environmental audits or reports provided for under subsection 4.1K or 6.9B(ix)
and any audits or reports provided for under subsection 6.5B with respect to
Inventory and accounts receivable of Holdings and its Subsidiaries; (vi) all the
156
reasonable costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any consultants, advisors and agents employed or
retained by Administrative Agent or Collateral Agent and its counsel) in
connection with the custody or preservation of any of the Collateral; (vii) all
other reasonable costs and expenses incurred by Syndication Agent or
Administrative Agent in connection with the syndication of the Commitments and
the negotiation, preparation and execution of the Loan Documents and any
consents, amendments (requested by or for the benefit of Company), waivers or
other modifications thereto and the transactions contemplated thereby; and
(viii) 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 Syndication Agent, 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 in connection with the sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranties Subsidiary Guaranty) 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 are consummated, Company agrees to
defend (subject to Indemnitees' selection of counsel), indemnify, pay and hold
harmless Agents (including Collateral Agent) and Lenders, and the officers,
partners, directors, trustees, employees, agents and affiliates of any of Agents
(including Collateral 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 from the gross negligence, bad faith or
willful misconduct of that Indemnitee as determined by a final, non-appealable
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 disburse 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 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 Related Agreements or the
transactions contemplated hereby
157
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 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 Holdings 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.
10.4 Set-Off; Security Interest in Deposit Accounts.
----------------------------------------------
In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized by Company
at any time or from time to time subject to the consent of Collateral Agent,
without notice to Company or to any other Person (other than Collateral Agent),
any such notice being hereby expressly waived, to set off and to appropriate and
to apply any and all deposits (general or special, including Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts or payroll 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 which are
then due and payable to that Lender under this Agreement, the Letters of Credit
and participations therein and the other Loan Documents, including 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 that Lender shall have made any demand hereunder
which are then due and payable. Company hereby further grants to Collateral
Agent and each Lender a security interest in all deposits and accounts
maintained with Collateral Agent or such Lender as security for the Obligations.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.4 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Collateral
Agent any payments otherwise subject to the provisions of this subsection 10.4,
such payments shall not be subject to the provisions of this subsection 10.4.
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
158
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.
Company, the Lenders and Administrative Agent hereby acknowledge and agree
that the provisions of this subsection 10.5 are subject to the provisions of the
Intercreditor Agreement. To the extent that any Lender is required pursuant to
the provisions of the Intercreditor Agreement to turn over to the Collateral
Agent any payments otherwise subject to the provisions of this subsection 10.5,
such payments shall not be subject to the provisions of this subsection 10.5.
10.6 Amendments and Waivers.
----------------------
A. No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Company therefrom, shall in
any event be effective without the written concurrence of Requisite Lenders;
provided that no such amendment, modification, termination, waiver or consent
--------
shall, without the consent of each Lender (with Obligations directly affected in
the case of the following clause (i)): (i) extend the scheduled final maturity
of any Loan or Note, or waive, reduce or postpone any scheduled repayment set
forth in subsection 2.4A, or extend the stated expiration date of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date, or reduce the rate
of interest on any Loan (other than any waiver of any increase in the interest
rate applicable to any Loan pursuant to subsection 2.2E) or any commitment fees
or letter of credit fees payable hereunder, or extend the time for payment of
any such interest or fees, or reduce the principal amount of any Loan or any
reimbursement obligation in respect of any Letter of Credit, (ii) amend, modify,
159
terminate or waive any provision of this subsection 10.6, (iii) reduce the
percentage specified in the definition of "Requisite Lenders" (it being
understood that, with the consent of Requisite Lenders, additional extensions of
credit pursuant to this Agreement may be included in the determination of
"Requisite Lenders" on substantially the same basis as the Tranche A Term Loan
Commitments, the Tranche A Term Loans, the Revolving Loan Commitments and the
Revolving Loans are included on the Closing Date), (iv) release all or
substantially all of the Collateral or Holdings from the Holdings Guaranty all
or substantially all of the Subsidiary Guarantors from the Subsidiary Guaranty
except as expressly provided in the Loan Documents, or (v) consent to the
assignment or transfer by Company of any of its rights and obligations under
this Agreement; provided, further that no such amendment, modification,
-------- -------
termination or waiver shall (1) increase the Commitments of any Lender over the
amount thereof then in effect, or extend the duration thereof, without the
consent of such Lender (it being understood that no amendment, modification or
waiver of any condition precedent, covenant, Potential Event of Default or Event
of Default shall constitute an increase or extension in the Commitment of any
Lender, and that no increase in the available portion of any Commitment of any
Lender shall constitute an increase in such Commitment of such Lender); (2)
amend, modify, terminate or waive any provision of subsection 2.1A(iii) or any
other provision of this Agreement relating to the Swing Line Loan Commitment or
the Swing Line Loans without the consent of Swing Line Lender; (3) amend the
definition of "Requisite Class Lenders" without the consent of Requisite Class
Lenders of each Class, or alter the required application of any repayments or
prepayments as between Classes pursuant to subsection 2.4B(iv) without the
consent of Requisite Class Lenders of each Class which is being allocated a
lesser repayment or prepayment as a result thereof (although Requisite Lenders
may waive, in whole or in part, any mandatory prepayment so long as the
application, as between Classes, of any portion of such prepayment which is
still required to be made is not altered); (4) amend, modify, terminate or waive
any obligation of Lenders relating to the purchase of participations in Letters
of Credit as provided in subsection 3.1C without the written concurrence of
Administrative Agent and of each Issuing Lender which has a Letter of Credit
then outstanding or which has not been reimbursed for a drawing under a Letter
of Credit issued it; or (5) amend, modify, terminate or waive any provision of
Section 9 as the same applies to any Agent (including the Collateral Agent), or
any other provision of this Agreement as the same applies to the rights or
obligations of any Agent (including the Collateral Agent), in each case without
the consent of such Agent (including the Collateral Agent).
B. 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.
160
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, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Syndication Agent or
--------
Administrative Agent shall not be effective until received. For the purposes
hereof, the address of each party hereto shall be as set forth under such
party's name on the signature pages hereof or (i) as to Holdings, Company and
Administrative Agent, such other address as shall be designated by such Person
in a written notice delivered to the other parties hereto and (ii) as to each
other party, such other address as shall be designated by such party in a
written notice delivered to Administrative Agent.
10.9 Survival of Representations, Warranties and Agreements.
------------------------------------------------------
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company and Holdings 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.
161
10.11 Marshalling; Payments Set Aside.
-------------------------------
Neither Administrative Agent nor any Lender shall be under any obligation
to marshal any assets in favor of Company or any other party or against or in
payment of any or all of the Obligations. To the extent that Company makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent for the benefit of Lenders), or Administrative Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
10.12 Severability.
------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders' Rights.
----------------------------------------------------------
The obligations of Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
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 NEW YORK (INCLUDING SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW
▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇), ▇▇▇▇▇▇▇ 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 assignment are subject to subsection 10.1). Neither
Holdings' or Company's rights or obligations hereunder nor any interest therein
may be assigned or delegated by Holdings or Company without the prior written
consent of all Lenders.
10.17 Consent to Jurisdiction and Service of Process.
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY OR HOLDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY AND HOLDINGS, FOR THEMSELVES AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY
(I) ACCEPT GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVE ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREE THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO HOLDINGS AND COMPANY AT THEIR ADDRESSES PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV) AGREE THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREE THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREE THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND
163
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL
OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 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
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 10.18 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.
10.19 Confidentiality.
---------------
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with prudent lending
or investing practices, it being understood and agreed by Company and Holdings
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 by any direct or indirect
contractual counterparties (or the professional advisors thereto) in swap
agreements (provided that such swap counterparties and advisors are advised of
--------
and agree to be bound by the provisions of this subsection 10.19) or disclosures
required or requested by any governmental agency or representative thereof or by
the NAIC or pursuant to legal process; provided that, unless specifically
--------
prohibited by applicable law or court order, each Lender shall notify Company of
any request by any governmental agency or representative thereof (other than
any such request in connection with any examination of the financial
164
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 Holdings or any of its Subsidiaries.
10.20 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.
[Remainder of page intentionally left blank]
165
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:
SEALY MATTRESS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name:
Title:
HOLDINGS:
SEALY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name:
Title:
Notice Address:
Sealy Corporation
Halle Building, 10th Floor
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ Capital, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-1
AGENTS AND LENDERS:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
individually and as Syndication Agent
By:
--------------------------------
Authorized Signatory
Notice Address:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: 212-357-1500
S-2
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Administrative Agent
By:
-------------------------------------
Name:
Title:
Notice Address:
▇▇▇▇▇▇ Guaranty of New York
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Guaranty of New York
c/o ▇.▇. ▇▇▇▇▇▇ Services Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Credit Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
S-3
BANKERS TRUST COMPANY,
individually and as Documentation Agent
By: /s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
-----------------------------------------
Name:
Title:
Notice Address:
Bankers Trust
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
S-4
SCHEDULE 1.1(i)
Addbacks to EBITDA
------------------
Without duplication:
(i) MIS Upgrade Expenditures, Year 2000 Expenditures, EITF 97-13
Expenditures and Other MIS Expenditures, in each case to the extent
deducted in determining Consolidated Net Income;
(ii) any bad debt and factoring losses incurred specifically with respect
to the bankruptcy of ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇;
(iii) items classified as unusual or nonrecurring gains and losses
(including restructuring costs, severance and relocation costs, any
one-time expenses related to (or resulting from) any merger,
recapitalization or Permitted Acquisition);
(iv) one-time compensation charges, including any arising from any
recapitalization of Holdings' special bonus program or existing
stock options, performance share or restricted stock plans resulting
from any merger or recapitalization transaction or expensed in any
period prior to the consummation of the Merger;
(v) non-recurring cash restructuring charges incurred in connection with
the Recapitalization Transactions and related transactions to the
extent deducted in determining Consolidated Net Income; provided
--------
that such charges are incurred on or before December 18, 1998 and do
not exceed in the aggregate the sum of (a) premiums paid in
connection with the Debt Tender Offer plus (b) $1,000,000;
(vi) non-recurring cash restructuring charges incurred in connection with
Permitted Acquisitions to the extent deducted in determining
Consolidated Net Income; and
(vii) Bain Management Fees (excluding any portion thereof representing
---------
reimbursement of expenses or fees for acquisitions, financings or
divestitures) paid during such period under the Bain Advisory
Services Agreement, and any Harvard Management Fees (excluding any
---------
portion thereof representing reimbursement of expenses paid during
such period);
(viii) non-recurring cash charges incurred prior to June 18, 1999 in
connection with the relocation of any of Company's facilities and
transition expenses related
1.1(i)-1
thereto, but only to the extent that such non-recurring charges do
not exceed $6,000,000; and
(ix) to the extent deducted in determining Consolidated Net Income,
premiums and transaction costs on Existing Subordinated Notes not
tendered in the Debt Tender Offer.